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Alder's 10 Laws for Venture Capital Companies

How a VC Thinks, according to Adler's Laws

Venture capitalist Fred Adler has condensed his experience into a few epigrams that give some insight into how a VC thinks:

1. The probability of a company's succeeding is inversely proportional to the amount of publicity it receives before it manufactures is first product.

2. An investor's ability to talk about his or her winners is an order of magnitude greater than the ability to remember the losers.

3. If you don't think you have a problem, you have a big problem.

4. Happiness is positive cash flow. Everything else will come later.

5. The probability of success of a small company is inversely proportional to the size of the president's office.

6. Would-be entrepreneurs who pick up the check after luncheon discussions are usually losers.

7. The longer the investment proposal, the shorter the odds of success.

8. There is no such thing as an over-financed company.

9. Managers who worry a lot about voting control usually have nothing worth controlling.

10. There's no limit on what one can do or where one can go if he or she doesn't mind who gets the credit.


     Fred Adler was the primary investor in Autech Data Systems in the early 1980's -- not one of his winners. This is where I poured my heart and soul into inventing the DAC-6000, a highly ruggedized DCS designed for the Hybrid Industries. This was the first DCS to use fiber optics on Ethernet, color graphic touchscreen HMI, and 1oo2D fault-tolerant controllers.

-- Dick Caro

Richard Caro
4 Clyde Terrace, Arlington, MA 02474