Please take a look at this video.
To me, future looks perfect for entrepreneurs. What do you think?
Archive for the ‘inspiration’ Category
If anyone still has any doubt that new models are needed…
Tuesday, March 2nd, 2010
Future of Angel Investing?
Saturday, February 27th, 2010Today I got a question about “International angel investing. Can it work?” – from Giandomenico that posted it in LinkedIn.
In his question he’s pondering about the angel investing in international level. The main point in the question is to compare it to more local investing and in what situations would international angel investing work.
My idea is that an international angel investment is frequently a co-investment with a local (and trusted) angel investor. Otherwise, international angel investment can happen if the amount of invested money is very small and limited for the investor and if both the investor and the entrepreneur are good at communicating through email and throughsoftwares like Skype, webex etc. But these are particular cases.
I think this is a very good question so I wanted to spend some time thinking about it, to answer properly. Here’s my answer to he’s question:
I think you pretty much got this right.
I also think it’s not so much of local or international than it is who knows who. Typically angel investments are referrals within a network. That network can be friends, friends of friends or some professional network and ultimately a professional angel investing network.
It just happens to be that there are more locally focused networks, since building any kind of international network in past have been much more difficult and costly.
So my answer for situation today, is that international angel investing happens where there are angels that have personal networks of friends that are internationally spread out.
How do I think this will change in the future?
1. Now that there are so much more effective tools that enable people to join networks that are international and find new friends online, this will start to increase.
2. When the next generation of angel investors grow from people commonly using facebook in their daily activities today, it’s very simple for them to also feel comfortable making investment decisions with their online (angel investing) friends, if they trust their opinions in other matters in their life as well.
3. When the costs related per investment comes down with more effective tools online and at the same time there is bigger pool of deal flow, that will enable new options.
Crowdfunding can also be fundingcrowd
If the concept for crowdfunding in fund raising side means;
- instead of looking for few people with plenty of money, choosing to find plenty of people with small money
Then for investing that can be translated to;
- instead of putting plenty of money to few startups, choosing to put little money to many startups.
From investors point of view this is a balance between how much they want to distribute their risk.
These are the reasons we are building Grow VC, to help enable this development for international angel investing. More deal flow to choose from, social network of like minded people to make new international friends, bring down the cost per deal and smaller investment to more startups.
We also believe, that in future by enabling more efficient tools it also makes sense to do smaller rounds more often to make it easier for startup to be agile and also limit the risk by investing into “momentum” and milestones based funding – milestone by milestone.
This all have possibility to make stuff more “real”, when the focus is more in the near future, rather than 3 years with hockey stick plan.
Last July my co-founder Jouko also wrote about this topic with the topic “invest globally or locally“. What’s your thoughts on this topic and how do you see this developing in the future?
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Crowdfunding by Cupcakes
Friday, February 26th, 2010
Yesterday I received an email to Grow VC from Laura Williams in Cleveland Ohio. She had started her own crowdfunding project to open up a new cupcake store, without even knowing there is such model called crowdfunding.
Here’s her email:
Dear Grow VC,
My name is Laura Williams and I am the owner of LaBella Cupcakes here in Cleveland, OH. I am also currently following you on Twitter (LaBellaCupcakes).
What led me to your site was an initiative that I rolled out via Twitter where I am asking anyone who would like to donate (sponsor) me in helping me open up my first retail store can do so via my website. In exchange, I am giving them free cupcakes pound for pound so to speak, my cupcakes are $2.50 a piece, so if someone sponsors us with a $20 donation, they would receive 8 cupcakes when we open.
When a company contacted me yesterday because they wanted to use me as a good example of “Crowd Funding” I had never heard this term before until yesterday. I basically thought that my idea of pooling all of my customers and followers together was a great idea to help me launch my business but never knew there was an actual term for it.
So, as I started researching between yesterday and today, I came across your company. And from what I can gather, this concept of using crowd funding to help launch entrepreneurs is actually a fairly new one, so I guess I am getting on the right track at the right time.
So what my question to your company is, do you only invest in Tech companies or do you invest in companies such as mine? I noticed all of the places you are visiting and wished you were closer to where I live so that I could meet with you.
My goal is to raise $50,000 by April 30th. The retail shop that we found won’t stay available forever, so I have to try to raise the money in 60 days. I launched my initiative a week ago and so far we’ve had 15 sponsors donate $379.00.
I have one customer who believes in our product so much that he is willing to be an investor in my company.
There are only 2 other cupcake only bakeries here in Ohio and the one bakery sells 1,000 cupcakes per day. And sells out per day. Her cupcakes sell between $1.90 – $2.50 a piece.
