After eight years as president and CEO of Portland, Ore.-based natural grocery chain New Seasons Market, Lisa Sedlar left in late 2012 to make that earlier inspiration a reality. Based on her “7-11-meets-Whole-Foods” concept, she founded Green Zebra Grocery, which offers a range of mostly locally sourced health-conscious food packaged for convenience in a small, neighborhood store setting. She toiled to raise $1 million, and opened the first store in Portland’s Kenton neighborhood on October 8 of this year. Before raising her next round of funding for expansion, Sedlar was contacted by Katie Fitzgerald at CircleUp, a crowdfunding site that connects accredited investors with promising small consumer retail businesses. Through CircleUp, Green Zebra raised and just closed on its next $1 million—in three weeks.
“I don’t invest anymore in entrepreneurs who don’t have charisma.”
“I had a CEO who had offered this new engineer three-quarters of a percent of the company, but he wanted more. He was screwed over at his last startup. And the CEO didn’t know what to do. I asked, ‘What’d you give other guys at his level?’ Three-quarters. So that’s what he should tell him: ‘You’re not going to get screwed because nobody’s talking me into paying more.’ The CEO came back and said, ‘Done deal.’ The engineer didn’t want 1%. He was asking for fair. If you’ve been a CEO, you know. If not, you have to learn the hard way. We make some of the hard way the easy way.”
Despite the mythology that has built up around venture capital, it has become a slowly moldering investment vehicle. “The past 10 years haven’t been very productive,” Maris points out. According to the research firm Cambridge Associates, during the decade ending last September, VCs as a class earned a 2.6% interest rate for their investors—less than you could have earned in an S&P 500 index fund. The numbers look slightly better over shorter periods; VCs have delivered a 4.9% return the past three years and 6.7% over the past five, still far from terrific.
Google’s insurgent attitude—perceiving startup funding as broken and appointing itself as the fixer—has ruffled some in the insular, clubby world of venture capital. Not on the record, of course. Google Ventures is already big enough that it has participated in deals with almost every prominent Valley investor, and nobody wants to talk ill of a partner. Behind the scenes, though, some question the firm’s experience—most of its partners are former Googlers who haven’t worked in venture capital before—and its passion. If you were looking for money and were choosing between Google Ventures and such top firms as Andreessen Horowitz or Kleiner Perkins Caufield & Byers, people would tell you to go with one of the other guys.
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