http://www.amplifierventures.comRSS feeds for Amplifier Ventures60http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/805/Default.aspx#Comments4http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=805http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=805&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/805/Default.aspx You might have missed this, but over the last few days Ebay found a buyer for most of Skype.  The Skype story has many threads that resonate with issues such as the success of peer-to-peer data networks, the affect of true price competition on the incumbent telecommunications companies and what happens when a company buys a business that is outside of its core competency.  Skype has been important bell weather in all of these ways, but the part that has struck me the most is how it shows the importance of knowing where the core intellectual property rights are before you buy or invest in the business. Jonathan AbermanSat, 05 Sep 2009 13:28:00 GMTf1397696-738c-4295-afcd-943feb885714:805http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/802/Sometimes-Its-Better-Just-to-Play-My-Guitar.aspx#Comments2http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=802http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=802&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/802/Sometimes-Its-Better-Just-to-Play-My-Guitar.aspx One of the best things about having a hobby is that it can help you release tensions in a crazy world.  And, I am sure you agree, this has been a crazy making time – yo-yo oil markets, nonstop punditry, the cacophony of contrasting opinions and the specter of a Depression. Almost a lifetime’s worth of stress in a single year.  It’s been fun, hasn’t it? I must admit that some of the things that I have seen have made me extremely unhappy, and perhaps a bit of a curmudgeon.  Sometimes I’ve shared those opinions in blog postings, but other times they are just great inspirations for songs.  Last week the band I play in, Two Car Living Room, played some of these songs in a gig.  For those of you that weren’t there, I’d thought I’d post a few of them here.  If you are looking for the secrets of raising capital in today’s world, this blog post won’t be of much use to you. But, in the spirit of fun, I thought I would share a few of my songs with you. Jonathan AbermanSun, 02 Aug 2009 15:26:00 GMTf1397696-738c-4295-afcd-943feb885714:802http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/799/Default.aspx#Comments2http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=799http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=799&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/799/Default.aspx Earlier today I participated in an interesting comment string on Facebook. This is happening more and more to me, and I am sure that I am not alone.  As information flows through our lives, via Facebook, Twitter and so on, the ability to share our thoughts and have them shaped by others becomes more efficient and quicker.  There is no doubt that these changes facilitate better communication about the trivia of our lives also.  But, recently, I have also been having some second thoughts about whether this is always a great thing. Jonathan AbermanMon, 27 Jul 2009 17:20:00 GMTf1397696-738c-4295-afcd-943feb885714:799http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/786/Default.aspx#Comments4http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=786http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=786&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/786/Default.aspx Recently an entrepreneur I know contacted me to help her figure out what many would call a “high class problem.”  She had a potential buyer for her business, and the buyer was asking her the price at which she would be willing to sell her business.  Not surprisingly, valuing her business to sell was not something that she had been spending any particular time working on – she was too busy growing her business – but even if she had taken the time she admitted she really had no place to begin.  Over the next few days we had series of conversations about how to value her business -- the overall themes of which I thought would be of use to other entrepreneurs.  So, with that, here are some thoughts on how you deal with the issue of “what’s your business worth” when an unsolicited buyer comes along. Jonathan AbermanSun, 07 Jun 2009 13:18:00 GMTf1397696-738c-4295-afcd-943feb885714:786http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/780/Default.aspx#Comments4http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=780http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=780&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/780/Default.aspx For years I have been fighting a lonely battle against written business plans.  Recently some of my colleagues at the Smith School of Business published a study that suggested that VCs don’t really care about business plans.  An article about the report is here and a link to a podcast from the researchers is here .  In fact, the study, at least as reported by the NY Times, suggests that business plans are useless!  Now, that’s a tact that I had never taken but one that I think requires a bit of clarification and guidance for entrepreneurs.  Jonathan AbermanWed, 20 May 2009 22:29:00 GMTf1397696-738c-4295-afcd-943feb885714:780http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/773/Jujitsu-for-Entrepreneurs.aspx#Comments2http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=773http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=773&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/773/Jujitsu-for-Entrepreneurs.aspx Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} If I could teach only one skill to entrepreneurs, it would be Jujitsu.  This naturally enough brings to mind the thought of thousands of well coached entrepreneurs felling petulant potential investors with a single chop. That’s not quite what I am getting at…..  Jujitsu is a martial art that turns the energy of an attack against the attacker. If you try to punch someone and you are suddenly on your back looking up at your adversary’s smiling face while your wrist is pinned against his left leg – that’s Jujitsu.  The energy of your attack becomes the energy he uses for the defense – basically you are fighting yourself.   In the context of entrepreneurship, Jujitsu means something else – it’s taking the unspoken negatives that someone brings into a relationship with the entrepreneur and turning them into an advantage.  How to do this, and when to do this, is the most important thing any entrepreneur can do to improve his prospects of success. Jonathan AbermanWed, 22 Apr 2009 19:46:00 GMTf1397696-738c-4295-afcd-943feb885714:773http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/759/Funding-When-You-Cant-get-Funded.aspx#Comments2http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=759http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=759&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/759/Funding-When-You-Cant-get-Funded.aspx Next week I am going to be doing a panel for the NVTC on how to grow a business without external financing.  The link to sign up is here .  This is certainly a topic that is near to my heart, as I am sure you know from some of my prior postings .  I have felt for some time now that as the economy adjusts to a reality of smaller amounts of Angel and institutional risk capital, entrepreneurs would find ways to adjust.  In other words, I do not believe that people stop being entrepreneurial merely because equity financing is harder to obtain. With the upcoming panel and my recent experience with local entrepreneurs, I thought that I would catalogue some strategies I have seen entrepreneurs use to advance their business in the absence of venture capital or significant outside investment.  Jonathan AbermanMon, 09 Mar 2009 23:12:00 GMTf1397696-738c-4295-afcd-943feb885714:759http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/748/Anger-Makes-Bad-Economic-Policy.aspx#Comments5http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=748http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=748&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/748/Anger-Makes-Bad-Economic-Policy.aspx “May you live in interesting times” is a phrase that has been bouncing around in my brain the last few weeks.  This quote, attributed to an ancient Chinese wise man, is often described as a curse –the Confucian equivalent of a Jewish mother’s exclamation “you should only be so lucky to have a son like you.”  As I watch the news reports about our government’s actions regarding the financial crisis and the economy, I often ask myself “What did we do to deserve this mess?  Are the politicians paying attention to what’s going on outside of Washington?” After reflecting on this, I have decided that the politicians are paying attention.  Perhaps too closely.  Jonathan AbermanFri, 06 Feb 2009 15:38:00 GMTf1397696-738c-4295-afcd-943feb885714:748http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/744/Default.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=744http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=744&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/744/Default.aspx We announced today the establishment of the Amplifier Business Accelerator Program. The link to the Program is here.  We did this for a number of reasons. The largest one is that as we looked at the local early stage community we saw that the recession has caused an almost a complete breakdown in the local company formation ecosystem.  For many years  there has been a tendency to couple an entrepreneur’s desire to obtain experienced help and access to contacts with the need to obtain an investment from a VC firm or an Angel group.  This worked very well when times were good – or at least there were enough successes stories when times were good to obscure the entrepreneurs and companies that didn’t get venture capital funding and missed out on its benefits. Jonathan AbermanMon, 02 Feb 2009 15:55:00 GMTf1397696-738c-4295-afcd-943feb885714:744http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/735/Grow-a-Real-Business.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=735http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=735&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/735/Grow-a-Real-Business.aspx For many entrepreneurs the biggest point of confusion when starting a new enterprise is identifying what is necessary to start a business and what is necessary to obtain venture capital.  In boom times, this differentiation is often not necessary.  Often you hear about start ups that obtain financing, and then “find a business model.”  It is certainly true that many venture capital backed early stage businesses seem to meander a bit, as the founders take advantage of a multi million dollar financing round to find the right formula for success.  And, these success stories (if success is getting money and then figuring things out) reinforces for many founders the idea that the most important thing for any start up that has aspirations of growth is to get capital first.   Unfortunately, for many entrepreneurs and others in the emerging company ecosystem the concept of obtaining capital, and then growing a business seems the natural way of progression.  While, this might be OK when times are good, when VCs are not financing start ups (and Angel investors are worrying about their stock portfolios), this formula appears to break down.  And, many seem to conclude, without venture capital there is no way to start a business.    Jonathan AbermanMon, 19 Jan 2009 16:18:00 GMTf1397696-738c-4295-afcd-943feb885714:735http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/730/Outlook-2009.aspx#Comments3http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=730http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=730&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/730/Outlook-2009.aspx Last year, I ended my Outlook 2008 with the following sentences: “As we head into 2008 my best advice to entrepreneurs is to be flexible and creative. This is going to be a very interesting and probably volatile year.”  Talk about understatement.  Well, as 2008 draws to a close, I can safely say that one thing is certain: if you scare the stuffing out of consumers and businesses, they will stop spending money.  That’s pretty much where the certainty appears to end. As we head into 2009, uncertainty is the order of the day. That being said, there are some data points out there which I will try to connect to provide some guideposts for the coming year. Jonathan AbermanWed, 31 Dec 2008 03:23:00 GMTf1397696-738c-4295-afcd-943feb885714:730http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/723/Is-Venture-Capital-Broken.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=723http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=723&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/723/Is-Venture-Capital-Broken.aspx Venture Capital as an industry is under considerable stress right now.  Early stage venture capital is hard to find, and existing venture backed businesses are finding it difficult to obtain expansion capital.  These difficulties should not be surprising to regular readers of financial pages, in light of the general problems of obtaining capital in the current economic crisis.  