It\’s nearly 3 am, and I\’m having one of those sleepless nights, where
my mind is racing with new ideas and lists of things I have to do. I
know (from experience) that I won\’t get back to sleep until I\’ve
written things down. And while I\’m at it, I decided to blog about one
of these new ideas.
For several months I\’ve been contemplating a shift in my career from
pure startup entrepreneur to venture capitalist. I\’ve been studying the
history of venture capital and have learned that many of the pioneers
of the industry and many of the leading VCs today don\’t just look for
deals, but they create them. They help form companies, generate
business plans, recruit management, and act in many ways like
founders–they just don\’t often run the companies.
This appeals to me a great deal. In fact, it is really what I\’ve been
You always hear about how much venture capital is out there, and that
there is more capital than there are good ideas or good teams. Business
2.0, one of my favorite magazines, just interviewed 11 VCs to discover which idea they are most anxious to invest in right now,
if only they can find a team to execute on it. Someone emailed this
article to me and suggested that we could implement something like this
so that angel investors could list the ideas that they are hoping to be
able to fund. I love this idea, and we\’re going to experiment with it
I\’m adding David Hornik to my Blog Roll. He is a venture capitalist
with August Capital (and helped with the Six Apart investment) and is
one of the best VC bloggers I\’ve found so far. He made one post about time management for VCs at 4 am. You gotta love that.
Here\’s a post by Hornik–the best post I\’ve ever seen on the value of attending conferences.
If you want to learn more in less time than in any other way: go to
If you are an entrepreneur and want to understand how smart VCs are in terms of financial wheeling and dealing, read this summary of the Intermix Media deal by VC Bill Birnhaum.
Like many entrepreneurs, you\’re probably either great at technology or
marketing, but you leave the finance stuff to others. This can be a
costly mistake. Invest a lot of time talking to investors and
entrepreneurs to get an idea for what kind of deals and terms are out
A report shows that early stage funding is increasing.
$1.3 billion in venture capital flowed into early stage companies in
the second quarter up from $830 million in the first quarter. I keep
hearing that VCs are doing more early stage deals, but this is the
first report I have seen that bears this out.
Still, the 750 companies funded by VCs are a tiny number compared to
probably 10-15,000 that are funded each quarter by angel investors
(including friends and family, doctors and dentists and first-time and
serial angels). That is why there is such a need for FundingUniverse.com to match local entrepreneurs with local angels.
According to Angel Investing (p. 146), a book published in 2000 by two Harvard
Business School professors, "In the United States, angels invest in
Ben Kou (a former Utah guy) from socalTECH sent me two great links yesterday:
Congratulations to the folks at LogoWorks who have received $9.3 million in venture funding from Benchmark Capital (one of the very best VC firms I know of) and Shasta Ventures–both based in Silicon Valley.
FundingUtah.com got its 100th
angel investor yesterday. More than $75 million in funds are now
available from Utah angels who want to invest in Utah companies. And
370 entrepreneurs have registered, posting 92 business plans so far. New plans are posted every week.
The Utah Angels, Utah\’s oldest
organized angel investing group, voted recently to use FundingUtah.com
as its source of deals. We have added functionality to allow their
Yesterday there was a panel discussion at the annual Edison conference
(for inventors and entrepreneurs) on how to raise seed capital. It was
moderated by David Bradford, partner at Greenberg Traurig, the 8th largest law firm in the nation. David is also my partner in FundingUniverse.com.
Panelists included myself, Blake Modersitzki of UV Partners and Michael
Keene, former Chief Science Advisor to two Utah governors.
In preparing for the discussion I read through all my markups in Angel
Investing, the excellent book that every entrepreneur and every angel
investor should read about capital. Here are some of the facts and
quotes I wanted to share:
- Angels fund 30-40 times more companies than VCs, but they do much smaller deals.
In the biggest VC funding round since 2000, Vonage, a leader in voice over IP telephone solutions raised $200 milllion
led by Bain Capital in Boston. It will be very interesting to watch
Vonage vs. Skype. Check out the Mary Meeker quote about Skype in this