If you would like to learn more about me, please visit
www.labellacupcakes.com.Our sponsorship page is:
http://www.labellacupcakes.com/item_46/Would-you-like-to-sponsor-my-mom-and-help-her-open-up-her-very-first-store.htmI look forward to hearing from you,
Sincerely,
Laura Williams
Owner
LaBella Cupcakes
Website: www.labellacupcakes.com
Phone: (216) 375-5303
Email: laura@labellacupcakes.com
I think this was such a great story and a great entrepreneurial effort, that even if we could not help her directly via Grow VC platform, I wanted to help a fellow entrepreneur and also help spread her story of crowdfunding. So I asked to blog about her story.
I also wanted to “practise what I preach” so I went to her crowdfunding page and bought 50$ worth of cupcakes and asked her to donate those cupcakes to nearby public daycare, if the store would actually be opened.
Just few hours ago, I got this confirmation from her to my email:
Dear Valto,
This email is to confirm your official sponsorship status for LaBella Cupcakes.
Your sponsorship donation amount is: $55.00
As mentioned on our website, our goal is to raise the money needed to open up our new gourmet cupcake bakery shop by April 30, 2010. If the money is not raised by April 30th, your sponsorship donation will be promptly refunded.
Per your request, your donation will be used to give cupcakes to a nearby daycare. The shop that we are looking to open at Kamms Corners has a daycare just a few doors down, they will be so pleased.
Please check back on our sponsorship page as we all watch the sponsorship dollars grow.
Thank you very much for your support!
Sincerely,
Laura
So there you have it (that $5 extra was for shipping). I think it’s great to see entrepreneurs finding new and more independent ways to move their business forward. Let’s see if Laura will have her cupcake store crowdfunded 
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How to build a presentation like Steve Jobs
Friday, February 19th, 2010
- Image by Getty Images via Daylife
For any Start up, there is a need to build a great pitch and make it effective. Here are the most typical topics you should cover in your first short pitch, where the goal simply is to have a change in the next step.
- The problem
- The solution
- The market
- The plan to reach the market (inc. your team’s knowledge base)
- Proposed Deal
If you think about this in “PowerPoint format”, in your elevator pitch (3-5 min), you should not have more than 5 points per slide with max 7 rows of text. The idea is that you only hit the highlights and make your audience “want to hear/read the details” = your goal.
Here’s few pointers by Carmine Gallo about the Presentation Secrets of Steve Jobs.
- first set the theme
- outline your presentation and make it clear when you have covered one thing before moving on to the next one
- BE excited. If you are not, why would the audience be?
- sell experiences or value, not the features
- make it visual, less text more images
- practise, practise and practise
More in the video below.
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What stage should Startup proposal be, to post it to Grow VC?
Wednesday, February 17th, 2010
- Image by DavidDMuir via Flickr
Now that the long awaited core model is out, we are working on collecting questions and feedback from various blogs, emails etc. and are going to write longer and more detailed post to answer all of the important questions, but just briefly wanted to share this one question I just replied via email.
I’d like to ask you at what level should be a Start up proposal? I mean, an entrepreneur should present a complete business plan or can present just an innovative idea too?
My reply:
It can be at in any stage that you want, but it will need to be web or mobile focused business idea/model. However it’s good to understand that typically very early stage ideas are not so interesting “as investment”, but then again that “typically” comes more from the “old models of investing” and to be honest we have no idea what will become “typical” in our service, because that depends on the users.
Also note that all information you post into your startup profile in our service, is visible to all paid members (and early beta registrants that have their active role/profile), so I suggest you to read this post related on “idea level”
This will be very interesting to see, if entrepreneurs as “investors” will be different than “traditional investors”.
It’s been a big push to get this concept build and thanks to our great team it’s now out. It feels so great to finally have it out in the real markets and get real feedback. Now we can finally start to be fully open about our service and can continue to develop our service openly with you.
There is a lot to do and we are just getting started with all of this, so please share your feedback and questions in comments so we can get the dialog going here
BIG thanks for each and every one of you for being part of this exiting journey with us!
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Welcome to The Year Of Tiger
Sunday, February 14th, 2010
- Image by Fuzzybunn via Flickr
Happy Chinese New Year!
The Year of the Tiger will bring far reaching changes for everyone. New inventions and incredible technological advances have a good chance of occurring. For all of the Chinese horoscope signs, this year is one to be active – seizing opportunities and making the most of our personal and very individual talents. Everything happens quickly and dramatically in a Tiger year – blink and you could miss an important chance of a lifetime!
This is the last day for claiming your free “premium account” for 2010 valued up to $1,200, that includes one or many of the following:
- active startup profile (+ entrepreneur role)
- expert role
- funder role
Steps to claim your free “premium account” for 2010:
- Register
- After registration, complete your profile
- Go to the Subscription & Role page
- Select your subscription type
- Click “apply for subscription”
Tell a friend
Small things that you do can create great opportunities for you and people you care for. Let your friends know there’s only 1 day left to get their own free Grow VC premium subscription for 2010. You can even use your affiliate link if you like. More details about the affiliate model
Good luck for the year of the Tiger!
