Very Interesting And Provocative Blog Posts
May 10 2012

I wish I had more time to come up with compelling, informative posts, but one must prioritize.  So instead, I’m fortunate enough to happen upon some interesting ones

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Eleven Compelling Startup Pitch Archetypes (with examples from YC companies).  A really easy to read summary of the types of pitches based on the type of company.  A must read for all entrepreneurs trying to fundraise.

Same Sex Marriage on AVC by Fred Wilson on President Obama’s support of same sex marriages.

Unforgiven: Inside America’s Student Loan Bubble about the student loan crisis.

Love And 6 Other Things Your Subconscious Mind ControlsAs a result, scientists are becoming increasingly convinced that how we experience the world – our perception, behavior, memory, and social judgment – is largely driven by the mind’s subliminal processes and not by the conscious ones, as we have long believed.”

Author: | Filed under: entrepreneur, fundraising, marriage | Tags: , , , , , , | Comments Off

TheFunded Now Has A Founder’s Institute
May 5 2009

I just heard about this and it sounds pretty interesting.  You don’t have to relocate to take advantage of this program.

***

TheFunded Founder Institute is a new founder-centric incubator that trains new and seasoned entrepreneurs the best practices for building next generation companies. The unique 4-month program offers remote participation, the industry’s most founder-friendly terms, focused mentorship and training from renowned CEOs, resources from leading service partners, fundraising opportunities at fair market value, and shared equity upside among all participants in the companies formed. Passionate Founders can apply today at www.FounderInstitute.com – registration for the Summer 2009 Semester ends on May 10th, 2009.

Why was the Founder Institute Created?

The National Venture Capital Association recently reported that VC fundraising dropped nearly 40% in Q1 of 2009. In these dire economic times, only the highest quality, most disciplined new businesses will proliferate – and The Founder Institute was created from the ground up to create such businesses. Our focus on quality is evident in our process;

-        Institute Founders receive guidance from renowned, experienced start-up CEO Mentors.

-        The Institute’s unique equity-sharing model aligns incentives and ensures maximum effort from all parties involved. When one of the Institute’s companies does well, all of the participating companies benefit – and when the Institute’s Mentors help the participating companies, they share in the upside as well.

-        The Institute focuses Founders on non-abstract, critical company-building assignments that build successful businesses in a weekly, step-by-step fashion.

-         The Institute helps Founders secure investment at market rates and under the best possible terms – instead of forcing a valuation or equity purchase at a premature stage.

-        The Institute does not require Founders to relocate or live on reduced incomes.

-        The Institute sets up regular meetings with investors and the public throughout the company-building process to increase quality and focus.

-         Institute Partners provide discounted or free services, so Founders can focus more time and resources on building the business.

Great Founders are often overlooked by the current entrepreneurial ecosystem, and innovative startups have a dramatic positive effect on the global economy. TheFunded Founder Institute aims to help the global economy by helping smart people start new, high-quality businesses.

For more information, visit www.FounderInstitute.com, or contact jonathan@thefunded.com.

Author: | Filed under: entrepreneurship, fundraising | Tags: , | 2 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 »

It’s Leap Day! It’s Leap Day!
Feb 29 2008

Given that I’ve been busy fundraising (i.e., pulling my hair out!) and haven’t had much time to come up with any interesting new blog posts, I thought I’d do a post on Leap Day.  February 29 only comes around every 4 years so here’s an off the cuff poem about Leap Day to brighten your day, make you smile, or at least make you scrunch your forehead…

Leap Day, Leap Day where did you come from?
Leap Day, Leap Day where is your home?
You arrive every 4 years and soon you are gone.
You remind some of us of lizards or frogs
And others of leaping antelopes, hogs or dogs
But some of us wonder why the heck don’t we have the day off!
                                 Aruni Gunasegaram, February 29, 2008 11:45 a.m. CST

Happy Leap Day everyone!  May the extra day bring you one special day closer to achieving your 2008 goals. :-)

Author: | Filed under: Just For Fun, random stuff | Tags: , , , , , , , , | Comments Off

Cost of Customer Acquisition – What Is It?
Feb 18 2008

dock.jpgOne of the interesting things about fundraising is the different perspectives you get from potential investors.  If they spend enough time to really understand what you are trying to do, they offer great feedback, suggestions, and advice.  They also sometimes ask a tough question or two.

