See original post at BRYCE DOT VC:

About this time last year as I walked down the Embarcadero, en route to my office, I thought there was a 50/50 chance I’d have an FBI agent waiting for me in the lobby.

A few nights prior, only weeks after moving to the bay area and days after having a new baby, I went to a dinner at Bin 38 that got turned into a meme. What followed was an amazing spectacle of mud slinging, grand standing and finger pointing unlike any I had ever found myself in the midst of. Heavy accusations were made, threats of FBI investigations were implied and career ending personal attacks were levied.

I wondered to myself, my partner Mark, our attorneys and the limited partners of our fund if I could recover. Based on the awful accusations that were being made could entrepreneurs ever trust me again? Would the investors in the new fund we had just closed ask for their money back?

It was a massiver personal blow and, for a few days, it felt like my world was crashing down around me.

Then a funny thing happened.

Within days the headlines slowed to a trickle then vanished altogether. As the voices of grandstanders and fingerpointers quieted new voices of supporters and advocates, many of whom I hardly knew, began to speak up. Those FBI investigators I was so certain were waiting in my lobby never arrived, but many others did wait in that same lobby to show support, offer help or just lend an ear.

The past year has been the most transformational of my career. We’ve been more active in making new investments than ever. We’ve seen two massively profitable exits (TripIt and Instructables). And I went from being a VC no one had ever heard of, to being the only VC no one had ever heard of on a list of 7 other VCs everyone else knew.

I learned a lot of lessons after stepping through the doors of Bin 38.

The one I’m most grateful for today is that no matter how bad a situation we find ourselves in there is a way forward. That when we think we’re on the brink of ruin we’re not. That the most insurmountable trials often appear right before our biggest breakthroughs. And that, in fact, the personal insights and learnings we achieve in passing through these trials are the foundation upon which breakthroughs are built.

See original post at A Smart Bear: Startups and Marketing for Geeks:

In a two-party political system like we have in America, the fight is always over the middle.

The hard-lefts vote Democratic, the hard-rights Republican, even if they don’t know the candidate, even if they don’t like the candidate, because it can’t be as bad as that other guy who is even further removed from their ideology. No sense in either party trying to battle over those extremes.

But fighting for the middle is murky — without a strong affiliation and a consistent set of beliefs, how do you convince all of the centrists you’re the best candidate?

The answer is political safe-talk: saying the right thing to the crowd in front of you while leaving enough wiggle room to say something different to the next. Frolic at the intersection of ambiguity and generality. Assert nothing controversial, lest you lose the room. Even when you can’t bring yourself to say something they’ll love, just say something they can’t quite hate.

Of course this sort of behavior is why we distrust and dislike politicians, and why most Americans prefer voting for “none of the above.”

A startup must be the opposite of a politician.

A startup should be the bat-shit crazy independent candidate who runs for president even though he’ll end up with only 40,000 votes.

After all, wouldn’t you be happy with 40,000 zealous fans, each contributing $10/mo to your cause?

How do you get 40,000 fans, whether web app customers, blog readers, or book-buyers? By talking to the fringe, not the middle.

By taking a hard line on what’s important to you. By having strong opinions, even if weakly held. By being specific, not general, By speaking to your target audience, not to just anyone who happens by your website. By taking the smallest, most well-defined niche you can muster and owning it 100%.

You’ll need to be honest too. It’s hard to be passionate, strong, specific, and zealous without also be honest. Honest with yourself in what you profess and honest with others that you’re espousing it with neither apology nor qualification.

Not sure what you believe? Not sure what’s important to you? I wasn’t either three years ago when I started this blog. Maybe that’s something worth fixing. Best way to figure it out, though, is to start writing and see what comes, then look back later and see if you still believe it.

Though this part is difficult — as much because of introspection as of converting thoughts to words — it makes everything else easy because zealots aren’t like normal customers. They willingly put up with bugs or lack of features, they’re your unpaid salesforce, you’ll feed off your own words and theirs to construct compelling yet accurate website and advertising copy.

Then you’ll discover the best part: People outside your niche will like what you’re saying too. You’ll find that people who aren’t your “perfect” customer are nevertheless willing to join you, because strong opinion coupled with abject honesty is compelling. Even if you say, right on the home page, “This product is for little startups only!” some project manager from IBM will buy 300 seats.

