Management Teams, MBA Monday’s, The Crucible
Feb 20 2012

Fred Wilson has been doing a very interesting series on Management Teams for the last several weeks on his blog.  It is part of his MBA Monday series and this section was on building and maintaining the management team. They just did a wrap up post called The Management Team – Guest Post By Jerry Colonna – The Crucible of Leadership.  It’s well written and gets to the heart of the matter of what makes the difference between good and great leaders and managers.  So much easier to say than do.  I feel like I’ve been through a Crucible and I hope that I’ll get an opportunity to see what I’ve learned about the topic and practice my leadership skills.  Empowering people and getting things done are near and dear to my heart and apparently seem to align to my strengths according to Strength’s Finder 2.0.

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Bottom line is that we are all different.  We aren’t Steve Jobs or Bill Gates and we shouldn’t strive to be.  We need to find that place where our passions, skills, and opportunity come together. constantly look inward and then work on it until something happens.  We need to accept and stare our demons down as we can’t fight them because the more we do, the more they stick around to haunt us.  Surrender to the demons and they will surrender to you or leave you be is what Colonna mentions in his post.

Time Is The Undeniable Constraint and if you find that rare person who has put so much into looking inward then as I said in my recent post on Leadership, Management and Unicorns, try to get a front row seat to see how they do it.

Author: | Filed under: bill gates, entrepreneurship, steve jobs, venture capital | Tags: , , , , , , , , , | Comments Off

Venture Capital Human Capital (VCHC) report
Aug 7 2010

A long time Adviser/Mentor of mine, who also happens to be a very successful investor, sent me a link to the Venture Capital Human Capital (VCHC) report.  The findings were interesting but not too surprising (except for possibly the average age of the founding team, given I founded my first company at the “didn’t know any better” age of 26) from my vantage point.   I have embedded the report below so you should be able to scroll through the pages.

They say: “In part 1 of our first-ever Venture Capital Human Capital Report, we look at the race of founders, the racial composition of founding teams, age of founding teams and the # of founders of VC backed companies to see if there is any relationship between these characteristics and the VC funding received.”  Some of their findings:

  • 87% of Founders are White; All-Asian Teams Raise the Most Funding
  • Nationally, South Asian and East/Southeast Asians are funded to a similar extent
  • 83% of Teams are all White.  All Asian teams raise more money.
  • Average founding team is age 35 to 44 years old.
  • 39% of founders were CEO/Founders before.  Sales/Marketing and Product Management/Development were common previous roles.
  • Majority of companies have two or more founders, but a third are led by one founder.


Venture Capital Human Capital Report (Part 1)

Author: | Filed under: entrepreneur, entrepreneurship, fundraising, venture capital | Tags: , | 3 Comments »

Board Management
May 22 2009

On May 20, 2009, we held a board management Lunch & Learn at the Austin Technology Incubator.   We hold these monthly or bi-monthly.  Our next one is going to be on Building A Great Corporate Culture.  It was a very productive meeting and our companies learned a lot.   I served as moderator and the people on the panel (with the exception of Janice because she got struck by swine flu sick) were:

Richard C. Benkendorf, Co-founder/Managing Principal, Technology Impact Partners (TIP)

Dick, through his role at TIP, serves on the Board of Directors or Advisory Board of both private and public firms as well as investment partnerships including Wave Max, Open Scan, Care Data Systems, Revelation, Concentric Equity Partners, AllianceTech, Adtron, State Street, Murphree Ventures, Facilities Technology Group and CMIT Solutions as well as not for profit entities such hospital charitable or civic organizations.  Other current or very recent investees of TIP include @security, Globalscape (now public), Voxpath Networks, Pointserve, Tobin, Dwight’s Energy Data, Advent Networks, Liberty Fitness, Facilities Technology Group, American Telesource (now public), Reunion Ventures, and Affinegy.

Previously, Dick was a Senior VP of Ameritech and prior to that spent 16 years at IBM.  He founded The American Software Company (TASC) and was President of Telemed and Chairman of Execucom.  He founded T/D Technology, a private equity firm that acquired and operated software and information technology firms.  He also founded ISSS Ventures, a $155M venture capital fund.