I officially started the fundraising process a couple of weeks ago and have had a couple of meetings and a few more set up in the coming weeks.  Since many of these angel investors are really busy, getting on their calendar can take weeks!

One question I was asked had to do with the cost of customer acquisition.  It’s so hard to tell what that might be given the uncertainty and newness of many business concepts out there (including mine) today.  I searched and searched and oddly only found very dated ancient info (i.e., 1999 – 2001) figures for sites like Amazon.com.   At a high-level, the cost of customer acquisition is how much it costs to get a customer/visitor to your site.  My guess is for sites with successful viral uptake like facebook the cost is in the cents (i.e. [total marketing and some R&D costs]/number of unique visitors).  On the other hand I’ve heard that customer acquisition costs for companies like Vonage are in the hundreds of dollars.  Anyone who has seen their mailers and expensive TV commercials can see why that number is so high.  Last I heard I think it takes them at least 2 years to break-even on each customer they get.

I even had the MBA student who helped me create the financial model search his resources and no such luck.  I would be happy to get information on even what the amount that a magazine like O Magazine or Pregnancy Magazine spends getting one customer to sign up.  You’d think that as much has been written about facebook, that their cost per visitor would be somewhere on the Internet, but for some strange reason that information is not readily available.  Go figure!

In my quest, I happened upon the following links that might be useful for any other entrepreneurs looking for the same information. 

Calculating Customer Acquisition Costs  (an online calculator)

Customer Retention and Acquisition (definition and 1999 info on Amazon.com)

On Measuring The Cost of Customer Acquisition (a 1999 Entrepreneur.com article)

There may not be a satisfactory answer (or more likely I don’t have access to the money or resources to help me find it) but at least being aware that there could be an answer is probably not a bad thing.  I ended up backing into some numbers using the information in our financial model which to me, the ever optimistic entrepreneur, seemed reasonable enough. :-)

UPDATE: This post was re-published on Found|Read here. Check it out to see additional comments by their readers.

Author: | Filed under: angels, entrepreneurship, fundraising | Tags: , , , , , , , , , , | 2 Comments »

A Story About Angels And Venture Capitalists
Feb 5 2008

angel_button_frame.jpgSeveral readers who saw my Fundraising Toolkit post have asked me about my experience raising funds from angels and VCs for my first entrepreneurial endeavor.  We raised about $15 million of which $3.5 million was from angels or what I would call boutique VC firms (i.e. a group of angels under one investment roof).   Keep in mind that was all before the bubble burst back in 2001.  Here are some of my observations based on my experience and from stories I’ve heard from other entrepreneurs.


Angels

They tend to invest their own money and reputation in earlier stage companies that can benefit not only from dollars but also their advice and contacts.

The really good ones (yes, there are fallen bad ones) have built their own businesses from the ground up.  They have a great appreciation of what it takes to build a business and are creative with solutions to the inevitable unexpected issues that arise.

They tend to get their ‘hands dirty.’  Our lead angel investor for my first company was Marc Seriff, founding CTO of America Online.  You may recall that in 1999/2000 talent was scarce and the Internet bubble was close to its biggest.  Marc actually manned a career fair booth that we had at The University of Texas at Austin.  He also participated in the interview process of finding great developers!  Needless to say we found some good people.  Since Marc was our lead for our first round, he even assured our vendors that he would make sure (i.e. personally guarantee) they got paid if for some reason we couldn’t close the round! 

They tend to bring their friends along for the ride.  Marc and another of our angel investors, Jack Baum, brought in their friends and contacts making the fundraising process a little bit easier.  Jack also introduced us to the owners of our very first big paying customer who ended up doing a nationwide rollout with us.  I remember framing the check! He and his partner Steve Winter brought in two of our three venture investors.  The two good ones!  Steve even served as our interim-CEO between the time we parted ways with the first CEO we hired to replace me until we found the next one.

They don’t necessarily have to invest money to be an angel.  Richard Benkendorf was one of our advisors who introduced us to our first key customer in the Coca-Cola bottling system that helped us achieve our first $1 million in revenue!  We framed that check too!

When the dollars needed get big for future financing rounds, angel investors usually voluntarily step back or can’t provide the needed growth capital.

