Posted on Wednesday, August 3rd, 2011 at 12:51 am.
Exploring the web about venture capital partners or investors will give you a myriad of results, each of them offering a good quality of business investment opportunities and valuable resources in today’s market. But the challenge is how to go about attracting these people – venture capital investors or angel investors – to help you with key decisions to your investments? For entrepreneurs and investors, connection is the right key to help your business venture a success. Successful business startups are built around innovative ideas and leading-edge technologies, yet realizing these business plans require the right resources, information, infrastructure, and most of all, the right partnerships.
It all comes down to how well you click with people you first encounter. Clicking has always been a subjective art form. There is that special moment when two people click, rather than simply meet. Brothers Ori and Rom Brafman authored a book, Click: The Magic of Instant Connections, and Ori shared his ideas to business owners looking to assemble an inner circle of advisers, partners and investors they click with. He categorized the ingredients involving clicking into the following:
- Vulnerability – Exaggerating how many people you employ or boasting about your revenue will only attenuate the ability to attract investors to help you. Brafman’s research found that people who actually display their weaknesses are the best to click with. Just simply try to hang out with these people and bring yourself a box of pizza or invite them for a coffee without a scheduled formal meeting so you get to know each other as real human beings, is exercising a sense of vulnerability.
- Proximity – The advanced communication technology such as Skype, Yahoo Messenger, or Google Talk, is now widely used for most businesses in meeting with people. But Brafman advices that it is better to show up face to face. According to their research, you definitely click with people you meet face to face, people who are physically close to you. And the most important part of any meeting is what happens just before or after the actual meeting because that is when you take the time to get to know the people you are meeting with as individuals, and the chance to click occurs. That is very unlikely to happen when you are talking to someone on the phone.
- Resonance – According to Brafman, people who resonate are both Present and Flowing. Being present is about showing up as a real person and a fully engaged human being. Flowing is about being challenged while doing something you are really good at. He said that if you are talking to an angel investor, and you are just going through the motions of your elevator pitch, you are toast! People know when you are just acting rather than feeling challenged and being fully present.
- Similarities – You best click with people when you have trivial similarities, such as what sports they enjoy, what school they went to, what gadgets they like and a lot more. However, the number of similarities between two individuals is critical when you are trying to click with someone, according to Brafman. The quantity of commonalities overrides the qualities of those connections according to his research.
- Shared Difficulties – The experience of going through something difficult together and coming out of the other side to safety makes people feel as though they click. Brafman suggests that you acknowledge difficult periods you have gone through with your inner circle in order to stimulate this sensation in a business context.
You must take note that above all of these categories, you must not forget that you should connect with the right venture capital partners in order to take your business further; otherwise, you might just be wasting your effort, time, and money.
Posted on Monday, July 11th, 2011 at 11:03 pm.
by Nathan Jorgensen
This is a really interesting competition for those of you who have tech start-ups seeking seed capital funding.
The Citrix Startup Accelerator Global Challenge is a focused program for discovering entrepreneurs internationally for direct investment. We are looking for the best and brightest new businesses doing cutting-edge work in software technology, especially in the areas of mobile + cloud computing.
Posted on Friday, July 8th, 2011 at 11:12 pm.
by Nathan Jorgensen
The Founder Institute is a global network of startups and mentors that helps entrepreneurs launch meaningful and enduring technology companies.
Through our four month pre-seed incubator program, you can launch your dream company with expert training, feedback, and support from experienced startup CEOs, while not being required to quit your day job.
Our unique Bonus Pool also shares equity upside with all participants, creating local, teamwork-based ecosystems where great startups can flourish. In less than two years of operation, the Founder Institute has already helped launch over 275 technology companies in over 15 cities worldwide.
Posted on Tuesday, June 21st, 2011 at 11:57 pm.
He used to be a model but was rose to fame in Hollywood by playing romantic comedy roles in movies and in sitcom. He starred in “Dude, Where’s My Car?”, “That 70’s Show”, “Just Married”, and “What Happened in Vegas”, and a lot more. He is also the producer and co-creator of the supernatural TV show “Room 401” and the reality TV show “Beauty and the Geek”. But did you know that the comedian actor, Ashton Kutcher, is the most prominent entertainment figure in the high technology venture capital game, and invested more than his money into it?
