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Venture capitalists buy minority positions in young companies they think will grow quickly; buy-out investors buy most or all of companies they think can be turned around by fixing a few basic things.

There are lots of ways to make money in venture capital, and there are even more ways to be mediocre. The industry has too much money and too many smart people chasing too few great entrepreneurs.

I think one of the key differentiators I bring to the table as a venture capitalist is a solid understanding of the public markets and how they operate.

I don't think a lot of people have been entrepreneurial about venture capital.

Venture capitalists are like lemmings jumping on the software bandwagon.

Every venture capitalist says at some point, 'I wish I could run this company myself' - to be the entrepreneur instead of the investor.

Most startup entrepreneurs unnecessarily spend half their time and give up half their equity in search of funding from angel investors and venture capitalists. Tens of millions of dollars are available to them for free from partners who not only don't want their equity, they don't even want to be paid back.

Many entrepreneurs, and the venture investors who back them, seek to build billion-dollar companies.

So many folks in the venture capital business are sheep that just want to follow the herd. They are momentum investors purchasing highly illiquid investments. That is a recipe for disaster.

First of all, in terms of investment in Internet-related developments, venture capitalists - once burned - are now very cautious and are investing in areas that actually make business sense.