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And it holds for angel investing too

November 13, 2008

Fred Wilson’s post amplifying Jeff Nolan’s post about the “broken” VC model says about venture capital investing what I was trying to say about angel investing at Ignite Boulder. Both made the point far more eloquently than I did, even though I was given five minutes. My point at Ignite was that most (the vast majority) of angel investors will never make any money by doing it. It’s hard (and takes alot of work) to be in that group of 10-20% of angel investors who do make money.

I’m in Toronto today speaking at Canada’s startup conference, Startup Empire. My presentation is called “Boulder, TechStars, and Why Venture Capital doesn’t have to matter.”   In general, I think that entrepreneurs put far too much weight on the availability of venture capital. Worse, they put too much mental energy into it.  I’ve been pitched many ideas over the last 3 or 4 years that always start with “get venture capital”. These business plans fundamentally depend upon venture capital (even prior to collecting underpants), causing many of them to never even get off the ground. The availability of venture capital cannot be your barometer.

My presentation in Toronto today argues that (based on raw data) it’s mathmatically 100 times harder to raise venture capital in Toronto than it is in tiny little Boulder, Colorado.  But my point is that whether your chances are 0.5% or 0.005%, does it really matter? Are you really going to focus your efforts there unless you have some of the things that improve your chances dramatically, such as a track record or a truly-world changing technology?

If you’re a first time entrepreneur with no big wins under your belt and no special relationships, it’s time to stop deluding yourself. Focus on your product and your customers, not venture capital.

Don’t let the down economy stop you from starting a business right now. That’s an excuse, and entreprenurship is about breaking through excuses. Sure, it’s hard to raise money from VCs (it always has been) and it’s also hard to raise money from angels (and it always has been) and it’s hard to build a business from the ground up (and it always has been).  It always will be, but you can do it.

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Written by David Cohen · Filed Under Blog, Venture Capital |  

Angel Capital Summit is around the corner

November 8, 2008

The Angel Capital Summit is coming up in a few weeks. Here are some details from the organizers.

Angel Capital Summit
Hosted by Rockies Venture Club
Presented by EKS&H

Friday, November 21; 7:30am - 5:30 pm
Denver Marriott City Center, 1701 California St., downtown Denver

Opening Keynote Speaker
Denver Mayor John Hickenlooper

Lunch Keynote Speaker
Anita Burke

Town Hall Meeting
Angel Investing On The Edge
Colorado’s entrepreneurial response to the credit crisis, election, energy and sustainability.

40 Presentations for Colorado’s top entrepreneurial companies in 4 tracks throughout the day!

These are times of profound change in our economy, and entrepreneurship is the single sector in the business ecology poised to capture the opportunities that are being stirred up by these changes. You’ll also learn that you don’t have to do this alone.

Now, more than ever, our society needs a healthy entrepreneurial sector. Now, more than ever, you should attend the Angel Capital Summit, to work with the rest of us to make this a reality.

For information and registration, go to www.angelcapitalsummit.org.

As an incentive for your guests, we offering attendance at the Summit at Rockies Venture Club member rates. Please instruct guests to choose the standard “Guest Ticket - $159” on page 1 of the registration form. On page 2 of the registration form, have them enter the code “ACSIAP08″ in the Discount Code Field at the top of Page 2, then click the “Recalculate” button which will adjust their discounted price and ticket. Attendees registering for the Town Hall Meeting only will need to pay the $25 registration fee and should not enter the code.

The companies who are presenting are:

18 Principles, Inc,  3D at Depth, Affinity Telecom, Inc, Alaskan Hardgear, Allegro Multimedia dba Music Wizard Group, ApopLogic Pharmaceuticals, Inc., AppVenture, Atrato, Inc., Aubice LLC, AWhere Inc., BOCS, Cadeka Microcircuits, Center For Innovation, Metropolitan State College of Denver, Chata Biosystems, Inc., CTM Software Corporation, Del Norte Brewing, DEMAND1, FacetoFace Health, flaik Inc, Fluonic, Inc., Frontline Aerospace, Inc., GroGreen Inc, iVation LLC, JuJu Central, LLC, Lingoport, Inc., Magic Portrait, Munch Away, LLC., NanoPrint Technologies, Progressive Health Center, PROJECT C.U.R.E., Shrewd Foods, Inc., Spatial Networking, Tissue Genetics Inc., Toghers Inc., TruEffect, Inc., Two Moms in the Raw, VanDyne SuperTurbo, Inc, VarVee, LLC, VitruMed Inc., Web2Storage, WhiteDove Herbals, Inc., Xpressplay, LLC, and Zerista.

