Creative Capital Makes Top VC’s Best Books of 2009 List

When I wrote my first book Creative Capital, I hoped that it would cross over into the mainstream AND appeal to the venture capital community.

This week, I got some proof that VCs are finding value in the book. Brad Feld, a founding managing director of the Foundry Group, a venture capital firm in Boulder, Colorado that has invested in Zynga, StockTwits and Topspin, posted his list of the Best Books of 2009. And I am honored to report that Creative Capital made the list along with some very distinguished company, including great books by Dave Eggers and Andrew Ross Sorkin.

This year, Feld read 72 books and he listed his top 5 non-fiction and top 5 fiction books. Thanks Brad!!!

Here they are:

Non-Fiction

Zeitoun: New Orleans + Katrina + Muslim American + Heavy Bad Stuff

How Starbucks Saved My Life: A Son of Privilege Learns to Live Like Everyone Else: Successful Ad Exec finds himself in the dumps later in life. Fixed by a job at Starbucks.

Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves: The Financial Crisis of 2008 unfolding in great detail.

Shopping for Porcupine: A Life in Arctic Alaska: Actually, in really remote Alaska.

Creative Capital: Georges Doriot and the Birth of Venture Capital: The story of General Georges Doriot and the start of the venture capital industry.

Fiction

The Scorpion’s Gate and Breakpoint: Brilliant contemporary spy vs. spy stories by Richard A Clarke. Yes – I realize this is two books – read them in order.

The Player of Games: An Ian Banks classic. Particularly interesting if you are addicted to Zynga games.

The Orpheus Deception and The Echelon Vendetta and The Venetian Judgment: David Stone is my favorite new mental floss writer. Three books – read them in order.

Daemon: Easily the best cyberthriller I’ve ever read.

Supreme Courtship: Anything by Christopher Buckley always makes the list. Especially poignant given my Supreme Court visit this year.

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New Review: Venture Capitalist Brad Feld Gives Creative Capital Five Stars

Check out this review that Brad Feld, co-founder of the Colorado venture capital firm Foundry Group, recently posted on my Amazon page.

5.0 out of 5 stars
Fantastic History of the Venture Capital Business
March 16, 2009
By Bradley Feld (Eldorado Springs, CO USA)

Most people that have been involved in a VC-based tech startup have heard the parable of General Georges Doriot and his famous $70,000 investment in Digital Equipment Corporation. However, few people actually know the full (and very extensive) story of Doriot and the creation of the Venture Capital business.

Spencer Ante does an awesome job of telling this incredible history. As a former entrepreneur and now VC, I’ve read many books that touch on parts of the history and have heard many anecdotes. Spencer brings them all together in one concise, well-written, fast paced book.

Every entrepreneur and VC should, along with anyone that is involved in creating companies, should read this book.

Entrepreneurs + VCs = Goodness (And why it will help lift us out of the Great Recession)

Yesterday, venture capitalist Brad Feld published a candid post in which he made the argument that entrepreneurs played a much more important than financiers in the startup ecosystem. Even though I wrote a book highlighting the importance of VCs, I totally agree with him.

It’s the entrepreneurs that drive innovation. They are down in the trenches building the businesses every day. They create most of the value.

However, without risk capital, the startup system ecosystem would be far less powerful and effective at generating innovation. You simply can not build a business without capital–even in these capital efficient Web 2.0 days. Look at any survey of a small business and the top concern is always money–having enough of it to run your day-to-day operation and getting more to grow the operation.

One of the big reasons that America is the world’s engine of innovation is that we were the first country to develop a professional and robust venture capital market. Now, other countries are following us, but our risk capital market is still one of the nation’s competitive advantages.

It’s also one of the reasons why I think we will lift ourselves out of this recession more quickly than we did in the Great Depression. There was no venture capital market in the 1930s. We have one now and the capital being put to work in startups will create companies and markets that will help grow the economy and revive our animal spirits. In fact, as I detail in my book, the VC industry was born out of the Great Depression when a group of businessmen in New England in the late 1930s realized the U.S. had created a “risk-less economy” and needed to find new ways of creating new companies.

I struggled with this tension in writing my book. I was writing about a VC but I came to see that what I was really writing about was the birth of this startup ecosystem, the entrepreneurial economy. I was writing about the largely symbiotic relationship between the entrepreneur and the venture capitalist. You can’t talk about one without including the other.

Sure, there will always be tensions between owners of a business and the managers. And that’s OK. But instead of pitting entrepreneurs against VCs I think it’s better and more appropriate to view them as partners in a mutually beneficial relationship.

Live from Beaver Creek, Entrepreneurship is Alive But Challenged

Apologies for not posting the last few days. I’ve been on a working vacation in Beaver Creek, CO attending the Venture Capital in the Rockies Conference.

Despite the recession, the VCIR conference pulled in about 300 attendees, only 30 fewer people than last year, says conference co-chair Seth Levine, who is a partner with the Colorado venture capital firm Foundry Group.

A few thoughts on the event:
* The Rocky Mountain region is emerging as a hub of clean technology innovation. I attended several interesting company presentations with startups working on various clean technologies.

Among the more promising:

SkyFuel: a startup based in Albuquerque, NM, which is making solar thermal power technology. They are doing a commercial demonstration with a utility this year, with plans to go into commercial production in 2010.

InfoUtility: a Boulder-based company making software to manage the smart electricity grid. Pacific Gas & Electric and Con Edison are doing test pilots of its software.

ION Engineering: another Boulder-based company making a technology that captures carbon from coal-fired plants. The company’s CEO Alfred Brown says, however, that there is no viable economic model yet for this technology.

* Although there are many promising technologies, most of them are still not yet ready for prime-time commercial deployments.

* Several entrepreneurs I spoke with were complaining that the VCs are reluctant to make new investments. One reason is that many area VC firms are having a tough time raising money.

* I was on a panel with Rebecca Buckman from Forbes, Mark Ververka of Barron’s and peHub’s Dan Primack. Foundry Group partner Brad Feld did a great job moderating the session. We all agreed that the venture capital industry was ripe for reinvention and that it was most likely the limited partners that were going to drive that change.

With venture capital returns down or non-existent for many firms, one likely area of change is the industry’s management fee structure in which firms get paid fees worth 1% to 2% of capital under management.

* Despite the tough environment, some new VC firms are getting funded: I bumped into Dave Moll, the former CEO of Webroot Software. He told me that last year he started a new Boulder-based firm called Infield Capital. The firm has raised a $50 million fund and is focused on investment in early-stage clean technologies for the transportation industry, with an emphasis on future powertrain technologies, and has already made three investments. Congrats Dave and good luck!