At the age of 33, Mr. Kutcher has invested a huge amount of money, failed with his first attempt in the tech industry but his deep interest in the internet captured the attention of several Silicon Valley big-time venture capital investors. One of these big-time venture capitalists was the founder of Netscape, Marc Andreessen. He lured Mr. Kutcher to invest in Skype, a software application that allows users to make voice and video calls and chats over the Internet. And just within 18 months, he earned three times his money when the company was sold to Microsoft for $8.5 billion last month.
People will always believe in anything that a celebrity would talk about. But Mr. Kutcher did not make his way to venture capital world with a crushing noise just because he is a celebrity, but his understanding of social media and his talent for marketing brands such as Levi’s, Gatorade, Intel, and Pepsi, is invaluable to a startup. However, good looks and a little charm do not hurt either.
Mr. Kutcher has become a smart early investor in some of the most notable internet startups such as Foursquare, the mobile social network; Path, a photo sharing application; and Flipboard, a news reading application for the iPad. Since then, he has built up a circle of fellow heavyweight investors. He remains discreet with the size of his investments which he has recently been making through a partnership called A-Grade, a partnership between the manager of Madonna, Guy Oseary, and supermarket magnate, Ron Burkle. People in the venture capital world estimated that his investments would range perhaps from $50,000 to $200,000, just like what other early-stage investors would be investing in. Foursquare may now be valued at up to $80 million, and one of its investors who stand up to gain most is Ashton Kutcher, an early angel investor in this company.
Posted on Saturday, June 4th, 2011 at 5:35 am.
Venture capital is not an easy game. Not all venture capitalists have been successful investing in start ups in different fields such as infrastructure, innovation, biotechnology, information technology, or software. Investing in these types of businesses involves great risks and hard works, not to mention the huge amount of money that they have to venture in. Venture Capitalists assume enormous risks with high levels of uncertainty.
Successful VC investors accept uncertainty as an integral part of being in business. They must be ready to face many crises and allow temporary failures without having to panic. After all, failure is the mother of success. Even Thomas Edison, a genius inventor, failed a thousand times before he finally succeeded with his inventions or discoveries. Talk to an entrepreneur or to any group of up-the-corporate-ladder type businessmen who sees innovation and creativity as the path to profitability and long term sustainability, and they will share openly about failures, mistakes, and setbacks as steps along the path to success.
Venture Capitalist Adi McAbian, a 36 year old successful entrepreneur who is the managing director of TwistBox, and a board member of the Internet Task Force of Boston, has a proven track record for creating, growing and selling successful businesses. He shared that the secret lies in being able to harness that idea and quickly bring it to fruition in a cost-effective manner. “Many budding entrepreneurs get too caught up with the massive amount of detail involved in creating a burgeoning company’s infrastructure, rather than focusing on the business itself,” explains Adi McAbian, “I advocate outsourcing the basics to those that specialize in this. To be successful in this tough economic climate, you need to focus 100 percent of your attention on your business model and customers.”
On the other hand, mastering the VC game combines the right mix of facts, advices, people and stories. Integrating the experiences of notable entrepreneurs is extremely helpful and beneficial. Dee Power and Brian E. Hill, authors of Secrets to Unlocking Venture Capital for Your Company, also shared the secrets to obtaining venture capital:
- Preparation – It is imperative to prepare yourself and your company in searching for seed capital or growth capital by developing a clear, concise, and realistic business plan that would make the reader excited about the opportunity that your company would present. Failing to clearly identify the opportunity is the most critical mistake that entrepreneurs make, according to venture capitalists. Before you approach an investor, speak to advisors or other entrepreneurs who have worked with them to find out as much as you can. Provide a strong and experienced management team with diverse range of expertise. And do not make simple mistakes such as wrong spelling, grammar, or computation.
- Positioning – To make sure that what you are offering is what they are looking for, research the investment criteria of the venture capitalists. A company that does not match with the venture capitalists’ investment criteria is the second most common reason why they are being declined. It is also important to get referrals by other VC firms, and get one if you do not have one yet.
- Perseverance – Keep trying. Do not give up. Follow up your submitted plan through phone call, fax, or email weeks after your proposal. Or you can be persistent by calling the VC firm everyday. Continue to widen your network of contacts to give you more avenues of approach to the investors. And most of all, believe in your passion about your company.
An accomplished venture capital investors spend a lot of time digging into an entrepreneur’s past failures because they believe that such failures will make an entrepreneur more amenable and responsive. Success stories have many milestones – positive and productive, or even setbacks. But it is not what you lose from setbacks, rather what you learn from it and apply that would make a ventured business a success.
Posted on Friday, May 6th, 2011 at 11:19 pm.
