some interesting info on the VC world for young people. features a couple of quotes from me!
http://www.examiner.com/x-828-Entry-Level-Careers-Examiner~y2008m12d30-Getting-attention-and-cash-from-VCs-and-angel-investors
Getting attention (and cash) from VCs and angel investors
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December 30, 12:42 PM
by Heather Huhman, Entry Level Careers Examiner
Many college students and recent graduates are starting their own businesses these days, whether the reason is their Generation Y entrepreneurial spirit or the sluggish job market. But, these individuals don’t have a lot of capital and are often the victims of “reverse ageism.” So, how can you break through to get attention – and cash – from venture capitalists (VCs) and angel investors to launch your new business?
1. Make waves on campus. “Students and recent graduates starting a business need to first demonstrate that they can capture attention of – and lead – their peers, school administrators and alumni in unique, groundbreaking ways before anyone in the investment field is going to put money behind them to go out and drive a business,” said Charlie O’Donnell, co-founder and CEO of Path 101. “So, this means it's not just enough to run the school’s finance club, but the backable entrepreneurs are the ones that, while in school, thought bigger, like helping to conceive of and implement a real student managed investment fund, and then worked with the alumni office to solicit funds for it.”
2. Learn how to build lasting relationships with professionals. “Students are also notoriously bad at creating long-term relationships with professionals,” said O’Donnell. “One of the angel investors in my current company is someone who I worked for at an internship that I started when I was 17! Eleven years later, he put a significant amount of money into my business. Students have to get out and get to know people – and get people to get to know them. That's why a digital presence like a blog or Twitter can be so valuable.”
3. Be upfront about your age. “I started my first company while still in school, at 14, back in Karachi, Pakistan,” said Zaki Mahomed, CEO of TimeSvr. “That was a long way away from the young prodigy culture of Silicon Valley. I learned early on that your age is always going to be hanging in the air, and it’s best to be the first to address it, in order to get it out of the way.”
4. Create something newsworthy. “Any press – either from blogs or the mainstream – is a good indication that you're doing something right. VCs pay attention to what others are paying attention to,” said Nate Westheimer, entrepreneur in residence at Rose Tech Ventures.
5. Involve great people. “Find relevant mentors and advisors and get them truly engaged in the business. This isn't building an ‘advisory board’ in name only. Rather, it means finding ways to really get some experienced people with strong reputations involved in your business in a meaningful way. Then, leverage those folks to get introductions to investors,” said David Cohen, executive director of TechStars.
Bruce Bachenheimer, program director of entrepreneurial studies at The Lubin School at Pace University, adds, “Build a real board of advisors, not just people who agree to let you use their name as ‘window dressing’ for a business plan or investor pitch – rather, experienced entrepreneurs and seasoned professionals who will dedicate the necessary time to understand your business and formulate meaningful advice. The young entrepreneur should not only assemble such a board, but must understand what is required to keep the advisors engaged and committed.”
6. Show that your business has traction with the market. “The best evidence is customer acceptance. Facebook was being used by hundreds, if not thousands, of students before they sought outside financing,” said Robbie Kellman Baxter, president and founder of Peninsula Strategies.
7. Focus your investor targets. “Make sure that your business is appropriate for the type of investing that your target investor does,” said Diana Benedikt, founder and principal of Venture Insight Advisors. “Some deals will just never get big enough for VCs who are looking for ‘home run’ type wins, where the payouts are huge (i.e., Google). It’s a waste of everyone’s time to try to sell a small deal to an investor who only does big deals. Also, angel investors want to see their deals passed down the ‘financial food chain’ – meaning the good ones will want to see your deal financed later by a VC who, if they’re only looking for the next Google, won’t put money in a small opportunity.”
Cohen adds, “Don’t spray and pray. Do your research, and approach the right investors for your business with the right approach for them. You just need one interested investor who can introduce you to others. So, look for those investors that you respect and that have strong experience in the market you're entering.”