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iPad and Apps Economy
Thursday, January 28th, 2010We all now know officially that Apple launched iPad. It is an interesting new concept between mobile phones and laptops. And definitely it will have and need a lot of applications to be successful. We saw already some games, books, and newspapers that are available.
The next step is to get developers to make much more apps. Paul Grim, a General Partner at venture capital firm SunBridge Partners, commented the apps business from the traditional VC point of view in Venturebeat’s article, An investor’s take on the iPad — how to parse the hype. In this article Paul Grim says:
“Although I do believe there will be many successful apps on the iPad, I don’t believe they are generally venture-backed material. As with most of the iPhone apps, this will be a hits-driven business with little capital intensity; most of the successes will likely be angel or self-funded.”
This is the same point Grow VC has emphasized many times (like yesterday). We have actually divided the mobile startups now into two main categories (there are of course much more segments inside these categories):
- Hardware and more demanding technical platform startups
- Application startups
The first category includes companies that have been funded by traditional VC’s. But many of those firms also need seed funding before a VC round. The second category is not really for the traditional VC’s. But it doesn’t mean that they are not good business opportunities. But the capital structure and risk profile is different from VC’s targets. They can start with small money, and it is not technology risk, but much more market risk, i.e. can they really get loyal users.
This is one reason, why new models for seed and startup funding are needed. And we believe Grow VC’s concepts, which we have now in beta and especially new ones we launch in this year, will offer a new way to fund these companies.
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Future of Venture Capital
Saturday, January 23rd, 2010
Image via Wikipedia
Today I was reading one of my favorite VC blogs AVC by Fred Wilson about “The Venture Diet is Working“, where he says:
2010 will be an interesting year. If VC investments go back up to $25bn to $30bn per year, then the diet didn’t stick and we are back to an overfunded industry that will produce subpar returns on average.
If, on the other hand, the new normal is $15bn to $20bn per year, then the diet worked and we’ve scaled back the business to healthy levels.
This comment relates to he’s earlier post about the “Venture Capital Math Problem“, where he explains about the problem that – too much money will make the whole VC industry to under perform.
As this is one of the reasons we have started Grow VC, I wanted to point out that things are not the same everywhere. So here’s my take on the topic:
I think this is similar problem than it is with food. In some western countries there is too much food and problems that are associated with that, like obesity. Yet in many parts of the world, people are starving.
So if some markets in the world have too much money in VC, it does not mean there is too much money overall, it’s just wrongly distributed. I do understand that, there are also problems with having too much money per sector, so that nobody is getting good results, but that too is wrong distribution.
Early VC money should always be going towards new innovation and not to be “me too in the popular segment” – there are plenty of problems in the world for entrepreneurs to solve & VC’s to be successful.
If we think that “Four Years After Founding, Kiva Hits $100 Million In Microloans“, I feel that it’s a strong indication that entrepreneurship in all shape and sizes can be instrumental on reshaping our world for the better.
There is a big gap between what Kiva.org is doing and with these problems of having too much money in venture capital in some regions. For us this shows that there needs to be much better distribution, more transparency and more activity in this segment overall – and this is exactly where we are focusing our efforts.
Here’s my dialog with Fred, on the “Venture Capital Math problem” 8 months ago:
Me:
I think this just shows that money does not solve problems. The problem here is not too much money, but how it’s now distributed.
VC industry is starting to look like the newspaper industry
– better to wake up, the blogs are coming…
Fred:
What are the blogs of the VC business?Things like Y Combinator are great but they are feeding us even more opportunities so I see them as additive, Although I also see blogs as additive for the newspaper business if they’d just see themselves as curators and aggregators instead of content creators
Me:
I guess the closest thing to “blogs of VC industry” today are angel investors. But that’s for today. Also Y-combinator and the likes are great too and could be considered as “blogs of VC industry”. However their “next step” need to change away from just VC’s.
The fundamental change will become, when there are “platforms” for anyone to start a “blog for VC industry” and that’s what we are doing in www.growvc.com.
Overall, we feel that in long term the money will be spread to more potential start-ups and more of them will not go via IPO but just buy back of shares, mergers etc. with lower ROI. But that’s OK if the time for ROI is shorter and cost of management is lower.
So – be more direct, spread wider, lower the management cost, speed up the ROI cycle and you can accept lower ROI.
If you think about the structure of today, from where the VC money really comes from, you start to see the “big picture”. – basically it means that individuals like you and me pay for pensions funds etc. and these funds then invest to VC funds. VC’s then make investment decisions and “manage” the investments, all the way to take it public (hopefully). Basically just to sell it back to us…
When more people will start to understand this cycle because of more info and transparency online (if they are interested), people will not accept this structure. Because in the long run what matter is, if the companies in question sell what matters. And that is not a question of size.
