1. set up a limited partnership (LP)--you'll need a good lawyer for this
2. word of mouth is how the business operates for the most part, but you could gain some exposure by hosting/judging at business plan competitions (e.g. Stanford's BASES Social E-Challenge, which is coming up--they're still looking for judges I think and I know the guy in charge, so let me know if you want to be put in touch)
3. Money needed = (# of boards you want to/can reasonably sit on * average amount of money you want to invest in a startup) + miscellaneous -- most VCs make 1-3 new investments per year in the $1-$10M range, so you would probably need about $30-$50M to have a reputable fund
4. major gotchas: VC investing isn't all about the money, it's really a people business. they spend 70% of their time talking to people, most people that can help their portfolio companies
like jgrahamc said, if you don't have a lot of time, you probably shouldn't be a VC, look into angel investing. if you're really serious about it, try to get in touch with Ron Conway or Mike Maples, they're two of the best known angels in the Valley.
Whoa, $30-50M is waaay out of my price range. I'm talking really small time here, a couple k at most. Thanks for the info though. And, I would like to learn how the whole VC world works. I know pretty much zilch about it.
Yeah, then you're on the scale of "friends and family" like Will said.
I suggest reading Venture Hacks if you want to learn more about VC, and the blogs of people like Fred Wilson, Don Dodge, etc. I'm sure you can find a list somewhere out there.
It sounds like you don't want to be a VC, you want to be an angel. I'd suggest you look at an angel network in your ___location and go talk to them about what you are thinking of doing.
"I'd be funding friends, but I don't have a lot of time myself."
He wants to be part of a "friends and family" round or two. No harm in that-- but I think most of the questions you need to ask are best answered by a lawyer.
Can anything significant come of something like this, or is it way too small time? I'm just a normal working schmoe, so I can only afford to support someone's basic living requirements and simple hardware.
1. set up a limited partnership (LP)--you'll need a good lawyer for this 2. word of mouth is how the business operates for the most part, but you could gain some exposure by hosting/judging at business plan competitions (e.g. Stanford's BASES Social E-Challenge, which is coming up--they're still looking for judges I think and I know the guy in charge, so let me know if you want to be put in touch) 3. Money needed = (# of boards you want to/can reasonably sit on * average amount of money you want to invest in a startup) + miscellaneous -- most VCs make 1-3 new investments per year in the $1-$10M range, so you would probably need about $30-$50M to have a reputable fund 4. major gotchas: VC investing isn't all about the money, it's really a people business. they spend 70% of their time talking to people, most people that can help their portfolio companies
like jgrahamc said, if you don't have a lot of time, you probably shouldn't be a VC, look into angel investing. if you're really serious about it, try to get in touch with Ron Conway or Mike Maples, they're two of the best known angels in the Valley.