8. Initially, ask for advice, not funding. “Be open to feedback from potential investors and think of the first meeting as relationship building, not an investment meeting. Your goal in the first meeting is to get a second meeting, and the sure way to get a second meeting is to make progress based on feedback from the first meeting,” said Cohen.
9. Network, network, network. “There are countless examples of companies raising capital from networking events,” said Dave Lavinsky, president and co-founder of Growthink, Inc. “I recently interviewed a CEO of a venture backed company who met his investor at a MIT alumni event. Even if the fellow alumni won’t invest, they can refer you to someone who can.”
10. Don't quit your day job. “No matter how long they tell you it will take to get your money, it will take longer. Be ready to wait, and wait some more. Some funds hold out on you to see if you still have a viable business and plan months later, for fear they would be throwing money down the drain at the minute they meet you,” said Anthony Migyanka, managing partner at Mobile Money Minute, LLC.
11. Build a great team. “At the end of the day, VCs invest in people, so the stronger your team, the better. Balance your team with known successful people and young, eager and capable individuals,” said YuChiang Cheng, CEO of World Golf Tour, a recently launched start-up. “Determine your strengths and build your team from what you are missing. If you can’t hire or find co-founders, identify three to five great advisors who can mentor you, make introductions and vouch for you to investors.”
12. Be prepared. “This means do your homework and prepare investor materials that tell a compelling business case and at the same time, answer the questions that all investors will have. Who? What? How?” said Benedikt. “Imagine that the investor is managing your money. You want him to have the key pieces of information to make a proper investment decision on your behalf, right?”
Caspar A. Szulc, executive vice president and co-founder of Innovative Medicine, LLC, adds, “Whether you’re 19 or 60, what matters most is a well prepared and concise business plan. Investors will want to see something on paper before they have a face meeting, and having a well constructed business plan is essential to spur interest. Take the extra time to make sure your business plan is solid and forecasts a realistic yet attractive picture. If your plan is solid, when it comes time to present, investors will already be interested regardless of age.”
Recommended reading:
The Successful Business Plan: Secrets & Strategies
Finding an Angel Investor in a Day
13. Don’t be disappointed by disappointment. “I was turned down for investment more than 30 times, and I didn’t speak with that many people! Patrick Byrne from Overstock.com was trying to raise a lot more money than I did and was rejected by more than 50 firms,” said Mark Newman, CEO of HireVue. “If you can’t accept rejection, don’t try to raise money from investors. As you go out in the market, don’t take anything personally – refine the pitch and improve the approach.”
Topics: Entrepreneurship
Tuesday, December 30, 2008
Tuesday, December 9, 2008
For Innovators, There Is Brainpower in Numbers
Unboxed
For Innovators, There Is Brainpower in Numbers
By JANET RAE-DUPREE
Published: December 5, 2008
“None of us is as smart as all of us.”
— Japanese proverb
DESPITE the enduring myth of the lone genius, innovation does not take place in isolation. Truly productive invention requires the meeting of minds from myriad perspectives, even if the innovators themselves don’t always realize it.
Keith Sawyer, a researcher at Washington University in St. Louis, calls this “group genius,” and in his book of the same name he introduces a scientific method called interaction analysis to the study of creativity. Through studying verbal cues, body language and incremental adjustments during team innovation efforts, Mr. Sawyer shows that what we experience as a flash of insight has actually percolated in social interaction for quite some time.
“Innovation today isn’t a sudden break with the past, a brilliant insight that one lone outsider pushes through to save the company,” he says. “Just the opposite: innovation today is a continuous process of small and constant change, and it’s built into the culture of successful companies.”
It’s a perspective shared broadly in corporate America. Ed Catmull, president of Pixar Animation Studios and Disney Animation Studios, describes what he calls “collective creativity” in a cover article in the September issue of Harvard Business Review. “Creativity involves a large number of people from different disciplines working together to solve a great many problems,” he writes. “Creativity must be present at every level of every artistic and technical part of the organization.”
