On Monday night the Da Vinci Institute’s Startup Junkie Underground hosted Perry Evans, founder of such successful companies as MapQuest, Jabber, and Local Matters. Over the last fifteen years Evans has raised over $80 million in investor capital and “created value” to the tune of $1.5 billion. These figures are all the more impressive considering Evans spent a large part of his career working for larger companies, until he spun MapQuest out of R.R. Donnelly & Sons in 1994. MapQuest was subsequently acquired by AOL in late 1999 in a stock deal valued at $1.1 billion.
Evans began the evening by offering a short list of “macro thoughts” on what he’s learned as an entrepreneur, believing there is a “difference between the romance of being an entrepreneur and the reality.” For the professional on the front end of a venture, he offered the following guidance:
- When sitting down with VCs, an entrepreneur should extract her feelings from the equation. VC advice may be administered callously, but that doesn’t mean it’s not worthwhile. Listen, learn, and adjust the business plan.
- Evans insists that “stubbornness and passion are not the same.” In 95% of scenarios, the original idea for the startup is flawed. Entrepreneurs waste too much time attempting to prove the validity of their original idea.
- When being presented with a term sheet, “mind the capital tables”. According to Evans, no two financings are created equal, and the best advice for this corporate moment is to find a good lawyer.
On running the business:
- Form an inner circle of advisers and mentors who exist outside of the company. With these folks an entrepreneur should share doubts, fears, and feelings of personal and professional exposure. Evans recommends keeping these considerations away from the rest of the startup team.
- “Avoid premature Intoxication,” or celebrating too much over completing a single milestone. Evans believes an entrepreneur must always “keep the long-term clear and present,” considering that building a business is a marathon and not a sprint.
On closing the doors:
- Evans believes an entrepreneur must be disciplined about “having x-months left of cash.” He considers smart entrepreneurs to be those who resist bravado in favor of objective reality. He believes that towards the end, it is imperative to be honest with investors on the reality of the balance sheet.
- “Exiting failure will impact the next one.” Evans interprets failure as a stepping stone for many future successes, and sees a graceful exit as necessary for building trust among investors and venture capitalists in backing the next venture.
Evans’ talk was followed by a question and answer session where he was joined by Joe Pezzillo, Principle of the Rogers Pezzillo Group and Founder of the internet firm MetaFly. When asked how an entrepreneur can maintain a life balance, Pezzillo offered, “I’ll give you an honest answer – you don’t.” Evans was more moderate, believing that everyone “needs something that will clear your head,” so as to come back to the office re-energized. When asked about the current economic environment, Evans expressed concern that some of Colorado’s name VC firms – including Sequel and Appian – have come to the end of their current fund and are facing difficulty in raising the next one. Pezzillo added that any firm seeking financing should “focus on customers first and generating revenue out of the gate.”
The DaVinci Institute produces a variety of events designed to share the knowledge of the most talented thinkers and seasoned veterans who have fundamentally changed the business landscape. Upcoming events include a Twitter Boot Camp on March 26th and Night with a Futurist, featuring Burke Forte on “The Business of Space 2.0″ on April 6th. The next Startup Junkie Underground meeting will take place on April 20th at the MADCAP theatre and feature Arjun Sen.