Some of them may not have sat on a Board or been involved in building their own businesses making some board meetings interesting to say the least.  In other words, an angel who made his/her money from their own business versus someone who came in later at Google, Microsoft, or Dell have different perspectives and experiences.

Venture Capitalists

They tend to invest in later stage companies with some revenue, product completed, and market traction.  They seem to like to come in after an initial angel round of investment (if the deal structure is not too messed up).

The really good ones (yes there are bad VCs – in case you haven’t heard) have had repeated success with other portfolio companies, have built their own businesses, and come with a big rolodex of contacts and partners to help you cross some of the early hurdles.  One of our venture investors, SAP Ventures, led by Jeff Nolan who blogs at Venture Chronicles (the only former investor I found who blogs publicly) introduced us to departments within SAP who were targeting the same customers that we were.  He also gave me a copy of The Monk and The Riddle by Randy Komisar (see below for book link) that was a great read at a time when I think he sensed I was no longer enjoying the journey.

They tend to be more bankers/financiers than operating (i.e., built their own business) people.  They tend to look at a business with a black/white eye on numbers and how fast they can get their money plus a nice return on their money out.

The good ones will often bring along investment partners in what is called a syndicate.  A few VC firms who have worked together before will join forces to fund a deal which makes life easier for the founders because they can go back to building the business versus fundraising sooner.

They seem to use and apply a formula that they have achieved financial success with before which often means replacing the founding CEO or other key founders with people they have worked with many times before.  If more often than not something has worked for them with a portfolio company in the past, they’ll apply the same logic to future deals companies.

They are investing other people’s money (i.e. their limited partner’s money – insurance companies, wealthy individuals, other corporations) and if they perform well those people will give them more money to invest.  In other words they are risking more than just their finances and reputations, they are risking other people’s finances and reputations as well.

Who To Choose?

Personally, I think it all comes down to the investor fit and the stage of the start-up game you are in.  It’s definitely better to have people who have built businesses on your side.  It’s also good to have people who have backed high-growth businesses if you plan to IPO or sell to an established business in the near future. 

Most technology start-ups don’t make it big.  It’s a unique combination of talent, dedication, luck, timing, and great people that make the difference between the companies who become household names and those who shut down on the wayside or find another comfortable existence.   We often forget that it is more than OK to start a good profitable business that provides value to your local community.  If you want to play with venture capitalists, then you need to aim for the ‘household name’ category like Google or Yahoo! even if chances are high you won’t make it to an IPO.

My biggest learning was how important it was to be able to communicate with your investors openly and honestly.  Trust your gut and if they respect and trust you as a person and you respect and trust them, it will be much easier to weather the inevitable storms.  It’s easy to take money for money’s sake but in the end it can end up being more costly than what it was worth.

As Ben Yoskovitz says in his Startup CEO School of Hard Knocks post, you must have fun!  When you are no longer enjoying the journey, take a break and look around to make sure you are doing what you should be doing.  Make sure you are in the right place at the right time for yourself and don’t be afraid to make changes.

Author: | Filed under: angels, entrepreneur, entrepreneurship, fundraising, marc seriff | Tags: , , , , , , , , , , , , , , , | 15 Comments »

Choosing A Corporate Attorney
Jan 20 2008

Picture by Sandy Blanchard
rocks-across-water-sblanchard.jpgChoosing a corporate attorney is an interesting endeavor.  I have avoided using attorney’s for Babble Soft in the past because a) they are very expensive, b) sometimes they make you feel like they need to review everything you do for fear of some horrible thing happening, and c) I wasn’t sure what I was going to do with my life what my strategic business plan was.   Since I have a new business strategy and have decided to raise funds, an attorney is a must have.

I’ve met with a couple and spoken to a few more.  The first I spoke to was the attorney at my first company and although I would love to work with her we both agreed that the firm she is at now is catered more for more established businesses (i.e., very, very expensive).   It is so much better to understand that up front because we have worked on many outside projects together, and I consider her a friend.

The second attorney I spoke to was referred by another entrepreneur in the area.  I liked her and her partner but a few things gave me pause.  One potential area of risk is the fact we might end up doing business with the other entrepreneur’s company which might result in a conflict of interest.  They had good rates and good experience but did not have an in-house tax attorney.  Since Babble Soft is currently an LLC and we’d like to continue as an LLC for at least our first round of financing, having someone who understands the tax implications could be important.

