It’s more than the green stuff

Here’s the deal. If you’re smart, you realize that “the right investors” can offer you way more value than just the green stuff they are putting into your deal. I think entrepreneurs – because they are desperate, jump way to soon and end up in bed with someone who might have money, but beyond the money, they are pretty much useless.

Instead of looking at the investor as, holly shit this guy has a ton of money, look at him like, who does this guy know? What can he teach me? Who are his contacts? How well does he know the industry I am in? Try this next time and I promise you will be thanking me later.

I share this because I think all entrepreneurs F this up at some point in their entrepreneurial career. I have, you will, everyone does. Why? Because we are normal people who get excited and end up pulling the trigger to soon. Take my advice and the thousand other entrepreneurs that have pulled the trigger to soon. Be smart.

The other thing that I’ve learned, when your dealing with venture capitalists, they know their shit and they have been around the block a few times. And, when you get the right VC involved in your deal, it is the difference between achieving minimal vs. maximum success.

Here is where VC’s tend to offer the most value: 

1. Their networks: They’ve spent their entire life building their network. This includes: investors, partners, talent, vendors, distributors, etc.

2. Experience, knowledge, and wisdom: They can help you understand what it is going to take to make your deal a huge success. They have been there and done that. Listen to them. If you think you no more, you need to be bitch slapped.

3. Sources to other green: When you spend your entire life building and growing companies you end up having several investor and VC relationships. Tap into this, It’s the fastest route. I promise.

 

What’s up with all the LA Incubators and Accelerators?

Are they legit? Why so many? How much money are they putting up? What kind of deals are they looking to invest in? Do they do follow on capital? How are they going to scale with talent?

These were some of my questions going into last nights Lean LA event titled “Learn About LA Incubators/accelerators” – really glad they put this event on.

If your curious about what Lean LA is, it’s a non-profit organization that is all about helping entrepreneurs build successful companies. The organization is run by Pete Mauro, Patrick Vlaskovits, and Joe Zulli. I haven’t had the chance to officially meet Patrick or Joe, but my coffee meetup with Pete was very positive.

By the size of the crowd last night (350 people), I wasn’t the only one with questions. The event was packed with people waiting outside the Santa Monica Civic Auditorium hoping someone wouldn’t show and they could score a ticket to come in.

Another good call was the meal ticket that came with the admission price. How awesome is that? You could redeem at any one of the food trucks outside. Well done with this one!

So, let’s get to the meat of this thing. Why in the world would you want to move to Los Angeles for a startup? I wouldn’t, just being honest here. Not that I don’t think that everyone is doing a great job building the infrastructure and figuring it out, I just prefer to be in a place that already has it figured out.

Essentially all the incubators/accelerators said the same thing: they are working their tail off to create the infrastructure that will allow entrepreneurs and innovators to tap into and build great companies. I think this is important and overtime will happen. Do I think it will happen quickly? No. As with any startup infrastructure, you have to work your nuts off, take a ton of risks, put your ass on the line, be willing to lose some serious dough, f some stuff up, and then, after all that, make the decision to keep going. If LA can do this, they will, overtime, have something great!

And, the other thing is talent. I think there is talent as there is talent everywhere, you just have to find it, organize it, and put it to good use. If you can’t get talent involved in the community that is your own fault – this really means you suck at selling.

The panel was fantastic – mainly because it was moderated by Dave McClure who wasn’t afraid to ask tough questions and put people in their place – not in a negative way – I think he was just trying to challenge everyone to really think about what it is going to take to build this kind of community.

After Dave got everyone loosened up – it didn’t work for everybody, the event started with a representative giving a quick intro, history, and what their interest was in supporting the LA startup scene.

Some of the people who were on the panel were:

Start Engine (Howard Marks), Idealab (Allen Morgan), upStart.LA (Dan Dato), K5 Launch (Amir Banifatemi), Originate (Jeff Scheinrock), Amplify (Jeff Solomon), Muckerlab (Jeff Rannala), and Launchpad LA (Sam Teller).
______________________________________________________________________

Here is a list of all the incubators/accelerators and how they are structured as it sits today.

LeanLA.com Los Angeles Area Incubator & Accelerator Cheatsheet.

(Courtesy of Patrick Vlaskovits, more details here.)

Start Engine: 120 Startups @ $20,000 per year
Idealab: 4-6 Startups @ $50k – $500K a year
upStart.LA: 5-10 Startups @ $18,000 each class (1-2 classes per year)
K5 Launch: 10-50 Startups @ 25K-$200k
Originate: 10-15 Startups @ $100K-$1.5 million per investment
Amplify: 20 Startups @ $50,000
MuckerLab: 20 Startups @ $21k a year
Launchpad LA: 20 Startups @ $50k a year
______________________________________________________________________

Here’s the good news – at least from what I could see, people are fired up about entrepreneurship and they’re willing to step up to build the community, shape the culture, and pour cash into companies. And, for me, I don’t care where it is, if this is happening and people are trying, I am excited and fully supportive of it.

Now, go do your part…good things are happening.

 

Streamlining the investment process

Check out this great new company called CaplinkedIt’s a new tool that streamlines the investment process and gives companies a new way to raise capital and sell assets.

Also, it’s not just built for tech startups, but for all startups. Some of the investments on the site are:  financial services, energy, transportation and food and beverage industries.

Here’s the number that got me excited! The company launched in Oct 2010 and it already has $12 billion in deals.

If your entrepreneur or investor, I say, click on over to the site and check it out.

Note: (To view a deal, would-be investors have to certify that they are accredited investors, institutional investors or advisors to one of the investors.)

Oh, and last but not least, the service is FREE! Who doesn’t love FREE!