Street Smarts Live – an Inc. Magazine Event

Tonight I went to an event sponsored by Inc. Magazine (where I write for the Start-Up blog). The event featured Norm Brodsky, a serial entrepreneur and writer of the Street Smarts column, and Bo Burlingham, Inc. Magazine Editor at large.

I ran into Lauren Solomon of LS Image Associates, whom I worked with several years ago, and haven’t seen in good while. She introduce me to Elyissia Wassung of 2 Chicks with Chocolate.

We went inside, and here are my live blogging notes (excuse typos and partial sentences – this is raw note-taking).

Street Smarts Live – an Inc. Magazine Event:
The Knack, How Street Smart Entrepreneurs Learn to Handle Whatever Comes Up, by Norm Brodsky and Bo Burlingham.

Continue reading “Street Smarts Live – an Inc. Magazine Event”

Project 10 to the 100th – A Google idea

Check out the video about project 10 to the 100th (10 to the 100th is a Google in math for those following along). There are no words, but the pictures tell the story really well

helping government become more open, transparent and effective through better use of published information.” Show Us a Better Way asks “Do you think that better use of public information could improve health, education, justice or society at large?”  The task force put up 20,000GBP for the winner of that competition to develop the best idea. (I noticed the Google prize via Tom’s blog).

All these prizes to improve the world, plus X-prizes for 100 mile-per gallon cars, space travel, and more.

I hope that these contests and market forces can help us improve the world in some significant way, and I’m glad some big companies are asking for solutions with their hands on their wallets. Now, about that idea for a jet pack I had…

Office Spaces (officespaces.nl)

Yesterday, I saw the almost-finished construction of OfficeSpaces.nl, a very cool concept in shared office space, leased space for small entrepreneurial companies, and a common area that will be the first lounge for the E.Factor network members.

Martijn Roordink took Bill Sobel, Roeland Reinders, and me around on a tour of the IMG_1433
beautiful new space,which is taking final form over the next 6 weeks. The concept combines elements of shared space like Regus clubs (printing, coffee bar, and other services on site) with concepts of co-working (with an entire area for soloists who will share space).

From this new glass top to the building, making the entire inside an open court, to board rooms and common areas designed to get the companies and workers interacting, there’s a lot that’s well-thought out about this place.

Flickr is giving me a hard time about photo uploads this morning, so I will update with more photos later. Additionally Bill Sobel and I took some video and when we upload that later, you’ll get a much better sense of the place, and I’ll expand this entry.

Beyond Web 2.0 with the E.Factor at Philips in Eindhoven 6-25-08

The reason I’m in the Netherlands was an invitation by Adrie and Roeland Reinders and Marion Freijsen of the E.Factor to speak, along with Bill Sobel and two gentlemen from the Netherlands at a “Beyond Web 2.0” event. at the Philips Innovation Center (research labs) at Eindhoven.

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After a great drive out to Eindhoven, (thanks Martin), and some initial networking, I met Tom Paffen and Tom De Bryune who spoke on Venture Capital raising and on “Freaks and Geeks” as the leading indicators of where social media and social networking tech are heading as cultural and technical phenomenon.

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The photo set is on Flickr.

Bill and I spoke after the break. Bill did an excellent job talking about the “3 screen world” where TV, Computers and Smart Phones are the locations that people are using when they view and interact with content, all to different extents, of course. I chimed in afterward about how media companies are using Social Web tools to create new kinds of stories (like the Heroes show and related content), and also about how, as seems to come up in conversations a lot lately – destination sites are not the future. Having content everywhere, via syndication, mashup, widgets, and basically where your viewer, user, customer wants it, will be the future. The panel finished with questions and more networking.
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I know the slides and information on the panel, as well as the full video will soon be posted on Efactor.com and I’ll update with a link to that when it’s available.

BTW, Mashable did a brief review of the E.factor here.

Angel Investing Talk 4-10-08

David Rose from NY Angels and Angelsoft spoke tonight at the 92nd Street Y’s Tribeca location on Hudson Street on Angel investing. About 225 people in attendance.

Key ideas: 600K companies start every year. Only 50k are funded by angels. Rest are funded by the founders, or by friends/family.

VC: Professional investors.
Angels: Rich-ish people investing own money and their mentoring time for a good economic and personal returns. – Early Stage Deals.
Profile of Angels – 57 yrs old, masters degree, 15 year entreprenur, 2.7 ventures founded. Has to be an accredited investor (1MM in assets,or 200k/yr income for 2 years or more). Invest for 9 years, in avg of 10 companies, have had 2 exits/closures, and 10% of their wealth is in angel investments.

