SXSW Interactive – Tuesday, March 11, 2008
Mar 12 2008

Yesterday was the last day of SXSW Interactive and I have practically a desk full of business cards.  Our son came yesterday (yes, it’s Spring Break here) for part of it as well but went with husband this time to a panel he attended.  I was only able to make one panel yesterday and spent the rest of the time networking.  Check out my posts on events I attended on Sunday (including my take on the Zuckerberg/facebook interview) and Monday.

Robert Scoble even did an interview of me that was posted to Qik but for some strange reason (due to the 3G connection) it got broken down to 16 different few second clips.  Here’s the first one, here’s a middle one, and here’s the last clip.  They are going to try to see if they can string it together, but it’s looking doubtful.  Guess that means we’ll have to do a more official one next time!

UPDATE: Qik was able to string pieces of the video together and you can see it HERE.  Once they get Robert’s phone, they will see if they can fill in some of the missing gaps using the files on his phone.  Once they do that, I’ll embed the video in a future blog post.

The Insiders Guide to Angel Investing
angel_button_frame.jpgThis panel was not really a panel because the only speaker was David Rose.  David is the founder of New York Angels and Angelsoft, a software application that helps angel investing groups manage plans received by entrepreneurs.  He had some great info on angels and angel investing.  He mentioned that he would make his slide-show presentation available and I will update this post if and when he sends the link, but here are some highlights:

  • There are 600K new companies started each year.  Of those 350K are self-funded, 200K are funded by friends and family, 50K by Angel investors, and a mere 1200 by venture capitalists.
  • Angels are generally about 57 years old, they have a master’s degree, 15 years of entrepreneurial experience, have been involved with and/or started on average 2.7 ventures.
  • To be an accredited investor you must have $1 million in assets and have to have made $200K of annual revenue for the past 2 years.
  • The average angel investor has spent 9 years investing, had done 10 investments, had 2 exits (profitable or lost their money), and 10% of their wealth is tied up in angel investments.
  • Angels look for companies with Scalable Business Models, an “Unfair Advantage,” a Great Entrepreneur, External Validation, Low Investment Requirement, Reasonable Valuation ($1 to $3 million pre-money range),  and a 20 to 30 times return on their investment within 5 to 7 years.
  • The single most important characteristic an Angel investor looks for in an entrepreneur is Integrity.  Then they look for Passion, Experience, Knowledge, Skill, Leadership, Commitment, Vision, Realism, and Coachability.

David said most angel investors don’t end up making a ton of money from angel investing.  In fact most lose money.  Many invest because they want to give back and help other entrepreneurs.  He even offered us a joke that goes like this:  How do you make a small fortune angel investing? You have to make a large fortune first! 🙂

He then went on to talk about the process of applying to an Angel network and described what the entrepreneur as well as the Angel investor sees if they are using the Angelsoft software application tool.  If you are an entrepreneur, he suggested you submit your plan at www.angelsoft.net/entrepreneurs.   They will soon be launching a site called Open Deals where entrepreneurs who don’t have access to a local angel group can submit their plan.  For a full list of angel groups, check out the Angel Capital Association site and their directory of angel groups.

All in all, I had a great time at SXSWi.  I look forward to attending next year and maybe even being a panelist!

Author: | Filed under: angels, conferences, entrepreneur, entrepreneurship, fundraising, new york city, venture capital | Tags: , , , , , , , , , , , , | 7 Comments »

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 »