Bob Bridge, Entrepreneur In Residence, Office of Technology Commercialization

Bob has been in management, marketing, and engineering roles at semiconductor and system companies for 33 years, including serving as founding CEO at three technology companies. One of those companies, Zilker Labs was sold to Intersil in December 2008. Bob has also served as an entrepreneur-in-residence at Austin Ventures, vice president of marketing at Agere (a network processor IC startup), and vice president and general manager for communications ICs at Crystal Semiconductor/Cirrus Logic. Additionally, Bob has held engineering and management positions at Motorola, AT&T corporate headquarters and AT&T Bell Labs. Bob holds a Ph.D. in Electrical Engineering from The University of Texas at Austin and a bachelor’s degree in Mathematical Sciences from Rice University.

Janice Ryan, CEO and Chairman of Social Dynamix

Janice Ryan has a 27 year track record of growing profitable sales organizations and venture-backed startups.  She is currently CEO and Chairman of Social Dynamix, an early stage venture focused on tools for social media performance measurement.  Prior to this, she was CEO of Sigma Dynamics, a predictive analytics software company in San Mateo, which under her leadership was sold to Oracle (ORCL) in August of ’06.  Prior to Sigma Dynamics, Ryan was the founding President/COO, of ROME Corporation, headquartered in Austin, Texas.  She was also a member of the founding executive team that launched Vignette Corporation (VIGN), an early internet enterprise software company which experienced one of the most successful IPOs of 1999.  As Vice President of Sales at Vignette, Ryan established the company’s sales infrastructure and management team, and was responsible for driving Vignette’s revenue through all channels worldwide, including direct sales, telesales and a network of systems integrators and resellers.

Ryan has served on several high tech Boards and Advisory Boards, and as an Interim Executive for multiple venture-backed companies in Texas and California.  Early in her career she held a variety of senior sales and leadership positions at IBM, Lotus Development, Filenet Corporation and ViewStar.  Active in philanthropic causes, Ryan has also served on various non-profit Boards, currently serving with the Center for Child Protection.  She earned her BBA degree from Baylor University with distinction in the fall of 1977.

Brian P. Wong, Director, Intersil Corp.

Brian was the President and CEO of D2Audio Corporation, a leading audio semiconductor and software company, which he recently sold to Intersil, a public company in August 2008.  He is currently running the D2Audio-Intersil business as part of Intersil Corp. Mr. Wong has more than 26 years experience as an executive and general manager in the sales, marketing and the development of semiconductors, firmware and software.  Market sector experience includes digital media, consumer, IT and computing, telecom, and storage.  His technology experience includes power management; digital audio, optical and wired datacom; data converters; semiconductors; optical, firmware/software.

Brian has closed over $130M from Venture Capital funds and corporate strategic partners.  He has formed Strategic Partnerships involving investment and/or licensing with AMD, Intel, Intersil, Delta Electronics, MediaTek, and Form Factor. Previously, Mr. Wong was CEO at Primarion Inc, a company focused on I/O and Power Management ICs, which was acquired by Infineon.  Prior to that, he was a senior manager at TRW and ran the Mixed Signal IC business, which included data converter, Clock/Data Recovery, PLL, and high speed digital ICs. Mr. Wong holds a BSEE from University of California, Los Angeles, a MSEE from University of Southern California, has taken graduate management classes at UCLA Anderson School of Management. He is the Chairman of The Austin Technology Council, sits on the Advisory Board for the UC Davis ECE Department, and served on the board of Integral Wave Technologies, a power management company.

The key takeaways were:

  • Pick and interview your board members carefully.  Pick people with skills that complement yours.
  • Make sure there are no surprises on the day of the board meeting, unless of course they are good surprises!
  • Equity compensation for board members ranges from .25% to 1.00% and is granted up front or vests over time depending on the board and the company
  • Sizes of the board ranges from 3 to 5 people at the very early stage.  Any more it becomes unweildy and unproductive.
  • Boards in small, start-up companies usually meet at least once per month.
  • After a successful board meeting, everyone should know the financial state of the company, people/equity grants, milestones achieved, and milestones to be achieved.

It was great to hear the war stories and I contributed some of my own.   They are truly battle scars.

