We recently had the opportunity of working with Monica Beeman to help her secure debt financing for her new company. The company, called Vines to Vino, is Baltimore’s only winemaking establishment where you make the wine! Using grapes from the world’s finest vineyards, you crush, press, barrel, and bottle the wine under the guidance of a master winemaker.

Monica dropped us a line and talked about the positive experience she had with FundingUniverse:

“I found FundingUniverse while searching for a way to connect with angel investors and peer-to-peer funding websites. I quickly called and spoke with Darren Lunt (he made such an impression on me that I will never forget his name!) to ask questions about which level of service I should consider, as I was still unsure of how to structure investments in my business.

I knew I had major obstacles to overcome because I had a bankruptcy 5 years earlier. Darren very bluntly instructed me to consider debt financing, which is what I wanted to pursue anyway. He suggested that I purchase the risk profile report. Having lost my job back in February and living on unemployment (with a newborn baby), I had NO money to purchase this. After begging a family member to borrow the money, I started my process with FundingUniverse and purchased the Risk Profile Report.

I was a little disappointed to read information that I already knew (I stay very current on my credit reports), but I was somehow energized to make the necessary changes to go from an 11% chance of funding to a 90% chance. Once again I was at a speed bump, as I now needed actual cash to make the changes to my personal credit and start building the business credit. I spoke with Jordan in the Finance Dept and we made arrangements for me to start pursuing a microloan to accomplish this.  We did this, understanding that with these changes, I would have a better chance of getting the funding I really need.

I have since secured a $5,000 loan through and have been able to incorporate the business, build a website and print marketing materials, and I am now working with the legal group to dispute the negative information on my credit.  Shortly, I will return to FundingUniverse and re-apply for financing for a larger amount to bring Vines To Vino to operation!”

We wish Monica the best of luck in her new venture!

Check out the website here – http://www.vinestovino.com

Just Another Day in Paradise: Good news at FundingUniverse, another deal funded and more to come.  Nothing gets us more excited than hearing that one of our clients got a check, and that’s nothing compared to the excitement they experience when they see the green.  Now just a reminder, raising money is not really about the money, it is what the companies can do with it that is exciting.

When, I see one of my clients quit their day job and start doing what they love and are passionate about, it really makes it all worth it.  Let me tell you a little about how it went, so that you can get an idea of how our engagements can go.  (Names have been changed)

1. Joe, Mike and Pete have worked for four years developing some pretty impressive alternative energy,  Joe is an engineer with an MBA and Mike is a die hard engineer.  Pete is a business man that is well connected in the geographic market that represents their initial target.  Together they make a fine team and obviously they are committed to what they do or they wouldn’t work four years on a project while at the same time keeping their day jobs to make a living.
2. The great thing about their deal, is that they came to FundingUniverse, already having developed their technology to a prototype stage, they had gotten some market commitments and they had really done the research.  Plus they had contributed sweat equity or got donated real assets and expertise to the equivalent of about 400k, which shows ingenuity and commitment.
3. Basically this team needed help formulating their business documents, preparing to pitch and learning to network.  We spent about 6 weeks getting this done and then gave them exposure through a speed pitching event.  Within about a month of that event they had a check and are now moving forward with their plan.

This is just an example of the success that is experienced on a regular basis here at FundingUniverse.  Now I am not saying every engagement turns out this way, much of that depends on you as an entrepreneur. I will say that for those who have paid the price and need some help getting off the plateau and on to the mountain, we know how to get you there.

Comments from the client:

Funding had been the biggest obstacle to starting our business when we inquired into the services that Funding Universe offered.  At the very first meeting it became clear that we had been going about it the wrong way and needed to change course.  Funding Universe helped us refine our business plan and focus our efforts to find the right investors.  It took time but we were able to find the investors we needed and start our business even during a world financial crisis. The most important contribution that Funding Universe gave us was the ability to understand and approach investors, which helped us make the changes we needed to move forward.

It’s been a while since I’ve written about one of our Speedpitching events.  Last week, when we sent out an email announcing our upcoming event on June 4th (in Utah), we received an email response from one of our previous participants:

The first Speedpitch event that I participated in was wonderful – a terrific experience. The Speedpitch put our company in front of a lot of different types of angels, got us about a dozen follow-up meetings, as well as several term sheets. It was a great position to be it having to choose between competing funding offers – and I am sure that the Speedpitch event allowed us to be in that position. We have since raised close to $1 million through equity and licensing deals and we will be looking to grow to the next level very soon.

Can I tell you how much fun it is to get emails like that? 

I just read an article on TechCrunch about how the independent film “Artemis Eternal” has already raised $40k of the $100k total amount that they are seeking for the film project via “crowd-funding.” In other words, they are allowing the public to contribute as little as $1 to fund their film development and “cut out the middle man.”

This announcement is very interesting to me because we see so many independent films and we normally just turn them away (unless there is a special circumstance). There are very few companies that we turn away at FundingUniverse, but as of today, we don’t have any confidence helping films to get funding — they are just too high risk for the overwhelming majority of investors. To be honest, it is just a world that we don’t know very well and so we don’t feel comfortable helping film-makers.

