I think there is a major nuance that needs to be pointed out related to venture capitalists and the way they operate. Because there is a preponderence of opportunity and venture firms in the Valley, many of the venture firms tend to specialize. Peter Fenton of Benchmark Capital for example, is an open source maven, earning his chops from the likes of funding Marc Fleury’s JBOSS. When you specialize, you can react more quickly to things because you are a true expert in the space and understand the gaps and opportunites. Southeast VCs are not experts, although we do minor in categories that we think our regions is good at. I know a fair amount about Internet Security having invested in three deals and looked at many more. Greg Foster has ad network and deep new media knowledge.

When I see an Internet security deal, I have a good sense of its potential for success. Witness Purewire, which just received $2 MM in angel funding. I would have loved NMP to have been in that deal if we could have gotten the terms and ownership, without looking at a number.

Reaction time by VCs regardless of region is largely based on specific knowledge. In the absence of specific knowledge, which is the case for many Southeast VCs, there needs to be some evidence of success, like what you spoke of in your post. In the case of Jeff, the truth falls somewhere in between. Jeff is an impressive guy who surrounded himself with successful people. We were really never given the opportunity to react to his company. We could not fund just the idea because we are not experts in RIA. But given who he was, we also would not have to see much to be persuaded. Anyway, it is a bummer he is leaving and I wish him the best.