The third attorney I met had done some pro-bono work for me a year or so ago because I guess he knew I couldn’t afford his services at the time.  What I liked about him is that he does have a tax attorney in his firm, has represented several small companies in the technology space, one of my business Advisor’s has worked with him in the past, he was on time for our meeting, said he could help with introductions to potential investors, and he sent a brief follow-up note after our meeting expressing his interest in working with me.  However, his rate is $125/hour more than the attorneys at the second firm I spoke with!

Special thanks to @princess_belle who blogs at GloKay, @chelpixie who blogs at Chelpixie.com, and LPT who blogs at Direct2Dell who tweeted me things to think about and questions to ask the attorneys.  I plan on making a decision in the next couple of weeks so if you have attorney stories or suggestions to share with me or the blogosphere, please leave a comment.  Thank you!

Author: | Filed under: babble soft, entrepreneur, entrepreneurship, fundraising, twitter | Tags: , , , , , , | 11 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 »

Other People’s Money (OPM) – The Hunt Begins
Jan 4 2008

If you are a regular reader of my blog you have no doubt caught on to the fact that I have begun the fundraising effort for Babble Soft.  If you are new you might want to check out The Entrepreneurial 7 Year Itch to get some background.

I’m currently working on creating a business plan comprehensive executive summary (who has time to write read a 30-50 page business plan?!?), the financial assumptions and projections (with assistance from an MBA student), creating screen mock-ups of our new applications (with Projekt202, a fabulous local design company), and setting up meetings with potential angel investors.  This process is an ongoing, reiterative process that can sometimes make you want to pull your hair out.  As soon as you type the last character on your plan, it is outdated because something has changed somewhere that you may or may not know about.  Strange but true.

While doing all that, I also need to finish software testing of our new Baby Insights mobile application, learn more social media, make SEO changes, make sales, establish partnerships, and make progress toward meeting my 2008 New Year’s Goals!  Hmmm something might have to give here…

Stay tuned for more about my journey to persuade people to part with their money in exchange for hopefully a lot more money at some time in the future…

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

Is Software Hard or Soft? Please Tell Me.
Dec 21 2007

babysleep-200w-150h.gif

I’ve seen companies doing soft launches of software products which makes me wonder what a hard launch is.  So far the main difference I’ve noticed is that the official press release about the new application or new feature doesn’t go out until after the ‘hard’ launch.  My guess is that a lot of bug fixing is going on between soft and hard launch.

So, I’m happy/thrilled/ecstatic to report that we just soft launched our new sleep and immunization recording features of Baby Insights Web!  We are still working on some development issues on Baby Insights Mobile and plan to hard launch that app in January 2008.  The mobile app is not web-based (yet) so we don’t have the luxury of a soft launch.

Babble Soft is offering FREE 3 month gift subscriptions valued at $19.95 until March 15, 2007 to anyone who discovers a software bug in our NEW Baby Sleep and Immunization features of Baby Insights Web. Gifts are transferrable!  Sign up for your FREE account today. Happy hunting!

So far the soft launch has been uneventful (i.e., no major bugs), which is nice.  Thanks go out to our development team Cressanda and especially our project manager.  I recommend them highly.  The smoothness of the soft launch is also because we don’t have thousands upon thousands hundreds upon hundreds of users yet.  I’m banking on our foray into SEO to help get us there.  I mean if the “right people” (a.k.a. target market) don’t know we exist; it’s not surprising that we don’t have thousands of users yet.  Even viral marketing takes a bunch of upfront work because you have to get to the right early adopters who have major Internet influence.  I need to figure out how to do a video and get it in YouTube.

Given the fact that over 4 million babies are born in the US each year then include Australia, Canada, Europe, Japan and other Internet savvy countries, I’m anticipating that once those new parents and nannies find out about us, the floodgates will open.  Babies and floodgates…not sure if the analogy works but I think you get the point. :-)

I’ve been spending my time the last couple of days doing website updates to reflect the new features. And I’m working on pulling the pieces together of a business plan for some potential angel investor meetings that I have scheduled for early next year.  If you know an angel investor (or you happen to be one) who likes the baby/new parent/web application/social networking space, please send them my way!  The applications we have now are only the tip of the colossal iceberg.

