VC recommends stealth mode

Silicon Beat interview John Doerr, Brook Byers and Ray Lane - partners at Kleiner Perkins Caufield & Byers, one of Silicon Valley's most prestigious venture capital firms. They gave this insight Q: The venture capital survey shows a decline in VC investing (in the third quarter), but some suggest one reason may be artificial: Start-ups are trying to stay under the radar longer and not announcing their VC funding. Doerr: The entrepreneurs want it that way. Ten years ago, as soon as a venture was funded by a reputable venture capitalist, within six months, two or three clone ventures would be launched like heat-seeking missiles right up their tailpipe. People got wise to that. Why should we say anything about what we're doing until we have happy customers, and we're ready to try to expand and grow our market? You see many more entrepreneurs wanting to remain in stealth mode for a long, long time. The smart ones, anyway. Lane: It's worse than that. By talking too early, they produce weak competitors. The worst thing you can have is weak competitors. A strong competitor is actually good for you in an early market, because it helps build the market. A weak competitor, it turns off a client. The client says, ""I don't get it,'' because they're not able to put it across. It's not good for that original idea.