Boston VC Files To Run For Governor

Jeff McCormick, Saturn Partners, Boston VC, Boston startups, Massachusetts Governor


Massachusetts has a new candidate for the Governor’s Mansion. The Sentinel Enterprise reported on Monday that Saturn Partners founding partner Jeffrey McCormick has filed papers to run for government as an independent candidate.

McCormick founded venture capital firm Saturn Partners in 1994 to support early stage growth companies. Their portfolio boasts 35 companies that are still active. Crunchbase reports that the firm’s latest startup investment was Oregon-based Chirpify, a company that facilitates financial transactions via Twitter. Saturn participated in Chirpify’s $6 million dollar series A raise back in July. 

McCormick’s firm has a reputation of being hands-on in a good way. According to many online sources, including some of the companies that they’ve supported, Saturn lends their expertise in developing companies in a strategic partnership tied to their investment.

As for the governor’s race, politics is no stranger to startups. Techstars co-founder Jared Polis is a congressman from Boulder who uses his background in startups and investment to help champion legislation that will spur the economy through startups and small businesses.

In fact, McCormick isn’t the only candidate with ties to venture capital. The only Republican candidate at the moment, Charlie Baker, is part of the venture capital firm General Catalyst.

On the Democratic side McCormick is facing off against Attorney General Martha Coakley, Treasurer Steven Grossman, former Obama administration Medicare and Medicaid chief Donald Berwick, biotechnology executive Joseph Avellone, former state and federal homeland security advisor Juliette Kayyem and Sen. Daniel Wolf.


Follow Friday: 30 Angels And VC’s To Follow On Twitter

Follow Friday, VCs, Angels, Follow on Twitter, Startups

It’s Friday morning which means its time for another great list of startup related people to follow on Twitter. Last week we brought you this awesome list of startup rockstars.Earlier lists have included these 50 women in startups to follow and another great list we had was 100 Techstars mentors to follow.

One of the most important things to our readers is the money, so this week we’ve got 30 angel and vc’s to follow on Twitter.  Here we go!


CincyTech Closes Biggest Fund To Date

CincyTech, Funding, Cincinnati startups, Everywhere Else

CincyTech, the public/private partnership, seed stage investor, and pillar of the Cincinnati startup community, has reportedly raised it’s largest fund to date. Earlier this month The Cincinnati Business Courier reported that CincyTech has closed on a $10.8 million dollar fund.

CincyTech Fund III, LLC combines a $5 million Ohio Third Frontier investment with $5.9 million raised by CincyTech from Southwest Ohio partners.

Like CincyTech Funds I and II LLC, Fund III will invest in companies focused on information technology and bioscience that are based in or willing to move to Southwest Ohio. The fund has the capacity to invest in at least 15 companies.

“Over the last five years there has been a significant increase in seed stage investment activity in the Cincinnati region. CincyTech Fund III will enable us to continue to invest in entrepreneurs in Southwest Ohio to create jobs and wealth to propel our region forward,” said Bob Coy, president of CincyTech.

CincyTech has a variety of investors that have participated in Fund III, including eight local institutions and 51 individual investors.

“The number of individual investors in Fund III represents a dramatic increase from the nine individual investors in Fund II. These individuals are the foundation of the larger seed stage investment syndicates that we organize for our portfolio companies. Based upon our past investment experience, for every dollar invested in a startup from Fund III, an additional $3 will be invested by other investors in the seed round prior to an investment by an institutional venture capital fund,” said Coy.

Local institutions that have committed to invest in Fund III include Castellini Foundation, Cincinnati Children’s Hospital Medical Center, The Christ Hospital, The Greater Cincinnati Foundation, and the Health Foundation of Greater Cincinnati.

CincyTech has invested in $15.3 million dollars in 43 portfolio companies, including ChoreMonster, Impulcity, Lisnr, VenturePax, Ahalogy and many more.

Speaking of Cincinnati, this huge national conference for startups everywhere else is in Cincinnati Sep 29- October 1.



SoftBank’s Joe Medved And Mercury Fund’s Blair Garrou To Speak At Everywhere Else Cincinnati

Today’s been a big day for Everywhere Else Cincinnati. Earlier this morning we announced that Greatist founder Derek Flanzraich had joined the already amazing line up for the conference taking place in Cincinnati September 29-October 1st.

