2009 investor interview highlights

Draper, Khosla, Chang and more on what it takes to succeed (and win their investment dollars).

Bambi posted highlights from the CEO interviews Vator conducted this year. The financial plague that was 2009 makes those standout entrepreneurs look a few feet taller.

Investors, though somewhat less deserving of sympathy, also had to overcome a dismal year. Looking past the LP funding nosedive, the thinning out of their own industry, possible pay cuts and job loss, these VCs continue to place big bets on the future of tech. The ten interviews below were chosen for popularity and poignancy. We think they're worth another look as the high-growth marketplace closes out a tough year and top VCs prepares to increase startup funding in 2010.

Vinod Khosla: Vision is "bumbling around"
Our top pick is a low-production quality shot (Bambi holding her iPhone) of Vinod Khosla accepting (and rejecting) a Visionary Award, at the SDForum, a leading Silicon Valley non-profit organization. "Vision is great, especially when you can do it with 20/20 hindsight," said the entrepreneur-turned-venture capitalist, who ended up attracting $1 billion from LPs this year. "I still don’t believe in vision. I believe in bumbling around long enough to not give up on things. Eventually, when success comes your way because you've failed in every possible way, and the only way that’s left is the one successful way. And, always for those of you who are entrepreneurs, it seems to come last. This bumbling around is to me what vision is about. It’s the best way to be a visionary. You just keep failing enough, and not giving up." Somehow the production quality seems appropriate for the content--we bumble sometimes, too ;)

Andy Klein: you can do anything, but not everthing
Andy Klein is the pioneer of taking companies public on the Internet. He started Spring Street Brewing Company - the most high-profile and successful direct public offering ever. When Andy wanted to create more buzz around his beer company, he decided to create a market to provide liquidity for the shares. That market became known as Wit Capital, which went public and in 1999, went on to acquire another investment bank, Soundview, in that same year. Andy is currently running his latest startup, Spotzer, and offers three pieces of advice to entrepreneurs in this five-minute segment.

Tim Draper unveils the Xchange marketplace
Increased regulation and pullback in funding left startup employees and investors alike thirsty for liquidity in 2009. That led to an increase in private stock trading, most notoriously in the case of Facebook, whose stockholders were so busy trading shares on the not-so down-low that Facebook decided to take foreign money to buy back the shares. Some saw opportunity in the cash-flow crunch. Tim Draper, whose various funds invest in over 500 startups, unveiled XChange, at Venture Summit East in late May. XChange is a trading platform for private-company stock where startups can go "prublic" and equity holders and qualified buyers can trade restricted assets based on a tightly-controlled system for sharing private company information.

Charles Moldow: Be relentless, don't compromise, be thrifty
Before Charles Moldow became a general partner at Foundation Capital, he spent more than a decade as an entrepreneur. He wrote the original business plan for AtHome, a high-speed Internet access comapny, which eventually became ExciteAtHome. He also worked at TellMe, which was sold to Microsoft. Charles also led investments in roughly 10 startups, including Xoopit, Powerset, Weblistic and AdWhirl. In this segment, Charles gives his three pieces of advice and explains how his team positioned Xoopit to get bought buy Yahoo for $20 million this past July.

Tim Chang on the future of gaming 
Before Norwest Venture Partners pulled in the biggest VC megafund of the year ($1.2 billion), we interviewed Partner Tim Chang about his vision for a brave new world of “gaming-as-a-service”: cloud-based, free-to-play, frictionless distribution, all monetized through advertising, virtual goods and premium subscriptions. And to help build it, he's looking to fund everything from a vertical gaming cloud to "Paypal 2.0" microtransaction processing, next-gen publishers, new platforms, service layers, and technology enablers.... It sounded overly ambitious at the time, but now Tim has the funds to make it happen. In this segment, he offers his thoughts on the coming consolidation in the VC world, why he thinks gaming is a bright spot, and what the new online entertainment utopia will look like.

Yoav Leitersdorf helps European entrepreneurs overcome failure
Part of the G20 recovery plan is to stoke investment in Western Europe, but European entrepreneurs can have a tough time accepting failure. "Entrepreneurs who've failed in Europe rarely go back... there's not enough respect for entrepreneurs that have not made it the first time," said Yoav Leitersdorf, an entrepreneur-turned-venture capitalist who founded YL Ventures, which looks for companies that can exit in a few years time at between $20 million and $80 million. "If you look at Silicon Valley, most successful entrepreneurs have had to fail once or twice before they became successful."  Leitersdorf is helping lead the entrepreneurial charge among Europe's growing startup community, and offers his advice to founders in this segment.

Marten Mikos on the Stockdale paradox for entrepreneurs
OK, so he's not technically an investor, but Mikos did join Benchmark as their entrepreneur-in-residence this year, having sold MSQL to Sun for $1 billion. In this segment, Mickos advises entrepreneurs to seek wisdom in the words of Admiral Jim Stockdale, the highest-ranking American prisoner in the Hanoi prisoner of war camp from 1965 to 1973, who through  unwavering faith believed he would one day be set free from prison.  "You must have two sides to yourself," Mikos says. "A pessimist wouldn't survive in the prison, they'd give up, the optimist wouldn't survive, because they are too hopeful. But those who have unwavering faith that they'd ultimately get out yet face the brutal truth of everyday - they eventually get out. Entrepreneurs must believe that one day everything will be perfect and until then, you have to go through whatever pain you have to go through. Although he [Stockdale] went through more torture than entrepreneurs, the metaphor is relevant. Entrepreneurs must sacrifice everything, commit completely, an keep believing that one day everything will be sorted out in their favor.

VC Ken Saywer: Overcommunicate with your stockholders
Ken Sawyer of Saints Ventures echoed a common piece of advice during the downturn: communicate like crazy when things are tough. "I think in this period of time, we have to recognize that customers, suppliers, employees, shareholders, and venture capitalists all want to learn about what's going on. Communication can be very important during these tough times and I think the fact that our suppliers are struggling, our customers are struggling, and often our venture capitalists are struggling for exits. The communication that a company and a CEO can do for its employee base anad its investor base is really important. Because with that communication there is less of a chance of issues evolving into a conflict, and of difference of point of view, and keeping people in line is super important especially in this tough time period."

Trinity's Gus Tai: Run, Crawl, Walk
Gus Tai is an active investor in Wetpaint and mSpot. He also invested in Photobucket, which sold to Fox Interactive Media in 2007. He said one of the hardest lessons he had to learn was not to grow too fast, a problem that plagued promising startup Imotors. Another piece of advice: repetition, repetition, repetition: "It's really important to keep repeating the message of why what you do matters. You need to repeat it frequently to everyone, your customers, your audience, and to your employees. Often at times, it's easy to think that it's obvious, but by repeating it, you get people to understand and believe what you are up to."

Marc van den Berg: how to win VantagePoint's money

Green was the new black in 2009, and one of the heaviest cleantech investors was Vantage Point. General Partner Marc van den Berg invests in every cleantech sector from biofuels to solar, he told VatorNews exactly what he's looking for now; if you run a startup in energy storage or energy efficiency, especially in lighting, HVAC ("heating, ventilating, and air conditioning" aka climate control) or green building materials, you may want to talk to Marc. Oh—and there’s one other requirement for pulling down an investment: you need to be willing to take huge chunks of capital