Author: | Filed under: entrepreneurship, venture capital | Tags: , | Comments Off

Clean Energy Venture Summit 2008
Nov 24 2008

In my day job running Operations for the Austin Technology Incubator, I work with great people.  They were factored into my decision not to jump off The Entrepreneurial Ledge

One of those amazing people is Melissa Rabeaux.  She is coordinating the 2nd Annual Clean Energy Venture Summit happening Dec 2 – 4, 2008 here in Austin, Texas.  It’s going to be a fabulous event with several top name individuals in the clean energy space speaking and attending.  Texas is poised to be the hub of clean energy innovation and the conference theme is How Can Texas Win in the New Energy Economy.

There will be panels with topics ranging from venture capital, utility, agriculture, power, and state policy.  The big keynote speaker is Fred Krupp, President of the Environmental Defense Fund.  Check out the Conference Agenda for names of people who will be flying in from all over the country to speak.

If you are interested in clean energy (i.e., looking for a new career), this conference is the place to be!

There may even be some special passes for big time bloggers who want to cover the event. :-)

Check out the sponsors below:

 

 

 

 

 

 

 

 

 

 

 

 

Have a great Thanksgiving everyone! I’ll be taking a much needed holiday break…but I’m sure I won’t be able to keep myself from tweeting so if you are really that interested in seeing what I’m up to, I’ll be sending out a few tweets… @aruni.

Author: | Filed under: conferences, venture capital | Tags: , , | 1 Comment »

Adventures in Blogging
Sep 9 2008

I’m sure many of you have noticed that I haven’t been blogging as much recently.  It’s not due to lack of desire, but due to lack of time and mental energy.  I have a full list of topic ideas I want to blog about, but by the end of the day after interesting and bureaucratically taxing events, kids, dinner, husband, baths, teeth brushing, catching up on Babble Soft stuff and personal emails, I feel pretty dazed. 

I have blog posts floating around in my head with rarely enough thoughtful time to get them down in a post.  Fortunately, I have had some timely guest posters who have filled in some of the gaps. 

I can’t say I’ll be able to get to a blogging pace (in the near future) that can keep up with my blogging ideas given my current schedule and life situation, but so far I’ve done a better job at posting than Marc Andreessen, founder of Ning and formerly Netscape, who hasn’t consistently blogged since May 2008!  But he’s running a heavily venture backed company so I’m guessing he has just a few more people breathing down his neck than I do.  

I’m glad I’m not in his shoes right now in this economy, with the news constantly talking about the questionable results of social networks from a business model perspective, and with some of the widget partner issues his company is facing.  But Marc’s a tried and true entrepreneur so I’m sure he and his team will figure something out.  If not, he is a millionaire and married to a millionaire so chances are they won’t be out on the streets any time soon. 

Yep, it’s all relative and I’m thankful for the opportunities I’ve been given and the opportunities yet to come.  Thank you to all of you loyal readers for sticking around!

UPDATE: On an interesting note, Seth Godin, the famous author and blogger on marketing tips & ideas, did a post on September 10 called How often should you publish? and in it he says: “Key assertion: you don’t publish it unless it’s good. You don’t write more blog posts than you can support, don’t ship more variations of that software than your engineers can make marvelous.”  So I guess my haphazard blogging is OK because it fits what I can support!

Author: | Filed under: blogging, entrepreneur, entrepreneurship, social networks, venture capital | Tags: , , , , | 4 Comments »

Women 2.0 Conference – The Rest Of The Story
May 16 2008

So here’s the rest of my Women 2.0 Conference story.  If you want to see tons of pictures (which sadly I and my deep pink Banana Republic shirt don’t appear) please check out the official Women 2.0 Conference Wrap Up post.  You can also see Sophia Perl’s (another semi-finalist) post on it here.

Friday – May 9, 2008
I took my rented yellow car and drove around the Palo Alto/Menlo Park area to meet some people.  I met Jeff Nolan, who was one of the venture investors in my first company, for lunch at a place called Buck’s.  We only just got to know each other while at my last company before I left, but he seemed to be one of the good guys.  I mentioned him in a post I did about angels and venture capitalists a while back.  We might get to work together again and this time in hopefully a more creative and collaborative way.

