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.

Some of you may be attending the upcoming Harvard Business School Entrepreneurs Conference on Monday May 19^th in Anaheim, CA. As these things go it is definitely one of the better early stage events. While it does attract its share of service providers, it also seems to attract a nice cross section of entrepreneurs. I think this will be the 6^th year that I have attended. This year one of my other Momentum partners, Matt Ridenour, and I will be speaking on the panels. I am particularly excited about the topic that my panel (first panel of the day at 9AM) addresses: Do You Have the Right Stuff? Characteristics of Successful Entrepreneurs. Continue Reading »

On Friday, I moderated the Idea Validation panel at UCLA’s Anderson School Entrepreneurs conference. Thanks again to the four panelists – Jimmy Henricks and Patrick Dillon, co-founders of www.collarfree.com; Dr. Vladimir Ban, CEO of PD-LD, Inc.; and David Silver, author of Smart Start-Ups and President of Santa Fe Capital Group – all of whom pulled from their own experiences give helpful advice on how to think about validating a startup business idea.

One discussion item really stuck with me after the panel – whether women entrepreneurs face a tougher road when trying to raise venture capital. A panelist made the observation that women have a tougher time raising capital than do men and in a slightly tongue-in-cheek way, advised women to partner with men if they were to hope to raise funds. Several members of the audience disagreed strongly including an ex-associate from a Sand Hill Road VC and a fund-to-fund expert who made the point that “VC’s want to make money and couldn’t care less what you look like if there is a good ROI to be made.” I tend to agree with the audience but would love to hear what others with personal experience have to say on the point. I know several woman entrepreneurs who have successfully navigated the VC process and don’t recall any hearing about any specific bias against them. But I may be blind to the issue.

The panelist also cited data that supported his point. I do know there are fewer female venture funded entrepreneurs than there are male, but I’ve never seen any data that supports the claim that it’s the VC process that creates the disparity. If anyone has data, I’d love to see it.

When you start your company you need to decide what form of corporate structure you want to use.  Depending on what you are trying to achieve, you might operate as a sole proprietor, form an LLC or C corporation. In the interest of brevity, I’ll divide corporate structure alternatives into those that, for tax purposes, are “pass through” or not. “Pass through” entitities include sole proprietorships, partnerships and LLCs.  Essentially, if an entity is “pass through” it means that any losses or profits will be passed directly to the owners of the entity on a pro-rata basis or as defined in the organizing documents.   In a C corporation, all of the gains and losses are dealt with within the corporation and the corporation either pays taxes or accumulates losses with no effect on the ownership until there is some distribution.   This is how we can categorize these organizations, but this is not what is important for you to know as an entrepreneur.

Continue Reading »

I was on a great panel last weekend at the CalTech/MIT Enterprise Forum on the CalTech Campus (www.entforum.caltech.edu). The topic was “Social Networks and the Entrepreneurial Reality: Fertile Platform or Investment Nutworks?” The panel was kicked off with a keynote from Jason Feffer, CEO and Founder of the social networking site Sodahead (www.sodahead.com), and also included Mark Jeffery, CTO of social search site Mahalo (www.mahalo.com), Joe Jason from SK Telecom, Tony Karrer founding CTO of eHarmony (www.eharmony.com) and Andrew Shandlin, Executive Director of the Caltech Alumni Association.

While panelists seemed to agree that while there are plenty of nutty social networking ideas out there, the social networking space in general continued to be a fertile area for smart entrepreneurs and well placed venture investments. After the discussion, I had the opportunity to speak with dozens of social networking entrepreneurs who were looking for some “rules of thumb” to help launch or expand their ventures. Much of the advice I gave was echoed by the earlier panel discussion. I’ll attempt to summarize the main points here: Continue Reading »

Take a step back 20 years, and pretend you’re the owner of a neighborhood bookstore. Being there everyday, you can count how many people came into the store day, how many picked up a book and looked through it, and most importantly, how many people actually bought a book. You can easily determine the demographics of shoppers and observe which books they peruse and which they neglect, how much you spent on advertising to pull each customer into the store, and analyze the data to increase your bottom line.

Fast forward 10 years to the days of the dot-com bubble. Companies were raising tens of millions and spent obscene amounts of money on acquiring eyeballs (bringing customers into the store aka customer acquisition). Cookies and user tracking were in their infancy. More importantly, tools which informed webmasters of who was coming to their site and what they were doing were very basic. Continue Reading »

For many founders to be, the thought of starting a company is fairly daunting. Founders often come from one function like development or marketing and must figure out how to deal with all of them – with limited resources to boot. The good news is that the right philosophy will enable you to make good, quick decisions in business functions you have little experience. The right philosophy is based on “how to think” as opposed to “what to think.” “What to think” answers only specific questions. “How to think” provides you a guiding philosophy to make good decisions. Remember, you don’t have time to learn everything or make the same mistakes most people do.

I was playing around on GoDaddy the other day w/ my hosting account and ran across the “16 Rules” by GoDaddy’s enigmatic founder and CEO. I think they are pretty interesting:

1. Get and stay out of your comfort zone.
I believe that not much happens of any significance when we’re in our comfort zone. I hear people say, “But I’m concerned about security.” My response to that is simple: “Security is for cadavers.” Continue Reading »

Attached is a very helpful, well written article on the “new rules” for building a successful SaaS model. The article was written by Kyle Murphy, the EVP / CFO of VantageILM, an early stage SaaS company located in Pasadena that serves the finance industry. I would strongly encourage this read if you are building this type of business.

Software Gets A Service Call

I once had a seasoned VC board member tell me that the nastiest divorce is often cleaner than most partner breakups.

Startups with more than one founder are more likely to succeed than those with only one founder: double the mind share, double the work done, double the domain experience and the ability to bounce ideas off of each other are benefits that are hard to argue with. If having a partner is such a good thing, then why do they often go bad? Continue Reading »