But, by the same token, problems in the venture industry could have a profound adverse effect on the US economy, and its ability to grow once the systemic financial crisis passes.  Jonathan AbermanSun, 14 Dec 2008 14:37:00 GMTf1397696-738c-4295-afcd-943feb885714:723http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/721/Mr-Obama-Please-Dont-Forget-the-Entrepreneurs.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=721http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=721&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/721/Mr-Obama-Please-Dont-Forget-the-Entrepreneurs.aspx President-elect Barak Obama is one of the most entrepreneurial presidential candidates in American history.  He has shown himself to be an optimistic self-starter who can create and sell a vision to others.  His campaign and transition activities demonstrate his exceptional communication and organizational skills.  As a country that is based upon entrepreneurial behavior, it is not surprising to see that Americans elected an entrepreneur to lead them through a difficult economic crisis.  Professional investors back entrepreneurs who have the characteristics that Mr. Obama is showing.  The question now is whether this most entrepreneurial of Presidents will support those most like him. Jonathan AbermanFri, 05 Dec 2008 20:02:00 GMTf1397696-738c-4295-afcd-943feb885714:721http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/716/Default.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=716http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=716&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/716/Default.aspx This week brought a new low in day time programming to America. In case you missed it, mixed in with Days or Our Lives, Oprah and countless Swiffer commercials we had the Secretary of Treasury do his best Emily Litela imitation. And, if that wasn’t enough hilarity, there on the large screen were the heads of the Big Three (plus their Union Leader sidekick) going to Congress with their hats in hand.  It was just riveting, sort of like watching a train wreck in slow motion is riveting if you are not on the train.  Problem is – the last time I looked we were on the train, and worse, the train is being run by the some folks that give us Amtrack.   Jonathan AbermanSat, 22 Nov 2008 21:21:00 GMTf1397696-738c-4295-afcd-943feb885714:716http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/711/Get-Me--a-VC-I-Need-to-Start-a-Company.aspx#Comments3http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=711http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=711&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/711/Get-Me--a-VC-I-Need-to-Start-a-Company.aspx You ever have one of those Grinch moments?  You know, the one when you are in a room with a group of people and you find yourself about to shout out “bah, humbug!” or the modern day equivalent?  Ever feel that?  Thought so.  Well, I had one of those moments a few days ago.  And, it’s been rolling around in my mind ever since. Jonathan AbermanFri, 14 Nov 2008 19:34:00 GMTf1397696-738c-4295-afcd-943feb885714:711http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/710/The-Political-Entrepreneur.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=710http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=710&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/710/The-Political-Entrepreneur.aspx Years ago, back before time began and there were dinosaurs roaming the earth (well maybe not that long ago, unless you ask my kids) I studied political science, particularly the American Presidency.  I learned many things that felt useful and interesting at the time, and, although I didn’t really think about it that way then, was actually studying patterns of entrepreneurship.  Two recent events crystallized this for me. The first was watching President Elect Obama’s first press conference and the second was talking with a friend of mine who had lost a hard fought Congressional election.    In each instance, I thought about what had made me a supporter or friend, and why I thought that they would ultimately be successful.  And, I realized that what I had really been doing was evaluating them as if they were an entrepreneur I would back. Jonathan AbermanSat, 08 Nov 2008 17:26:00 GMTf1397696-738c-4295-afcd-943feb885714:710http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/708/But-Can-I-Trust-You.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=708http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=708&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/708/But-Can-I-Trust-You.aspxA few days ago I was asked by an entrepreneur how he could figure out “which VCs he could trust.”  I was struck by the question.  Not because it isn’t a question I get asked regularly by entrepreneurs, but because as I began to answer the question I realized that in the answer was an explanation of what is wrong with the general financial economy. But, to get to that conclusion, first I’ll need to answer the entrepreneur’s question.Jonathan AbermanSat, 01 Nov 2008 20:40:00 GMTf1397696-738c-4295-afcd-943feb885714:708http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/697/Default.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=697http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=697&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/697/Default.aspx One of the frustrating things about running a venture capital fund is that your ability to help entrepreneurs is generally tied to your ability to deploy capital.  That’s the business of venture capital – investors make fine distinctions and try to back companies that in your business judgment have the best chance – at the time of investment – of being successful high growth companies.   While that is the right way to approach things for a venture investor, there are two big problems with that business model  from the entrepreneur’s standpoint– company and entrepreneur picking is at best an inexact science, and in the course of the year an investor will meet many more deserving entrepreneurs than could reasonably be funded.  As I thought about this problem last year it came to me that one of the best ways that I could help entrepreneurs was to combine my own network of relationships with the types of technology Amplifier Ventures was investing in: Jonathan AbermanMon, 20 Oct 2008 12:08:00 GMTf1397696-738c-4295-afcd-943feb885714:697http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/696/Default.aspx#Comments5http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=696http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=696&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/696/Default.aspx It’s a sad, sad time for entrepreneurs, at least it is if you read the press.  Here’s just a small selection: ·         The VC boom is ended – entrepreneurs should forget about raising “easy money,” so says Sequoia one of the best regarded venture capital firms in Silicon Valley. ·         “It’s just too hard”, says an entrepreneur in a press release announcing the closure of his start up.   ·         Early stage businesses won’t be able to get capital due to the current market down turn, says the National Venture Capital Association. And that’s just what I found in my RSS feeds today!   Jonathan AbermanSat, 18 Oct 2008 16:11:00 GMTf1397696-738c-4295-afcd-943feb885714:696http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/689/If-You-Didnt-Feel-Like-a-Piata-Id-Worry.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=689http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=689&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/689/If-You-Didnt-Feel-Like-a-Piata-Id-Worry.aspx Over the last week as I read the financial press I found the emotional responses almost too wide to process – I suppose that the finger prints that are embedded in my forehead from constant head slapping will eventually fade.   This is a time for trying to find your inner zen.  I mean, it’s just getting ridiculous – a theory I read today was that the market will turn when investors “capitulate” -- that somehow when we all give up and stop caring, the market will turn.  So, when we all get exhausted enough to stop worrying, the market will correct itself?  This reminds me of the old joke about banging your head against a wall because when you stop it feels good. Jonathan AbermanSat, 11 Oct 2008 18:21:00 GMTf1397696-738c-4295-afcd-943feb885714:689http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/681/Playing-Chicken-with-Our-Little.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=681http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=681&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/681/Playing-Chicken-with-Our-Little.aspx Around a week ago I wrote an extensive piece on the current credit crunch. In it I suggested that the Fed and Treasury were doing a great job, and that we were on the path to a stronger economy in 2009.  And, for those of you who read it, I did suggest that the government take on those toxic mortgages.  I will leave it to others as to whether Mr. Paulson read my blog – the great thing about punditry is that you can leave the inference of a connection for others to make.  Of course, you know that he didn’t read my blog, and had most likely been hatching his plan for quite some time.  But that’s not the point here.  The point is that I made a prediction that at the time might have been far fetched, and it came true.  And, therefore, I could, if properly motivated, claim to be a market savant. Jonathan AbermanWed, 01 Oct 2008 19:08:00 GMTf1397696-738c-4295-afcd-943feb885714:681http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/675/Hey-Chicken-Little--the-Sky-is-Not-Falling.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=675http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=675&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/675/Hey-Chicken-Little--the-Sky-is-Not-Falling.aspx As is true for many of you, most conversations I am having these days center around the economy, and particularly the credit crunch that is prevailing at the moment.  While I must admit a certain nostalgia for the conversations we were all having last week around what “moose dressing” actually was, it’s amazing what a couple of government “bail outs” will have on public discourse.   Just goes to show how quickly the news cycle goes, but also how incredibly powerful current economic events are.  People clearly have a sense that they are living through something momentous, and in many cases feel very, very concerned. Well, I’m worried too.  But, I am not concerned that the US economy and financial system is facing immanent or long term collapse.  In fact, I think that the Federal Reserve Board and US Treasury are doing a fantastic job.  Really, I do. They are improvising a solution to the crisis that is internally consistent, and is being executed well. You wouldn’t know this from the media, but more on that in a moment.   In order to appreciate what they are doing, you need a bit of background.  Jonathan AbermanThu, 18 Sep 2008 21:39:00 GMTf1397696-738c-4295-afcd-943feb885714:675http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/666/Fixing-the-Early-Stage-Capital-Gap.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=666http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=666&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/666/Fixing-the-Early-Stage-Capital-Gap.aspx If you are an early stage technology entrepreneur I am going to tell you something you already know – there’s not enough early stage risk capital available in our economy.  Since the aftermath of the Internet bubble, the aggregation of capital has largely moved away from early stage, high risk technology businesses.  It went to different places – real estate (remember real estate?), hedge funds, private equity/buy out funds and foreign markets to name the most prominent examples.  And, the capital that has remained available for technology businesses has largely pooled in a concentration of larger venture capital funds, which are generally poorly configured for investment in early stage businesses.  All these trends were in place and affecting entrepreneurs before the current credit crunch, and are being accentuated by current market conditions.   Why does this matter?   Jonathan AbermanSun, 07 Sep 2008 12:10:00 GMTf1397696-738c-4295-afcd-943feb885714:666http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/641/A-VC-Crisis.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=641http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=641&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/641/A-VC-Crisis.aspx So, the world of VC is in crisis – at least that is the prevailing view of the National Venture Capital Association and others.  Check out this post from Techcrunch or this article from my friend Kim Hart at the Washington Post.  I talked with Kim as she was writing the article and some of my thoughts are included in the article.  I thought that I’d share some more of my thoughts in this post. Jonathan AbermanWed, 02 Jul 2008 01:39:00 GMTf1397696-738c-4295-afcd-943feb885714:641http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/638/Party-On--Who-is-on-Your--Guest-List.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=638http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=638&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/638/Party-On--Who-is-on-Your--Guest-List.aspx Recently, I got a call from a frustrated university professor who is a friend of mine.  