I tried to meet up with Guy Kawasaki later that afternoon but he had something mildly important to do like make some sort of silly book submission deadline, so we traded tweets and emails instead.  Then I went to the Stanford mall.  I’m not a big shopper, but since I had a few hours to kill, and my husband wanted me to get him a Stanford t-shirt (It’s one of his alma-maters) I wandered around a bit and read The Power of Now by Eckhart Tolle, but was not feeling in the “now” at the time so didn’t make much progress.  So I got some hot chocolate, my rings cleaned, and happened to find a couple of light-weight jackets at really good sale prices to protect me from the Bay Area cool evenings!

Later I had the pleasure of meeting up with Maryam Scoble for wine and fabulous brie with a flakey crust. Yum! Maryam and I met through our blogs.  I initially heard about her and her husband Robert Scoble from our very own Austin based Connie Reece.  Robert even did a Qik video of me at SXSW but I don’t think that many pregnant moms or parents with newborn babies, preemies or twins are watching those videos.  Go figure!

Saturday – May 10, 2008 (conference day)

You can see the agenda for the conference here.  It was an interesting day in a tent near the Stanford golf course.  Walking in grass was a challenge for many of us who were wearing heels.  Those wearing pointed heels especially suffered by sinking into the grass/dirt, but since I would trip and fall on my face in pointed heels, I wear more flat ones.

The most interesting sound bites, in my opinion, came from the Power Panel: “Igniting the spark through strategies taught and lessons learned”

Terri Ghio, Unique Solutions and TBS Connect said: Make sure you have an audience, a secret sauce, strategic alliances, and ability to build the blocks and barriers for success.

Amy Love, Protégé Performance Group said: Build an inner circle, share your dream, think big, and have the confidence & energy to move forward.

Dr. Jwala Karnik, JwalaCo said: Be open to inspiration, tell people what you want to do, and just take the first step!

Dr. Maggie Haertsch, VOICEMAP said: Have passion and be totally committed, focused, and fearless!

Pat McEntee, AuxoGlobal said: Women entrepreneurs are different and that’s OK.  Women look at things they want to spend their time on differently.  Women build different companies. The fact that many retail companies are currently dominated by men is not going to last long, but women should build companies that men feel comfortable in.  By the way, Pat is a guy!

I mentioned the winners of the napkin business plan challenge in my yellow car post, so I won’t mention it here again, but I did want to mention one company and founder who was on one of the panels: Erica Estrada of d.light design.  She is impressive and her company is very cool!  They make affordable, small, solar power lighting units for people in third world countries who have no access to electricity.  So the kids in who live in shacks can study/read after dark and parents can cook or work after dark without having to use a kerosene lamp that not only stinks and has to be bad for your lungs, but also doesn’t last very long.  I really do wish her and her company great luck, good partners, fabulous investors and perfect timing!

I ended the day by eating sushi with the friends I was staying with.  They even took a picture of me (see below) drinking this huge cup of sake! The waitress finished the bottle on me, so the sake overflowed into its holding bowl.  I was glad I wasn’t the one driving us home in my rented yellow car. :-D

Coming soon I’ll post an update on my SEO experiences, so you might want to subscribe to read more about the birth pains of a web business.  It’s not pretty.

 

Author: | Filed under: competition, conferences, diversity, entrepreneurship, silicon valley, venture capital | Tags: , , , , , , , , , , | 4 Comments »

Going to Cali for Women 2.0
May 7 2008

You might have heard, I was a semi-finalist for the Women 2.0 napkin business plan competition.  Well, they informed me on May 3, I didn’t make the finals.  Sigh.  But trying to look on the bright side, I’m actually kind of relieved because now I can focus on networking and learning instead of being stressed out about giving my pitch!  I’m starting to think I’ll have to get a job to support my entrepreneurial addiction.  Too bad I didn’t get rich off of my first entrepreneurial endeavor…

I’d like to profusely thank Sylvester Becker (a.k.a. German Cowboy) of Dana Lynn Media for helping me pull together a very cool 2 minute pitch video which I can’t share with the world yet, but maybe soon.  Sylvester was awesome to work with and so creative!  We used crayons.  We used Little People to illustrate our future customers as well as small figures of Dora the Explorer and her friends Boots and Benny.  Although I think Boots got cut out in editing.  My daughter loves Dora and in fact some people say she looks like her especially now with her new haircut.

