November 15, 2007

TechCoast Angels: Luis Villalobos Speaks

FundingUniverse was fortunate enough to be able to participate in today’s Utah Angel Summit.  It ended up being a fantastic turnout with nearly 100 angels, vcs (and some service providers) in attendance.

Luis Villalobos, the founder of the world’s largest angel group (Tech Coast Angels), was the keynote speaker and he did an amazing job.  You can tell the Luis has been around the block and knows his stuff.

Here are a few things that stuck out in my mind:

  • I was very impressed with his approach of “transforming” a company into a great deal.  He spoke about how 99% of the deals are not great deals when they first come to you… BUT, as an investor, you can transform good opportunities into great ventures.  The concept was refreshing because so many investors just automatically “pass” when they see the smallest concern in the deal.
  • He mentioned a few signs of the type of CEO he looks for:
    • Impeccable Integrity:  It’s more than the normal “not going to lie, steal, etc.” integrity.  Luis is talking about the type of entrepreneur that identifies problems (early) and takes responsibility (as opposed to hiding problems, making excuses, shifting responsibility, etc.)
    •  Knows Business Model:  the CEO that knows exactly what the business has to do to be successful and focuses on them — and we’re talking about the nitty gritty key drivers/statistics.
    • Continually Measures:  Piggy-backing on the last concept… the CEO is continually tracking, analyzing, and adjusting the key metrics of the business.
    • Knows how to Connect the Dots:  The CEO just makes things happen.
    • Motivational:  The CEO can motivate his/her team.  Can recruit team members and communicate vision.
    • Focuses on Value to the Customer:  The CEO is more focused on delivering value to the customer (over revenue/profits) because they know that customer value = success.
  • Luis knows angel investing inside and out.  He knows what to focus on.  He knows how to bring value to the company.  He has built a very successful and well-performing angel group.

Even though the event was for the angel investor, I always encourage entrepreneurs to attend those types of events.  To me, the more that you know about the investor’s motives and expectations… the better.

Thanks to Luis for a great event today!

November 13, 2007

Why Most VCs and Angels Don’t Sign NDA’s

One of the questions that is asked most often is, “Will you have the investors sign an NDA before looking at my plan?”
(NDA = Non-Disclosure Agreement)

Here are a few responses to that very important question:

  1. At some point, we may provide the option to upgrade your service in order to have a “password protected” business plan. That way, if an investor is desirous to look at your plan, they would have to first contact you in order to get a password. That being said, it might defeat the purpose of posting your plan on our site. Most people are here to get their plan in front of investors (exposure). It seems that if you required an investor to request a password, it may reduce the amount of investors that viewed your plan.
  2. That being said, we don’t suggest that you shout your “secret recipe” from the roof tops for everyone to hear. My recommendation would be to tell investors that you have a “secret sauce,” but don’t tell them the recipe or ingredients.

I guess that one of the key points is to work with good angels and VCs. For the most part, I have confidence and trust in the angels that I know. However, I did read this article that made me think twice about who I should trust.

Brad Feld — one of the best (entrepreneur-friendly) venture capitalist’s in the nation (in my opinion) wrote a great blog post on Why Most VC’s Don’t Sign NDAs. After you read that article, I believe that most entrepreneurs will be able to understand why investor’s are hesitant. With good angels and VCs, it’s not that they want to take your proprietary information and go create a competitive company… it’s that they don’t want to get into trouble by signing thousands of NDA’s each year.

November 2, 2007

We’re Moving

We’ve been in the unenviable position of moving our offices for the last few days, and communication with out clients and customers hasn’t been as efficient as it usually is.

We’ll all be checking our voicemail on Monday.  We’ll be fully online by Wednesday of next week.

Until then, please have patience with us.  Believe me, we’d rather be talking to you about entrepreneurship than packing boxes and haggling with the cable guy about how many connections we get.