In his recent op-ed in the Wall Street Journal, Tom Perkins claims that “Too often, there is confusion between investment banking and venture capital.” It’s hard to argue with that statement, but it’s investors like Tom Perkins that deserve the bulk of the blame for this confusion. Perkins says the difference between VC and Investment Banking (IB) is that “venture capitalists work with entrepreneurs to start new companies from the ground up”. I’m not sure how Perkins defines “the ground”, but I’m pretty sure I’d need to take an elevator to get up there.

Perkins’ firm Kleiner Perkins Caufield & Byers has certainly done its fair share of early investing. They became famous for being early investors in homerun deals like Amazon and Google, but even in those cases, they weren’t in ‘from the ground’. When they invested in Google, for example, Google already had 11 employees. That may seem really early considering the number of employees Google has today, but it’s really late compared to Andy Bechtolsheim’s investment a year earlier. He wrote a $100,000 check before there were any employees and before the entity was even filed!. That’s ground level investing.

More importantly, KPCB (and most of the other Sand Hill Road crowd) get most of their exposure from the massive returns they generate when one of their portfolio companies IPO’s. The returns are phenomenal (KPCB’s Amazon investment produced about a 55,000% return), so I can’t blame them for focusing intently on these opportunities. But, please don’t whine about the confusion with IB when taking companies public is your MO. For more evidence of this attitude, look no further than Sand Hill Road’s disappointment in the measly 5x return that Aaron Patzer produced for his mint.com investors.

The confusion is furthered by VC’s who openly offer ‘Founder Liquidity Stage Investments”. I’ve received calls this year from some of the most recognizable VC’s on both coasts telling me about these types of offerings, but apparently it’s been happening for a while. This is a really awesome thing for founders, because it allows them to realize a payday without dealing with the nightmare of taking a company public. But these VC ‘investments’ are nothing more than a clever way to buy options in an imminent IPO. Gee, I wonder why that would cause confusion.

Every investor loves the ‘no-brainers’ that produce certain returns, and every investor loves revenue and clear exit opportunities. Even traditional banks will finance many of these types of opportunities.  If some of us don’t step up and make pre-revenue investments based solely on our faith in the idea and the people involved, the bankers won’t have any ‘no-brainers’ to consider. Unfortunately, this banker-mentality investing has infected more than just the big VC’s. In Part 2, I’ll talk about how some prominent angel investors are giddy about later-stage, fixed-return, low-risk, loans. Some of these guys should call themselves ‘Angel Loan Originators’.

Ok, let’s be honest, I never really was any good at following directions. That’s probably why I’m an entrepreneur today. That’s also why I spent a few hours trying to find out why I kept getting this error when trying to talk to the CampaignMonitor API in the most basic way:

(101) Invalid ListID

Ok, yeah I didn’t read every line of the documentation. I’ve worked with countless API’s in the past and continue to do so. They’re all very simple on the surface but they all have their little nuances. It turns out that the CM API has one of the most annoying quirks that I’ve ever seen.

I’ll start at the beginning. I decided I wanted to use the API to add subscribers to a list on CM. That’s pretty straightforward, I thought. You know, some sort of authentication mechanism, then provide the email address in some REST-ful way. I glanced at the docs to see that there is a SOAP interface. I quickly decide on that since usually this bloated way of interacting with a simple API is the quickest to code. So, I fire up a SoapClient and throw the four parameters at it and I get that 101 error. Again and again, I try every different way I can think of. Same 101 error.

During the pulling-out-hair stage, I ran across this post: Using Zend_Soap_Client with the Campaign Monitor API which pointed toward the need for a special input header. That prompted me to write a wrapper. I’ll get to that in a sec. It turns out that the input header wasn’t required after all.

When I glanced at the CM API documentation, I saw that there are 3 parameters required for the Subscriber.Add call: ApiKey, ListID, Email. Easy enough. It took a sec to find the ApiKey. The Email parameter is easy. So is the ListID, or so I thought. To find that, I just clicked on the list name in the CM gui and then there, in the address bar, was exactly what I was looking for:

Nope. Its a ListID but not the ListID. No, I had to click on the “edit list name/type” link to find that. What a waste of half a day.

Alright, I’m done blaming CampaignMonitor for my inability to RTFM. I wrote a very quick wrapper around the Zend_Soap_Client class specifically for CampaignMonitor API oddities. Hopefully this will save someone else some headache. Download it here:

CampaignMonitor.php

Use it like so:

$cm = new CG_CampaignMonitor('yourApiKey', 'yourListID');
$result = $cm->AddSubscriber(array('Email'=>'test@example.com', 'Name'=>'Test Subscriber'));

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