The Everywhere Else conference series is aimed at startups “everywhere else,” cities across America where startups are fueling the new economy. Startups in areas that aren’t traditional tech hubs, like Silicon Valley, often have a common set of challenges including access to capital, access to talent, and not knowing which resources are available to tap into.

At Everywhere Else Cincinnati, startups, angel investors, and VC’s from everywhere else will be able to learn and collaborate with like minded people in similar situations. We’ve compiled an amazing list of national speakers who will offer a range of discussions from starting up everywhere else, to raising money everywhere else, to accelerating everywhere else, and even what VC’s and angel investors are looking for when they turn to startups everywhere else.

After our huge conference in Memphis last February, a theme kept recurring: the need to “Start Where U Are.” This conference will help startups realize that in most cases starting where they are is the best scenario for them and the community.

We already have VC’s from some of the nation’s most respected firms attending or speaking at the conference. Two more of those VC’s, Soft Bank Capital’s Joe Medved and Mercury Fund’s Manging Partner Blair Garrou, will share their insight into what VC’s are looking for and how startups, who often have the odds stacked against them in the first place, can make sure they look good and ready in front of investor.

Both VC’s are distinguished in their fields, have an active role in their startup communities and advisory roles with their startups. Both investors have also been on the Business Journal‘s 40 under 40 in addition to other great accomplishments.

Joel Medved, Blair Garrou, Soft Bank Capital, Mercury Fund, EE Cincinnati, Everywhere Else CincinnatiJoe Medved joined SoftBank Capital in 2005. He’s been investing in digital media companies for over nine years, from seed through growth stage.  He focuses on supporting primarily Seed and Series A stage companies with special interests including consumer and enterprise mobile, gaming, and social marketing.

Prior to joining SoftBank Capital, Joe was an Associate with Constellation Ventures, a media and communications venture capital fund under Bear Stearns Asset Management. Prior to Constellation Ventures, he was an Associate and Analyst for the Technology, Media and Telecommunications Group with JPMorgan Investment Banking.

In 2011, Joe was selected by the Boston Business Journal for its 40 Under 40 class. He is Co-Founder of the Digital Media VC/Corp Dev Connection, a group that brings together active investors and corporate development professionals from large corporations focused on digital media.  Joe is also Chairman Emeritus of the New England Venture Network (NEVN), one of the largest venture capital organizations on the East Coast.

blairgarrouBlair Garrou is a co-founder and Managing Director of the Mercury Fund (formerly DFJ Mercury). The Houston-based VC firm makes investments in technology and energy where they even support their own accelerator called Surge.  Garrou’s reach to accelerators doesn’t end there, though. He is a big believer in the accelerator model and is a mentor at The Brandery and often speaks to other accelerator cohorts across the country.

Prior to co-founding the Mercury Fund, Blair was the CEO of Intermat, Inc., a leader in product information management software (acq. by IHS). Before Intermat, Blair was a Principal of Genesis Park LP, a Houston-based venture capital and private equity firm, where he focused on the firm’s software investments, including Intermat, FuelQuest (acq. by Saracen Energy), and SAT Corporation (acq. by Invensys). Prior to Genesis Park, Blair helped launch and was the Director of Operations for the Houston Technology Center (HTC), the largest technology incubator in the state of Texas, and he led the formation of the Houston Angel Network, one of the largest and most active angel investment organizations in the U.S. Previously, Blair was an investment banker with BMO Nesbitt Burns, and an auditor with Deloitte & Touche. Blair is a licensed CPA in the state of Texas. He received a B.S. in Management with special attainments in Commerce from Washington & Lee University.

Medved and Garrou join this already amazing list of speakers

  • Naithan Jones, Founder AgLocal
  • Derek Flanzraich, Founder Greatist
  • Andrew Warner, Founder Mixergy
  • Andy Sparks, Co-Founder Mattermark
  • Wil Schroter, Founder Fundable
  • Jake Stutzman, Founder
  • Jonathon Perrelli, Managing Director, Fortify Ventures
  • Justin Gutwein, Filmmaker and Entrepreneur
  • Mark Hasebroock, Founder Dundee Venture Capital
  • Jason Healy, Founder Blu
  • John Bracken, Founder Evite and Speek
  • Dave Knox, CMO Rockfish, co-founder Brandery
  • Patrick Woods, Managing Director a>m ventures
  • Sarah Ware, Founder Markerly
  • John T. Meyer, Founder
  • Raghu Betina, Managing Patner The Starter League
  • Ryan O’Connell, VP Influence & Company
  • Blake Miller, Managing Director Think Big Accelerator
  • Michael Bergman, Founder Repp.