I had already decided that even if I didn’t make the finals, I was going to the Women 2.0 conference (check out the site for the fabulous list of panel speakers – entrepreneurs and venture capitalists) this weekend in the Bay Area where the skies are blue, the weather is usually predictable, the money made in tech is gigantic, and everything is way too expensive.  Except for, oddly, the reasonably priced rental car I got from Hertz.  Thankfully, some friends are letting me crash at their place so I can save money by not getting a hotel.

Anyway, in case you are interested in the names of the finalists, here you go:

 Women 2.0 Napkin 2008 Pitch Finalists

I’ll do a post about it after I get back, so Subscribe Now so you don’t miss a thing about my sure-to-be idyllic, fantastic, jaw dropping trip to Cali!  I wonder if I can find a way to eat some sushi while I’m there…

Author: | Filed under: competition, conferences, diversity, entrepreneur, entrepreneurship, venture capital | Tags: , , , , , , , , , , | 4 Comments »

The Economy and Entrepreneurs – Hold On!
Mar 17 2008

oryx-antelope.jpgUnless you live under a rock or don’t drive a car, you have no doubt heard about or felt the state of the US economy.  It’s in a state of well let’s say ‘confusion’ with indications it’s moving in the wrong direction.  Gas prices are at record highs, people are filing for bankruptcy, they are losing their homes, the government has a record amount of debt, the stock market is going down, etc. etc.

So where does this leave us entrepreneurs who want to raise funds to take their businesses to the next level?  Well, that’s a good question and a challenging one to answer.

I’ve had a handful of meetings with potential investors and a couple of them have expressed interest in participating, but they might change their minds given what’s going on in the economy.  As the saying goes “It’s not in the bank, until it’s in the bank!”  Fred Wilson, a venture capitalist in NYC, linked in his Read the Blogs post to a post on the Bear Stearns bailout by JP Morgan, which illustrates why even if you think it’s in the bank, it might not actually really be in the bank!  Our personal savings accounts are also going down with the market.

I had several conversations with entrepreneurs coming from different parts of the country at SXSW Interactive who have been struggling for a while to raise funds for businesses that are up and running with strong visitor and user traction.

So despite only being less than two months into the process, all of this has forced me to revaluate my fundraising plans for Babble Soft.  Entrepreneurship is not for the faint of heart as there are many ups, downs, and false starts.  The economy changes however have a huge impact on the success or failure of a startup.  If the economy is doing great you get all sorts of crazy new ideas/businesses popping up with chances to live and prove themselves.  If it’s bad, even the companies with wonderful ideas can suffer, die out, or never even get a chance to shine.

The good news is that of all the industries out there (except for maybe the alcohol industry), the baby market is fairly recession proof.   People don’t stop having babies nor do they stop buying things for their babies or things to help them take care of their babies.  The bad news is that what we are trying to do at Babble Soft does not yet have a predefined “mental need or want” (because it’s so new) like say bouncy chairs, bright/shiny toys, Baby Einstein videos, or diapers.

On the plus side, we have not taken any outside money to date so we don’t have to worry about how and when we pay investors back like some other start-up companies.  The downside is that if we don’t raise money right now, it will take longer to bring the exciting, potentially life changing vision I have to the world or worse we might miss the market opportunity.

I’m still trying to figure out the best plan of action.  I wish we had more money to create a new user experience, enhance our current applications, and create new applications ourselves.  I’m evaluating trying to raise a smaller amount of money and growing slower.  Now’s the time when the creative juices start flowing!

If you know an entrepreneur, give them a hug (if you can’t give ‘em money) because it’s going to be a tough roller coaster ride for the next probably year or so.  Some will be able to hang on and emerge stronger and better, some will get off gracefully, others might fall off unexpectedly, and yet others will wish they had fallen off before they lost their money and lost some of their sanity. :-)

If any of you have any thoughts, advice, virtual hugs, or even questions please share below…

Author: | Filed under: babble soft, entrepreneur, entrepreneurship, fundraising, venture capital | Tags: , , , , , , , , , , | 6 Comments »

SXSW Interactive – Tuesday, March 11, 2008
Mar 12 2008

Yesterday was the last day of SXSW Interactive and I have practically a desk full of business cards.  Our son came yesterday (yes, it’s Spring Break here) for part of it as well but went with husband this time to a panel he attended.  I was only able to make one panel yesterday and spent the rest of the time networking.  Check out my posts on events I attended on Sunday (including my take on the Zuckerberg/facebook interview) and Monday.

