VC Fundraising Slows

Monday, April 13, 2009

VC Fundraising Slows

Startups aren't the only ones seeing a slowdown in fundraising: a report released today finds that venture capitalists themselves are seeing a slowdown in their ability to raise funding. According to a report released this morning by Thomson Reuters and the National Venture capital Association (NVCA), only 40 venture capital funds were able to raise funding this quarter, raising $4.3 billion in capital for Q1. The amount was the smallest number of funds raising capital in a single quarter, since Q3 of 2003. According to the report, only three of those funds were new funds; 37 of the funds raising capital this quarter were follow-on funds. However, the news was not all bad: according to Thomson/NVCA, the amount raised by the funds was an increase from the previous quarter, when only $3.5 billion was raised. posted on Monday, April 13, 2009

http://www.socaltech.com/vc_fundraising_slows/s-0021066.html

Entrepreneurial Videos

There seams to be a lack of high-quality videos touching the topics of entrepreneurship and business. For the sake of convenience, I've gathered together a few videos I felt our readers and clients would find interesting and inspiring.

The Call of the Entrepreneur (trailer)

I have purchased, but have not yet watched the full 1-hour video.

Quote:

"An entrepreneur is the creative force in economics"



Celebrating What's Right With The World (with Dewitt Jones)

While this inspiring video doesn't specifically address entrepreneurship, it touches on relevant topics such as change, and vision.

Quote:

“The right vision. It keeps us open to possibilities, it gives us energy, and it makes us much more accepting of change.”

Celebrate What's Right With The World


Also, click here to view Guy Kawasaki's Art of the Start video.

Quote:

"If you want to change the world, if you truly want to be a successful entrepreneur, the best reason to start a company is to make meaning...is to change the world."


Posted by W. Garrett Myler

How to Kill an Idea

Whether they currently run their own business, or are in the process of starting one, entrepreneurs recognize the need to innovate in order to establish, maintain, and increase their market share.

As Charles Darwin said, "It’s not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” Due to today's climate of rapid change, largely due to advancements in technology, Darwin's words stand as true in business as it does in the animal kingdom. This has led author and prominent corporate consultant Ram Charan to call these times "the era of the renaissance of innovation", in a recent article from Fast Company.

"If you don't do innovation...you will be left behind," said Charan.

In the article, Charan explains that in order to turn an idea into a business success, it must be a "social process". He also explains that the team should recognize when an idea should be killed.

Some key points from the article are provided below:

"The key to turning an idea into a business success is to gather all players around the table from the beginning."

"The conversion of an idea for most companies, if not all, requires more than one person to make it happen."

In regards to involving the various members of the team simultaneously and not linearly:

"When multiple disciplines sit together, they see the total picture, isolate the major hurdles, and work together to solve the problems. The principle of working simultaneously is huge in making breakthroughs in innovation. Any handoff linearly is going to reduce your success."

"Any handoff linearly is going to increase your cycle time, and you're going to run into problems."

Speaking about looking at multiple ideas and knowing which ones to kill:

"First you look at the whole portfolio and you prioritize it. Some things fall in the bottom priority. That's the time you know you have to kill it because you don't have resources."

As it is common for multiple ideas to run rampant in the mind of the entrepreneur, it is important to prioritize those ideas, and killing those not currently worth the resources needed to commercialize that idea.

Once a worthy idea has been identified, converting it into revenues and profit is best done by simultaneously involving each member of the team.

Posted by: W. Garrett Myler

The SFV Business Journal reports on the i3 Advanced Technology Incubator

Below is an article previously published in the San Fernando Valley Business Journal on 5/26/2008. Click here to print and share this article. A special thank you to staff reporter Mark R. Madler for writing a great article and covering a news-worthy opportunity for technology entrepreneurs in the Los Angeles region.

"Entrepreneur Incubator is Hatching in Santa Clarita"
By Mark R. Madler

The College of the Canyons has put out a call to any and all entrepreneurs.Through its I3 Advanced Technology Business Incubator, the Santa Clarita Valley institution seeks to pair neophyte business owners with investors, mentors and area companies offering services and products for start-up needs.

Currently housed in a trailer on the campus, the incubator has big plans for its future. With the opening next summer of the new university center, space becomes available for permanent offices and space for up to 15 business people to work out of as they get off the ground.

The long-range goal is to have the companies leave the incubator and grow elsewhere in the city so they create jobs and contribute to the local economy.

Making investors and mentors available creates the right environment for these start-ups to prosper.

“For Los Angeles County and the Santa Clarita Valley to ensure a healthy economy we have to ensure we are supporting entrepreneurs,” said W. Garrett Myler, a part-time specialist with the incubator.

The most recent study by the National Business Incubation Association from October 2006 counted 1,100 incubators in the U.S, with 39 percent focused on technology businesses.

