Monday, November 28, 2011

Getting Seed Capital for Startups

Here is 30-minute interview with Daniel Scott, founder of Gazelle Labs in St. Petersburg, Florida. (Note: NOT in Silicon Valley or Silicon Alley or Silicon anything!) Gazelle Labs is a "mentor-driven, three-month, seed stage investment program that provides selected companies with up to $18,000 each in seed funding", according to Karen Rands, the interviewer and founder of Launchfn, an early stage coaching firm.  Check out the interview on BlogTalkRadio. Karen Rands on Blog Talk Radio

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Get Your Customers to Invest Via Direct Public Offerings (DPOs)

Do you need to raise capital to grow your company? Have you tried tapping into your existing customer base? I’m speaking of offering customers an ownership stake in your business through direct public offerings or DPOs. DPOs are governed by SEC Rule 504 of Regulation D which allows companies to raise up to $1 Million every 12 months.

Advantages:

  • You give up a smaller portion of equity for the same amount of capital that angel investors would inject. You typically even give up less than you would using a more traditional private placement.

Read the rest of the article, Tap Your Customers Via Direct Public Offerings (DPOs)

 

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Thursday, November 24, 2011

Happy Thanksgiving!

Happy Thanksgiving to all of you! If you are residing in another country besides the U.S., any time is the right time to give thanks. If you are in the US, enjoy the time with family and friends.I most definitely am.

Thanksgiving_cornecopia
If life seems crappy around the holidays and you are getting depressed, please, please, please go volunteer at a soup kitchen, food bank, or other location or visit a senior citizen's home, children's group home, hospital, or just do little acts of kindness for others. It WILL make you feel much better...to see how well off you truly are and to see the gratitude people express for thinking of them.

Happy Thanksgiving!

(My posts will resume on Monday, Nov. 28.)

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Wednesday, November 23, 2011

A Craigslist-Inspired Company

I'm a huge fan of craigslist. Tra la la la la! That's me singing craigslist's praises! (Believe me, you'd prefer to see my singing in writing than to hear it in person.) Anyway, I was aware of one company, Airbnb, which got started after a few things came together, including renting out their apartment for several days using craigslist. Here's another one, described in an Inc.com article:

Getaround_website

Company: Getaround

"How it Works: Car owners earn money by renting out their unused vehicle through a peer-to-peer rental service. People in need of wheels for a day can get a car for a few dollars an hour. How it Makes Money: Getaround charges a 40 percent commission for car owners." 

Is this an alternative to Zipcar? Sounds like it.This sounds like a viable option for people residing in bigger cities such as San Francisco, where Getaround is based. Need a minivan to haul around the nieces and nephews you are watching for the day? Try Getaround. Need an SUV to transport all your friends to and from a party at the same time, try this company.

Want to know about more craigslist-inspired companies? Read the Inc. article, 7 Startups Inspired by Craigslist.

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Tuesday, November 22, 2011

Angie's List IPO

As I previously "reported", Angie's List went public last week. (Actually, I reported that Angie's List was scheduled to IPO on 11/17/11.) Did you know Angie's List was an Inc. 500 company? Well, I did not until I read an Inc. article about the company. (I'm an avid reader of Inc. and save the Inc. 500 issues but my brain can't retain lists of 500 companies year after year!)

Angies_list
Here's an interesting excerpt from the interview with Angie Hicks, the founder of Angie's List:

"I started going door to door in 1995 to sell subscriptions to a magazine and call-in service, in which people would submit reviews of the work someone had done for them. Our website went up in 1999. By 2006, we were operating in 30 markets. Now, we're in 124." and

"We are seeing more competitors spring up, like Yelp. But when people ask me who our biggest competitor is, I tell them it's when you go ask your neighbor for a referral, instead of coming to Angie's List."

To read more, go to the The Anomolous IPO: Angie's List.

(For those of you who said, What the he__ is anomolous? Actually, according to Dictionary.com, there is no such word. I believe the Inc.com staff writer meant anomalous, which means "deviating from or inconsistent with the common order, form, or rule; irregular;  abnormal:")

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Monday, November 21, 2011

Great Video on Equity Partners

I repeatedly preach the need to think long and hard about co-ownership...and how you NEVER enter into a 50/50 equity split.

Here is an interesting video about equity partnering to start or grow a business. I wholly agree with the initial comments and find the later suggestions compelling.

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Friday, November 18, 2011

Dealing with Divisive Employees

"Divisive people are destructive and toxic. They’re like an infection which drags down morale and then performance and has potentially serious repercussions for the business. Deal with them as soon as you notice or the problems is brought to your attention."

This is excerpted from the following blog article I wrote: Dealing with Divisive Employees . Click on the link to read the article in its entirety.