Startups hurry only 4 Startup Village Booths left at the early bird discount rate!



5 Investment Mistakes Even Smart People Make

Guest Post, YEC, Startups, Investment mistakesIf you’re so smart, why aren’t you rich?

A lot of smart people ask themselves that question, especially as they struggle to keep up with the bills and worry about an inadequately funded retirement. In my work consulting with entrepreneurs, I commonly find that they spend so much time juggling the competing demands of their business that they take little time to analyze their personal saving, spending, and investing behaviors. And yet giving attention to these areas is vital if one hopes to achieve long-term financial success. 

Here are some common mistakes that can derail even the smartest individuals:

  1. The Status Chase: You’ve worked hard, earned your degree and paid your dues. Now you want to show the world how far you’ve come. But the massive house, the new car every two years, and custom-made suits might keep you from building your nest egg. Instead of seeking status through material possessions, pursue excellence in your field or seek to free yourself from status concerns. Ultimately, it’s more satisfying and better for your bottom line. Warren Buffett lives in a very modest house and is hardly known as a snappy dresser and no one seems to hold it against him.
  2. Overconfidence: More than once, financial journalists have highlighted that some of the smartest people in the world have the worst performing portfolios; doctors are a classic example of this. This could be because smart people are used to being able to figure out the system and use it their advantage. They’re not used to playing in a game like the financial markets, where so much of the action is due to chance — and where an inability to admit mistakes is your worst enemy.
  3. Target Marketing: Some unscrupulous financial services firms target professionals, hoping to manage their cash, sell them complicated financial products, and make an unfair amount of money from them. In such cases, their victims would be better off managing their money themselves, or selecting a financial advisor more carefully.
  4. Insufficient Time: Investments require a bit of attention now and then. When you’re busy all the time, it’s easy to ignore things for years on end, to your detriment. It’s better to hire help than to simply ignore everything, but even hiring someone requires that you take the time to research your choice.
  5. The Expert Trap: Investing isn’t like neurosurgery. Investment managers with very impressive credentials often do just as badly — or worse — than those with more modest backgrounds. Because so much of market success depends on being able to buck the trend, exercise self-control and stay calm. The performance of a Harvard MBA may not be as good as that of a no-name university, newly minted graduate. Bright and accomplished people tend to rate others according to a scale of academic and personal credentials that may be largely irrelevant when it comes to managing money. One thing is certain, though: The people with the fanciest credentials will have the highest fees, whether their results justify it or not.

In short, smart people can do better with their nest eggs if they avoid overconfidence and stop seeking to buy status. They should choose their investment advisors carefully and not rely solely on impressive credentials.

Robert Sofia is a best-selling author, award winning public speaker, and financial industry thought leader. He has developed marketing strategies for Fortune 500® companies, personally coaches hundreds of financial advisers nationwide, and is the COO and co-founder of Platinum Advisor Strategies.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.


New VC Fund Is Linking Michigan To Silicon Valley

Michigan eLab, Venture Capital, Michigan startups, Ann Arbor startups

While the bankruptcy of Detroit has put Michigan in the news in a negative way, there’s a light at the end of the tunnel coming from startups and entrepreneurship. This isn’t anything new for the state of Michigan; after all at one point even cars were new technology.

While Detroit has a blossoming startup scene and is preparing to rebuild, Ann Arbor and the University of Michigan have a startup scene that’s starting to thrive. The latest startup-focused venture, a VC fund called Michigan eLab is the most recent organization to join the cause.

Most startup communities “everywhere else” struggle with two major things: access to capital and access to talent. The new Michigan eLab is positioned to help entrepreneurs in Ann Arbor with both.

MichiganeLablogoCrain’s Detroit reports that the new Michigan eLab is raising a first fund of $40 million dollars. While any startup community would welcome a new VC fund, Michigan eLab is uniquely positioned to bridge Ann Arbor and Michigan with Silicon Valley.

For starters the fund has two offices: one in Ann Arbor, the other in San Mateo California. An even bigger benefit that eLab brings to Ann Arbor is that three of the fund’s four founders have ties to Michigan. Doug Neal, one of the fund’s founders is originally from Mt. Pleasant. Neal spent 15 years in Silicon Valley with companies like Hewlett-Packard and Symantec before co-founding his own startup Mobile Automation.  That company sold to iPass Inc in 2005 for $20 million dollars.

