I'm not usually catty. Well, usually not usually. Still, I couldn't help myself today. I was inspired.
I'm not a venture person, of course, but I can't help but observe that, for someone who's only real claim to fame is that they worked for Apple back in the 1980s, started a failed software company in the 1990s and published a series of books, there is a lot of self-aggrandizement going on within the boundaries of Guy Kawasaki's blog, which dispenses critical advice essential to any aspiring founder like why you shouldn't start your company name with an X or Z, or that you should "sound different."
Of course, it's equally important, it seems, to "suck up to a blogger." If that doesn't give you enough then you can always read about how Guy writes his blog entries, and how they differ from his book writing skills. Oh, there are also lots of important looking pictures of Guy (obviously deeply contemplating weighty affairs).
No. I am not making this up.
It's perhaps no wonder that, 4 years on, Kawasaki's fund, the "Garage California Entrepreneurs Fund, LP," which somehow managed to tear $5,000,000 from CalPERS and another $5,000,000 out of other investors is looking at a sad -2.4% IRR and has only managed to invest half its committed capital.
Really, if you're going to hold yourself out as an expert on venture capital and write books on "The Art of the Start" shouldn't you at least have a fund with more than $10 million in committed capital available? And shouldn't it be doing well?
We wrote $15 million in equity last month and you don't see me writing a book.
Because of the long-term nature of investing in private equity, funds can produce low or negative returns in the early years of the partnership. In the first few years management fees are drawn from partner's capital and portfolio companies are held at cost leading to an understatement of ultimate value.
Yeah, ok. One year on our firm doesn't seem to have an issue, though we are a buyout firm, not a VC. Neither does Carlyle High Yield Partners IV, LP, which also is a vintage 2002 fund and also has $10 million in committed capital and has somehow managed to show a 19% net IRR.
But then, success in building companies doesn't seem to be his dream. How can I describe his dream exactly? Oh, let's let Guy do it himself in his own words from an entry he calls "How to be a Mensch." I don't think I could sum it up better.
But The Goal is to spend eternity in first class--specifically Singapore Airlines first class. Here your seat reclines to a completely flat position, and there's a power outlet, personal video player, wireless access to the Internet, and noise-cancelling [sic] headphones. There are also chefs, not microwave ovens.
You've got a way to go, Guy. Your 2% management fee on $10 million is only $200,000 per year by my count.
Wait. Did I mention he's a Stanford grad?