Written by David Cohen · Filed Under Blog, Venture Capital |  

What does BizSpark mean to you?

November 5, 2008

In case you were too busy chanting “Yes we can!” and missed the news, Microsoft just announced a new program for startups called BizSpark.  This is a really important move by Microsoft and it represents a huge value for startups who are considering the Microsoft platform. Basically, you can quality to receive free Microsoft development tools, platforms and server products for up to three years. Perhaps more importantly, you get plugged into the BizSpark network partners and support services.

To qualify, your company must have under $1M in revenue, be less than 3 years old, and still be private. You must also be sponsored by one of the Network Partners. Essentially, these Network Partners have the power to grant the free software and services to any startup they see fit. Many angel groups and venture capitalists are BizSpark Network Partners, including The Foundry Group, CSIA, The Keiretsu Forum, and TechStars.

Don Dodge has an excellent detailed post on the program on his blog.

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Written by David Cohen · Filed Under Blog |  

How to pitch that Feld guy

November 2, 2008

I stumbled across this video while playing with Vator.tv tonight. It’s a good quick explanation of how to pitch Brad Feld and/or The Foundry Group. It’s one of the many interesting videos in Vator’s Lessons Learned series.

Here’s the video.

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Written by David Cohen · Filed Under Blog |  

Do you know a company that should present at VCIR Winter 09?

November 2, 2008

If you know a company that should present at Venture Capital In The Rockies Winter 2009, please let me know. We are soliciting executive summaries for the “Venture Capital in the Rockies Winter 2009 Conference” in Beaver Creek on March 3-5, 2009. If you know of promising companies in the Rocky Mountain region that intend to raise capital in the next 12 months, encourage them directly to submit their executive summaries to submissions@vcintherockies.com. The deadline for submissions is December 31st, however, the selection process and early admissions will begin in early November so it is in a company’s best interest to apply early.

Prospects for VCIR Winter 2009 should fit the following criteria:

  • A promising business that you think would be interesting to venture capital investors.
  • Expects to raise capital in 2009 and headquartered in the Rocky Mountain region: Colorado, Utah, Arizona, New Mexico, Montana, Wyoming and Idaho.
  • We are looking for companies in a range of fields including information technology, Web 2.0, clean technology, consumer media and electronics and consumer products. We will not be having a life sciences track at VCIR Winter 2009.
  • All stages will be considered—from seed level start-ups to established companies looking for growth/mezzanine capital.

The details on VCIR Winter 2009:

  • Location – The Park Hyatt at Beaver Creek
  • Dates – March 3 – 5, 2009. Cocktail reception on evening of 3rd, company presentations on 4th, and ski day on 5th.
  • Audience – Venture capital firms from the Rocky Mountain region and around the United States. Last year we had over 100 venture capitalists in attendance including 40+ from the west coast and east coast.

Here’s my coverage of last years VCIR.

If you or a representative from a promising company has any questions, please contact me.

Written by David Cohen · Filed Under Blog, Startups, Venture Capital |  

Ingite Boulder lit it up

October 31, 2008

Ignite Boulder was one of my favorite tech events that I have been to in a long time. The format is just fantastic. 13 presenters each had 5 minutes with 20 auto-advancing slides to talk about anything they were passionate about. The energy was tremendous.

My talk and some of my favorite talks are embedded below. You can find the rest here.

Like many others, I want Ignite Boulder to come back again. Follow the Ignite Boulder blog for details on when that will happen.



Written by David Cohen · Filed Under Blog |  

CU New Venture Challenge ramps up

October 30, 2008

The University of Colorado is holding a campus wide business plan competition called the CU New Venture Challenge (CUNVC).