He had just met with a very nice and smart group of entrepreneurs from his college.  They had gotten together, and spent a fair bit of their own money to develop a piece of technology.   The technology worked, very elegantly at that.  Problem was, they had no idea who, or why someone, would use the technology.  And, they wanted to raise capital so that they could figure that out.  They were mystified why, having taken the risk to develop a product on their own nickel, investors weren’t clamoring to invest in their company. As my pal sighed on the phone, it struck me that this is a pattern I see pretty often in entrepreneurs. Jonathan AbermanThu, 26 Jun 2008 18:49:00 GMTf1397696-738c-4295-afcd-943feb885714:638http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/591/An-Updated-Outlook.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=591http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=591&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/591/An-Updated-Outlook.aspx A number of months ago I wrote about the US technology economy and the outlook for 2008.  I made a number of observations about the “credit crunch” and the likelihood of a recession.  The posting is here .  Since then many people have asked me what I think is going on now, and whether my outlook has varied. For those of you who didn’t read my earlier post, I posited that the credit crunch was being addressed by the Federal Reserve Board and that an overall recession was not going to happen.  I did feel that the state of the economy was going to result in individuals suffering and that start ups would find it more difficult to find initial capital.  The prevailing environment is pretty much as I anticipated, with some major, albeit unanticipated, differences.  The largest difference being the explosive acceleration in price increases for commodities, particularly food and energy. So, where are we now, and what does it mean for technology start ups? Jonathan AbermanSun, 18 May 2008 22:49:00 GMTf1397696-738c-4295-afcd-943feb885714:591http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/537/Default.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=537http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=537&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/537/Default.aspx Over the last few months I’ve been involved directly, or indirectly, in a number of negotiations. They’ve had their ups, downs and movements of sideward sliding into anarchy – most negotiations do.  What has struck me mostly is that each of them was fundamentally driven by the concept of fairness.  And, often, what is fair is determined by context – the various factors that lead a negotiator to think that his position is fair.  Understanding the drive to fairness and context is essential to getting to a deal. Jonathan AbermanSat, 15 Mar 2008 15:51:00 GMTf1397696-738c-4295-afcd-943feb885714:537http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/518/Some-Thoughts-on-Board-of-Advisors.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=518http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=518&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/518/Some-Thoughts-on-Board-of-Advisors.aspx Recently, a member of the Amplifier Network emailed me and asked some questions about how to structure the Board of Advisors for his start up.  I suggested that I’d use his questions (and a few others) to provide some guidance to a larger group of readers.  He happily agreed, so with that, here are some questions that he asked (and some that he didn’t). Jonathan AbermanSun, 24 Feb 2008 20:13:00 GMTf1397696-738c-4295-afcd-943feb885714:518http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/480/Stop-the-Madness.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=480http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=480&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/480/Stop-the-Madness.aspx As you probably know if you read this blog or have otherwise heard me speak recently, I do not think that the US is heading into a period of long term recession and decline. Having that optimistic viewpoint is surely being challenged right now. I mean, if I hear one more vacant eyed networker commentator ask “if we are in a recession” or read one more too clever pundit talk about the current or coming recession I am going to just scream. Well, OK, I’ve already done that. But, seriously, let’s all take a deep breath here. There are a lot of reasons why politicians, media types and pundits want to talk about the current economy in the most negative terms. Here are just a few that I have thought about over the last few weeks. Jonathan AbermanFri, 18 Jan 2008 19:43:00 GMTf1397696-738c-4295-afcd-943feb885714:480http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/441/Outlook-2008.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=441http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=441&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/441/Outlook-2008.aspx As we get ready for 2008 I thought I’d mention a few of the things that are striking me about the current entrepreneurial and technology economy and make a few predictions for the upcoming year.  As always, they are provided with the knowledge that predictions are usually wrong, but the process of making them, or thinking about them, provide useful touchstones.  With that, here are a few observations of trends that I feel will be of importance to the technology economy in 2008 Jonathan AbermanMon, 10 Dec 2007 00:15:00 GMTf1397696-738c-4295-afcd-943feb885714:441http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/424/Default.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=424http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=424&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/424/Default.aspx A fair bit of entrepreneurial energy (at least when I am meeting with entrepreneurs) centers on getting equity capital.  Now, putting aside the limited sample size of people meeting with me because Amplifier has money to invest in their businesses, it does appear to me that most entrepreneurs I meet are making the assumption that the best way to grow their business is to obtain venture capital.  Well, I am not sure that for most of them I agree.  Actually, for most start ups and emerging businesses, venture capital should be the financing source of last resort.  I am not saying this because venture capital (or the denizens of the industry) are “bad”, rather I am suggesting this because venture capital is a particular financing tool for a particular type of business. There are moments of time when a company is best suited for venture capital and many more times when it is not.  And, more to the point, venture capital money is very, very expensive.  So, even in the best of economic times, the trade offs of obtaining venture capital are stark.  It makes sense to have an alternative plan to grow a business.  And, this makes even more sense in a time of economic uncertainty, when obtaining venture capital is generally harder.  Whether the market is good or bad, a successful entrepreneur should be ready to grow a business without outside capital, particularly in the earlier stages of development.  Jonathan AbermanMon, 19 Nov 2007 16:47:00 GMTf1397696-738c-4295-afcd-943feb885714:424http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/392/Market-Standards--Can-they-Make-you-Evil.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=392http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=392&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/392/Market-Standards--Can-they-Make-you-Evil.aspx The Wizard of Oz (a great training video for learning to work with start ups by the way), has a moment where Dorothy asks a newly arrived friend if she is “a good witch, or a bad witch.” Putting aside the obvious “duh” that you wanted to throw at the TV, as Dorothy looks at an angelic, wand clutching Bugsy Berkeley blond pushing every subliminal cue Hollywood could then throw, she does make an interesting point.  Who’s a good witch, depends upon where you sit, or whichever house you are under. I am reminded of this as I watch Apple get pummeled for its actions surrounding the iPhone, and its relationship with third party developers. The back story, for those of you that have missed it, starts with Apple introducing the iPhone, which is tied to an exclusive sales relationship with a single cellular carrier.  It continued with the development of various software programs by third parties which purported to “unlock” the iPhone so that it could be used on other cellular networks.  Further on, others developed applications to run on the iPhone (a logical thing to do as it provided a way to reach a growing base of new customers).  Then, Apple released an update of its iPhone operating system, which when executed, rendered “unlocked” phones inert, and third party applications wiped away.  What a resulting hullabaloo…..   Now were learn that Apple intends to release software that will facilitate third party software development for the iPhone, and the blogosphere is alight with the debate of whether Apple “finally gets it.”  Well, what exactly are they getting? Jonathan AbermanThu, 18 Oct 2007 23:51:00 GMTf1397696-738c-4295-afcd-943feb885714:392http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/358/The-Decline-of-Society--Blame-the-Web.aspx#Comments5http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=358http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=358&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/358/The-Decline-of-Society--Blame-the-Web.aspx Over the last few months I have been recommending to Web 2.0 entrepreneurs that they check out “the Cult of the Amateur” by Andrew Keen.  It is a provocative book, which has caused strong reactions in many places.  It is interesting that a serial entrepreneur, steeped in the Web 2.0 culture of Silicon Valley, would suggest that the development of the Web, particularly Web 2.0 business models, is undermining and dumbing down our society.  Not exactly a welcome thesis in many quarters to be sure.   You can check out the author’s thoughts here in a recent television interview.  And, you could read the book, but for those of you that want a quick summary of his argument – the combination of anonymity, the rapid transfer of information, and the growing ease in authoring and distributing content, has created an information chaos, where existing means of measuring and evaluating information are being challenged and devalued.    Jonathan AbermanSat, 22 Sep 2007 14:47:00 GMTf1397696-738c-4295-afcd-943feb885714:358http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/345/Will-Credit-Crunch-Technology-Start-Ups.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=345http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=345&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/345/Will-Credit-Crunch-Technology-Start-Ups.aspx If you have had a pleasant summer caving in Montana you might have missed out on the fun that has been had in the financial markets over the summer.  Here’s a summary – the market for the creation and packaging of mortgages froze.  This resulted in the grinding to a virtual halt of origination and trading activities in unrelated corporate debt markets.  The world’s central banks stepped in to provide liquidity to grease the wheels of the debt markets. And, the stock market gyrated like a school yard seesaw with sugar rushing 8-year olds on each end.   Having brought everyone up to speed, what does this all mean to the technology entrepreneur. Should you be worried about this?  Well, yes and no.  But, before getting into that in detail, let’s take a moment to examine what is going on behind the curtain.   Jonathan AbermanSat, 01 Sep 2007 16:17:00 GMTf1397696-738c-4295-afcd-943feb885714:345http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/291/Why-I-Hate-Roller-Coasters-but-Love-Start-Ups.aspx#Comments2http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=291http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=291&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/291/Why-I-Hate-Roller-Coasters-but-Love-Start-Ups.aspx My daughter and son are lobbying me for their annual pilgrimage to HersheyPark next weekend.  If you haven’t been there – think chocolate factory, on a heat sinking Dessert Shield tarmac, meeting countless upside down, inside out and water shooting devices of mass terror and destruction.  My idea of a party…… Just the thought of an upside down roller coaster makes my stomach flipflop.   Meanwhile, I am living the dream of VChood -- working with my portfolio companies, talking with new entrepreneurs, and living first hand the ups and downs of entrepreneurship.  It is absolutely amazing how quickly a start up company’s prospects can change.  Each day is different from the next.  I realize that it really is the grown up equivalent of an upside down super soaker vertical climbing rocket coaster.  So, if I hate roller coasters, why do I like working with start ups?   And, more to the point, why do entrepreneurs subject themselves to this?   A good friend of mine describes being an entrepreneur this way: “Being an entrepreneur is riding home in your car at the end of a day thinking that you can’t possibly be more screwed than you are at that moment, and then finding out in the morning that you were wrong.”  He says this with a smile, having been part of a number of successful start ups.  