Rick Bolander is another one of the Michigan eLab founders with ties to both Silicon Valley and Michigan. Bolander graduated from the University of Michigan with a master’s in electrical engineering. He went on to launch Chicago’s Blue Sky Ventures and then co-founded San Mateo-based Gabriel Venture Partners.

Bob Stefanski is the third founder with ties to both Silicon Valley and Michigan. He is a graduate of UM earning both an engineering and a law degree. Stefanski is a partner in the Silicon Valley-based Reed Smith LLP. He is also the cofounder of Tibco Software, which has more than $1 billion in revenue according to Crain’s.

The final partner, Scott Chou, has no direct ties to Michigan or UM, but he is a managing director at Bolander’s Gabriel Venture Partners. Chou’s first venture deal was a 2001 seed round investment in NextG Networks, a California company, which sold to Texas-based Crown Castle International in December of 2011 for $1 billion dollars. That earned him a spot on the highly coveted top 100 venture capitalists in Silicon Valley list from AlwaysOn.

The founders of Michigan eLab hope to link Ann Arbor’s tech community, startups, and entrepreneurs with other famous founders with ties to the region. Those include: Larry Page, Dick Costolo, Skype’s Josh Silverman, Sun Microsystems co-founders Scott McNealy and Bill Joy, Groupon co-founder Brad Keywell, former Palm Inc. CEO Donna Dubinsky, and more.

Source: Crain’s Detroit.


How To Deal With The “How Will You Acquire Users?” Question

Startup Tips, VC, Venture Capital

Venture capital investors ask a lot of tough questions before they sign any checks. One of the hardest is when they start drilling down into your business model and ask “How will you acquire users?”

But in reality this is a difficult question, because even well-known companies like Dropbox might have been hard pressed to come up with a satisfactory answer if they were asked that particular question.

Common answers include such nebulous coveralls like ‘build up a community identity,’ ‘implement viral marketing,’ and ‘create incentive packages’. Maybe these will indeed be persuasive. But, many companies learn as they develop through real life challenges and don’t really have all the answers.

Here we take a look at a few of the particular issues involved in acquiring users which may be more persuasive in wooing VCs over to the cause than the usual stock responses.


VCs prefer hearing that you’re committed to focusing on a particular market sector rather than how you will target a much wider audience and then go viral. There’s never any guarantee you’ll ‘go viral,’ but narrow the target a little and you’ve got a better chance of hitting the bullseye.

Budget and resources are limiting factors for any startup. If you focus all your energies on one particular sector, you will almost certainly yield far better results because that target sector will see a superior value in your service.

Events that are sector specific are the norm, though there are exceptions to the rule such as targeting engaged couples and college students. With these, there are usually sector-targeted content platforms and/or distribution channels involved that make it easier to penetrate a small but ultimately profitable market, from which you can expand.


If you can tell the VC that you have the scaling flexibility to go from a hundred to a hundred thousand subscribers and thereby transform into a sustainable business, this will be music to their ears. Promoting a product one-on-one is not scalability. If on the other hand, you’re able to say that you already have a partnership with Coles Group Ltd in place, this is real scalability built into your business plan, and they’ll be suitably impressed.

Get in early with validation

You need data to back you up. Look into several different types of acquisition strategy and decide which will suit your line of business best. For example, if you took out ads on Google and Facebook and found that SEO is more cost-effective than other methods, this sounds like you has done your homework. If you’ve worked out a conversion rate against costs to come up with a realistic ROI, that sounds even better.

All this is validated data, rather than just a bunch of assumptions tied together with a string of wishful thinking. When presented with such solid data investors can see how an injection of capital will help an early trend to scale up.

Author: Carlo Pandian worked at Adzuna, a tech start-up based in London. He is currently writing a tutorial on QuickBooks (accounting software for entrepreneurs), and has previously published for Techli, Killer Startups and Under30CEO. Connect with him on Twitter @carlopandian.

First Round Capital Shares Their Expertise With First Round Review.

First Round Review, First Round Capital, Philly startup,startups, Josh Kopelman

Josh Kopelman, the founder of and the founding partner at Philly and New York-based First Round Capital, has been a big supporter and encourager of startups. In addition to First Round Capital, he’s been very active in the Philadelphia and New York startup scenes.