The college’s incubator identified the industry clusters of biotech, digital manufacturing, aerospace, nanotechnology, information technology, and entertainment as their focus.

Similar UCLA and USC programs commercialize their research so they are not technically incubators.

The I3 incubator has its roots in a program started with the Business Technology Center of Los Angeles County in Altadena in 2005.

A year-long federal grant that expired in March provided the funds for Doug Howe, the interim director, to lay the foundation for the incubator to assist entrepreneurs. A state grant funds the program through August 2009.

Howe and Myler have so far lined up about a dozen of the 20 mentors they hope to have giving advice and coaching. Howe has also talked with area angel investment groups to gauge interest in providing funding for the businesses that will locate to the incubator.

There is the feeling that quite a number of investors would like to participate in something more local, Howe said.

One of those is Matt Ridenour, of Momentum Venture Management.

The Los Angeles region is a booming environment for new technology but lacks the support system to assist start-ups, unlike the Silicon Valley, said Ridenour, a Santa Clarita resident.

The scientists with the skills to create new products are here but there are not many with experience taking those products to market.

“The support and the mentoring that groups like these bring are a great resource and source of deals for us,” Ridenour said.

Being on the campus adds an educational component to the business enterprises.

College of the Canyons will tie in the practical business experience with training programs and classroom curriculae, and make students available as interns who can earn course credits.

The entrepreneurs can access the school’s digital manufacturing lab and its clean room facilities for use by biotech start-ups to develop pharmaceuticals or biomedical devices.

Howe has forged ties with the Small Business Development Center, also hosted by College of the Canyons, and the two refer business people to one another.

The SBDC works with any small business, whether they are just starting out or are well-established, offering training and free consultations with specialists.

Unlike the mentors, the specialists are available at the college throughout the day to give free advice on finance, marketing, sales, and product development, said the center’s director Paul De La Cerda.

The mentors will provide 10 free hours of consultation with an entrepreneur and if more time is needed than the two will work out an arrangement, Howe said.

Posted by W. Garrett Myler

Facebook: A Powerful Business Tool

If you still view Facebook as another Myspace: a teen's internet playground used merely to post pictures of last weekend's party, you may want to take a closer look at the power and capabilities of social networking sites. Last January, Facebook established its legitimacy and credibility by teaming up with ABC News to sponsor New Hampshire's presidential debates.

With more people taking Facebook seriously, more and more businesses are using Facebook for marketing and for what Standford professor BJ Fogg calls "mass interpersonal persuasion". In a recent Fast Company article, Fogg explains why Facebook is "the most powerful thing ever invented."

Fogg believes, "the social networking platform is revolutionary because it takes the dynamics of one-to-one persuasion and scales it up to millions." For this reason Fogg states that Facebook has emerged as "the most effective persuasive technology ever".

Fogg explains how Facebook can be used in identifying your market and adapting to your customers:

"You have a lot more visibility now into who's using your service and why, and you can see how it gets socially shared. You don't have to pre-define your market right out of the gate. As long as you watch what's going on, you can adjust and go with what's working. ...It's continuing to improve products and experiences based not on guesses, not on consultants, not on checklists, but on real data and real usage. That's very exciting, and it's only going to get easier."

Companies are also finding other creative uses for Facebook. Inc.com recently published an article which described how "more recruiters are relying on Facebook, LinkedIn and other social media sites to fill job openings". The article sites that "in a recent survey of 115 human resource managers at small technology firms nationwide, 64 percent said they're tapping into online social networking to find job candidates".

Along with other innovative companies, the i3 Advanced Technology Incubator has recently extended it's online presence via Facebook by hosting the Los Angeles Technology Entrepreneur group. In reference to balancing wise and thoughtful decisions with being innovative, i3's Director Doug Howe notes, "when you're on the cutting edge, it's important to remember which way the blade is facing!"

Posted by: W. Garrett Myler

Teen Entrepreneurs

A recent article from Entrepreneur.com entitled "Early to Rise" addressed increasingly younger entrepreneurs successfully starting companies in their teens. This trend is attributed to tech savvy teens being empowered by their understanding and use of the internet.

Below are excerpts from the article:

"'This trend of more teen businesses has a lot to do with the internet giving easier access to the resources they need to develop their business ideas," says William Walstad, an economics professor at the University of Nebraska, Lincoln. 'Today's teens are more tech-savvy and, as a consequence, are at an advantage when it comes to finding those startup resources."

"Besides being tech-savvy, teens have other inherent advantages when starting a business. One...is that there is less overall risk."

"Another huge benefit of being a teen running a business is that it's an attractive story for local and national news."

As online resources, Web 2.0 applications, and e-marketing continue to make it easier and cheaper to start a business, it is likely teen-inspired start-ups will continue to pop up, with more and more of them finding success and thus making Generation 'Y' a legitimate player in the entrepreneurial community.

Posted by: W. Garrett Myler