Startup food chain is: You! first. You fund your own business. But, if you’re at a University or can create an app, you can go for an SBIR/STTR grant – phase I is up to 100k, phase II is up to 700k. Or, Bootstraping – get your own contracts/sales, and start up yourself.

Banks don’t like to invest – they rent money.

When you sell shares of your company, your first stage is usually sold to friends and family. This is a first test – if you believe you have a business that can scale, if you can’t convince friends or family to invest, there’s probably a problem.
Next stage – Angels – 25k – 250k.
In the middle -the gap – between 250k and 2MM. – Angel Groups – group of angels who share deal flow, pool capital, shared expenses (via dues), variety of experience, standardized terms, and lets them be smarter investors and enjoy social experience.

Later on stages – Venture Capital Firms, 200k and up.

Over time, there have developed over 300 groups. Typical groups do 7.3 deals, 4.5 are new, rest are follow-on, 1.9 mm (NY angels did 5-6MM), do aprox 250MM per round, on average. Typical angels are investing around 33K. NY Angels do 25k minimum per investment.

VCs invest in less than 1% of deals. Angels, about the same.

NY Angels get 30-40 plans/month. What do they look for?

  • Great Entrepreneurs – integrity, passion, skills, expertise in the domain, business management skill, leadership, commitment, vision, ability to listen and be coachable
  • Scalable business model – something that will get big, fast. Which is why web businesses can get funded.
  • Unfair advantage – something special that’s important to the angels , ex patents
  • External Validation – ex. sales, beta tests with known companies, great advisors,
  • Low investment required –
  • Reasonable Valuation – in case of angels, that often has to be low valuation – 1MM to 2-3MM

Secret economics of Angels –

  1. $1MM for angel investment from a person’s portfolio. Must diversity portfolio so
  2. Distribute it across 10 deals
  3. 1.25(to the 6th) = 3.8x ROI – it’s as risky as it gets, wants 25% annualized return, this is a long term hold 5-7 years (6 yrs).
  4. However, not every investment returns that amount.
  • 5 return 0. 0
  • 2 return 1x. 0.2 return
  • 2=3x return. 0.6 return
  • 3.8-.8 – last deal has to return 3x money. You have to make 30x to help the angel make their return.

So, if your deal isn’t in the position of returning 30x, they won’t invest.

How do you find an angel? Network and tell everyone. Get introductions. Lawyers, accountants, etc. LinkedIn could be good for it.

Angel groups have two parts of a process.
Part 1.

  1. Have a detailed business plan. They may not read the whole plan, but you must know the answers to the questions they’ll ask
  2. Research the groups to find a good fit.

Application to the group – including a video.
You get a one pager back, and gives to the angels, all the salient features of your business.

Angels get this – and try to figure out which are appropriate for them.

Part 2 – if your submission is accepted, (30 submit, 15 go forward)

  1. You’ll meet a screening committee – 3 deals per month are recommended forward to present
  2. You’re coached by angels to improve your presentation
  3. You’re then able to present to whole group
  4. Exec committee meets – once they find good company – will present to other groups in a network
  5. Attend a Due Dilligence meeting (2 hours) – meeting with those who are interested, go through financials, meet with mgmt team
  6. Negotiate terms sheet

From the angels’ point of view – showing dashboard that’s the backend for over 400 angel groups.
Your submission creates a secure deal room, where angels can collaborate, links to your documents, your video, your one line pitch and your summary, your referrals. System also tracks the updates, the notes, etc.
This also lets other angels see who’s investing and their commitment.

For entrepreneurs, your one upload can be shared with all angels via “Open deals.”

UPDATE: Apparently the final few lines of what I wrote last night didn’t post – I had some trouble with the WIFI (Free wifi appreciated, 92nd St Y, but it was having some issues).

So, I thought David did an excellent job laying out the Angel landscape and helping entrepreneurs see it both from their side and from the Angel’s side. The networking both before and after the event was pretty high quality. I spent some time with Hank Williams and Jason Olim, both of whom will be on my panel at NYSIA this coming Monday the 14th. Also got a chance to catch up with Franklin Madison from ITAC and Sanford Dickert. I also caught up briefly with Karen Kline from Softbank, who always has something going on.