Kopelman is active on the Philly Startup Leader’s list, and he’s also the founder of the Dorm Room fund. He’s particularly active in startup events that cater to young entrepreneurs, like nvigor’s student startup summit.

First Round Capital has participated in over 100 funding rounds from seed to series D. They also recently expanded their dorm room fund by $500,000 to spread that fund to Silicon Valley.

Kopelman and the team at First Round Capital have been quietly working over the past four months to take their vast knowledge to the Internet and share it with entrepreneurs and founders everywhere. Their newest product is called “First Round Review,” and it’s dubbed “Actionable Insights for Technology Entreprenerus”

“There is no shortage of media available on startups – every day there are dozens of stories talking about what startups are doing – the funding rounds, product launches and latest tech rumors and trends. Yet there are so few stories talking about how they are doing it, ” Kopelman said in an email to the Philly Startup Leaders listserv.

Startup tips and startup advice are very popular. Some of our best stories here at Nibletz fall into that category. Kopelman takes that notion a few steps further by offering insight that only an angel investor or venture capitalist with over 100 investments could offer.

They’ve already published 30+ articles in a wide range of topics.

Kopelman explained in this First Round Review post how they differ from other startup blogs:

“We know we’re a venture fund — not a publishing company. But many venture capitalists have published amazing content in their personal blogs before. The difference is that while other VCs have done a great job sharing their personal observations of the market and their personal thoughts on how to build and finance companies, we’re going to be primarily focused on sharing actionable knowledge from the best practitioners – those actually in the trenches building. So one day it might be a piece on how to interview product managers and the next featuring how to build high performance teams with the Chief Talent Officer of Netflix.”

The very first article they published was: “How Estsy Grew Their Number of Female Engineers by Almost 500% in One Year”

Check out First Round Review here.


Now sign up for the biggest startup conference in the US dedicated to startups “everywhere else”


Steve Case Re-Affirms Faith In Startups, Raising Another $150 Million Dollar Fund


Washington, DC-based Steve Case, founder of AOL, Revolution, and the founding Chairman of Startup America, has made some bold moves over the past few years when it comes to startups. He’s also been a strong advocate for startups everywhere across the nation and on Capitol Hill.

Monday, Case put his money where his mouth is again by announcing through TechCrunch. The AOL-owned website reports that through his venture capital arm, Revolution Ventures, Case and partners are raising another $150 million dollar fund to support early stage startup ventures.

Revolution is calling the fund “Revolution Ventures II,” and like the previous fund, it will back early stage tech companies. Some of their previous portfolio companies include ZipCar, Living Social, and HomeSnap.

TechCrunch also reported that they’ve heard $125 million was already committed.

Two and a half years ago Case launched Startup America, a three-year initiative to spur startups, innovation, and job creation. Two months ago Case, along with several others,  announced that Statup America was joining forces with Startup Weekend to take the initiatives global. Now we know that Case wants to continue to do his part directly by launching more companies.

Ann Arbor Venture Firm Raises First $11 Million Dollar Fund

Huron River Ventures, Ann Arbor VC,Michigan startups, startup,venture fundingHuron River Ventures, an Ann Arbor and Grand Rapids, Michigan-based venture capital firm, announced late last week that they have raised their first venture capital fund.

“We started working on this fund in 2010 and we had our first close at $7.5 million in March 2011,” managing director Tim Streit told

Huron River Ventures is a ten year fund and to date they’ve deployed about 30% across seven different companies. They plan to invest in another 7 or 8 companies within the next two to three years and round out the fund at 15.

The fund was started by Streit and college friend Ryan Waddington, who met at the University of Michigan. The goal of the fund was to invest in Michigan companies and with that mission they were able to raise an initial $6 million dollars from the State of Michigan as part of their Accelerator Fund Program.

“We’re here, we want Michigan deals, and that’s what we focus on… we invest in Michigan-based companies or companies that have a strong presence in the state. Almost all of our capital is from the state or investors who are from Michigan or still live here.” Streit said.

Announcing a fund’s closing is basically a formality; however it sends a signal to Michigan entrepreneurs that Huron River is funded and ready to invest.

Find out more about Huron River Ventures here.


Check out this new startup accelerator in Michigan, Coolhouse Labs.







The Startup Fred Wilson And Union Square Ventures Would Back Right Now

Fred Wilson, Union Square Ventures,, investor, startups, New York startupThe startup and venture capital world breathed a sigh of relief earlier this month when New York based venture capitalist, blogger extraordinaire and managing partner at Union Square Ventures, announced he was investing in Coinbase a startup that helps facilitate Bitcoin transactions. Sure Bitcoin is a hot commodity these days, just ask Ashton Kutcher, but there was more to it than that.

