I was part of one of the loosing teams (Bootstrap) in the first annual Labor v. Capital Dodgeball event at Sky High Sports in Santa Clara. The event was organized by David Hornik and Hunter Walk.
Some of the photos I took are posted here.
Working with the Angel Community – Angel vs. VC was the theme of this Startup-U session. While no angels were on the panel, it was still very useful, as the three VC’s represented 3 different VC funding/business models.
Bart Schachter of Blueprint Ventures represented the traditional VC model – A VC with a large fund, making typical A rounds of $3 – $5M, and needing a 10x – 20x return in order to “move the needle” of their portfolio for their LPs.
Carl Showalter of Opus Capital represented the smaller VCs. Opus does both seed and A rounds, and will entertain much smaller A rounds – $1M or so. They expect to typically partner with at least one other VC in an A round. Opus will also do a bridge loan in lieu of a seed/A round in order to get some quick forward movement if they believe that they will eventually do an A round.
Doug Renert of Tandem Entrepreneurs represents a newer model of VC that I would best describe as Small VC meets incubator. Tandem will fund a seed/A round of typically less than $1M with the intent that Tandem’s VCs will be extremely active in the day-to-day operations of the startup, rather than just providing guidance on a monthly basis.
There was some good discussion and interplay between the audience and the panelists, although much of it was introduction to VC/Introduction to these particular VC firms.
One interesting topic was sales people for pre-product/pre-revenue startups. Both Bart and Carl were very positive on a company if they had sales people at this stage (assuming the salesman was good). Good salespeople can earn a lot of commission dollars working for the large enterprise players. There’s a lot of goodness if they’re committed to a startup without immediate revenue opportunities.
Networking both before and after the event was good, and I met a lot of good people. I had an interesting conversation with Cooper Marcus of Spark Parking. Cooper mentioned that he had recently attended a mobile startup pitch event. He said that anytime one of the companies mentioned that they required either interaction/cooperation of the carrier, or to download their program onto the phone, the company received immediate, emphatic negative feedback. Working with the carriers is extremely difficult, and there are a raft of problems with phone downloads. This was great feedback for me, as my current thought are wrapped around a mobile service.
This month’s SVASE/Startup-U event in Silicon Valley had a change of agenda, and featured Ed Van Deman of Financial Navigator and Ofer Ronen of Sendori, both of whom prepared some simple slide decks.
Ed started, giving a quick overview of Financial Navigator, and talking about how it came together. Financial Navigator is a software package to help those with high value net worth (>$5M) manage their money and taxes. Some interesting facts:
Ed’s key thoughts and comments:
Ofer Ronen then discussed Sendori, which is a marketplace to bring advertisers and the domain name parking market together. Currently domain name parkers rely on keyword searches to drive revenue. With Sendori, they can hook into additional revenue streams such as eBay. For instance, the owner of cellphones.com could have someone land on his page immediately see an eBay cell phone auction.
Sendori’s challenge, as he sees it, is to bring two diverse types of people together in the same marketplace, and strike a deal — the advertisers are corporate types, and the domain name folks (until very recently) are hacker types.
Ofer echoed many of Ed’s thoughts, including be friends with everyone, and view your competitors as potential partners, using co-opetition as a tactic. He also supported getting together with decision makers at conferences, and building relationships. One tactic that worked well was to span the breadth of a trade show and make sure you introduce yourself to everyone there, and start the relationships. They paid $800 for an ad in the convention map, and said it was very worthwhile in getting their brand recognized by the end of the show with all their potential customers.
On hiring, Ofer argued the opposite of Philip Kaplan regarding hiring – at least for sales, claiming that experienced, well connected people are extremely valuable.
Ofer also claimed that in reality, everyone knows that there really aren’t many barriers to entry. When asked by the VCs, he claims patents, API tie-ins, and existing customer relationships.
Overall, the information was very useful. Surprisingly, the crowd was about twice the size as I’ve come to expect from previous SVASE Startup-U events, which made the networking useful but noisy, and the post-talk question and answer sessions very busy. As I had another meeting, I bailed out pretty quickly.
The Open Coffee Club is a concept started by Saul Klien of Index Ventures in London as a way for entrepreneurs and investors to meet and network in a casual atmosphere. It seems to have really taken off in Europe, probably because, unlike here in the valley, there aren’t other venues for this type of activity.
While not as popular in the States, there are small gatherings here and there. In Palo Alto is one such group. The meeting organizer, Keith Teare is the CEO of Edgio.com. On Tuesday, I meet Keith and James Littlejohn, both of whom are ex-pat Brits. We had a nice conversation and their both really interesting people. Keith said that he’s not really publicizing the meetup just yet, as it seems to be more useful to the Europeans, particularly those coming to the states.
For me, it was fun and useful, and I’ll probably show up every couple of weeks. I always like meeting new people.
The Private Equity Venture Capital Club, one of the SCU MBA clubs, hosted an evening round-table with Jim Marshal, of Selby Venture Partners, and Bill Baumel, of RWI Ventures, discussing how to become a VC.
Their general advice could be summed up as: get technical training, then join a hot startup and become the product manager. This will allow you to get the proper experience, as well as to impress the VCs and directors of your company. If you’re good enough, they might invite you. The problem, they explained, is that the VC community is very closed and tight-nit, and it’s hard to break in. Like most other jobs and career transitions, networking is the best method to get your foot in the door.
