Position:Brief Article

Software, as a packaged product, is just about dead. The software business is now about service. Venture capital is heading down the same path. It's not just about writing checks anymore.

Frank Mendicino Ill understands. "Good VC firms are about what they do after the check is written," says Mendicino, a partner in Access Venture Partners, a VC firm with offices in Denver and Austin, Texas. "Companies need capital, and the investment is important. But with the public markets shut down as a way to raise money, the other stuff we do is most important."

Mendicino and three partners closed their first, $34 million fund in February 2000, just in front of last year's massive market correction. The four partners had spent years with Woodside Fund, a successful Silicon Valley-based firm.

From 1996 to the first quarter of 2000, "You had to be pretty stupid not to make money in our business, Mendicino said. "Things were so overheated it was like falling off a log. We had companies in our 1996 fund who never made a dollar, and we sold them for $250 million. That's not going to happen anymore,"

No, it's not.

Companies need to make money or die, and they're likely to take the check-writers down with them. The smart VCs are helping their clients in three key areas:

* Recruiting. Startups need good people, and the right people in the right jobs. A good VC will help find the management team, get...

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