Thursday, November 23, 2006


Venture Capitalists: A Call to Action...

I wonder if VC firms have noted that large enterprises are starting to pay attention to smaller analyst firms...

If you work for a venture funded startup, you should seriously consider how you spend monies on industry analysts. This week I had an email exchange with one vendor in the entitlements space regarding this topic. He thought that paying analyst firms is a racket which at some level I agree with. Of course, I have two different perspectives on this subject.

The first perspective says that if you aren't happy with large analyst firms because they aren't going deep into research or are attempting to classify you with other vendors that simply don't make sense then don't abandon all analysts as that would be like throwing out the baby with the bath water. Instead, consider working with smaller firms such as Redmonk, Elemental Links and the 451 Group.

James Governor of Redmonk tells vendors the following:

I wonder if the likes of Dan Gordon of Valhalla Partners, Ed Sim and David Beisel will start encouraging their portfolio companies to take Redmonk up on their offer? I have been encouraging vendors who cold-call me to also consider smaller analyst firms but many of them aren't paying attention. I wonder if I should pay attention to their value proposition...

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