Startups that the VCs Want to Fund

28 Aug ’05

Business 2.0 recently ran an article on the results of a survey of VCs it conducted to find out what businesses they were interested in funding.  Gist:

Like most venture capitalists, Jim Armstrong, managing director of Clearstone Venture Partners, receives dozens of business plans every week. But when we stopped in recently, he was more interested in talking about what was missing from the pile than about any hidden gems. Riffing on the future of instant messaging, for example, and how a killer business could be hatched around his concept, Armstrong complained that he was ready to write a check to get it launched, if only a smart business plan would hit his inbox. "I’ve got $1 million to invest in this tomorrow," he said, "if I can just find the right team."

A column that appeared on the next day described the company Armstrong envisioned and his wish list of criteria. Those who thought they had the right stuff could send Armstrong a business plan. A few weeks later, Armstrong had a new gripe: He’d received more than 20 solid plans and couldn’t decide which of three finalists he wanted to fund — not just for $1 million, but for as much as $5 million. He has since winnowed the list down to two.

That got us thinking. Why not ask dozens of VCs a tantalizing (but often unasked) question: What types of ideas would you fund tomorrow if the right pitch landed on your doorstep? After a few weeks of trolling Sand Hill Road and beyond, we got 11 leading venture firms to spill their most promising business ideas — and to pony up $50 million in funding to the entrepreneurs who can pull them off.

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