Fred:
Got it
I hope this works
It would scale much better
Related to this topic, below is a very interesting speech given by Fred Wilson at talks@google. You need to spare an hour to look the whole video, but I feel it’s well worth it. Just have some popcorn & coke and relax.
What makes it interesting to me, is that those industries that are going to be disrupted by internet in the future, currently have same issues what Venture Capital does, yet for some reason those would not apply to VC industry.
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Asking for money?
Monday, September 28th, 2009
Image via Wikipedia
This is a guest post by: Brad Christen from CW Consulting
For startup companies, raising your first dollar is the biggest challenge: everyone is hesitant to place the first bet on a new company. Luckily, there’s a range of people out there willing to help – from investment groups and consultants to well-connected friends and registered broker dealers. But even if you’ve enlisted help in your search for capital, on many level you’re still going to have to be involved in the fundraising process.
And all too often, in spite of an entrepreneur’s passion for their project, they aren’t psychologically prepared to “ask for money”.
That’s quite OK, entrepreneurs should never ask for money. They are selling a stake in a new opportunity. They are inviting people to be part of an exciting venture. And they have to practice their pitch until it’s as familiar and unforgettable to them as a sit-com’s theme song.
There are three psychological tricks that entrepreneurs can employ. First, collect “no’s.” Make it your mission to hear the word “no” as many times as you can. Set a daily goal of how many times you want to hear it. Second, tell everybody what you’re doing. If a bank teller, a UPS delivery person or a pharmacist asks “how are you doing?” don’t say “fine.” Tell them exactly how much money you’re raising for your new venture. Third, build a movement. Replace “How many shares can you buy?” with “How many people can you find who be right for this kind of investment?”
The key is to stop asking and start telling. We’ve seen these tips transform entrepreneurs time and again. And we’ve seen how investors respond positively to entrepreneurs who have overcome any fear of rejection when it comes to financing their startup.
Are you still “asking” for money?
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The new era of ownership and funding: join the journey
Monday, July 20th, 2009
- Image via Wikipedia
Wired published a couple of months ago an article “The New Socialism: Global Collectivist Society Is Coming Online”. To be honest, I don’t like too much the word socialism in the title. But if we ignore the word, this is really relevant article. And it is especially relevant for mobile and web related start-up companies and their funding.
Wired writes:
“We’re not talking about your grandfather’s socialism. In fact, there is a long list of past movements this new socialism is not. It is not class warfare. It is not anti-American; indeed, digital socialism may be the newest American innovation. While old-school socialism was an arm of the state, digital socialism is socialism without the state. This new brand of socialism currently operates in the realm of culture and economics, rather than government—for now.”
And it continues:
“Instead of gathering on collective farms, we gather in collective worlds. Instead of state factories, we have desktop factories connected to virtual co-ops. Instead of sharing drill bits, picks, and shovels, we share apps, scripts, and APIs. Instead of faceless politburos, we have faceless meritocracies, where the only thing that matters is getting things done. Instead of national production, we have peer production. Instead of government rations and subsidies, we have a bounty of free goods.”
And the writer has also some examples: “Who would have believed that poor farmers could secure $100 loans from perfect strangers on the other side of the planet—and pay them back? That is what Kiva does with peer-to-peer lending. Every public health care expert declared confidently that sharing was fine for photos, but no one would share their medical records. But PatientsLikeMe, where patients pool results of treatments to better their own care, prove that collective action can trump both doctors and privacy scares. The increasingly common habit of sharing what you’re thinking (Twitter), what you’re reading (StumbleUpon), your finances (Wesabe), your everything (the Web) is becoming a foundation of our culture.”
I think Grow VC could be one example in that list too. But I would call it as a new era of capitalism, where individual people and companies have better tools to work with other individuals and also have better control on their own life and businesses.
People don’t have be to a small part of a huge organization as it has been during the industrial age. But we still need models to work together and we also need owners and their control in companies. But openness, transparency and peer-to-peer models can make more effective capitalism.
All this is quite theoretical and abstract. Anyway, at Grow VC we believe that this new era of the web business also needs new models for funding and venture capitalism. VC business has been very similar the last 20 years. Our vision is to get it to support the needs of today’s new companies. Our global match-making service for investors and companies is the starting point. And all feedback proves that it is really needed. But I can tell it is only the first step on our journey to re-write the rules of venture capital funding. You will see a lot of other things during the coming months, how we think the funding world must also be renewed. And we talk about openness, collectivism, and co-operation; we want that all of view participate into this development. We want to get your ideas, comments and contribution to make this development possible.
This blog is one forum to discuss and develop concepts. If you register into the service, we have an internal discussion forum. You can also email us and you can develop components for the service.
How far you think crowd sourcing and collective actions, assisted by Internet, can take us in the future?
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