Now for a short SEO break:

Whether you need breastfeeding support, are excitedly following your pregnancy week by week,  are experiencing baby sleep issues, or are already under way creating your baby’s first year album, Babble Soft offers unique, easy-to-use Web and Mobile software solutions that improve communication between caregivers about baby’s and mom’s schedules.

Baby Insights helps caregivers keep track of baby’s breast & bottle feeding, sleep periods, diaper changes, medicine doses, and immunization records, as well as mom’s breastfeeding, pumping and medicine intake. Having important information stored in one location makes communication between parents, their nanny, babysitters, grandparents, or doctors seamless and reliable and gives new parents insight into their baby’s patterns to help with crucial baby care decisions. Baby Say Cheese lets you create a wonderful online baby’s first year photo album with milestones and family tree that you can share with friends and family. 

If you are interested in reading about how I cope with manage software launches, fundraising, and SEO consider subscribing to this blog’s feed.  If you are an entrepreneur, it will be worth your while…even if I crash and burn….which I won’t…because I said so, that’s why.   Now go play with your Power Rangers.  Sigh.

Author: | Filed under: baby insights, baby say cheese, baby sleep, entrepreneur, entrepreneurship, fundraising, seo, sleep, software, technology | Tags: , , , , , , , , , , | 3 Comments »

The Entrepreneurial 7 Year Itch
Dec 16 2007

birds-wall-sblanchard.jpg
Picture by Sandy Blanchard

As I contemplate a plan to raise angel financing for Babble Soft in 2008, I have begun mentally preparing myself for the inevitable ups and downs of the process.  I have raised funds to the tune of $15 million as founding CEO of my first start-up, Isochron, back before the first Internet bubble burst, so I have that experience to leverage.  But that was just over 7 years ago and a lot has changed since then. 

Isochron, which we started as part of a business plan competition back in 1997, was sold in 2002 after the bubble burst.  I had already left in 2001, but Erin stayed on for two more years until 2003.  The Founders/employees were washed out (i.e., got nothing) and the Investors got only a small fraction of their invested capital back.  At that time many companies were just disappearing all together.  When it was sold, Isochron was on its 4th CEO with me being the first.   Now it’s on its 5th, is still operating and as I understand it doing reasonably well, but not the high growth trajectory we had hoped for back when we started.  Looking back, if we (and our investors) had truly understood Porter’s 5 Forces we would have approached the business differently or maybe even run the other way because with a customer like Coca-Cola you don’t have much negotiating power!  But hey, we were young entrepreneurs (I was 27 – what did I know? ) who felt we could conquer the world of distribution to and maintenance of vending machines and other equipment after that.  Mostly because we were tired of going to school vending machines and them being out of stock of what we wanted so we figured we could help sove that problem with creative technology.

Since then, I have taken time to decompress, teach entrepreneurship at the University of Texas at Austin business school, have two amazing kids, consult, and dabble with the notion of Babble Soft.  Erin and I did some development and had a beta product ready in 2005 to use when our daughter was born, but it really wasn’t until 2007 when we launched our Web application and she started full time care, that I became serious about committing to the bigger vision of Babble Soft.  I quit straddling the mental fence probably around October of 2007 and jumped squarely onto the side of the fence that has a vast open field with mountains, land mines, cool rivers, placid lakes, tornados, sunny skies, rainy days, ego bruises, good decisions, bad decisions, no money, fun, and most importantly a yet to be discovered journey!

After Isochron, I didn’t think I’d ever want to do a tech startup again.  It was hard.  It was tiring.  I aged.  It was stressful.  I was disillusioned.  It didn’t end like I had hoped/planned it would.  But if you read my Entrepreneurial Self Portrait, you’ll see that I since discovered that it is in my blood.  Looking back, I wouldn’t trade the experience and lessons learned for anything!

Do I wish I had made the decision earlier to dive head first into Babble Soft or another tech company?  Sometimes, because I spent money on the wrong things due to not being focused/committed, which leaves us less money to spend now and means I have to raise funds sooner than  I might have had to.  But I know deep down I will not regret the decision I made to stay home with my kids when they were babies, work from home, and maintain a fairly flexible schedule for them.   So maybe now’s the right time to really scratch my 7 year entrepreneurial itch! :-)  This time I want to make sure I laugh a lot more…which is not hard to do with little kids around.

