The greatest thing about being a part of Momentum Venture Management is the opportunity to meet and interact with entrepreneurs. Their passion is contagious and the sheer fact that they are building out their dream is inspirational. That is why this past Tuesday’s Entrepreneur Only event put together by Momentum and held at the Wilshire Grand Hotel was such an incredible experience. Over 60 entrepreneurs came to share their visions, meet each other, and have a couple of drinks.
Entrepreneurs were out in full force, with businesses ranging from nanotechnology to internet media. It was an amazing display of the exploding startup scene in Southern California and a testament to the innovation happening in Los Angeles.
At one point towards the end of the evening I looked around and took in the scene; a room full of amazingly talented people helping each other build out the next wave of businesses. I couldn’t be more excited about what the future holds.
Based on the success of this past Tuesday, we are planning on having several more of these events. So if you are an entrepreneur who is interested in meeting other likeminded people, getting free advice from the Momentum partners, and enjoying a relaxed evening of interesting conversation, then please leave a comment below and we will make sure to email you details about our next event.
On June 17 we’re going to be hosting our first “????????Entrepreneur Only” event. We are launching this concept for a few reasons: first, because we believe that Southern California continues to be way behind in terms of the informal mentoring network for early stage and start up entrepreneurs; second, while there are some great “public” events and membership organizations in Southern California, they don’t afford much quality one-on-one time between experienced investors and entrepreneurs and people looking to launch a first venture.
So… we have designed this to be a fun event in an upscale, “hip” environment. And, most important, we are asking guests to pre-register so that we can set up a small ratio of entrepreneurs to mentors / advisers. We’ll have our partners at the event and typically we’ll add a few other guests such as a successful entrepreneur, venture capitalist, deal attorney, etc. There will be no program - just a casual event w/ cocktails and chat. We hope it works!
If you are interested in joining us, please follow the link above for information or contact: katie@mvmpartners.com.
There’s been a lot of talk lately about investors laying low due to the recent slowdown in the economy. Looking closer at the numbers, it appears that there is a lot still happening.
Ben Kuo at SocalTech points us to the recent National Venture Capital Association (NVCA) study published just a few days ago. Though the amount of venture capital invested in southern California from Q1, 2007 to Q1, 2008 has decreased from $1.1B to $856M, the number of deals has actually risen! 93 companies were financed Q1 this year versus 85 last year.
Though valuations are lower and capital may be more difficult to come by, venture investors are still alive and well. Yes, exit markets are tightening up. Yes, the IPO market for venture baked companies seems to be in a drought.
However, keep in mind that there is a very distinct cycle to venture capital. Companies receiving their first round of institutional capital this year have a 3 to 5 year time horizon before they exit. Don’t forget that several household names (i.e. Google, Paypal) “grew up” during downturns - just like the one we’re in right now.
Today’s Los Angeles Times carries an article that predicts that 2008 will be even tougher for start-ups seeking cash. There are a few themes in this article that we often talk about:
Venture investors will be very picky and, specifically, they will be looking for “the complete package”: great technology, a big market, a strong team and, most important, evidence that the company has already started to get traction. This is a bit self-serving, but we think that groups such as Momentum can help bridge the funding gap by providing bridge funds and management that is willing to go at risk to get traction.
There is also an interesting anecdote on a theme we often talk about: high valuations in early rounds are often a BAD thing. A company featured in the article was unable to raise additional capital during the current economic slowdown because they had been so successful at achieving a high valuation in an earlier round (it is always difficult to do a “flat” or “down” round). So, the company went out of business.
If there is any news is in this article it is “more of the same”. You should not expect to fund a great idea or a great product but should be working to build a solid company one step at a time. As you take capital along the way, don’t always focus on valuation but instead focus on getting the right amount of capital from the right partners.
In 2005, I followed in the footsteps of many other Los Angeles-based entrepreneurs. I moved our internet startup, Insider Pages, from Southern California to Silicon Valley. While we knew it would be a huge disruption to a fledgling company, we did it for some good reasons – access to capital, engineering talent, and a bubbling ecosystem of ideas, energy and innovation. It was the right move — Silicon Valley turned out to be everything we’d hoped for and more. In a few months, we’d built a top tier engineering team, attracted successful product and marketing people from other Silicon Valley companies, and had started building a network of business development relationships with other Silicon Valley firms. Continue Reading »
