Auren Hoffman's Summation Push for the week of April 12, 1998

You can visit my thoughts and reflections at http://www.summation.net or you can be lazy and wait for these tidbits to be sent right to your in box (subscribe and unsubscribe information is at the end of this e-mail).

This issue:
* Industry Insights
* Drive-Through Venture Capital (Do you want fries with that?)
* Career Tip
* Summation Push Picks Links

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INDUSTRY INSIGHTS:

Everyone is talking about Yahoo's stock. It has gone on a tear in the last year and now gives Yahoo a market cap of over $6 Billion and puts it into the Fortune 500. Amazing.

But is Yahoo worth it? I think it might be. Yahoo's market cap is still 3-4 times as small as most other traditional media companies. But it means that other sites, like Excite, might be extremely under-valued. Though I think Yahoo is the best site on the web (and the site I personally frequent most), there is no reason why Excite can't overtake them in a few years.

That said, if the Yahoo frenzy continues, look for it to spill over to other high trafficked Internet media companies.

(all rumors and insights sent to auren@summation.net will be kept confidential)

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Drive-Though Venture Capital
Would you like fries with that?

By Auren Hoffman

Everyone these days is an entrepreneur. And for good reason -- because everyone else is a venture capitalist. Every moderately successful businessperson, every person with an inheritance, and many with just a second mortgage are joining the invest-in-a-start-up-so-I-can-be-cool-and -have-my-picture-in-the-Red-Herring hype.

Nowadays, with a reasonable idea and good management record (like three years as the nighttime watchman at the local Denny's) you can attract cash, and lots of it, from the investor public. With some more technical experience and a product that you can claim is "proprietary," you can reasonably expect to raise cash from even the most prestigious venture capital companies. If you are defining a "whole new paradigm shift" you can expect a whole slew of VC's firms to be calling you every day.

And why not? There is so much money flowing into VC funds these days all chasing after generally low-return start-ups. People are hoping for a 20-30% annual return when a good mutual fund will beat that. If you invested in Yahoo in 1997 you would have made a 500% return. Even a safe investment in Microsoft would have yielded over 80%.

I'm thinking of opening my own VC shop. Instead of modeling it after Kleiner Perkins or Bain Capital, I'm going to model it after McDonald's. That's right, the fast-food venture capital. It will be called DTVCP, or Drive-Through Venture Capital Partners.

New Business: "I'd like Super-Value meal number 3, extra $1.5 million, and a 20% equity stake. Oh, and hold the lawyers."

Drive-through: "Would you like to super-size it? For $390,000 extra you get full public relations and diner at Spago."

New Business: "Yes. And please also include the free Happy Meal for my kids."

Drive-Through: "Thank you for shopping at Drive-Through VCP. Please pick up your check at the next window. And don't forget to deposit it in our newest subsidy across the street, Drive-Though Bank."

DTVCP is taking America by storm. My goal is to have one at every main intersection in America. Franchised, DTVCP will have a major impact across the nation -- an impact almost equivalent to that of Microsoft Bob.

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CAREER TIP:

When writing a resume, try not to format it in a funky way. Keep it simple and try not to use bolds or italics. Most major companies scan in resumes and the automated system cannot handle resumes that are complex.

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THIS WEEK'S LINKS:

* Alexa (http://www.alexa.com) -- Cool browser navigation utility
* Inquisit (http://www.inquisit.com/) -- get targeted articles delivered to your in-box
* Cybergold (http://www.cybergold.com/) -- get paid to watch cyber ads.

SUMMATION