Another friend describes working with a start up as riding a roller coaster where you know the dips are coming you just don’t know whether the dip is a large one or a small one because the hill is too steep.  And she says this with a smile too.   So, what are these folks?  Masochists?  Certifiable lunatics?  Thrill seekers?  And, what does that make me, since I invest with these people……   Clearly what roller coasters and entrepreneurship have in common are the thrills (or terror) that they can create.  But, I don’t think that means that entrepreneurs are thrill seekers, looking for a quick burst of sensation and the resulting endorphin rush.  Rather, I suspect that it’s something more subtle.  I think it is the longer term sense of accomplishment that comes from quelling a fear, or mastering a situation.  In other words, it’s not the roller coaster that’s exciting it’s the riding that matters.   I’m reminded of the face on my daughter when she rode an upside down coaster for the first time.  Her face at the top of the loop was frozen in what looked to me like primal fear.  Yet, as she bounded off the coaster her first words were “that was fun, I want to do it again.”  There was a palpable air of accomplishment about her.   And, this is where I see the overlap.  Entrepreneurs have in common a number of traits.  One of the most prevalent (if not the most prevalent) is that entrepreneurs are “doers”.  They live to make things happen, to shake up the world around them; in other words, to conquer situations and master them. That’s why when they talk about the ups and downs of being an entrepreneur they don’t complain (mostly), instead they smile, shake their heads and look forward.    There is another point to make, however.  The best entrepreneurs are able to moderate their desire for accomplishment and mastery.  Sometimes the best path forward is not to change things, but to sit tight. And, sometimes taking a risk just isn’t worth it.  The same way that you would not want to spend the day at an amusement park with someone that wanted to continually ride the roller coaster, you don’t want to invest with someone that is always looking to shake things up.   The intangible balance between facing and mastering change, creating change for its own sake, is probably one of the largest personality criteria VCs apply to evaluating entrepreneurs.  My best advice is that if you are a person that wants to be in constant motion, and always mastering changes, you should have as a business partner someone who values continuity.  And, if you value continuity above all others – well you probably should consider carefully starting a company.  But, if you do, find someone who will balance your desire for the status quo.   For my part, although I will try to convince my daughter that I get sufficient thrills from being a VC, I suspect that some time over the next week I will find myself upside down hanging from a roller coaster seat.  But, only in moderation….. Jonathan AbermanFri, 03 Aug 2007 17:13:00 GMTf1397696-738c-4295-afcd-943feb885714:291http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/276/Default.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=276http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=276&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/276/Default.aspx Assuming that you have been reading this blog for a while, you have some interest in venture capital.  As you know from prior entries I have a pretty strong bias that VC is a tool that is best used for a small class of companies at specific points in time.  More than a few times a week I remind an entrepreneur that venture capital is not the be all and end all for a business; you can be successful without it.  And, many, many businesses are.   Of course, if you have done some heavy thinking and really do believe that venture capital is best for your business, then it is important that you get your plan in front of the right investor.  Rightness can have many aspects (as discussed elsewhere it is important that you select an investor who you can work with productively). Here, I am concerned with you sending your plan to an investor who is actually going to be receptive to receiving it.    There are some common things that all venture investors use as an initial screen against which incoming investment opportunities are evaluated.  If you have some appreciation of them, your chances of your plan being reviewed are greatly enhanced.   Understand a Venture Fund’s Investment Focus   Venture capital funds generally have specific investment focus, sort of like mutual funds do (something you might be more familiar with).  These foci are usually categorized by industry, stage of development and geographic region.    Industry.  Venture funds usually specialize in particular technologies or industries. For example, life sciences or emerging software.  This is because, frankly, venture capital depends upon investors actually understanding a business and adding value.  It’s hard to have domain knowledge in everything, unless, of course, a venture capital fund is very large and has a large investment group (where individual expertise aggregate into a wide range of skills).   Stage of Development.  Venture funds generally specialize on businesses in specific stages of development.  This is because each stage of development carries a distinct risk/return trade off, and requires different levels of time commitment on the part of the venture investor.  Seed and early stage investments provide the greatest amount of risk and require the largest amount of investor assistance, but also the greatest potential return.  Stages also require distinct skills from the investor, early stage investors tend to be more operationally focused, for example.  The stages most commonly used to describe start ups are seed, early stage, expansion stage and later stage.  Here are a few attributes for each stage for purposes of illustration: Stage Company Attributes Funding Uses Investors’ Target Portfolio Return Seed stage No customers; limited management team; incomplete product but proven technology; corporate structure and intellectual property not fully developed; commercialization plan incomplete. Product development; Recruit management team; Pre-marketing; Implement corporate structure and ESOP; IP Protection; Working capital.   40%+ Annual IRR Early stage Limited customers; initial management team in place; beta or complete product; corporate structure and intellectual property substantially complete; commercialization plan completed and being executed. Aggressive sales and marketing roll-out; Begin development of additional products; Expand management team; G&A working capital to support rapid growth.   30%+ Annual IRR Expansion stage Customer adoption; developing support team to supplement management team; complete products and additional products under development; structure and intellectual property established and expanding to accommodate growth; commercialization plan executed.   International expansion; Acquisitive growth; Contemporaneous launch of multiple new products; Monetize portion of founder(s)’ ownership. 25%+ Annual IRR Later Stage Widespread customer adoption; professional management, support team and board of directors; multiple products; established corporate structure and intellectual property position; customer support and research and development; significant revenue and earnings.   Acquisitions; Liquidity for founders and venture investors; Future product development; Future territorial expansion   15%+  Annual IRR   Geographic Region.  Venture funds tend to invest close to where they operate, particularly in the early stages.  This is because venture capital is a high touch investment transaction; we need to be able to meet with our companies regularly and be quickly available to help when needed.  This is less important for expansion or late stage companies sometimes, since they require less day-to-day involvement on the part of the venture investors.   There Needs to be a Business   Venture investors don’t invest in ideas, we invest in businesses.  A business is a combination of an idea, entrepreneurs and a distinctive plan of execution.  With a few exceptions, venture investors don’t put companies together from scratch, although we often enhance a business by adding other individual talent.  Most venture capital funds have a network of entrepreneurs that they know and have experience with, who are between businesses and looking for their next opportunity.  Sometimes, when we see a good idea, or a good idea with an entrepreneur, we will match it up with others we know.  Still, even in this circumstance, we are investing in a business, not an individual or an idea.   The most important thing is that a business proposal must compellingly show how our adding money will create significantly more money.  Venture investors like money machines – businesses that when we add our money and assistance cause explosive growth.  Generally that requires a plan – it doesn’t just happen.  In a future blog I’ll talk about some of the things that make a business likely to provide explosive growth.   Get a Referral   Venture investors are just buried in data and opportunities.  The number of deserving entrepreneurs and compelling opportunities seeking our attention easily exceeds the hours in an investor’s day. Add to that the time they spend working with their existing investments, networking, managing their relationships with their own investors (yes, gasp, venture investors have investors too—the people and entities that give them money to invest on their behalf), and the fundraising that they must do every few years (if they are lucky and good), and venture investors are seriously over committed.  I know that there is a perception that being a venture investor is an easy gig, and all we do is hang out at the pool, drive our Ferraris and taunt entrepreneurs.  But, for the most part, we are hard working entrepreneurs too.   So, that being said, it is very important that you find a way to rise above the static.  Without a doubt, the best way to do that is to get referred to the venture investor by a trusted source.  An unsolicited business plan generally will get less attention than one that is expected, or sent over by a source that the venture investor will pay attention to.  There are many potential sources of a useful referral: a CEO of an existing portfolio company, a limited partner of the venture investor’s fund, a well respected service provider (venture lawyer or accountant, for example) or a well regarded local entrepreneur.  Without question, if you do nothing else, surround yourself will allies that have contacts and credibility in the venture community.   Understand a Venture Fund’s Investment Criteria   Most venture funds post on their websites their investment criteria.  And, they do vary enough for you to pay attention to. Don’t assume that every venture investor looks for the same things. Amplifier’s investment criteria are here.  The important point is that you should see a clear connection between a venture fund’s investment criteria and your own opportunity before you ask for a venture firm’s consideration.  If there is not a very clear overlap (and not just clear to you, but clear to the less vested viewpoint of those that surround you) then don’t send the plan or request a meeting.  But, if there is a clear overlap, reference the overlaps when you submit your proposal.  The one thing that venture investors love is an entrepreneur that actually has thought through why that investor is the right investor, and reflects that consideration in the initial communication.   Don’t Visibly Over Shop a Deal   Venture investors hate it when they feel that an entrepreneur is indiscriminate on where they get capital.  It is very important to appreciate that venture capital is predicated on the assumption that when we get involved with the company we will make it more likely to be successful.  The most likely way to accomplish this is to have a trusted and close relationship with our entrepreneurs.  Therefore, we tend to favor entrepreneurs that are looking for the right investor (i.e., us) and not any investor.  People who are looking for any investor just want money, and that will chill a venture investor’s interest.  It’s not that we are motivated by ego, or need to be loved, it’s just simple human nature – if you feel that you are fungible, then you are less likely to anticipate developing a close relationship.   The challenge, of course, is that the best way to get a good venture capital deal is to create some competition.  We expect that other comparable investors are looking at an attractive deal.  What an entrepreneur should be mindful of is keeping the list of potential investors short and focused, and create the impression that the deal opportunity is targeted.  In other words, doing things like sending mass emails, or seeking a large amount of PR prior to a fund raise, could create an adverse impression.  The best advice is to use your referral sources to build a focused and clear fundraising effort before looking for venture investment.   And, this brings an unpleasant corollary: if you have done your best with a targeted search and haven’t gotten any where…… STOP!  Take the time to learn from your meetings and re evaluate your plan.  Don’t just continue ever onward, expanding the search.  