For many, Wilson’s investment in Coinbase was one of those big “signaling issues”. As most know, Wilson has been in a two year slump with investments while he tried to figure out what the next big thing was.

His firm, Union Square Ventures, did just fine with investments and made some great bets during Wilson’s cool period.

So what’s next more Bitcoin startups? Wilson has always been one to go ahead of the curve, so undoubtedly whatever he invests in next will go to that record. Wilson just saw an exit with Tumblr, for which he was an early investor.  Some of their other great investments include Boxee,, Twitter, Twilio and countless others.

Regardless of what’s actually in the pipeline, we can tell you for certain, if you read Wilson’s personal blog,, if you’ve got a team of college graduates who’ve developed the next thing that’s going to stop Google, and big hint here’s it’s not Bing, Wilson would go all in.

In a tribute to his daughter Jess who just graduated from College earlier this week, Wilson acknowledges the fact that he and USV often bet on college drop outs but he writes;

“Dropping out of college is all the rage today in startup land (even dropping out of high school). And when it comes to our business, we really do not care if someone went to or graduated from college. We have funded many college dropouts and will continue to.

But there is also something to finishing something you started. ”

So just to be clear, Wilson will still bet on dropouts but I’m willing to bet a college graduate team may have a special place in his heart these days.

As for what’s stopping Google, Wilson also wrote a short, sweet and to the point post called “Running the table”. In the post he talks about how Microsoft “ran the table” with desktop computing, Apple did it with mobile computing and Facebook did it with social networking. That was until Apple and the internet stopped Microsoft and Twitter stopped Facebook.

As for Google, Google is trying to run the table with the “entire fucking internet” and Wilson wants to know “Who Will Stop Google”.

So if you’ve got a college graduate team ready to stop Google, you better get that deck in front of Wilson.

Read Wilson’s blog daily.  Got that startup ready, make sure your business plan submission includes a clear description of your operations and current progress and take it on over to Union Square Ventures, 915 Broadway, 19th Floor, New York, NY 10010, make it interesting, Wilson’s a busy go.

Here are Wilson’s Venture Capital Do’s & Dont’s 


12 Of The Hardest Questions Venture Capitalists Will Ask You


Venture Capital, How to raise money,startups, Guest Post, YECWhat Is Your Hole?

“The classic VC role is that of an interrogator, trying to break you for a key secret. But it doesn’t have to be that way. Folks who watch the TV show “Shark Tank” know this feeling. Time after time, a well-rehearsed entrepreneur goes through his pitch, and everyone loves it. But the Sharks (VCs) keep poking at the startup until they finally find a hole. Maybe the company has zero revenue, a poor growth strategy or a weak CEO. Know your weaknesses better than your strengths. Before our first VC meetings, my team sat down and asked each other “gotcha” questions until we were all experts.”

Neil Thanedar | CEO and Founder, LabDoor


rsz_incontentad2How Are You Different?

“With proper due diligence and competitive analysis, you should be able to make a case for how you differ from other folks in the marketplace. How can you prove that you have a truly unique value proposition? What is it about your offering, your approach, your technology and your team that makes your company able to achieve and execute on this opportunity? ”

David Ehrenberg | Chief Financial Officer, Early Growth Financial Services


How Much Is Your Company Valued at?

“The reason why determining the valuation of your company is so difficult is because there is no right answer. On the one hand, you need to be realistic, but on the other hand, you do not want to undervalue your company, as the VC may think something is wrong. The best way to handle this question, and most others that arise when negotiating with a VC, is to do all you can to have several VCs interested in your company. Like in most negotiations, if you have several interested parties, they may bid against each other, which will allow you to obtain the best terms for you and your company.”

Doug Bend | Founder/Small Business & Startup Attorney, Bend Law Group, PC


What’s Your Customer Acquisition Cost?

“The best way to tackle this question is to show reasonable estimates for customer acquisition, using well-researched numbers and reasonable conversion rates. If you can’t explain how you are going to acquire customers for less than what you sell them on average, at a fundamental level, you have failed to explain your business.”

Patrick Curtis | Chief Monkey and Founder,


When Are You Paying Me Back?