So, we all should brainstorm our way through the day, right? Wrong. That classic tool introduced by Alex Osborn in 1948 has been proved in a number of studies over the last 20 years to be far less effective than generally believed. “He had it right in terms of group process,” says Drew Boyd, a businessman based in Cincinnati who blogs and speaks often about innovation. “But he had it wrong in terms of the method.”
Brainstorming, Mr. Boyd says, is the most overused and underperforming tool in business today. Traditionally, brainstorming revolves around the false premise that to get good ideas, a group must generate a large list from which to cherry-pick. But researchers have shown repeatedly that individuals working alone generate more ideas than groups acting in concert. Among the problems are these: Throwing in an idea for public consideration generates fear of failure, and workers looking to advance their own interests often keep their best ideas to themselves until a more opportune time.
Instead of identifying a problem and then seeking solutions, Mr. Boyd suggests turning the process around: break down successful products and processes into separate components, then study those parts to find other potential uses. This process of “systematic inventive thinking,” which evolved from the work of the Russian engineer and scientist Genrich Altschuller, creates “pre-inventive” ideas that then can be expanded into innovations.
Kapro Tools, working with an Israeli company called Systematic Inventive Thinking, used the method to create a new type of bubble level calibrated to help build gentle slopes to improve drainage. Previously, construction workers approximated the slope they wanted by placing a nail or other object under the edge of a standard level.
“Innovation is a team sport,” Mr. Boyd says. “There’s a dynamic that happens between people that produces results I just don’t see with an individual.”
Even Albert Einstein, society’s most common mental picture of genius, needed group input to hone his insights. According to “Einstein’s Mistakes” by Hans Ohanian, the great physicist’s derivation of the famous equation E=mc2 contained several errors; it wasn’t until 1911 that another scientist, Max von Laue, developed a full and correct proof.
“The best innovations occur when you have networks of people with diverse backgrounds gathering around a problem,” says Robert Fishkin, president and chief executive of Reframeit Inc., a Web 2.0 company that creates virtual space in a Web browser where users can share comments and highlights on any site. “We need to get better at collaborating in noncompetitive ways across company and organizational lines.”
THAT’S exactly what innovators at a dozen health care systems throughout the country had in mind nearly four years ago when they formed the Innovation Learning Network, says its director, Chris McCarthy. The problem, he says, is that there are so few health care innovators within each organization that introducing technologies and processes can be painstakingly slow. “We thought if we could get all these experienced folks together to push each other’s thinking continually, we’d all be better off,” he says.
What started as a grant-financed, one-year trial is now a member-financed permanent network, he says. The members bring in new technologies and experiment with them in a faux clinical setting in San Leandro, Calif.,. One of the first large-scale initiatives to arise from the network is KP MedRite, an effort at Kaiser Permanente’s 32 hospitals to ensure that nurses are not interrupted while dispensing medications. Other member health care systems have already begun to introduce the program at their sites.
By using the group’s knowledge and experience, Kaiser Permanente accomplished in less than a year what would have required roughly two years to do without the network, Mr. McCarthy says. “It was a huge jump-start for us,” he says. “The group effort allows us to move much more quickly and become successful much faster.”
Janet Rae-Dupree writes about science and emerging technology in Silicon Valley.
More Articles in Business » A version of this article appeared in print on December 7, 2008, on page BU3 of the New York edition.
For Innovators, There Is Brainpower in Numbers
By JANET RAE-DUPREE
Published: December 5, 2008
“None of us is as smart as all of us.”
— Japanese proverb
DESPITE the enduring myth of the lone genius, innovation does not take place in isolation. Truly productive invention requires the meeting of minds from myriad perspectives, even if the innovators themselves don’t always realize it.
Keith Sawyer, a researcher at Washington University in St. Louis, calls this “group genius,” and in his book of the same name he introduces a scientific method called interaction analysis to the study of creativity. Through studying verbal cues, body language and incremental adjustments during team innovation efforts, Mr. Sawyer shows that what we experience as a flash of insight has actually percolated in social interaction for quite some time.