Venture investors do talk to each other enough that you should assume that after a period of time the general investment community will know about your company. And, the ones that hear about the deal from you later will often assume that you are no longer looking for the right investor but any, any, any investor. Just not where you want to be.  If that happens, re evaluate, re load, and go back out to the market when your business opportunity has changed sufficiently so that you can market it as a new, targeted opportunity.           Jonathan AbermanMon, 02 Jul 2007 16:01:00 GMTf1397696-738c-4295-afcd-943feb885714:276http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/235/Default.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=235http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=235&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/235/Default.aspx My grandmother used to tell me that the worst thing you can do when you are dieting is going to the supermarket hungry.  Apparently, that results in a frenzied purchase of Ho-Hos, Twinkies, Doritos and steak on a rope.  At least that’s what I have been told…. But, more seriously, the point of the advice is that if you go to the supermarket hungry you will make decisions that are not necessary based on your best interest (granola, Diet Twinkies, etc.) but based on your short term needs.   I was reminded of this a few times last week as I met with a few members of the Amplifier Network who were looking for advice on how to manage their current challenges.  In each case the founders were under a disproportionate amount of stress. (why disproportionate?  Well, being an entrepreneur is stressful, so we are talking about stress beyond the usual).  What I found striking, though, was that in each case they were about to make important decisions that were against their long term interests, because they were facing short term challenges that they felt were overwhelming.   After talking with them it became clear that in each case their immediate problems had solutions, but that the entrepreneurs couldn’t see them. They were so caught up in the moment of stress that they were unable to take that step back and look at alternatives carefully.  They were so hungry for a solution that they had stopped thinking clearly about the long term implications of their actions.   Were they bad people?  Not smart people?  Not at all – they were highly successful people, effective entrepreneurs and very ethical.  In fact it was their very character that had brought them to the place of crisis. Following a path of decisions to their logical conclusion, and feeling boxed in.  And, I suppose that is the point, they had started down a path, made decisions along the way, and now felt boxed in to a range of possibilities that were limited and requiring immediate attention.   Well, how does an entrepreneur deal with the crisis of decision making when it occurs – how does she balance the hunger for a solution with the long term best interest of the business.  The important thing is to somehow decouple oneself from the immediate feeling of crisis, to be able to take the time to figure out a better answer.  The best way to describe it is that if you feel that you are on the cliff wall clinging for survival, then you must find a way to take away that anxiety.  No one makes good decisions staring down at the abyss.   Here are some things that I have used in the past at my own times of crisis, which I applied in different ways in my meetings last week:   ·       Understand that You Will Fail.  Not to be flippant about it, but don’t be afraid of failing.  Everyone fails in business from time to time; it’s what we do after we fail that defines us as successful entrepreneurs.  The best entrepreneurs “fail upward”, but all entrepreneurs fail.  Look ahead, not behind.   ·       Lighten the Load.  It is easy to feel the weight of responsibility in times of crisis – what about your employees, your stockholders, your Aunt who lent you money?  It can feel that you are carrying people on your back.  Doing the right thing is an important thing, a characteristic that I look for in all entrepreneurs I work with.  But, often entrepreneurs take on too much accountability.  If you have been honest and tried your absolute best, what more can others ask of you? ·       You Will Run out of Money.   Many entrepreneurial crises center on money – usually the lack of it, or the immediate likelihood of lacking it.  Well, guess what, it’s the nature of start ups – they are always running out of money – that’s what they do.  That feeling in your pit of your stomach isn’t abnormal, but neither should it be a surprise or a crisis – it’s just part of being an entrepreneur, ·       Identify Your Stakeholders.  Every young business has stakeholders, people who are involved because they want to help and want to see the entrepreneur succeed.  Sometimes they have an economic stake, but not always.  What stakeholders have in common is that they have an emotional commitment to your success that is at least equal to their own interests.  Often stakeholders are the best place to go for help in crafting a solution.   ·       Remember Your Successes.  All of us have had successes along the way.  The best time to recall that is when you are in a crisis, both as a reminder that you can be successful and will be again as well as a touchstone. What made you successful?  Are the patterns of behavior that you used then applicable?   ·       Get Some Perspective.  Take a step back. Get some sleep.  Watch a bad movie.  Do something other than cycle your problems.    The point of these suggestions is that you are striving for a sense of removal.  It is essential that you never lose track of the longer term implications of your actions.  Nothing is so immediate that you can’t take some time to think about strategic implications.  And, hopefully, I have given you some clues for how to achieve some removal.  Trust me, Twinkies taste much better when you’ve bought them carefully…..     Just as an aside, we’ve started offering classes through the Get Educated Series.  There are small group classes currently on venture capital and business plans.  We will be adding more classes over the coming months.  I’d welcome any suggestions on topics.  And, if you are looking for some practical help in these areas, I’d encourage you to sign up for upcoming classes.   Jonathan AbermanMon, 14 May 2007 01:39:00 GMTf1397696-738c-4295-afcd-943feb885714:235http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/217/An-Angel-Round--the-VC-Perspective.aspx#Comments6http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=217http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=217&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/217/An-Angel-Round--the-VC-Perspective.aspx Earlier in the week, one of the entrepreneur members of the Amplifier Network reached out to me for some advice.  He had an “angel” investor who was ready to invest some money in his company.  He wondered how to structure the deal so that it would be appealing to a professional investor, or at least wouldn’t discourage an investment by an institutional investor.  As I spoke with him I realized (much to my surprise – well, not really) that I had some strong opinions on how he should structure his deal.  So, as we ended our call, and he went off to do his deal, my parting comment was that I was going to do a blog entry on our conversation.  Names won’t be used, to protect the innocent: we’ll call him “George” here.   Anyway, George started the conversation by saying that he and his investor had agreed to an equity investment, and that they needed some guidance on valuation.  That was a reasonable enough request, but it was really not as simple as he was hoping.  Merely providing guidance on valuation wouldn’t solve George’s problem, it would, in fact create more issues.   Here’s the basic issue: if you sell equity in a company, you must value the business.  This has two major implications.    Firstly, if you attempt to value a business without professional input (i.e., from a professional investor) you run a serious risk of not getting the valuation “right” when you later approach professional investors.  As I have mentioned in an earlier blogs, venture valuation is a process that is arcane, and usually VCs value a business below where an entrepreneur will.  This matters because if you sell equity to an angel and then a subsequent professional investor determines to invest at a lower valuation you have a real problem on your hands.  It’s just not a good thing when an angel investor finds out that the stock he paid $1 per share for is only worth $.25 to the professional investor.    You might say, well, that’s just a market. But, the reality is that no professional investor happily goes into a situation where earlier investors are going to be unhappy.  It often ends badly.  Perhaps your reaction to this is to say, “sure, but couldn’t the entrepreneur get the valuation wrong on the downside?”  That’s possible, but it’s just not the way human nature seems to work with start ups.   Secondly, if you value your equity by selling some to an investor, it then becomes practically impossible for you to provide equity to others at a lower price (i.e., your option grant price, or the value of stock you give to other founders or employees, has to approximate the value of the stock paid by your investor).   One of the most valuable things an entrepreneur can provide to early stake holders is “cheap” equity – indeed often that is the best currency he has.  So, doing anything to make a start up’s equity more expensive, should be undertaken very carefully.   So, after I told him all this in answer to his seemingly simple question, George asked, perhaps more patiently than I might have, “so if I can’t sell stock, what should I do?”  Here’s what I told him:   If you are going to raise money from non professional investors, your default position should be to structure deals that postpone valuation as long as possible.  How do you do that?  By issuing debt instead of equity.  Borrow the money.  Well, that was easy….. so obvious.  Of course, it’s a little more complicated than that.   People invest in start ups, particularly in the early stages because they want a high return possibility – 50 to 75% per year (that’s the equivalent of an interest rate of 50 to 75%). Well, who wants to pay that much interest? And, more to the point, what start up can afford it? So, if an investor wants a start up rate of return for his investment (which, by the way, he is generally entitled to for the risk he is taking by financing an early stage business where the risk of business failure is large), the only way an entrepreneur can provide it is to sell equity, because in equity substantially all the return is generated by the difference between the purchase price and the ultimate sale price.  Remember – “buy low, sell high.”   So, an angel investor should want equity, and indeed that is what he should get.  What the entrepreneur should do, however, is postpone the valuation of his company until it can be done by a professional investor as part of a professional financing.  However, George needed money now so what to do?   Do a convertible debt deal that has the following terms:   A market interest rate. A maturity date some reasonable period of time in the future, say a year. An obligation on the part of the investor to convert the note into the first equity investment priced by a professional investor (usually referred to as the “first institutional financing”). Provide that the investor gets an economic advantage for basically pre purchasing the equity offered in the first institutional financing.  There are many ways to do this – the most customary being to provide the angel with a “discounted” purchase price for the equity obtained in the conversion. The point of this structure is that it provides the earlier angel investor with two economic advantages: (i) the ability to participate in a professionally structured investment downstream, an investment opportunity that might otherwise not be available to the angel investor and (ii) a better purchase price in the round than the professional investors.    There are, of course, many flavors to these terms, for example, how much discount to provide, or the terms upon which, if any, the investor can participate in a business sale if a professional round does not occur.  So, here is the largest point.  If you are talking with an angel investor about an investment, go and talk to a lawyer that works with professional investors.  They can help you with the granular issues for your deal and help you structure something that a VC will view favorably.  Remember that when dealing with professional investors the most important thing to demonstrate is carefulness and credibility. Getting your earlier angel investments structured carefully and intelligently will be a major point in your favor. Jonathan AbermanFri, 06 Apr 2007 00:43:00 GMTf1397696-738c-4295-afcd-943feb885714:217http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/202/Still-Think-IP-Doesnt-Matter.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=202http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=202&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/202/Still-Think-IP-Doesnt-Matter.aspx Last week there were a couple of high profile patent cases decided with potentially large implications to two growing technology staples – VOIP and MP3s.  