Wednesday, July 22, 2009

Burn Rate

The burn rates of my portfolio companies is certainly top of mind right now, but that's not what this post is about. Not yet anyway...Things may change by the end.

Ever wonder what your ops guy is doing when he's not obsessing over your site's health 7x24. If anyone still carries a beeper these days, it's him. Well, our VP Operations at Fliqz, Daniel Marcus, dabbles in creating writing and music when not managing our data center.

His specialty is short fiction of the sci-fi variety, but has also authored numerous papers in the areas of applied math and computational physics, if that's your thing. Since I'm not a fan of any of those genres, I have been looking forward to the release of his latest work, Burn Rate.

A quick synopsis from the book jacket blurb:
Ross and Lori Williamson are living the Boomer version of the American Dream. Ross is a Silicon Valley entrepreneur, battered but still standing after the Internet collapse. Lori has quit her upscale corporate law job to make pottery, study martial arts, and start a family. Unable to conceive, they hire Annie Day as a surrogate to bear their fertilized egg to term. Annie has a few skeletons in her closet, including an ex-boyfriend desperate for cash and on the run from the Italian and Russian mobs.

It is hard to tell the bigger villain - Microsoft (aka evil empire), the vulture capitalists (aka Sand Hill Road) or the Jewish kid from Brooklyn who after some problems with gambling (what kind of nut bets on the Knicks?) and drug dealing (to pay off the stupid bet) takes up kidnapping and murder. Once you get past the stereotypes (of the first two anyway), this is a very funny and entertaining read and a great page turner to take to the beach or pool on one of these hot summer days.

While there are certainly better books that chronicle the highs and lows of starting a company, Burn Rate does raise some interesting issues on the personal side of entrepreneurship. The protagonist, Ross Williamson, is struggling to finance his company and hang on to his team during the process. His angel investors are tapped out and the VC's aren't biting. He convinces his wife to let him take a second mortgage on their home to give Tesseract a few more months of runway.

While credit cards, second mortgages, and personal guarantees are all common methods of early stage funding, they can certainly put a strain on marriages and personal relationships. When he receives a lowball acquisition offer, he must decide between protecting his hide and leaving his team hanging or rejecting the offer and rolling the dice on a better outcome.

I won't spoil the end of the story, but wouldn't bet against the good guys....Now back to hunkering down and figuring out how to deal with the burn rates in the portfolio.


DMZ said...

I'll definitely check it out. It sounds a little like Cryptonomicon by Neal Stephenson. Very near and dear to my heart for many reasons besides the math, owner/operator/vc wrangling, and one of the main characters lives in Pacifica like me.

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