It happened to me. Lots of times.

You’ll be surprised how many people outside your target market wish that they were inside, and will join you if only to live vicariously.

Take this blog — it’s written specifically for founders of small, single-digit-sized startups, bootstrapped or angel-funded, who sell product online. Yet, the majority of my readers are not that! Most aren’t running business yet, they’re thinking about it, or they have a side-project they hope might become a business, or they want to twist their corporate job into something more meaningful. Many are consultants. A strong minority aren’t even in software.

A strong, clear message of any sort beats a muddled, generic message attempting to appeal to the masses.

Let the silly politicians pander and play to the masses. Be your own tribal leader.

Sign up for AppSumo‘s daily deals specifically for web geeks & entrepreneurs.

See original post at BRYCE DOT VC:

I had a conversation with a VC about a year ago that I think about often these days.

We were discussing investment strategies and approaches to the current market and he, unconsciously at the time, made the distinction between seed “deals” and REAL investments. Me being me, I didn’t want to miss the opportunity to point out what he’d just said and get a deeper understanding of how such a distinction was made.

At the time, frankly, the answers were unsatisfying.

Talk of buying options, fear of missing out on the next big thing or being limited to just a handful of investments every year seemed to be the heart of it. Seed “deals” seemed like a reasonable route to cut through partnership red tape, scale up investment pace, cast a wide net all the while being freed from getting too distracted from making REAL investments.

No board seats, no information rights, no problem. Arms length relationships would buffer from any mixed signals in future fundraising and provide flexibility to back competitors in the category if the seed “deal” didn’t emerge as the leader.

This is certainly A strategy. The reason I go back to that conversation often is that I’m not sure it’s a good one.

So I was interested to read Fred’s post today on Lean approaches to businesses, including venture capital. In light of the conversation above, this piece caught my attention:

In the first two or three years of Flatiron, it was basically just me and Jerry. We were deeply engaged in all of our investments and we had one or two employees other than ourselves. We did very well in that period. In mid 1999, we went on a binge, raised a huge fund ($350mm), moved into a massive office, hired a staff of 25, made investments we weren’t engaged in, and got fat. We did poorly in that period. We shuttered Flatiron in 2001 and I took over the entire portfolio with the help of Jerry and Bob. It was basically back to the early model. We did very well in that period.

I do not believe that venture capital scales. I believe you need a small team of highly engaged partners and not much else other than great relationships with entrepreneurs. We’ve kept USV lean and I believe that has allowed us to focus on what matters most, to react quickly to opportunities, and to be focused externally as opposed to internally. And when I look at most of the VC firms I admire, I see similar lean approaches. It’s a winning model.

This seems right to me and is how we’re architecting OATV. We only make REAL investments in companies we have conviction around, in markets we care about and in people we want to work closely with. If that’s not REAL investing, than I guess I’ll have to change our pitch deck…

Trying to scale up in size of fund, size of partnership or size of portfolio via seed “deals” is certainly a strategy I’m just not sure it’s one I could get behind as a VC or one I would want behind me at the earliest stages as an entrepreneur. It will be interesting to see how this strategy play out over time.

See original post at cdixon.org – chris dixon’s blog:

What belongs in common to the most people is accorded the least care: they take thought for their own things above all, and less about things common, or only so much as falls to each individually. – Aristotle *

A major policy goal of capitalist countries in the 20th century was to encourage home ownership. It is widely believed that owners take better care of their homes than renters as they have much more at stake financially. There is also evidence that home owners are happier, healthier, and participate more in civic and political life.

The desire to create an “ownership society” led to some smart policy decisions like the mortgage tax deduction and some bad decisions like hazardously low interest rates that contributed to the housing bubble. Home ownership is a noble goal even if home ownership fueled by excessive debt can be disastrous.

Entrepreneurs figured out a long time ago that the benefits of having equity in your company are similar to the benefits of having equity in your house. Silicon Valley expanded this concept by making it standard to grant equity to non-founder employees. It’s no coincidence that Silicon Valley continues to innovate and create jobs while the rest of the economy is stagnant.