Verizon obtained a judgment of infringement against Vonage, a judgment that if enforced will at the best case cause Vonage to pay royalties to Verizon. And, at worst, put Vonage out of business.  Meanwhile, another judge determined that Microsoft was infringing upon certain patents relating to MP3 creation and distribution. The judgment? A whopping $1.5 billion.   I am reminded whenever I see these news items of a conference panel I attended a number of years ago, when a group of VCs stated clearly that “patents don’t matter” to a software business.  That might have had some currency when most software businesses didn’t pursue patents aggressively.  However, that’s just not the case now.  Quite simply, players both large and small, and the lawyers that serve them, are aggressively pursuing intellectual property protection and assertion as a business tool, if not a profit opportunity.  This is a distinct turn of events – inventors have always used intellectual property rights as a way to get compensated for their efforts, and inventors have often sought to use patents as a way to stifle competition against their businesses.  The Wright Brothers for example spent years asserting that they patented the airplane….. But, for most market participants patents were a means to an end – a successful business – rather than an end in themselves.   What we are seeing now, more and more frequently is that patents are being pursued as a business tool in their own right.  This has resulted in an explosion in the number of patent filings handed by the US Patent Office.  The largest technology companies are in many cases pursuing ever more expansive intellectual property programs, not only seeking to protect their current businesses, but to also “protect” future businesses.  It has also resulted in venture capital fund like organizations, and lawyers, seeking to acquire key patents from failed businesses solely for the purpose of future enforcement.  To capture an old cliché “it’s a jungle out there”, or more succinctly, it’s a gold rush.   What is an emerging entrepreneur to do?   The most important thing is to understand the distinctiveness that surrounds your business.  By this I mean, if your business is one that depends upon technology, what makes it unique – an idea? A process?  A combination of existing ideas?  How will you keep and capitalize on your business’ uniqueness?  A value proposition of quality of service? Or, perhaps a product that is faster, better and cheaper than prevailing solutions. The universe of possibility is very broad, but on a case-by-case basis each successful business has unique attributes that should be protected from misappropriation by others (i.e., free use).  Notice that I did not recommend that your first step is to go to a lawyer – figure out what is distinctive about your business first, and how it relates to your business strategy.  Only then is a conversation with a lawyer useful – a good lawyer will know what type of intellectual property protection to seek for your distinctiveness (if any), but he is not the best person to determine what is distinctive and relevant – you are.   As a practical matter, you will be much more likely to successfully protect intellectual property if you seek to protect it before it is widely known or sold commercially. This can create a conundrum for an entrepreneur, since paying a lawyer is less painful when you have business income to pay them.  However, in the current intellectual property environment, you might not have a choice.  The good news is that there are a number of excellent IP lawyers in DC that are used to working with entrepreneurs and managing their legal costs.   Recently, I was reminded of this when I saw a large company practicing an idea that an entrepreneur I know had developed five years ago. At the time, he didn't have the money to pursue a patent and sold his product without protection.  His business failed, but his business idea was a good one, and it is now being employed by others.  Did they develop it independently?  Would he have gotten a valid patent if he filed?  Who knows. But, I bet you that every time he sees his business idea on TV he must wonder.....   As an investor in technology companies, I would never invest in a company which does not have a clear IP position and strategy for protection and assertion. The level of development that I expect varies by the stage of enterprise – I would expect a growing business to have its IP rights in place and protected, and an ongoing strategy to protect future rights. For the earlier stage business I would expect at the minimum a baseline IP strategy, and if not some initial filings, at least near term plans and some comfort on the likelihood of consummation of the initial strategy.  Of course, implicit in all this is that I wouldn’t invest in a business that wasn’t distinctive or didn’t have the ability to protect its distinctiveness.   The net, net to this discussion is pretty simple.  Intellectual property rights are a primary way for a business to create a legally enforceable monopoly around a business.  If you don’t act to make this happen early and often, you should assume that somewhere else a competitor is doing exactly that.  It is pretty rare that any idea is so unique that no one else in the world is thinking the very same thing.  Often, the person who gets to assert an intellectual property right is the one that protects it the best.  If it is a jungle out there it clearly is better to be preditor than prey.    Jonathan AbermanMon, 12 Mar 2007 15:43:00 GMTf1397696-738c-4295-afcd-943feb885714:202http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/186/Default.aspx#Comments1http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=186http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=186&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/186/Default.aspx A few years ago there was a popular book that purported to bridge the divide between men and women called “Woman Are from Mars, Men Are from Venus”.  Perhaps you are fortunate enough never to have someone quote you a passage from this book, or give you a copy to encourage your communication skills.  In any event, the book’s central thesis – you have to understand how the other half thinks to truly communicate, seemed apt to me yesterday as I reviewed this post from TechCrunch.   The gist of the story was the passage into death of an unfortunate start up called FilmLoop.  The story itself appears to be a sad one – a start up raises significant venture capital, and is then merged out of existence – apparently squeezing out the founders.  Certainly, there is a cautionary tale there for any entrepreneur who is looking for venture capital. But, to me, the more interesting and instructive thing were the many, many comments following the blog entry.  Hence, the Mars/Venus moment.    The comments fell into two general camps: entrepreneurs who saw the story as another example of how VCs are evil and a smaller group, mostly of VCs, explaining that the VC at question was really just doing his job.  But, the emotion behind the entrepreneurial comments --- Wow.  The commentators really do get exercised, particularly on the VCs are evil side of things.  As you read the comments you’ll see what I mean.   What might not necessarily be obvious, though, is how many entrepreneurs who approach venture investors for funding really do have the attitudes represented in the FilmLoop blogstream.  I see it all the time, both in the initial meeting and (sadly) sometimes after an investment.  These entrepreneurs go into the process expecting to find evil, and often that’s exactly what they find.  The question is whether they find it because it is there, or because they make it happen. The answer of course is that it depends……   One thing that I do know for sure is that an entrepreneur who tries to have a relationship with the VC that is not based on transparency will fail miserably.  My father used to say “you can’t snow the snowman” (generally after I offered a lame excuse on why I didn’t do my homework), with the point being that he was older and had seen it all before.  Well, make no mistake, an experienced VC has seen a great many things, and worked with a wide range of people.  Rightly, or wrongly, a VC will ferret out the withholding of information or management of facts.  That’s one of the things that makes a good VC – “pattern recognition” – making connections quickly.   Of course, an entrepreneur might say that all the VC is doing is making an uninformed snap judgment……   In the interests of fostering greater communication, let’s spell out some of the truisms that entrepreneurs and VCs often hold of the other:   Entrepreneurs think VCs are evil because:   They want control. They will fire me the first chance they get. They provide their investment solely to get a return. They don’t take enough time to understand my business. They react badly when told bad news.  VCs find entrepreneurs frustrating because:   They do not want to share control with the VC. They get in the way of the company having the best management, whether or not it is the entrepreneur. They are not focused on growing and selling the business as quickly as possible. They don’t appreciate how many directions a VC is pulled in. They react badly when told bad news.   Clearly I’ve selected a small sample to illustrate the point, but aren’t so many of them mirrors of the same thing?  In other words, do we really have in the interaction between VCs and entrepreneurs a Venus/Mars divide?   As I have mentioned above and in earlier blog entries, an entrepreneur who is looking for venture capital must understand the limitations in the VC’s world, and the limitations on his world view.  He shouldn’t go into the interaction with unreasonable expectations, but he should look for one very important thing: acknowledgment.  Acknowledgment from the VC that the entrepreneur has prejudices and concerns that will shape how he works with the VC and how he “hears” what the VC says.  In turn the savvy entrepreneur must give the VC transparency and trust, otherwise the interaction between the entrepreneur and VC is doomed to fail.   This is not to suggest that there are not people involved in this dance who are truly “evil”.  Like anything else there are bad apples – people who in this context look to game the other.  But, in my experience in the industry that is the exception, not the rule.  More often, people do not take the time to communicate clearly, and allow their unspoken prejudices to govern their reactions.   My best advice is to look for a business partner that acknowledges and appreciates your prejudices and acts to counteract them.  In other words, don’t skate around the issues that separate entrepreneurs and investors, but instead hit them head on.  Not only will you be more likely to find a better initial fit, you will also be more likely to have a successful partnership over the longer term. Jonathan AbermanWed, 14 Feb 2007 23:32:00 GMTf1397696-738c-4295-afcd-943feb885714:186http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/155/Taking-No-for-an-Answer.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=155http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=155&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/155/Taking-No-for-an-Answer.aspx In any work week I will meet with a number of entrepreneurs who are looking for venture capital – that’s not surprising, since I manage a venture capital fund.  You’d think they would just want to spend time with me because I’m good company…. In any event, most of the meetings won’t after reflection result in further consideration.  At that point, as an investor you have a choice, you can either say something comforting or equivocal and plan to deliver the “bad news” later, or you can spend a bit of time discussing your reasons.  I tend to try when I have time to provide immediate feedback, but not everyone goes that route.   Generally (and I think that this is true for most of my VC brethren), when I meet with an entrepreneur I have a reason to think on first reflection that the entrepreneur may present an interesting opportunity.  But, that’s a very different thing from going into a meeting with all of my questions and concerns addressed.  That’s the point of the meeting, whether it’s the initial meeting or the last meeting before an investment is made.  The process of venture capital investment (unlike merely handing someone a check and hoping for the best), is probably best analogized to peeling an onion.  Of course, I have heard entrepreneurs compare the process less to food preparation and more to a visit to a doctor with rubber gloves and cold hands. But, the point is the same, getting a meeting and getting an investment are very different things.   So, understanding this, the conclusion is that most of the time when entrepreneurs meet with a VC the ultimate answer to the question of “give me money” is going to be “No.”  Faced with that, what should an entrepreneur do?   Some stress the requirement of a thick skin – all but the most fortunate entrepreneurs will have to endure many meetings and the accompanying disappointment.  And, without giving away a state secret, sometimes people (and yes, VCs are people too) are rude, distracted, or otherwise engaged elsewhere.    Personally, I think the more valuable approach is to get as much information as you can from the “No.”  