Robert Scoble even did an interview of me that was posted to Qik but for some strange reason (due to the 3G connection) it got broken down to 16 different few second clips.  Here’s the first one, here’s a middle one, and here’s the last clip.  They are going to try to see if they can string it together, but it’s looking doubtful.  Guess that means we’ll have to do a more official one next time!

UPDATE: Qik was able to string pieces of the video together and you can see it HERE.  Once they get Robert’s phone, they will see if they can fill in some of the missing gaps using the files on his phone.  Once they do that, I’ll embed the video in a future blog post.

The Insiders Guide to Angel Investing
angel_button_frame.jpgThis panel was not really a panel because the only speaker was David Rose.  David is the founder of New York Angels and Angelsoft, a software application that helps angel investing groups manage plans received by entrepreneurs.  He had some great info on angels and angel investing.  He mentioned that he would make his slide-show presentation available and I will update this post if and when he sends the link, but here are some highlights:

  • There are 600K new companies started each year.  Of those 350K are self-funded, 200K are funded by friends and family, 50K by Angel investors, and a mere 1200 by venture capitalists.
  • Angels are generally about 57 years old, they have a master’s degree, 15 years of entrepreneurial experience, have been involved with and/or started on average 2.7 ventures.
  • To be an accredited investor you must have $1 million in assets and have to have made $200K of annual revenue for the past 2 years.
  • The average angel investor has spent 9 years investing, had done 10 investments, had 2 exits (profitable or lost their money), and 10% of their wealth is tied up in angel investments.
  • Angels look for companies with Scalable Business Models, an “Unfair Advantage,” a Great Entrepreneur, External Validation, Low Investment Requirement, Reasonable Valuation ($1 to $3 million pre-money range),  and a 20 to 30 times return on their investment within 5 to 7 years.
  • The single most important characteristic an Angel investor looks for in an entrepreneur is Integrity.  Then they look for Passion, Experience, Knowledge, Skill, Leadership, Commitment, Vision, Realism, and Coachability.

David said most angel investors don’t end up making a ton of money from angel investing.  In fact most lose money.  Many invest because they want to give back and help other entrepreneurs.  He even offered us a joke that goes like this:  How do you make a small fortune angel investing? You have to make a large fortune first! :-)

He then went on to talk about the process of applying to an Angel network and described what the entrepreneur as well as the Angel investor sees if they are using the Angelsoft software application tool.  If you are an entrepreneur, he suggested you submit your plan at www.angelsoft.net/entrepreneurs.   They will soon be launching a site called Open Deals where entrepreneurs who don’t have access to a local angel group can submit their plan.  For a full list of angel groups, check out the Angel Capital Association site and their directory of angel groups.

All in all, I had a great time at SXSWi.  I look forward to attending next year and maybe even being a panelist!

Author: | Filed under: angels, conferences, entrepreneur, entrepreneurship, fundraising, new york city, venture capital | Tags: , , , , , , , , , , , , | 7 Comments »

Venture Capital Investment Competition at USC in Los Angeles
Mar 8 2008

For the past few years I have served as an Advisor to The University of Texas at Austin MBA team that competes in the Venture Capital Investment Competition (VCIC).  

It all started when I was an adjunct lecturer of entrepreneurship at UT Austin and since then I’ve continued to advise as they need me and my schedule permits.  This competition did not exist when I got my MBA, and even if I had the opportunity to participate I was too busy trying to start my first venture.  What a plus it would have been for any entrepreneur to have seen a term sheet presented by experienced investors in an academic environment rather than in real life when you feel like you have to learn another language just to understand parts of the investment terms!

This year the regional competition was held at USC in LA on March 7, 2008.  The UT team this year was comprised of:

Ben Jones – MBA 2008
Kyle Reese – MBA 2008
Rajiv Bala – MBA 2009
Ryan Sanders – MBA 2009
Scott Chiou – MBA 2009

I connect them with local venture capitalists and entrepreneurs to help them prepare but we had a late start with only about 5 weeks to get ready and midterms in between this year.  Other teams have semester long classes to prepare for this competition!