“There are many entrepreneurs with amazing ideas. Ideas are a dime a dozen, but execution is everything. Every investor will ask you when and how he will recoup his investment. What experience do you have? What is your track record? Before going into a meeting with a VC, make sure to tell him about your experience, your track record and, most importantly, how you will recoup his money. Lots of people pitch the idea before the finances. Pitch the finances and how the VC will make money; if he asks you a question, then you got him to bite — now it’s all about your elevator pitch. ”

Ak Kurji | Chairman & CEO, Gennex Group


Why Won’t a Huge Corporation Build Something Like This?

“VCs will ask, “Why won’t a huge corporation build something like this and use their existing customer base and capital to capture market share?” The best way to defend against this is to have technology and intellectual capital that the company will want to acquire, rather than destroy. ”

Matt Wilson | Co-founder, Under30Media


Why Hasn’t This Worked Before?

“Zaarly raised $14.1 million in a Series A in fall of 2011. But it was a question earlier that spring from Marc Andreessen in our pitch meeting that gave our founding team the most pause, “Why do you think this hasn’t worked in the past?” We didn’t have a great answer — more of a hunch really that mobile technology didn’t exist to allow distribution of information in real time previously. But the question forced us to examine our predecessors who had tried and failed to learn what landmines to avoid. Our lesson: Know your landscape and learn from prior failures and success. ”

Eric Koester | Founder, Zaarly


How Do You Define Success for Yourself and Your Company?

“VCs want to invest in founders who are dedicated to “hitting a home run.” If you’re satisfied with building a small company, that’s a big red flag for VCs. As we’ve all heard, a number of founders have said yes to exits their VCs wanted them to say no to. Other founders have taken the middle ground by cashing out some of their shares to secure their personal finances, and then continued to go big. Either way, VCs want to invest in founders who are focused on a disruptive, game-changing product/idea. This is a vital point to keep in mind as you consider whether funding is right for you.”

Mitch Gordon | CEO/ Co-Founder, Go Overseas


Do You Know [Insert Company]? Why Not?

“Anytime a VC throws out the name of a potential competitor that you don’t know or haven’t looked into, it can throw you off balance for a minute. The fact is, it may be a company that you don’t think is a viable competitor, so you don’t know much about it. The best way to tackle it: Tell them the truth, “We looked at our key competitors and that company did not meet the criteria. But we’ll look into it further after this meeting.” The key is to maintain control of the conversation because it shows you can handle a curveball. ”

Benish Shah | Co-Founder/CEO, Vicaire Ny


What Is Your Plan To Grow?

“The most difficult thing to explain to an investor is your plan to grow. They want to know how you’ll outdo everything you’ve already done. Prep by picturing your future: What staffing or product creation will help you have the business you want to have?”

Brian Moran | Founder/ Director of Online Sales, Get 10,000 Fans


Why Haven’t You Gotten Traction?

“The best way to handle that question is by not approaching VCs until you have achieved traction. Venture capital should be looked at as an accelerator for existing success, not as a runway extender to get it right.”

Brent Beshore | Owner/CEO, AdVentures


Debt or Equity?

“Many investors will know going into a deal whether they want preferred stock or a convertible note. Sometimes, however, they will leave it up to the company. Angel investors, in particular are likely to leave it up to the company as the more sophisticated party. For the company, this is an opportunity to maximize the value of the investment, but they must also be wary of getting off on the wrong foot with the investor by being overly aggressive or appearing uninformed. A crash course in VC deals and a good deal lawyer will make sure you maximize the former and mitigate the latter. ”

Peter Minton | Founder & President, Minton Law Group, P.C

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Now check out Fred Wilson’s Venture Capital Do’s And Dont’s 

Fred Wilson, PrivCo’s Report On Tumblr Deal Is Total Garbage

Fred Wilson, New York, Tumblr, PrivCo, YahooFred Wilson, who some consider the godfather of New York venture capital, made some money in the Tumblr deal. However he is quick to point out that a PrivCo report that suggested his firm, Union Square Ventures, netted a 5,000% return is “total garbage” Business Insider reported late Tuesday.

PrivCo is a private firm that reports on startups and they claim that they had access to details of exactly how much everyone made in the landmark $1.1 billion dollar deal between Yahoo and Tumblr.

Wilson took to Hacker News where he said “Total garbage. There is not one fact in this privco thing that is close to right. The numbers are good but nowhere close to that good. This is the same firm that predicted Foursquare would be out of business this year which will also prove to be nonsense.”