Merely stopping your discussion with the VC after you get a “No”, or even a “Maybe” might limit your further interaction and save your feelings, but you are losing the opportunity to get valuable information.  The secret is to try to drill down on the reasons for the “No” in a polite way and spend some follow up time in reevaluation.  Here are some standard examples of VC responses that can provide you with more information:   “We don’t invest in deals in your sector”.  Did you look at the VC’s website for his investment targets (stage of investment, technology focus) before coming in?  If you think that your opportunity falls within the VCs investment focus, then perhaps you didn’t do a good job of describing your business opportunity.  Look at your presentation and compare it to the VCs investment requirements – did you meet each one and explain why you did?  “We would be interested if you find a lead investor.”  Inquire whether the VC otherwise leads investments (or do some research ahead of time to see if he does), and if he otherwise leads investments, then something else is behind this reason.  It could be that your investment requires more money than he can comfortably provide, or he is intrigued but doesn’t have sufficient expertise to evaluate your opportunity.  In either case, an interested VC would likely refer you to other investors with whom he has a trusted relationship.  In other words, if a VC has led other deals and tells you to go find a lead without offering interested help, then that VC is probably not that interested in your opportunity. “Come back when you have [some/more] revenue.”  While this has the appearance of being a useful guidepost, without further detailing it’s probably about as useful to you as a mere “No”.  Get some clarification – what type of revenue, and why does the investor want to see it?  There are many reasons why revenue could be important, including providing customer validation, demonstrating the removal of technology risk, showing the team can execute and providing cash flow to leverage the VC’s capital.  “Your deal is not a venture capital deal.”  This response, while on its face the most critical, actually can hold the most information.  Before going to see the VC have you properly evaluated what makes a deal attractive to a VC – does your opportunity really provide those attributes?  If you thought that it did, then you should try to figure out more specifically how your deal falls down against these criteria.  “I don’t like your business model – I would like something that was ____________ [insert model here].”  Entrepreneurs hearing this often fall into two camps: those that bristle and those that take notes assuming that they are getting well thought out business advice.  Two things to think about here. First and foremost – don’t confuse an off the cuff reaction with well thought out business advice.  But, second, and more importantly, try to determine how the revised business model differs from yours.  Is it different in a few ways, or every way?  What explains the differences? The overriding advice here is that in my experience the most successful entrepreneurs are those that “fail upward.”  They take an adverse situation and use it as the launching pad for progress and advancement.  Obtaining venture capital is a difficult process – much of the focus on the lore of VC is how to get to “yes.”  Hopefully, now you will be more attuned to the converse. Jonathan AbermanSun, 21 Jan 2007 20:36:00 GMTf1397696-738c-4295-afcd-943feb885714:155http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/141/Investment-Outlook-2007.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=141http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=141&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/141/Investment-Outlook-2007.aspx The New Year is always a good opportunity to take a look back and forward, since it is a consistent measurement point, and at least in my case, thinking deeply is a better use of time than 18 hours of televised college football.  With that, I’ve been thinking some about the trends I see affecting the venture investment climate.  Here are some things that strike me as I think about 2007 and beyond.   Web 2.0   The Time Magazine cover story aside, there is a perception shared by many that “Web 2.0 is over.”  My view is that is far from the case – the underlying trends that caused the creation these new Internet businesses are now entrenched and further development is inevitable.  However, for those that equate Web 2.0 with explosive businesses sold for large amounts of cash, or Google’s sky rocketing public stock price, the YouTube acquisition may be the watershed.  What many Web 2.0 start ups are going to find is that there is not an exit for them – it won’t mean that they are not interesting businesses, or have not acquired customers.  And, without immediate exits, venture investors may look to other sectors and opportunities.   That’s the bad news, but the good news is that innovative software technologies cost less and less to create, so committed Internet entrepreneurs would be wise to approach their businesses as cash efficiently as possible, both to manage their capital requirements and also to ensure that if an exit comes it can occur at a price that satisfies the entrepreneur and the investor.  In other words, just as happened earlier in the decade, a fading of enthusiasm for financing Internet technologies will mask the larger trends – the Internet as a tool, and the things that it enables people to do, will continue to progress, and businesses that survive the times when investment is less in favor will be the winners when favor returns.  If you want an example of this, look at Google, which was largely financed and grown from 2001 through 2003, a time when consumer Internet was disfavored.   Bandwidth and Net Neutrality   Many of the most in favor investment sectors currently (mobile content, video, social networking and Software as a Service), have something in common – they assume that bandwidth will not be a problem.  In other words, if you think about the Internet as a rail road, there is an assumption that there will always be enough tracks to run fast trains all the time and every place.  That is a faulty assumption -- at some point available bandwidth will not be sufficient for demand. This will happen for one of two reasons: Internet demand will grow sufficiently to outstrip the amount of installed bandwidth or owners of the bandwidth will accelerate this trend by favoring certain utilization of their bandwidth to the detriment of other uses.  Rationing of bandwidth is a coming problem.   Basically, bandwidth is provided to consumers by private owners.  They build, maintain and sell the bandwidth.  To this point, the economic model has been to sell access to the bandwidth for a fixed price, and not to charge or otherwise pick favorites among the providers of the data transported by the bandwidth.  This model has been the underpinning of the so called “long tail” of the Internet – the small provider of customer shoes who can reach national customers through key word searches, or a blogger like Mike Arrington who reaches national prominence.  However, if these small guys had to pay for distributing their data, or if for some other reason bandwidth providers decided to favor other data producers, they would loose access to consumers.  You might have heard of the phrase “net neutrality” already, but if you haven’t, this is what it is about – will the owners of bandwidth be able to discriminate among the providers of data.    Over the coming year Congress will likely address the issue of net neutrality, and how it determines to regulate (or not) the bandwidth providers will have a dramatic affect on the investment climate.  If as a software or media entrepreneur you are not familiar with this issue, you should make it your business to understand it and be ready to adapt.  And, if you have a new technology to provide bandwidth to consumers that leapfrogs the current owners, get ready for a large number of investors to come knocking at your door.   Energy and Economic Security   Although you would not be able to judge by the number of SUVs on the Beltway, this year the American consumer got a taste of the fragility of our current energy consumption patterns.  Whether you blamed foreign instability, the demand of developing countries such as China and India, or hedge fund traders, the price of oil was volatile and threatening.  There is a growing sense on both sides of the political spectrum that the US’s national security depends upon changes in our energy consumption patterns – this can occur either through conservation or innovation.   Certainly, if you look at investment patterns in Silicon Valley and the activities of some of the best respected players out there, a part of the VC industry already believes that energy innovation is going to be an area of rapid investment growth in the coming decade.  This is a trend that is going to take over a larger part of the investment climate, and become part of the national consciousness – when you see a cover story in Time Magazine, for example.  I expect that one or more of the Presidential candidates will make energy policy an important part of the campaign, and that Congress will at some point adopt further measures to promote investment in new energy technologies.   Public Offerings and Being a Public Company   The continued depressed level of IPO activity and the number of large companies “going private” to avoid being public companies, reveal a troubling trend.  The regulators clamped down in a big way after the debacles of Enron, MCI and others earlier in the decade.  And, some would say, in light of the current scandals surrounding backdated options pricing and skyrocketing CEO compensation, that they haven’t gone far enough.  But, there is a real question of at what cost have the regulators been successful.  The efficiency and availability of the US public markets has been a major driver of our economic development – quite simply the sale of interests in attractive investments is necessary for earlier investors to be rewarded.  Or, to put it more directly, a venture investor needs to be able to sell his investment to generate returns.   The current regulatory trend will have to correct itself.  This will likely occur in one of two ways: changes in regulation to make it easier to become or stay public or US companies will seek liquidity in international public markets.  My expectation is that you will see a larger number of technology start ups investigating listings in Europe, particularly London and Germany over the coming year.   What does this all mean to the entrepreneur? See past the initial hype and understand the larger trends. Build your business against the larger trends, and build it to last. Pay attention to Washington.  The government is going to be addressing issues that will dramatically affect the technology investment climate and however it acts it will create opportunities for innovation and venture investment. Understand the dynamics of exits – who’s buying companies and why.  How available is the public market to your company? Venture investment doesn’t happen in a vacuum.  You’ll note that I didn’t mention anything about the level of investment activity in 2006 being at a healthy level, or fundraising for larger funds continuing to be at historic highs. That’s because those trends, while illustrative of a healthy venture market, don’t predict future investment patterns.  Whether the trends I’ve identified above will be more predictive is a matter of time; let’s check in with each other next New Year and see how they went. Jonathan AbermanMon, 01 Jan 2007 16:28:00 GMTf1397696-738c-4295-afcd-943feb885714:141http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/131/Default.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=131http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=131&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/131/Default.aspx In the dance between entrepreneurs and venture investors, the subject of valuation provides more friction and difficulty than any other single factor.  Understanding some of the metrics that venture investors use for valuation, and the unspoken expectations that surround the discussion of valuation, is essential for any successful entrepreneur.  This is a complicated subject, but in hopes of providing at least some guidance for the interested entrepreneur, here are a few thoughts from the trenches.   Let’s start with the basics: valuation of a business for venture financing, while seemingly a complicated process, is actually understandable by taking on board a few rules.  The first one is that there is are “market standards” for venture capital terms and valuations.  Unfortunately, for entrepreneurs this market information largely exists in the experience base of venture investors, and is not really published in any single comprehensive source (compare for example, the closing prices of the NYSE, which are available in various places).  Investors see many deals at a time, and generally discuss potential deals with their colleagues, so a general sense of a company’s market value and the required corporate attributes to be a desirable venture investment is something that they have internalized (or at least think that they have internalized).    