Grow Utah Ventures, an early-stage venture organization here in Utah, released a new regional entrepreneurial magazine about a year ago called Launch Magazine. This magazine is different than most magazines in that it focuses on the very early-stage entrepreneur.

The latest issue features an article on Cap Tables that every entrepreneur should read. Brent Hawkins, an entrepreneur-friendly lawyer (and good friend of mine), writes an excellent article on the nuts and bolts of a capitalization table.

It’s been my experience that most people that are trying to raise money are clueless when it comes to the cap table. I’m no expert, but I was lucky to be able to learn the foundation of cap tables in my Financing New Ventures class at BYU (taught by adjunct Professor Greg Peterson — amazing class).

Make sure you give it a read and you’ll understand why it’s so important to know the details about your cap table before you ever approach an investor.

The standout presentation for me this morning was DimDim.  This is a new web conferencing provider which isn’t exciting in and of itself, but there is something that is exciting about it.  It is free.  Not only is the software free, but their hosted service is free.  The service is built on top of an open source project and has been load tested at 500 users.  This could be a huge disruptor in this space.  Additionally, they are currently building a recording and archiving feature that will be released in the near future.  Other companies in this space need to watch out for this.

David Cohen made a great point in his webinar a couple of weeks back that is worth a second look.

“Most companies just don’t stay alive long enough to figure out what the heck they’re doing.  Don’t assume you know what you’re doing and go spend a bunch of money.  Spend as little money as you can over time so that you have longer to figure out what you’re doing wrong –  because you’re probably doing something wrong.“

• Have you raised enough money to last you through Version 1 (the version that usually flops) and Version 1.5 (the one that flops less and provides you the capital you need to stay alive until Version 2)?
• Are you spending money like there won’t be a Version 1.5?  Will you run out before you get there?
• Do you have a systematic method of gathering information from your customers that will tell you what Version 1.5 should look like?

One of the best ways for your company to stay alive is to be as frugal as humanly possible.  If possible, have your team work from home.  Trade services with lawyers, accountants and other service providers that are crucial to your startup.  Buy used office furniture and equipment.  Do everything you can to avoid spending money.

What else can you do to save money and keep on stayin’ alive?

These afternoon presentations haven’t been as “exciting” purely because of the product categories, but overall I have been more impressed by the companies. All of the companies have been pretty strong, though some of the company presentations have been more like a press release than an actual launch presentation.  Some of the interesting presentations came from Propel Software which is a personal desktop app that prioritizes bandwidth on your computer so that applications like voip connections still perform while under network stress. Fusion-io has a new pci express storage card that is supposedly 1000 times faster than a hard disk drive. Qumranet is a desktop virtualization system that seems very well done and has some very good technology backing it up. It seems like most of these companies are already very well funded.

I forgot to mention this earlier, that if you are going to be putting up an end user website especially in the “web 2.0″ space, name your company the same thing as your website or at least close. I hate when I see some name of a company like Adventis and then their website is yourcoolpage.com. There have been a few companies like that here and it just kills me. It is hard enough to remember one name let alone two names together. Simplify it and don’t be so egotistical that you need some fancy company name.

Here are some thoughts on some of the copies I have seen at Demofall so far.

The standouts:

Digital fountain - Video delivery network using Amazon S3 services. Improves video delivery by using “video repairing” technology so that packet loss and other problems doesn’t affect the end result of the video. Polished presentation, but there are a lot of questions about whether this is any better than the other things out there. Will be a solution for video providers as they are not an end user company itself.

Motion DSR (fixmymovie.com) - Site powered by patent pending algorithm that improves and fixes low quality video from camera phones and other sources. I think this could be huge hooked with cell phone providers and could be used to improve all those crappy youtube videos. One of my favorites.

Your Truman Show Inc - video network that organizes similar videos into a visual map and is a great tool to share videos within a social network style interface. The way this thing works is pretty cool, and it has to be seen to understand why it is different than what is already out there.

Here are the blah ones -

Clipblast! - Just a normal boring video desktop widget. It could go somewhere, but it isn’t that innovative and could very easily be duplicated by any of the big boys.

Metaradar - Cooling looking web mashup client, the only problem is AOL did this for a long time. That failed, we aren’t going back. People use the open Internet, closing it down again is a waste of time. Felt bad, Demo screwed up their presentation. They should get a refund.

Here are the “you wasted your money!” presentations

Global communications - We are gonna change the world but we won’t tell you how! (Internet over simple copper wiring)

Proxure - They looked like they wanted to run away. Don’t spend your money if you aren’t ready. Simple video desktop sharing software.

So, I am at demofall at the beginning presentations. I expected it, but it still amazes me how many entrepreneurs feel the need to promise to basically take over the world with their tech as well as cure baldness. Sometimes doing one thing really good is plenty good enough. Sent via BlackBerry by AT&T

If you’re an experienced entrepreneur struggling to raise VC money, you can start banging your head against the wall right … about … now.

Arjun Mehta, a little 6th grader from Northern California, just raised $6.5 million for his online gaming company, PlaySpan.

From alarm:clock:

“PlaySpan started in Arjun’s garage San Jose in 2006. Seed funding came from Arjun’s game challenge winnings at the 5th grade at Challenger School in San Jose. Today Arjun’s company announced that it has raised $6.5M in Series A funding led by Easton Capital land was joined by Menlo Ventures, STIC International out of South Korea and Novel TMT Ventures in Hong Kong.”

Wow.

This kid has got to have a wicked connected parent/uncle/cousin/someone.  I don’t care how smart this kid is, no 11-year-old raises that kind of money without a little help from his friends.  But I’m not hating on him.  More power to him.  If I had this opportunity when I was a kid, I’d be all over it.

I’m pretty sure I saw Arjun pitch a while back, and at the time his company made board games (I could be wrong).  Since then his company has become, “the game industry’s first publisher-sponsored in-game commerce network”.  It looks like little Arjun figured out how to adjust his company’s offering to match what the market is asking for.  Not bad for someone who should be trying to figure out how to avoid being hit in dodgeball during recess.

Many entrepreneurs probably get this reaction often when they pitch their ideas to angel investors.  Immediately the entrepreneur is stuck and the conversation usually can turn awkward quickly.  How can you avoid this?  Put yourself in the investors shoes.

3. Your valuation is a roadblock.  Often before asking for money, entrepreneurs have already told the investors what their “valuation” is.  In reality, your valuation is just what a group of people say your company is worth, and often is not directly connected to revenue or other fixed sources.  For this reason it is best to not give a strict valuation when first meeting an investor.  Sometimes this one issue can stop a potential deal in its tracks.

The Internet as we all know is a hype machine.  With all the tech blogs and pundits out there, it is hard to really know what sites/companies are gonna make it over the long haul.  What I would like to know from everyone, is what companies you have heard about in the last few months that you think are going to make it in the long term and why you think that.  Please be specific, since we don’t just want the answer, “Facebook Apps”.  Also, please give specific examples of sites or ideas even if it is not a new company.