Time Magazine is reporting the Privco data, that Tumblr founder David Karp is taking home $253 million dollars in the deal. They’re also reporting that on a combined investment of $5.25 million dollars over 2007 and 2008, and in conjunction with Boston based Spark Capital Union Square Ventures saw a return of 50x which was worth $253 million to USV and $231 million to Spark.

Privco also suggests that Sequoia yielded $176 million and a combined, Greylock Partners, Insight Venture Partners, CrunchFund and Draper Fisher Jurveston made $88 million.
Wilson has not revealed what the actual numbers are, and probably won’t which could make this information just a shot in the dark.

Another early Tumblr backer, Bijan Sabet said on Twitter that the PrivCo report was “complete garbage and incorrect”.

Now check out Fred Wilson’s Venture Capital Do’s & Dont’s

Demo Days Are The Worst Source Of Deal Flow? Mark Suster Says Yes

YCombinator,Paul Graham,Mark Suster, Demo Day,startup,acceleratorSince starting our nibletz sneaker strapped startup road trip last year we’ve seen hundreds of startups pitch at countless demo days. Nick and I were finally relaxing with one of our advisors, Patrick Woods’ with a>m ventures, on the last night of SXSW and we had counted over 65 startups that we saw pitch through a variety of demo events at the annual festival.

We’ve also seen countless accelerator demo days and with it being May and most of the spring accelerators graduating this month, we’re on track to enjoy another dozen or so before we get to the thick of the summer. Speaking of summer, last August their were three accelerator demo days in Tennessee alone.

Startup community members and leaders are constantly debating “the rise of the accelerator” and where accelerators should focus their resources. Is the best accelerator model general tech and cohort based? Or vertical and rolling? Who knows, it will take several more iterations until each community finds the accelerator model that works best for them.

But what about demo day?

On Friday Business Insider ran this piece which references an indepth article about YCombinator and it’s historic demo day from the New York Times.  In it, author Nathaniel Rich, quotes an investor saying that YC’s demo day, often thought of as the super bowl of demo days, “used to be a can’t-miss event, but that’s not so anymore. It’s a different vibe. Some major investors are starting to skip it.”

Rich points out that one investor said that YC Demo Day used to be a feeding frenzy for deal flow and it’s just not anymore.

Of course YC’s demo day is all the way at one end of the spectrum. Y combinator is said to take the best of the best and with hits like DropBox and Airbnb, the newer teams know they can set their valuations and standards higher, pricing a lot of smaller VC firms out of the deal. This either leaves VC’s empty handed or startups empty handed.

“The only way for a company to be overvalued is if there’s someone willing to pay that price,” Graham told the NYT. “So what they’re saying is: Going through Y.C. causes companies to raise money on better terms than they would have otherwise. We wouldn’t have the barefacedness to make that claim ourselves!”

Graham acknowledges that YC does take some bad startups though, saying sometimes investors can’t pick out the good startups; “Well, it’s not because the good start-ups look bad,” Graham says. “It’s because the bad start-ups look good! Which means we’re doing our job.”

Business Insider recently shared some of Mark Suster’s, a VC with GRP Partners and the founder of LaunchPad LA, best and worst sources of deal flow from his personal blog.

Surprisingly, blogging was revealed to be the best source of deal flow available. “The sheer number of relationships I’ve built through being public, transparent and being willing to engage in comments and through social media has enabled me to get to know entrepreneurs even before they launch their next company,” Suster said on his blog.

Investment bankers were said to be bad sources of deal flow, but the worst? Demo Day.

“Getting excited about a company at a conference and investing is a sucker’s bet,” Suster writes. “Entrepreneurs raising at prices not normally supported by progress face risks downstream when they have to raise more capital. And that fund raising is part of the job of being an entrepreneur – not something that gets in the way of your doing your job.”

Startup accelerators everywhere else are having a hard enough time getting investors in the door for demo day as it is. One accelerator participant in the middle of the country told us “outside of the investors that had a stake already in the cohort, no investors came to our demo day last year.” That can be hard to swallow.

As to the blogging, we have a handful of angels and VC’s that email us from time to time to get the vibe on some startup we wrote about. We also get thank you cards in the mail from startups that have gone on to raise money after getting their first piece of press from nibletz. To that end, we live off of our crowdfunding so to help out the everywhere else cause, click here.


See Dave Tisch’s biggest pet peeve when VC’s are talking to women entrepreneurs.