Generally, venture investing is generally made on the basis of future growth and subsequent sale, rather than the cash flows currently generated by the business. Without going too much into the “whys” of this, suffice it to say that venture investing is about financing explosive growth companies, which generally consume more cash than they produce (that’s why they need equity financing).  So, if an investor is looking to value an explosive business, he really has to value an investment opportunity by looking at comparable companies – either on a current basis (what similar companies have been financed recently, and at what valuation metrics) or on an expectation basis (what valuation have similar businesses sold for after 5 years).    The next thing to acknowledge is that when valuing a current business by looking at potential future exit values, venture investors need to apply some type of growth factor to determine whether a business opportunity is an attractive venture investment. For instance, an opportunity to invest in a company where comparable businesses have been sold five years later for twice as much as the investors put in will likely not be as attractive as one where the investors got ten times their money.  This concept of factoring growth is called the “discount rate” or “internal rate of return”.   The internal rate of return or discount rate applied by an investor will vary, but as a general matter, the riskier the perceived investment the higher the rate used.  In other words, a venture investor is going to expect a pretty large change in valuation of a business from investment to exit.   So we’ve given you a sense of the mechanism of valuation.  But, that’s just the beginning of where it gets tough.  Because the market is “imperfect” (an economic term that in this case means the VCs have a better handle on market prices than the entrepreneur), valuation on any deal is negotiated by the parties on an ad hoc basis.  You don’t go to a stock market to get venture capital you get it by asking an investor for it.  And, this introduces the most complicating factor of all: human behavior.    Venture valuation is thereby framed with a number of truisms an entrepreneur should be very aware of:   The entrepreneur is always going to value his business higher than the venture investor.  Why?  Because the venture investor is going to expect that every possible thing that could go wrong with a start up will, and the entrepreneur (even the most realistic) will have a greater sense of his likelihood of success.  In other words, the entrepreneur will always think his business is less risky.  And, since risk perception will affect the discount rate used by the venture investor in valuation a disconnect in agreement on risk will inevitably cause a disagreement on price. Supply and demand do affect valuation, but expressly trying to create an auction is something that venture investors don’t like.  Because venture investing is predicated on the belief that a constructive venture investor can help to create a successful company, venture investors are constantly looking for entrepreneurs that want to work with them.  In other words, if a venture investor believes that he is fungible with another, he will be concerned that he will not be able to influence the company.  That doesn’t mean that an entrepreneur shouldn’t seek to create demand for his company by talking with multiple investors, but understand that doing it baldly could create a bad dynamic. Although we will cover this in another entry (or many), venture capital terms (such as liquidation preferences, size of option pool and others) also can affect the true valuation of a deal.  For example, a valuation of $10 million dollars might seem more appealing to an entrepreneur than an $8 million valuation from another investor.  However, if the first deal has a liquidation preference of $6 million for the investors (i.e., the investors money first) and the second deal has a liquidation preference of $2 million, the second deal is actually a better valuation for the entrepreneur. An entrepreneur should surround himself with experienced help to level the playing field – service providers that do many venture deals, board members that have relevant experience, as two examples.  The point is that market participants that see many transactions can provide the entrepreneur with some sense of the “market” and provide a reasonable counterbalance to the VC’s market sense. An entrepreneur should have a sense of the valuation of his business before engaging with venture investors.  But, he should not generally make valuation a “drop dead” issue.  Ultimately, the valuation of a business occurs through negotiation and analysis.  Venture capital is not a zero sum game – the most successful venture investors and the entrepreneurs that work with them do not try to game each other.  That doesn’t mean that parties agree on everything, but they act in good faith towards each other and when negotiating and subsequently working together they seek to find results that allow all parties to benefit. The most important unwritten rule of all is that venture investors want to work with entrepreneurs that have at least some understanding of the determination of valuation, and the expectations that surround it.  This is because investors want to back winners, and in their world, one of the largest indicators of future success is diligence and care.  Go into a discussion of valuation with an appreciation of what is really going on, and not only will you be more likely to obtain a venture investment, you are also much more likely to have a great relationship with your investor. Jonathan AbermanFri, 01 Dec 2006 21:01:00 GMTf1397696-738c-4295-afcd-943feb885714:131http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/128/Web-30.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=128http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=128&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/128/Web-30.aspx A recent article in the New York Times calling out the coming of Web 3.0 caused me to think about some larger trends.  Over the weekend the NY Times ran an article about “Web 3.0”.  It was worth reading, and provided some good thoughts on where the Internet, particularly as an information appliance, was going.  The short synopsis is that various start ups and engineers are working to provide mechanisms for us to get contextual information from the Web – moving away from using the Web through key word searches (“pizza Mclean delivery”) to semantic searches (“I want a deep dish pizza that is as good as the one I had in Chicago last month, and I want it delivered to my house in McLean in 30 minutes”.).  In other words, they are trying to make the Web and its data more useful. Without question the ability for people to get data organized the way that they think will be an accelerator for adoption of information technology and continue to more tightly integrate people and data into the Web.  There are real implications here for privacy, technology dependency, social fragmentation, educational disparity and opportunity and the further flattening of the world, among other weighty issues.  Over time, I am sure that we’ll address many of those issues together. But, for today, I want to limit myself to a more mundane matter – the article’s gist that the so-called “semantic web” was the next stage in the development of the Internet and the Web – that it will be the basis of “Web 3.0.”   Certainly, there is a growing sense among the technocrati that “Web 2.0” is over and done.  I don’t necessarily ascribe to that view – what we are seeing now rather is that the innovations that have been labeled as “Web 2.0” are becoming adopted by the mainstream.  Inevitably this will result in missteps and me-too business plans, and there will be a shake out and some investors will loose money and founders will fail.  However, that does not mean that the innovations of  Web 2.0 will not become part of the fabric of the Web and how data is presented and consumed.  It does, however, leave the question as to where the next wave of accelerating innovation will come from. Jonathan AbermanMon, 13 Nov 2006 19:53:00 GMTf1397696-738c-4295-afcd-943feb885714:128http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/113/Huh--You-Do-What.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=113http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=113&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/113/Huh--You-Do-What.aspx The most basic of things, a simple description of the business, is often given the least attention in a presentation.  But, is there anything more important? From time to time I am fortunate enough to be part of panels evaluating the pitches of  start ups looking for equity capital.  I generally like doing these things, since it provides an opportunity to see some interesting new companies and hopefully help them along in some way.  I am constantly impressed by the energy and commitment that the presenters have – it takes guts to be an entrepreneur.  Jonathan AbermanSun, 29 Oct 2006 15:02:00 GMTf1397696-738c-4295-afcd-943feb885714:113http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/106/Why-Not-Here.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=106http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=106&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/106/Why-Not-Here.aspx Observers suggest that Silicon Valley is the "only" place to start a technology company. The DC region technology community shouldn't be ignored. Jonathan AbermanSun, 22 Oct 2006 18:54:00 GMTf1397696-738c-4295-afcd-943feb885714:106http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/92/A-Healthy-Venture-Market-Returns-to-DC.aspx#Comments2http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=92http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=92&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/92/A-Healthy-Venture-Market-Returns-to-DC.aspxA recent article in the Washington Business Journal painted a favorable picture of the local venture capital market.  Is it all rosy, or are there underlying trends to consider? Jonathan AbermanMon, 16 Oct 2006 16:25:00 GMTf1397696-738c-4295-afcd-943feb885714:92http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/86/Social-Networking--A-new-bubble.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=86http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=86&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/86/Social-Networking--A-new-bubble.aspx Social Networking as a business model provides an interesting challenge for valuation and raises questions as to whether these businesses are durable or are the makings of another “Internet Bubble.” Jonathan AbermanThu, 05 Oct 2006 23:59:00 GMTf1397696-738c-4295-afcd-943feb885714:86http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/79/Toast-and-Jam--The-Internet-as-an-Appliance.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=79http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=79&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/79/Toast-and-Jam--The-Internet-as-an-Appliance.aspx One of my partners, Bob Smith, describes the current state of development of the Internet as something akin to a toaster.  You don’t necessarily need to know how a toaster works to get toast.  It just comes out – brown, light, wheat, rye – your biggest challenge is to figure out how to make sure the buttered side doesn’t fall on your carpet.  While it may be counter intuitive to think about the experience of using a computer as having the simplicity of a toaster – anyone who has seen the “blue screen of death” would beg to differ. But, stop and think for a moment about how you use your computer these days – my guess is that more and more you are using your Internet browser to access sophisticated services.  Do you stop to think about how Google works?  Spend much time thinking about what made that YouTube video viewable on your laptop?  What about Ebay – know how their seller approval rankings are done? Jonathan AbermanSun, 24 Sep 2006 23:24:00 GMTf1397696-738c-4295-afcd-943feb885714:79http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/73/Welcome-to-the-Amplifier-Network.aspx#Comments0http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=93&ModuleID=399&ArticleID=73http://www.amplifierventures.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=73&PortalID=0&TabID=93http://www.amplifierventures.com/NetworkMenu/Bloggers/Blogs/tabid/93/articleType/ArticleView/articleId/73/Welcome-to-the-Amplifier-Network.aspx Sitting here starting a blog is a very interesting experience, something that I am sure many of you have shared at one time or another.  There are quite literally millions of things to write about.  And, yet there is the “who cares” aspect – if a tree falls in the forest, and no one is there to hear it, did it fall?  So, with that – timber! If you are an initial reader of this blog, then you probably know that I and a group of experienced business people decided around a year and half ago to start Amplifier Venture Partners (www.amplifierventures.com).  We started the fund because we believed that the DC Metroplex could use a source of institutional seed capital that provided entrepreneur focused “hands on” assistance. That doesn’t mean we thought that there weren’t already some great funds operating in town (we do, and work with many of them), but we saw a niche for us, to provide something additive to the community and the venture ecosystem.  Jonathan AbermanThu, 14 Sep 2006 20:45:00 GMTf1397696-738c-4295-afcd-943feb885714:73