Some people think we are in a startup bubble, and that once the bubble bursts people will run back to the supposed safety of non-startup jobs. I’d prefer to think we are at the beginning of a movement to create a true ownership society, where people own stakes not just in their space but also in their time.

See original post at Dan Shapiro:

Raising money is hard, and there’s no way to screw it up faster than going around asking, “Hey, could you introduce me to some investors?”  It’s sort of like when, on the second day of school, a goofy freshman asked me if I could introduce him to any girls.

Reason 1: Not every investor is the right investor for you

Asking for introductions to “investors” marks you as someone who doesn’t really know what they’re doing.  An investor/company match is very specific, and if you want to find your fit, you’re going to have to figure out what you’re looking for.

Most investors specialize in certain fields.  Some will invest in early stage companies, some later.  Some will invest in entrepreneurs they’ve just met; some will only invest in people they’ve known for years.  Some require a track record and grey hair; some like betting on smart people straight out of college.  Some invest big, some small.  Some do just a few investments a year, some do hundreds.

Furthermore, investor styles differ.  Some give you tons of room to maneuver; some like to work closely with you.  Some offer tons of help and advice; others are just about the cash.  Some will want regular updates; others don’t like to be bothered.

Before you start looking for investors, figure out what kind of investors you want, and what kind of investors will want you.

Reason 2: It’s lazy and rude

Somebody has to be the matchmaker.  That means thinking about your startup, then comparing it to every investor your contact knows and decide if it’s a fit. The right person to do that (or at least take a first pass at it) is you, since you know your company best, and only you know who you’ve already talked to.  You do this by researching your contact on Linkedin to figure out who they know, then researching those investors to see who’s a good fit.  Check their website, their portfolio, their blog – get a sense of what they look for, and cross them off the list if they already have competing investments.

Sound like a lot of work?  It is.  That’s why you should do it, not your friend.

Reason 3: They’ll give you a crappy introduction

Asking for an introduction from someone who doesn’t know you well yet never works.  If you haven’t pitched your contact and sold them on how awesome you are, there’s no way they are going to convince an investor to take a chance on you.  That’s because they’re going to have to tee up the intro, and if the nicest thing they can say about your company is that it “sounds interesting”, the intro isn’t going to go anywhere.  You want them super-jazzed about what you’re doing, and more importantly, you want them to be able to deliver a summary of your company in one or two sentences.  So give them the pitch and ensure they love it.

Note that this all implies that you can summarize your own company in one or two sentences.  This deserves an article of its own.  Actually, it deserves a book of its own, and that book is “Made to Stick”.  If you’re stuck, go read it.  But I digress.

A great investor intro is about conveying enthusiasm.  So you need to sell them, then give them simple tools to sell the investor.

The right way

Step 1: Do your homework.  Before you meet your contact, have an explicit list of 1-4 people you would like an intro to.  And this is definitely about people – it’s better to ask for an intro to Bob Smith than it is to ask for Acme Investors.

Step 2: Pitch your contact first.  Treat them like an investor, even if they’re not.  Good first-pitch rules apply: don’t teach them; tease them.  Show them just enough to get them to want more.  Be sure to hammer your one or two line summary a few times so they know it.

Step 3: The ask.  Say, “If you wouldn’t mind, I’d really appreciate introductions to A, B, and C.  Can I shoot you an email with a one paragraph summary of the business that you can forward along?”

Step 4: The reach. NOW is when you say, “And are there any other investors you can think of that I should be talking to?”  You’ve done your homework, they know about your business, it’s OK to ask them to ponder a bit to see if you missed any one.  And it’s easy for them to say,  ”No, your list is great” – you’re not obligating them to come up with any one.

Step 5: Followthrough.  Immediately after you step out of the meeting, send separate emails – one for each invitation request – that say something like:

Hello <contact>!  Thanks for taking the time to talk today.  Your perspective on the business was really helpful.  I appreciate you offering to connect us with <investor> – feel free to forward this email to <him/her>.  I’m including a brief description of us below.

<<brief description of business>>

Again, do one per investor, so they can easily forward each one to the right person, hopefully along with a little note that says you’re not a bozo.

Fundraising is hard

Look, I’ve been there.  Fundraising is daunting.  Actually, terrifying.  You want to be able to just get it done, so you imagine that it’s possible to just ask around, meet some nice people, wow them with your charm/business plan/demo, and get on with building your company.  And sometimes it is.