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Monday, November 14, 2011

More Corporate Venture Funding

I've posted information about pursuing venture funding or strategic investment from Corporate America. Well, here's another update: according to Term Sheet, American Express participated in the Series C funding of Clickable. Clickable operates an online advertising platform. Check them out at www.clickable.com

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Monday, November 7, 2011

Speaking of Corporate Venture Funding

Last week I wrote about pursuing angel and strategic investments from large corporations. Well, in case you hadn't heard, I thought I'd pass along this tidbit, courtesy of Dan Primack's Term Sheet,

Citi (as in Citi Group or Citi Bank) not only has a corporate venture fund, they're trying to mirror the VC big boys. Citi has set up a venture funding office in Silicon Valley...and hired people from Battery Ventures and Menlo Ventures to help run it. This comes after they closed their venture fund (more of a PE fund) in Tokyo earlier this year due to poor deal flow and had significant turnover in their Citi Venture fund based in India.

Endgame: If Citi is your bank, they may be able to provide equity financing in addition to debt (bank loans)...or perhaps a hybrid of the two.

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Sunday, November 6, 2011

Angie's List to IPO

Have you seen all those tv ads for Angie's List? Well, apparently they are working. I have a friend who used Angie's List to find a subcontractor in Boston...and that was before I saw the ads. Her mention of Angie's List was the first time I heard of them.

Angies_list

Fast forward. Angie's List will go public via an IPO on November 17, before Thanksgiving. Angie's List, based in Indianapolis (how about those Midwest IPOs? Groupon, based in Chicago just went public.), plans to raise $114 million+/-.  It's not profitable, due to significant marketing costs, but it's growing like gangbusters and needs money to fuel that growth (and pay off/release some of their investors).

So keep your chin up. There's hope for your business' funding.

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Thursday, November 3, 2011

Corporations as Angels

I read an article in the October 2011 issue of CFO Magazine that intrigued me. The title, Just Call Me Angel: Smaller companies in search of cash have a new source: big companies, says it all. According to this article, some corporations have amassed a large horde of cash. And you don't maximize shareholder value by sitting on a pile of cash. You have to do something with it that generates returns for the company. However, unless you are an insurance company, you can't just invest in anything. You have to invest in something that is related to your business.

Angel_investor
You can make partial acquisitions of companies in your space who give you something you need - market penetration, access to preferred customers, etc. You can invest in smaller entities that are developing new technology or methodologies...and have them serve as a de facto research arm.

According to the article, corporations are on track to invest their most in a decade, with nearly $1.4 billion in funding flowing out of corporate venture arms during the first half of 2011. (This is NOT to be confused with M&A activity. This is purely investment in smaller entities.) Small companies seeking angel investment can tap into this by identifying larger companies in their industry who may be interested in their technology, market, or service offerings. Then focus on what your company can provide the larger corporation that it doesn't already have. Make sure the company has some cash before you approach it and make the pitch. Another term for this venture funding by corporations: strategic investment. Fancy that. Not quite as new as the article's subtitle implies.

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60 Minutes Interview with Steve Jobs

I missed the 60 Minutes interview with/about Steve Jobs. I didn't even know it was coming. (Ok, I admit. I haven't watched 60 Minutes in a few years. A news junkie, I am not. However, somehow I manage to stay on top of domestic and international current events. Oh yeah. I subscribe to Fortune, the Atlanta Business Chronicle, the Wall Street Journal, and Inc. And I read Yahoo! news online. And watch Jon Stewart and Stephen Colbert...and occasionally check out other options.)

Sorry for the diversion. If you didn't TiVo or DVR it, you can check out the interview online. 60 Minutes devoted a whole program to Steve Jobs and the entire 60 Minutes' interview with Walter Isaacson on Steve Jobs is available online in two parts. Watch Part I or Part II at your leisure.

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Wednesday, November 2, 2011

Term Sheet's Liquidity Event

I am a subscriber to "Term Sheet", the daily synopsis on deal activity in the angel realm (somewhat), venture capital and private equity by Fortune writer Dan Primack. I just saw that Mr. Primack and Fortune will host Term Sheet's first ever event, which they are calling the Liquidity Event. (Hah!) If you are seeking funding, would like to introduce yourself to some of the local venture capital and private equity folks, or just want to meet finance people or fellow entrepreneurs, then I recommend you attend. And guess what? Tickets are only $10! So, on a cost basis alone I highly recommend you attend. In addiiton, the proceeds will be donated to a non-profit chosen by...the attendees. According to the notice I received, 125 people have already bought tickets so they may be in danger of selling out. So hurry if you are in NYC!

Details:

What: Term Sheet's Liquidity Event, an event featuring cocktails with an open bar (liquids, get it?) and conversation, sponsored by Golub Capital (www.golubcapital.com )

When: Tuesday, November 15, 2011, 5-8pm

Where: New York City

Cost: $10

Get your tickets (and more details) at http://termsheet.eventbrite.com.

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