“Innovation today isn’t a sudden break with the past, a brilliant insight that one lone outsider pushes through to save the company,” he says. “Just the opposite: innovation today is a continuous process of small and constant change, and it’s built into the culture of successful companies.”
It’s a perspective shared broadly in corporate America. Ed Catmull, president of Pixar Animation Studios and Disney Animation Studios, describes what he calls “collective creativity” in a cover article in the September issue of Harvard Business Review. “Creativity involves a large number of people from different disciplines working together to solve a great many problems,” he writes. “Creativity must be present at every level of every artistic and technical part of the organization.”
So, we all should brainstorm our way through the day, right? Wrong. That classic tool introduced by Alex Osborn in 1948 has been proved in a number of studies over the last 20 years to be far less effective than generally believed. “He had it right in terms of group process,” says Drew Boyd, a businessman based in Cincinnati who blogs and speaks often about innovation. “But he had it wrong in terms of the method.”
Brainstorming, Mr. Boyd says, is the most overused and underperforming tool in business today. Traditionally, brainstorming revolves around the false premise that to get good ideas, a group must generate a large list from which to cherry-pick. But researchers have shown repeatedly that individuals working alone generate more ideas than groups acting in concert. Among the problems are these: Throwing in an idea for public consideration generates fear of failure, and workers looking to advance their own interests often keep their best ideas to themselves until a more opportune time.
Instead of identifying a problem and then seeking solutions, Mr. Boyd suggests turning the process around: break down successful products and processes into separate components, then study those parts to find other potential uses. This process of “systematic inventive thinking,” which evolved from the work of the Russian engineer and scientist Genrich Altschuller, creates “pre-inventive” ideas that then can be expanded into innovations.
Kapro Tools, working with an Israeli company called Systematic Inventive Thinking, used the method to create a new type of bubble level calibrated to help build gentle slopes to improve drainage. Previously, construction workers approximated the slope they wanted by placing a nail or other object under the edge of a standard level.
“Innovation is a team sport,” Mr. Boyd says. “There’s a dynamic that happens between people that produces results I just don’t see with an individual.”
Even Albert Einstein, society’s most common mental picture of genius, needed group input to hone his insights. According to “Einstein’s Mistakes” by Hans Ohanian, the great physicist’s derivation of the famous equation E=mc2 contained several errors; it wasn’t until 1911 that another scientist, Max von Laue, developed a full and correct proof.
“The best innovations occur when you have networks of people with diverse backgrounds gathering around a problem,” says Robert Fishkin, president and chief executive of Reframeit Inc., a Web 2.0 company that creates virtual space in a Web browser where users can share comments and highlights on any site. “We need to get better at collaborating in noncompetitive ways across company and organizational lines.”
THAT’S exactly what innovators at a dozen health care systems throughout the country had in mind nearly four years ago when they formed the Innovation Learning Network, says its director, Chris McCarthy. The problem, he says, is that there are so few health care innovators within each organization that introducing technologies and processes can be painstakingly slow. “We thought if we could get all these experienced folks together to push each other’s thinking continually, we’d all be better off,” he says.
What started as a grant-financed, one-year trial is now a member-financed permanent network, he says. The members bring in new technologies and experiment with them in a faux clinical setting in San Leandro, Calif.,. One of the first large-scale initiatives to arise from the network is KP MedRite, an effort at Kaiser Permanente’s 32 hospitals to ensure that nurses are not interrupted while dispensing medications. Other member health care systems have already begun to introduce the program at their sites.
By using the group’s knowledge and experience, Kaiser Permanente accomplished in less than a year what would have required roughly two years to do without the network, Mr. McCarthy says. “It was a huge jump-start for us,” he says. “The group effort allows us to move much more quickly and become successful much faster.”
Janet Rae-Dupree writes about science and emerging technology in Silicon Valley.
More Articles in Business » A version of this article appeared in print on December 7, 2008, on page BU3 of the New York edition.
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