As we know, venture capital lies on the opportunity of investing. It involves high risks and it can be very time consuming. However, if the ventured business grows it can reap a very huge reward. A few years ago some venture capital partners are holding back their expenditures amid the financial downturn, according to some financial blogs. This financial crisis made it harder for investors to get funding for startup businesses or business expansion but those who prove themselves during this period of financial crisis will be better positioned to flourish when the economy recovers.
According to the IMF’s World Economic Outlook report last January 2010, they forecasted 3.9% GDP from the said year and projected 4.3% GDP for this year. Some people thought that the global economy recovered faster than what was planned, but some believed that the recovery has been slower than they had hoped. According to IMF chief economist Olivier Blanchard, a global recession has been avoided, so that a gradual recovery of world economy is present. But some developing countries have restored faster after the global crisis particularly in Asia such as China and India, and in Latin America such as Mexico and Brazil. Despite this unstable economic situation, the United States has always been a dominant force in fostering world innovation.
With the economy turning down and some educational concerns remain an issue; the United States has been desperately conscious of a changing world. Transforming ideas into marketable and lucrative products is the greatest skill of venture capital that was challenged by the globalization and technology breakdown in the past years. The venture capital community was more pressured to continue superior performance and maintain competitive edge as the global standards are arising. Since taking his office, President Obama has taken historic steps to lay the foundation for the innovation economy of the future.
The United States strongly focuses on innovation. The Obama Innovation Strategy builds on well over $100 billion of Recovery Act funds that support innovation, additional support for education, infrastructure and others in the Recovery Act and the President’s Budget, and novel regulatory and executive order initiatives according to the White House website.
This is an exceptional time for the venture capital community, and together as a whole, the industry must address venture investments and methods to make certain to have a continued growth direction for promising young or startup companies. The economic situation today creates ideal opportunities for angel investors and venture capitalists. The importance of venture capital lies not only in providing money for this innovation but also ancillary services such as selecting good firms, mentoring entrepreneurs, hiring executives, formulating strategies, and professionalizing companies thus, providing job opportunities for the Americans as well.
Posted on Wednesday, April 27th, 2011 at 10:40 pm.
Most often a high-growth and mature companies look for funding to increase their profit, to expand, to restructure operations through organic approach, to enter new markets, or to finance a significant acquisition without a change of control of the business. These companies seek for growth capital to finance a major transformation of their business.
Growth capital is a form of private equity investment in a late-staged level of a business life. Financial institutions tend to provide this capital to businesses who are able to generate revenues and operating profits, and to those companies who have already reached a stable point where they are capable of exploring opportunities or expansion but unable to generate sufficient funds. Financial firms who provide growth capital support businesses that have market leadership potentials.
Growth capital is also known as growth equity and expansion capital. It exists at the intersection of private equity and venture capital and it is provided by a variety of sources. Companies who seek for growth capital are likely to be more mature than venture capital funded companies because they have already established their revenues that are already proven in markets or industries. Because of insufficient funds these companies generally can find alternative conduits to obtain capital for growth and expansion.
Growth capital is often structured as either Common equity – a type of capital used to directly absorb losses; or Preferred equity – a measure of equity which only takes into account the preferred stockholders, and disregards the common stockholders. While other investors also use various Hybrid securities that include a contractual return such as interest in payments, in addition to an ownership interest of the company. Hybrid securities are group of securities combining debt and equity, the elements of the two broader groups of securities. It behaves more like fixed interest securities while others behave more like the underlying shares into which they convert.
There are numbers of dedicated growth equity firms around the United States that can provide the financial needs of your business development. The amount of capital that can be produced would range anywhere from $2 million to $100 million, depending on the firm and whether they would take a majority or minority investment in your company. Since this type of financial service involves a great amount of capital, therefore it is best to partner with financial firm who have time-tested and battle-hardened fund raising techniques, who do not just provide you financially but coaches you as well, and most importantly, who delivers service with the highest sense of integrity.
Posted on Thursday, March 24th, 2011 at 1:21 am.
Today’s economic situation creates ideal opportunities for angel investors and venture capitalists. It was reported that the world’s economy today may appear to be improving statistically but many believe that the global economic conditions are only getting worse. When a high intensity earthquake and ensuing tsunami devastated Japan last Friday – March 11, 2011, the world was shocked and in great turmoil.