At the competition, 6 teams were given business plans for 3 real companies including NiLA, makers of environmentally friendly lighting, on Wednesday, March 5 at 5:00 pm.  They use the Internet and other relevant sources to research the companies and come up with questions for the entrepreneurs.  On Friday, they heard the entrepreneurs pitch their business concepts in front of 11 real live venture capitalists, including Aditya Mathur of Revolution Ventures, Nathan Joyner of Pacific Ridge Capital, Neal Hansch of Rustic Canyon Ventures, representatives from Tech Coast Angel Group and many more. 

They then go into little rooms and subject the entrepreneurs to answering several of the same questions over and over again from the 6 different teams.  Why would any entrepreneur do this you might wonder? Because the VCs are in the room while they are being asked the questions so they are getting exposure that they might not have had otherwise to them.

After the questioning sessions are over, the teams again regroup and come up with a PowerPoint presentation which outlines which company they would chose to invest in and why.   For the company they choose to invest in, they create a term sheet.  They present their choice in 3 minutes in front of the VCs.  The VCs then grill them for about 15 minutes on their company choice and investment terms.

At the end of the day, the judges decide who wins and who takes 2nd place.  The 1st and 2nd place winners get money and the opportunity to compete in the national competition at University of North Carolina Kenan-Flagler Business School in April.  I have personally seen one student get a job on a team I advised in venture capital because of participating in this competition.

As an advisor I get to be a fly on the wall and watch the VCs deliberate and observe the decision making process.  Plus I build my network in areas outside of Austin.  Personally, I believe this experience has helped me gain better perspective on what venture capitalists are looking for which is why I’m currently seeking money from angel investors or smaller boutique/seed stage venture firms. 

So I’m sure the suspense is killing you as to whether or not our team placed and unfortunately they did not. They picked the company with the biggest market potential but with the highest risk and the VC judges picked NiLa, which has a great opportunity but less risk and less upside.  Goes to show you that most VCs are not early stage investors!

There are so many variables that go into winning from judges backgrounds, to student’s experience, to understanding of the market of the presenting companies, etc. that you can’t always prepare for everything.  But what an experience! 

Flying back to Austin today for SXSW Interactive and will post about my experience as a newbie SXSW attendee.  I’m looking forward to meeting many of the people I’ve met through blogging and twitter!

Author: | Filed under: competition, entrepreneurship, fundraising, venture capital | Tags: , , , , , , , , , , , , , , , | 2 Comments »

My Fundraising Toolkit
Jan 10 2008

sears-toolkit.jpgFollowing on my Other People’s Money – The Hunt Begins post, I thought it might be interesting to share what I will be putting in my Fundraising Toolkit.  Check out The Entrepreneurial 7 Year Itch to get some additional background.

I plan to raise seed financing from angel investors for Babble Soft, and here’s what I will have in my toolkit.

An Executive Summary.  Thankfully people have moved away from the 35 to 40 page business plans that used to be required when I raised money for my first company.  Now it’s easier to get your foot in the door with a 5 to 7 page summary.   If they are interested, they will ask for additional information.  In a typical Executive Summary you will see sections on: 

  • The Company
  • The Problem
  • The Solution (i.e., Your Products)
  • The Market (including Competitors)
  • The People
  • The Numbers (i.e., the Financial Projections).

Financial Projections.  In my opinion, creating Financial Projections for an Internet startup is often an exercise in futility that shows you have an idea of how you will make money.  Most experienced technology investors know that predicting the future is a crazy process at best especially when you are starting from ground zero and success primarily depends on many viral factors.  Financial projections for IBM are much different than financial projections for an Internet start-up.  The assumptions you make are the most important part of the model as they give the investor an idea of the homework you have done on the market. 

Some venture capitalists like high profile Fred Wilson (a.k.a. A VC in NYC) of Union Square Ventures go as far to say that sometimes you can wait to scale before figuring out and executing your business model when describing his stance on Twitter’s lack of a current business model

Since Babble Soft is not Twitter, I’m not already a gazillionaire, and I have a million things to do, I have a sharp MBA student, Anand Balasubramanian, helping me create an Advertising and Subscription based model.  I love energetic, rock star, cheap, student help!  He has done a great job so far building a simple, easy to understand financial model for me.

Visuals.  Since I’ll be raising funds for products that do not exist yet, I have engaged a great local design, user experience, and information architecture firm, Projekt202, to create a few mock-up pages illustrating both the web and mobile components of our new applications.  They seem as excited about the vision as I am and are taking on some of the financial risk with me.  It makes me so happy when I find people who get what I’m trying to do!  I’ll also have a demo account of Baby Insights and Baby Say Cheese ready to log in to demonstrate our existing applications.

