Gurus in the garage

Before the days of the Internet, it was primarily venture capitalists who c oached young entrepreneurs in Silicon Valley. Today, because of the phenome nal number of new companies, venture capitalists are just too busy. The lar gest firms still take on a few carefully selected, highly promising zero-st age start-ups, but they simply can't spend the time on ones that aren't goi ng to grow huge quickly. To fill the void, a new breed of adviser has stepped in to coach entreprene urs. Called mentor capitalists, they help entrepreneurs with everything fro m recruiting top talent to attracting their first million in seed money. The mentor capitalists in Silicon Valley are cashed-out, highly successful business architects who no longer want to start businesses but who love the thrill of the entrepreneurial game. They spend hours and hours with first- time entrepreneurs, guiding them as they create and refine a business model , test their ideas in the marketplace, build business processes, raise mone y, and find talent. The authors of this article found through dozens of extensive interviews wi th entrepreneurs and their coaches that mentor capitalists play many roles: sculptor, psychologist, diplomat, king maker, talent magnet, process engin eer, and rainmaker. In exchange for small equity stakes, the mentor capital ists wear these different hats, doting out expertise just in time, as situa tions arise, and in doses appropriate to the situation. Mentor capitalists seed Silicon Valley with expertise and knowledge, augmen ting or even substituting for classes in entrepreneurship at local universi ties. But, as the authors note, the role of the mentor capitalist is essent ial to any start-up, anywhere.