Japan, as one of the richest countries of the world is currently suffering from nuclear crisis that may influence the global economy, and may affect the health condition of the nation and its neighboring countries. It was the worst earthquake experience that this country ever had, and the worst calamity that ever happened to this country. Japan gets more than a quarter of their power from nuclear energy. The country has several nuclear reactors and became the third largest nuclear power user in the world providing 34.5% of its electricity. So many countries depend on nuclear power. But what happened in Japan recently made safety officials seek desperately on how to avert catastrophe because this nuclear meltdown is enough to impact human health.
Prior to the catastrophic event in Japan, several countries experience tragic situations as the strong forces of nature hit these countries while some experience chaos and wasted so many lives due to civil wars because of political ill-power or political dynasty. Following are just few of the major disasters encountered by some countries today, creating a humongous effect in their economies.
- A strong earthquake wreaked havoc in New Zealand last month and killed so many people while hundreds are still missing and left damages that caused billions of dollars.
- The wettest season ever in Australia happened earlier this year where one of its biggest cities and some towns were ravaged by heavy floods, killed few people but affecting thousands of families and establishments that cost billions of dollars in its damages.
- In south-eastern Brazil as well, they experienced the worst natural disaster after several decades. More than 500 people were known to have died in heavy floods and damaged a huge amount of money in their properties.
- Egypt encountered its first real international crisis and the biggest disaster since the Iranian revolution that happened three decades ago, pushing the Egyptian regime out of power. This also caused several civilian lives and affected a lot of foreign workers in the country.
- The people power started by the Egyptians subsequently brought tumultuous revolutions by Libyan and Bahraini people, still with the aim of pushing their leaders out of power due to political dynasty or regime. These countries are major producers of oil and employed thousands of foreign workers but they were vastly affected because they have to be sent back to their own countries.
- Saudi Arabia and Qatar are afraid to be the next middle-eastern countries to have possible signs of hostilities. According to some economists, if this would ever happen this could be the worst catastrophe that would eminently disturb the global economy.
To raise venture capital is one of the solutions to economic recovery today. Angel investor networks are very positive of seeing their money grow by investing in start-up businesses with potential, or in some business establishments that are still in the recovery phase after the catastrophe. Those who have good business lines of credits are very much capable of acquiring these unsecured business loans quickly. Entrepreneurs and investors can easily connect with each other no matter which part of the world they are because of the advancement of technology.
Posted on Friday, March 18th, 2011 at 12:15 am.
A placement agent is a financial firm who act as an intermediary in the world of fundraising. Sometimes it is an individual but more often a firm, who assists entrepreneurs, private companies, or institutional investors who are willing and capable of investing a private equity fund. Basically, they match cash-hungry funds with cash-rich investors. They are often structured as groups within huge investment banking firms such as Credit Suisse Private Fund Group and UBS Investment Bank, or as separate boutique investment banks such as MVision Private Equity Advisers and Campbell Lutyens.
In the context of private equity, a placement agent serves several functions for a company such as raise mezzanine capital or venture capital, as well as raise investor commitments to new private equity funds. The market is very competitive especially with the advancement of media and technology, and the need of a placement agent is now certainly arising in this new economic environment. They are crucial to fundraising for emerging markets of private equity funds.
A company usually hires a placement agent in order not to spend too much of its own time seeking for mezzanine capital or growth equity investors. Sometimes the lender also commissions an agent so that the fund partners can aim attention at management issues rather than focusing on how to raise venture capital. Mounir Guen, chief executive of MVision says, “A placement agent is a necessity.” Why? “Because if the job is done well it brings a level of sophistication and experience to the fundraising process.” This is because financial institutions have become more crucial and sophisticated in evaluating potential investments.
In the past, these agents were hired to introduce private equity funds to the investors or to what they termed as limited partners (LP), and simply congratulated after a job well done. But today, they are highly valued advisors who understand and know their limited partners and the market’s appetite for different approaches. They also advise and assist fund managers and help develop marketing strategies. Their critical responsibility is constantly trying to satisfy their limited partners and value their judgment in order to establish long term and deep relationship.
Placement agents can bring a myriad of relationships with growth equity investors, mezzanine capital firms, or venture capitalists. They can cherry-pick investors that are likely to come into a particular fund, increasing efficiency and minimizing risk in the fundraising project, according to James Coleman who joined Deloitte LLP after UBS Investment Bank, two of the globally known financial services firms. They can also advise some existing owners of private equity assets on secondary market sales of their interests.
Placement agents are mostly compensated through fees ranging from 1 percent to 3 percent by the companies or individuals who raise capitals. Sometimes their fees and terms of engagement would extremely vary depending on the length of time to execute the fund and based on the amount of money raised.