The CU NVC is a cross-campus collaboration consisting of workshops, crash courses, and other networking events leading up to a final business plan/new venture challenge in the spring. The CU NVC is designed to encourage entrepreneurship at the University, facilitate cross collaboration across the various disciplines and in the community, and foster a supportive environment for the creation of viable startups to emerge from CU and the surrounding areas. The buildup to the actual competition has included the successful “Entrepreneurs’ Unplugged series,” free introductory business workshops by the Leeds Business School’s Deming Center and Silicon Flatirons Center’s crash courses on entrepreneurship and will culminate in a business plan/new venture competition during CU’s Entrepreneurship Week from April 13-17, 2009. The winning team of the CU New Venture Challenge will receive a monetary prize along with expert advice and consultation from investors, legal counsel, and financial advisors on how to launch their idea and make their creative visions a reality.

Things kick off with a “Pitch Day” where the goal is to share possible ideas for submission and find possible partners. It’s happening November 6th at 6pm at CU’s Discovery Learning Center.

Anyone can enter the campus wide business plan competition as long as at least one member of the team who has a significant role is a CU ID holder. Learn more about Pitch Day and the New Venture Challenge here.

Written by David Cohen · Filed Under Blog |  

Now that’s how you build an angel network

October 27, 2008

Over time, I’ve been a member of various angel networks. Some have worked OK, but most have been dysfunctional at best.

Then one day about a year ago, I went to lunch with some nice folks who happened to be angel investors. I knew one or two, and met three or four more at that lunch. So it was a small lunch gathering of 6 angel investors at one of their homes. No “staff” or “support systems.” Just lunch.

That group started meeting monthly for lunch. They’d tell each other about the deals they were looking at. If someone was interested in a company, they would set up simple meetings for each other. This has continued to be informal with almost zero process.

As of this week, that nice little angel group decided it wanted to recruit a few more members. So I received this email, which I think sets the tone perfectly for how effective angel networks can be built. I’ve changed a few words here and there to protect the innocent.

David,

When you have a moment, review your personal network of individual investors in an effort to find new XYZ-PDQ Angels members. It might be nice to increase the size (breadth and depth) of our group as we head towards our one-year anniversary in January.

Ideally, potential new members have co-invested with the sponsoring member in the recent past. The goal is to limit invitations to people who have demonstrated favorable characteristics as a co-investor. Remember that your recommendation will be vouching for the new member’s behavior. Think about people with whom you and entrepreneurs will feel comfortable “being in the trenches”.

If you have somebody in mind, please post an email to the group or raise the name at the next lunch. Unless there is a desire to make the nomination process more formal, I suggest just posting the name to the group to confirm that there are no objections to the person. I and others can be available for an informational meeting with the nominee, but it is not required. Remember that we are trusting your judgment.

Bingo. Just like with most web sites, less is more. Angel networks are best (in my experience) when left small and informal. No fees to charge, just simple social controls. If you recommend a company or a group member, you’re putting your reputation on the line. And that’s exactly how it should be. This is one angel group I’ll continue to keep an eye on and participate with.

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Written by David Cohen · Filed Under Blog |  

Aspirations in Computing awards for high school girls

October 24, 2008

Applications are now open for the NCWIT Award for Aspirations in Computing. These awards will go to high school girls in order to recognize them for their contributions to the digital world. Award-winners receive $500, a new laptop computer, and a trip to the Bank of America Technology Showcase and Awards in Charlotte, NC.

Complete application materials and details are available on the NCWIT web site. Online applications and all supporting documents must be received by December 1, 2008.

The NCWIT Award for Aspirations in Computing is open to all high school girls and is sponsored by the National Center for Women & Information Technology (NCWIT) and Bank of America.

Written by David Cohen · Filed Under Blog |  

MIT Entrepreneur Showcase

October 23, 2008

Each year MIT has a Venture Capital Conference. This year it’s on December 6th. As part of the conference this year, 30 early stage startup companies will be selected to showcase their business to Boston’s leading venture capital investors and the MIT entrepreneurial community.

The Entrepreneur Showcase will take place from 4 - 7 pm on Saturday, December 6 , immediately following the MIT VC Conference, at the Charles Hotel in Cambridge, MA. Company applications are due November 7. More information and an application form are here.

Written by David Cohen · Filed Under Blog, Venture Capital |  

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