Stay tuned for more stories about my start-up journey.  Next up in this series will be a subjective post on the pros and cons of raising outside capital.

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Author: | Filed under: babble soft, competition, entrepreneur, entrepreneurship, fundraising, working mom, working mother | Tags: , , , , , , | 5 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

Fred Wilson on Venture Capital Fund Performance
Nov 10 2007

For those of you interested in venture capital, you should definitely check out Fred Wilson’s blog called A VC – Musings of a VC in NYC.  He’s been doing a series of articles on Venture Fund performance that is very interesting.  Although I’m not currently looking to raise venture capital, it’s good for entrepreneurs to understand the history of venture financing because these venture funds might be investing in future partners or competitors.

I am currently evaluating the opportunity to raise angel and strategic financing to take Babble Soft to the next level.  I am reaching near the end of my pocket book (or purse strings) and I have so many ideas that I want to implement that will mostly likely require outside capital.  The interesting challenge I have with Babble Soft is that we are not only a Web 2.0 (ACK!$%#) play but also a web portal, thingamajig, mobile application, [invent new word here] play.  Most of these plays are in my mind, scratched out on paper, or mocked up in PowerPoint and the only things lacking are the money and the people to bring them to fruition.

Anyway, check out:

VC Fund Performance – Some History

VC Fund Performance – Selection Bias

The Rise and Fall of the Venture Business

VC Fund Performance – Sample Size

VC Fund Performance – The Ugly Years

A VC – for future posts that I’m sure Fred will be putting up on the subject.

I’m excited about the prospect of raising angel funds because I had a good experience with the two angel rounds I raised for my first tech start-up.  However, having raised funds before I know how long it can take and how many doors will be slammed in my face before getting to the right investment partners and I’m not looking forward to that.  For my first company, we raised money in 1998, 1999, and 2000 (just a few months before the bubble burst) so I know that things went faster than they normally do in ‘fundraising land.’  Isochron survived because it has a solid product/service that companies like Coca-Cola were willing to pay for but let’s just say we as Founders were washed out when it was sold in 2002.

I’m a little bit wiser now on how to play this game, however, now I’m leading a company that has a Business-to-Business (B2B) and Business-to-Consumer (B2C) business model compared to my last which was purely B2B.  Plus even though the Internet has been around for a while, things are evolving at a lightening pace making last years, last quarters, or last months strategies in some cases no longer repeatable.

Interesting times ahead!  All I know is that of all the deals out there, Babble Soft will one day be in the top 10% of ‘why didn’t I think of that’ ideas!  Ah yes, spoken like a true high-tech entrepreneur who might one day wish she had invented those little, cute Croc shoe accessories called Jibbitz instead of trying to do a high-tech startup!  Yeesh…I don’t even own a pair of Crocs, but I know that mom who invented Jibbitz is sitting back laughing all the way to the bank!

Author: | Filed under: entrepreneur, entrepreneurship, new york city, technology | Tags: , , , , , | 7 Comments »

Center for Child Protection Bingo Luncheon
Oct 28 2007

On October 13, 2007 I attended the fabulous Play Bingo Ladies Luncheon benefitting the Center for Child Protection Agency.  I was invited by one of my business Advisors, Janice Ryan, to sit at her table.  I had a great time!  I attended this luncheon once before as a representative of the Association for Women in Technology – Austin, but I had forgotten how much fun and how much money one extraordinary event can raise for the unfortunately numerous amount of children in this world who need protection.  The Center for Child Protection’s mission is to reduce the trauma for children during the investigation and prosecution of child abuse cases in Travis County.

Here is a picture of us at Janice’s table.  I am on the far right, Janice is to the right of me and her daughter is to her right. 

Although no one at our table got the opportunity to yell “BINGO,” our table was randomly picked to receive gift bags from Dillard’s that had a nice toiletry bag among other things.  I needed a new one for overnight trips.  I also was randomly selected from a drawing that I had forgotten I entered when I first arrived and won a massage, a facial, and a book called Dancing Naked… in fuzzy red slippers by Carmen Richardson Rutlen.   I’m not sure when I’ll have a chance to read the book, but I can’t wait to get that massage!

Author: | Filed under: charities, random stuff | Tags: , , , , , | Comments Off