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The Truth About Venture Capital

Myth: Getting venture capital is impossible. Reality: It's not easy, but it can be done. We show you how.

By
This story appears in the February 2000 issue of Business Start-Ups magazine.

Some entrepreneurs beat the bushes in search of venture capital. Some pound the pavement. Others look high and low. Still others search with a fine-toothed comb or cover all the bases. Then there's Mark Fletcher, who did none of the above. (He avoids idioms.) Fletcher--chairman and vice president of technology for eGroups Inc., a free e-mail community service that allows Internet users to connect around common interests--sat back and let venture capitalists come to him. Well, maybe he didn't just sit back.

"We started working on eGroups [formerly ONElist] in August '97 and went online in January '98," recalls Fletcher. After nine months running the new business evenings and weekends while working full time, "we got calls from [venture capital firms] CMGI and Bertelsmann Ventures saying they had gotten together and were interested in investing in us. The Tuesday before Thanksgiving [1998], they called to set up a meeting the following day. We got the terms of the offer the day after Thanksgiving, and on Monday we signed a term sheet." In less than a week, the 29-year-old entrepreneur had arranged for a $4 million investment in his start-up.

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