An Investor Leads List.  However you choose to keep track of your calls, meetings, and referrals it’s important to do so.  I have met entrepreneurs who want to raise funds who aren’t organized about the process and end up looking a bit flighty.   Unfortunately the investors are allowed to be flighty but they usually don’t tolerate too much flightiness in entrepreneurs.  Remember:  “She who has the gold makes the rules.”  After a while it’s easy to forget what you promised to get to whom and who referred you to whom.  It’s important to remember at what stage of the investing dance you are in with each potential investor.  On this spreadsheet I plan to keep track of:

  • Name
  • Contact Information
  • Professional Background
  • Who Referred Them to Me
  • Investment History
  • Typical Investment Size
  • What Items They Need From Me, and
  • Personal Assessment on the likelihood they will invest. 

Passion Tempered With Wits.  I think that often the big thing that can swing an investor, especially an angel investor who has been in your shoes before when building his/her company is your passion.   Why are you doing this when there are much easier ways to make a buck?  What will keep you going?  What excites you about the business?  I am passionate about helping new parents and caregivers connect and find answers.  I am passionate about building a business.   I am passionate about finding great people to work with.   If that passion is tempered with some logical thinking, that’s a big huge ‘ole plus!  All of us entrepreneurs are a bit crazy at times so I just hope I don’t lose my wits in the middle of an investor pitch!

Since I am still working on everything above except for my passion which has recently been reignited, I’ve got a lot to do before the meetings I already have set up with potential investors in the next couple of months.  If you have suggestions on other things I should have in my fundraising toolkit, let me know by leaving a comment below.  It’s been a while since I have raised money and I’m always open to learning new things.

Join me for the journey.  Subscribe to the blog and hold on to your stomachs, it’s bound to be a scary roller coaster ride at times!

UPDATE Jan 12, 2007:  Found|Read republished this very post  on their blog and called it My Funding Toolkit.  Check out that post for some great comments!  They have many more readers than my blog currently does so I’m delighted that they chose to share it with their readers!

Author: | Filed under: angels, babble soft, entrepreneurship, fundraising, technology, venture capital | Tags: , , , , , , , , , , , , | 4 Comments »

Speaking of Venture Capital…
Nov 13 2007

First off, if you haven’t heard Al Gore is now a partner at Silicon Valley venture firm, Kleiner, Perkins.  Kleiner is the most prestigious venture firm in Silicon Valley.  He joined to help guide their investments in companies that are combating global warming.  I have to really hand it to Al Gore for totally reinventing himself from VP of the United States to candidate for President of the US to champion for the planet!  His parents must be mighty proud!

After writing my post on Fred Wilson on Venture Capital Fund Performance, I have happened upon a few more interesting posts on the subject of fundraising.

Wendy Piersall made me aware of 7 Things No One Tells You About Raising Venture Capital Financing by Ben Yoskovitz.

From Ben’s blog I found 7 Steps to Land and Leverage an Angel Investor by Carleen Hawn.

Here’s a chart listing their lucky number 7 items:

7 Things No One Tells You About Raising Venture Capital Financing 7 Steps to Land and Leverage an Angel Investor
Signing a term sheet is only step one. Step 1: Identify yourself.
It might not be worth negotiating the finer points of the deal at the term sheet stage. Step 2: Identify the right angel
Due diligence is an “interesting” process. Step 3: Your company’s fundamentals.
The paperwork is extremely detailed and extensive. Step 4: Valuation.
Most of the deal focuses on negative details. Step 5: Structuring the deal.
You pay all the legal bills. Step 6: Negotiation. (Psst!: You don’t need to do it!)
Don’t just focus on how much you’re raising and what chunk of the company you’re giving up. Step 7. Leveraging the relationship.

Ben and Carleen make great points and from my experience back in the late 90′s I agree with all of them.  I’d like to add, ‘trust your gut!’  Your gut feelings are based on years of experience that you may not be able to articulate quickly in words but you know…you know you do.

Author: | Filed under: angels, entrepreneur, entrepreneurship, fundraising, silicon valley, venture capital | Tags: , , , , , | Comments Off