Because of the demand and the pain in the market, we’ve thought a lot about dedicating a portion of our site to helping film-makers through the fundraising process, however, maybe we should just refer them to Artemis and learn how to raise “crowd-funding.” For those of you that have raised money for films, where did you go? We’d love to learn more about this industry.

I just got off the phone with another one of the entrepreneurs that has successfully raised investment capital through FundingUniverse and, let me tell you, there is nothing better!  It’s so much fun to hear their unique story and hear about their learning experience.

With this company in particular, they participated in one of our SpeedPitching events last summer.  They met a significant group of investors that were interested in their plan, and were even invited to pitch in front of one of the angel groups.  After their pitch (to the angel group), they realized that they were not ready to move forward with an investor and went back to their preparations.  After about 6 months of working on their company, financial projections, and business plan… they are now back on the “fundraising trail.”  They have already raised a significant chunk of their total amount and will be pitching again in front of the same angel group within a month (to finish the round).

Anyway… if you want to make my day, give me a call at FundingUniverse headquarters to tell me your success story!

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.

I was reading about yet another terrible example of how not to form, begin, and manage a startup. It is called Spiral Frog. It started with a lot of hoopla and has since degraded into a mess of wasted time and dollars. Any entrepreneur that sees companies like this has got to wonder about the overall knowledge of many investors in the technology space. Here is a link to a story about their recent escapades -

Trying to go public without a website

A few of the things they did poorly

1. They paid themselves 400k+ salaries during development stage.

2. They didn’t do much market research before beginning

3. They didn’t hire people who were truly entrepreneurs and instead had a staff of career execs

4. They spent way too much money on PR and marketing and still have not completed even a beta project

3. Generated a little over $3000 in about 3 years. Hey, a healthy 1k clip.

Here is some more background on the disaster that is Spiral Frog

 WSJ says:

“Menlo Park, Calif.-based venture firm Bay Partners has raised $300 million specifically for companies developing Facebook applications and is making $25,000 to $250,000 investments per application.”

Here’s the full story.

Every entrepreneur — brick-and-mortar, internet, and everything in between — should be aware of companies like Facebook, Twitter, Bebo, Flickr and the legions of other growing online communities.  Each community represents a business model/marketing plan waiting to happen.

As many of you may know, Skype left millions of people without a phone last week when their service crashed for 36+ hours. Skype is central to a number of critical processes here at FundingUniverse; so when the outage happened, we felt the crunch.

I absolutely love Skype. Unlimited domestic calls for twenty-something dollars/year is the best deal on planet earth, period. (No disrespect to my all-time fave, Diddy Riese in Westwood, CA.) But the outage was enough to test my fidelity to their service, and their response has been less than spectacular, although not a total failure.

I have heard absolutely zero from Skype until today. Everything I have learned about the outage has come through blogs and other news sources. As a customer, I shouldn’t have to search the internet to find out why one of the most crucial tools I use isn’t working. A simple email would have been great — much better than having to dig through their site to find out what was happening. A company like Skype should have a PR plan in place for this.

Well, today I did finally hear from Skype. Here’s the full text of the email I got:

Hello

You may or may not know but last week Skype wasn’t available for a
couple of days. There were a number of reasons for this and I am
delighted to say that the problem is now well and truly sorted and
everything is back to normal. For those of you who tried to use Skype
during that time but couldn’t, we’re very sorry. For those of you who
didn’t try to use Skype – well thankfully you were not affected but we
want to reassure everyone that Skype is now working happily and the
problem is fixed.

We know we have many faithful users out there who give us feedback
(good and bad) on what we’re doing as a company. The Skype community
makes us what we are. Without you, our users, we simply wouldn’t
exist. We’ve helped people stay in touch with their friends and
family over the past four years without any massive hitch and we want
it to stay that way.

When the unexpected happens, it’s important to remember the people who
stuck behind us and whose loyalty humbled us. I want to thank
everyone for their support, patience and being part of the Skype
community. And for those of you who missed out on using Skype last
week – I want to especially thank you as well.

As a goodwill gesture to all you faithful Skype Pro, Skype Unlimited,
SkypeIn or Skype Voicemail customers, we’re adding an additional seven
days to your current subscription, free of charge. And even if you
didn’t miss out on using Skype last week – you can still have a week
free on Skype, on the house!

So please enjoy it, call your loved ones, friends, family and
colleagues and thanks again.

Talk soon,

The people at Skype

The seven days free is a great move on Skype’s part. Nice work, Skypers.

The email should have been from Niklas, not “The people at Skype”. An apology like this should come from the top.

The email’s “thrown together” grammar gave it a real, sincere tone. I like that.

As noted above, the email should have come much sooner.

What does this have to do with entrepreneurship and start-ups? Well, when you are starting a company, glitches are bound to happen. We can all learn from the good and bad things Skype did to respond to this issue.

We can respond to issues like these quickly and transparently, being as up-front with our customers as possible. We can have a simple PR plan put together when big mistakes are made.

That being said, I’m back to using Skype, and I probably always will use it — a killer app goes a long way toward fostering forgiveness from customers. I just hope this never happens again.

Last week, the FundingUniverse team attended the Ernst and Young Entrepreneur of the Year awards in Salt Lake. The winner in the manufacturing category was BlendTec. Tom Dickson, CEO of Blendtec, has become an Internet celebrity because of his “Will it blend?” videos.