Daphne and I were recently interviewed by John Ince for Pod Venture Zone and Podtech. Here are five separate podcasts for those interested:
User generated video product reviews
Social commerce
Business models in new media
Mixing marriage and business
Staffing a start-up
Add comment April 15th, 2007
I’d be remiss if I didn’t close out this section on angels and initial board members by talking about importance of finding “the guy”. I’m sure I’ll talk more about this later, but when I was a VC, the CEOs I worked with talked about what a lonely job it was because ultimately you’re responsible for payroll, for hiring and firing and for generating revenues. Remember, these were VC-backed companies, so you can only imagine how hard it is for an angel-backed company.
In our case, we lucked into a solution which was that we had a “guy” who was with us every step of the way. We didn’t know him before the initial round of funding, but he came in through one of the people networks that formed and he became the Board member representing the angels (always give your angels a board representative…see also “What You Owe Your Angel Investors”). He was a great board member. But much more than that, he owned our situation in his bones. Death was not an option and that internal fortitude on his part was critical in getting us over many rough spots early in the business. How do you find ‘the guy’? Great question. But I think you’ll know him when you seen him. If you’re not sure, ask him to read this post and see what he says. Maybe he’ll identify himself as the “anti-guy” (see below) and you can decide it’s better if he’s just a passive investor.
I think some people end up with the “anti-guy” (sees himself as adding value by being a tough on management & trying to make very rational decisions each step along), and that’s pretty much a terminal disease.
Add comment April 15th, 2007
I’m sure there will be disagreement on this, but I think the function of an early stage Board member is uni-dimensional: to help raise more capital, including writing checks themselves. Really smart people, people with great industry experience, people with ‘name recognition’ – frankly, they are all a dime a dozen. When I read about a potential partner getting a new Board member with tremendous name recognition, I raise my eyebrows…and go to the next story. Don’t be seduced into the idea that a Board member can open doors just by their presence. And if you let your Board members think that you value you them merely for their Board participation, then they will be excellent Board members and nothing else. In an early stage company, the only thing that matters is keeping the capital spigot open and that has to be an ‘all-hands’ activity.
Add comment April 10th, 2007
The business side of the Expo blog is going to pick up some steam over the coming months. We’ll write about the product review space and other interesting notes, but one thread of the blog is definitely going to be general guidance for people starting online companies. Prior to Expo, I was a venture capitalist and prior to our raising venture capital late in 2006, we spent a few years as an angel-backed company…a hard existence to be sure, both for us and for our angels…to whom we owe everything. Given those two set of circumstances, I get a lot of questions from fellow entrepreneurs. It felt like it was time to start writing it all down. Here’s the first post with this theme…logically, all about getting starting with angels:
Perhaps the most common question I get and the core answer is actually very straight-forward: you already know your “anchor” angel investor. It’s someone in your network who possesses three critical elements: a) a belief in you, b) financial wherewithal, c) the constitution to take a flyer with some of their capital. While I am sure that there are plenty of stories of companies that raised money exclusively from people that they didn’t know beforehand, they would still be the exception to the rule and I have to think that that process is vastly harder (with a higher failure rate) than the other path.
There are two obvious comebacks to this idea and I’ll address them (bluntly) in turn:
1. “I’m not comfortable asking people in my network to give me money. I’m worried it might strain these valuable relationships”: If you aren’t willing to look friends and family (there’s a reason this phrase is so common) and ask for money, you need to turn around and go straight back to your cushy corporate job. You’ll save yourself a lot of heartache.
2. “I don’t know anyone who could invest & no one I know knows anyone.” I’ve got pretty much the same response as above. If you don’t think you have the contacts to raise some capital, you either lack the creative thinking (you don’t know ANYONE?) required to be an entrepreneur or you almost certainly also lack the contacts required to get vendors, customers and employees that will be essential to building a business. The only caveat to this last comment is that if you are some kind of freakishly talented programmer who can “build it and they will come”, then scale back your thinking and build the first version of your solution without capital.
Once you have your “anchor” investor (who, by the way, may not end up being the largest investor), now you need to leverage the heck out of that person’s network. They are absolutely your best reference and everyone with money knows other people with money. Ideally, you can get two or three independent “branches” of interested angels going, but even these all might come back to the same “trunk” (your anchor). Once the dynamic of angels telling other angels about your deal is working, your round is basically done as long as you vigorously follow-up and keep the momentum going.
Add comment April 6th, 2007
Investment led by Masthead Venture Partners and Prism VentureWorks
NEW YORK CITY – December 19, 2006 – ExpoTV (www.ExpoTV.com), the leading video provider of consumer-generated product reviews, today announced the completion of a $6.0 million Series A round of funding, led by Masthead Venture Partners and Prism VentureWorks, and included the participation of existing investors. Click here to read more.
Add comment December 19th, 2006
We’d always envisioned Expo as a place where consumers and companies (or marketers or manufacturers or advertisers…or whatever else you’d like to call them) would interact. The idea was to empower consumers to express their undiluted views on products while letting marketers make their pitch right there at the same time with Expo playing a relatively minimal ‘refereeing’ role. We’ve been focused on the consumer expression part and so we’d be the first to admit that we haven’t totally figured out how to integrate companies into the dialogue.
Well, along came a great VideopinionSM review on the Play Hard Flashflight and not long after came a comment submitted by the company, including a promotional code for Expo members to use when buying the product. Now we’ve got a dialogue going! Our instinct is that this is exactly the kind of interaction we’d like to see on the site and so we’re supporting & even promoting it to understand the kind of reaction that people have. Interesting questions certainly get raised as users create VideopinionSM reviews that lead to corporate interest in participating on the website. For example, how do we make sure that creators continue to feel celebrated for creating critical reviews? Can we convince manufacturers that critical reviews are just as important to understand and embrace? We don’t know for sure where it all leads, but as long as the dialogue is authentic, respectful and open, we’re certainly interested in continuing down the path.
Let us know your thoughts.
Add comment November 17th, 2006
This thread of the Expo blog is all about start-up life. It’s not so focused on Expo itself as just some commentary on all of the issues one faces as an entrepreneur. We pull it from our experience as entrepreneurs but also from our past in banking, venture capital and other related areas. Take it for what you paid for it, give us feedback about where our experience has given us myopia…and enjoy.
Add comment November 16th, 2006
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