Busy VCs Find Intranet Relief

Aug 27 2001

A good venture capitalist has to be a skilled juggler. The VC needs to know the diverse operations of his firm's portfolio companies. He needs to be familiar with the technology, products or services those companies are providing. He has to be able to explain those operations to the investors in his firm's funds.

Such time-consuming responsibilities often compete with the need to advise companies on the more pedestrian issues entrepreneurs face. Those include coaching the entrepreneurs on how to make board presentations, set up health care benefits and select a public-relations firm.

One early-stage VC firm, Sevin Rosen Funds, has established a decidedly high-tech, but simple solution: an intranet for portfolio companies that answers frequently asked questions.

"The same questions are coming up again and again," says Rosemary Remacle, a venture partner. "We thought [this would] make things easier for our entrepreneurs."

Lately, VCs have felt the need to spend more time looking after their companies. With the IPO window closed, many VCs are slowing down new investments and concentrating on helping existing companies reach profitability.

Investment professionals say the intranet, called Entrepreneurs Exchange, makes sense.

"If an entrepreneur is doing something for the first time, it doesn’t make sense for the VC to recreate the wheel each time and walk them through it," says Brian Rutberg, CEO of Rutberg & Company, an investment bank that focuses on private capital markets. "Any dissemination of information can make a difference."

Among the topics on Entrepreneurs Exchange: "How to present your company at a board meeting," "Who does Sevin Rosen recommend as a late-stage investor?" and "How to structure a benefit package."

The site has been a boon to Annette Gieseman, the chief marketing officer at ComSpace, a Sevin Rosen portfolio company. The intranet offers the kind of focused information that the Coppell, Texas-based company, which makes two-way radio equipment, once had to buy from consultants.

"Best of all, it's free," says Gieseman. "Before, we'd have to pay $4000 for research reports that didn’t tell us much."

Gieseman, who's been using the site since March, suggests that Sevin Rosen enable it to accept questions from startups. Sevin Rosen says it's working on adding such functionality.

So far, the most popular section is "Tips for raising funds in tough times." The section is written by Chris Ryan, CFO at Allen, Texas-based Xtera, which makes products to expand the capacity of fiber-optic cables. Ryan should know whereof he speaks: He closed a $110 million second round for Xtera in January, just as the funding crunch was accelerating.