But it’s usually not.  And the teams that invest the most in fundraising seem to have the best results.  (Well, the teams with huge traction or great resumes have the best results, but if you’re killing it on those fronts, you’re already cashing investor checks). If you’re a new team with a demo and a dream, you’ve got a lot of work cut out for you.

So don’t shy away from it.  Learn your network’s network, ask for smart and specific intros, and you’ll meet your dream investor soon enough.  Happy fundraising!

(One more thing: you should subscribe via RSS so you get new articles. You can also follow me on Twitter, or get new articles by email.)

See original post at BRYCE DOT VC:

Every time I push the “Create Post” button on Tumblr I cringe.

Doubt sets in.

Did I say the right things? What did I leave out? Do I sound like an idiot?

About a year ago is when I made a more conscious effort to get consistent posting stuff here. Around that time I caught up with my friend Marc Hedlund at Chelsea Market. I was bemoaning to him how hard it was to be consistent. How much effort it was taking to come up with something to say every day. How few people were even paying attention. And how even fewer people cared. To each point I posited and every doubt I dropped, Marc kept hitting me with the same answer:

Just Ship.

I’m reminded of that advice every day that I stare into a blank page for a new entry on Tumblr. And I was reminded of that advice when I woke to this post from Seth Godin this morning:

To the critic who hasn’t shipped, who hasn’t created his art, anything less than better-than-what-I -have-now appears to be a waste. To this critic, progress should only occur in leaps, in which a fully functioning, perfected new device/book/project/process/system appears and instantly and perfectly replaces the current model. 

Each step by any (and every) one who ships moves us. It might show us what won’t work, it might advance the state of the art or it might merely encourage others to give it a try as well.

Sure there are lot’s of nuances to something as simple as Just Ship. I can save those for other days and other posts. But today, as I wince at the “Create Post” button once again, I’m reminded to Just Ship and thankful to Marc for that advice.

See original post at Dan Shapiro:

I’m digging in to Brad Feld and Jason Mendelson’s outstanding new book, “Venture Deals”. It’s full of both thoughtful analysis and commonsense wisdom about how to make a financing successful.

In one section, they discuss the “business plan”:

“We haven’t read a business plan in over 20 years. Sure, we still get plenty of them, but it is not something we care about as we invest in areas we know well, and as a result we much prefer demos and live interactions…. However, realize that some VCs care a lot about seeing a business plan, regardless of the current view by many people that a business plan is an obsolete document.

They go on to caution you:

Regardless, you will occasionally be asked for a business plan. Be prepared for this and know how you plan to respond, along with what you will provide, if and when this comes up.

Unfortunately, this is where the topic ends – they don’t tell you what to do when an investor requests that you conjure an obsolete 30-page document from the ether and send it to them that evening.

A straightforward executive summary

I’ve been in this situation, and it’s very disconcerting.  We pitched about 70 VCs for our Series B, more than half of those in person, and not a single one asked for a business plan.  We talked to dozens of VCs (I didn’t keep track of how many) during our Series A as well, and got zero business plan requests.  But during our seed round, when we pitched probably 100+ angels, it came up more than a few times.

Whenever it did, we (“we” was usually my cofounder Brian Schultz and I; Charles Zapata, the third cofounder, was busy building product) were somewhere between guilty and scared.  Guilty that we had skipped something that was clearly important, and scared we’d look like idiots.  There was a lot of hemming and hawing before we figured out a foolproof solution.

Whenever an investor asks you for your business plan, send them the same damn packet you send to everyone else.  In our case, that was a 3-page “executive summary” and a dozen slides giving an overview of the business with some screenshots of the product (it was mobile, and 2006, so there wasn’t any easy way to send them a demo). Don’t apologize and don’t mention the business plan.

We did this at least a dozen times and had precisely zero complaints.

One final note: investors who want business plans are probably not your target market, if you’re founding a high growth technology startup.  We had lots of great followup conversations with the angels who wanted them, but ultimately none of them turned in to investors.

(One more thing: you should subscribe via RSS so you get new articles. You can also follow me on Twitter, or get new articles by email.)