We’ve been quietly spending the summer working on a private, invite-only social network for angel investors and VCs — think Linkedin with a focus around deals. One of the things that we pride ourselves on (at FundingUniverse) is the quality of our investor network. Every single investor on our site has gone through both an internet and phone interview to prove her legitimacy as an angel. We’ve now taken that one step further by closing off open registration to angels and making it an invite-only private network.

Now, investors that join our network will be able to connect to other like-minded angels from across the country. They’ll be able to see each other’s investment preferences and boast their personal investment portfolio. Collaboration and syndication on deals has never been easier.

One of the hidden gems of the service is the tool we’ve developed for investment groups. Any investor can create his/her own private investment group online — it doesn’t matter if the group consists of 2 friends casually looking at deals or 80 active members of a large angel group — the tools will work for both.

Let me give you a quick example: let’s say that 2 friends and I want to do some casual investing on the side. By the click of the mouse, I can create and name my own group, invite my 2 friends, and start adding interesting deals to our group watch list. Now, anytime 1 of the 3 of us logs in, the 3 of us will all see the deals that are on our group watch list. We can make private comments to each other regarding the deals and even send out a quick email to the group inviting each other to come & “vote” on the deals.

The service adds deal flow, organization, and easy communication to any investment group.

After a few demos, we already have small and large groups of angels adopting the tools. As the quality and quantity of our investor network grows, so will the quality and quantity of quality deals (and vice versa).

I don’t know a group of individuals that are more “relationship-based” than angels and VCs. Their world is all about who you know and they place a lot of emphasis on their network. At every event, many angels are coming to me asking… “who’s that gentleman that….” or “tell me about what investor x has done…” With our new service — that will all come very easy.

(If you are an investor and are interested in an invitation, feel free to contact me personally at bblake at fundinguniverse.com.)

Summers are pretty dang slow in the investment world.  It’s weird that almost everything (including new deal introductions) almost come to a stand still during the summer.  Most angel investment groups don’t meet during the summer and personal meetings are few and far between.  As a result, I was anxious for the fall to come around to see some of the deal flow pick back up.

I think that we are off to a great start for the Fall of 2007 because there are already a handful of exciting companies that we have seen here in Utah.  Tomorrow’s our first SpeedPitching luncheon since June 6th and I’m excited to see how things turn out with the companies that are presenting.  We have a nice mix of companies and industries — including technology, telecom, wholesale retail, energy, and food.

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Some might call it luck, persistence, timing, confidence, talent, etc…. but whatever it is, you’ve got to have it. I’ve seen a lot of deals and a lot of flops. Sometimes you are just down right lucky. Other times, you’ve got the best deal in the world, but still can’t find anyone to invest.

As I’ve gone through these 10 signs, I know that I’ve missed a ton. There are probably 100 signs of a fundable company, but hopefully this provides a good start. Good Luck!

This post can be summarized by the following questions:

If you don’t believe in your business enough to put your own “skin in the game”, how can you expect investors to put their financial resources into your deal?

Appropriate questions that you might ask yourself:

• Have you put your own money into the deal?
• If not, have you worked for free?
• Have you put a 2nd mortgage on your house?
• What have you given up to make this deal successful?  (another job, nights, weekends, etc.)

Don’t be haste or stupid, but if you want to attract capital from investors, you better believe enough to put skin in the game!

Yesterday, we hosted another SpeedPitching Luncheon in Utah.  It was an incredibly successful event with nearly 40 early-stage investors in attendance.  I’ll write more about the event in a bit, but for now, I’d like to continue the discussion posed by Devin Thorpe about “Do You Dodge the Valuation Question?”

Devin:  I think that you pose a great question.  There were a few investors that came up to me and requested that we coach them on how to respond to the valuation question.  The reality is that we DO coach them on the valuation question… we just coach them to push off the discussion until the next meeting!

I agree with you that it’s not fair for the entrepreneur to nail down a valuation after a 7 minute discussion.  Too often the investors make large assumptions about the company, the market, and the management team without knowing all of the facts.  I know that the investors can’t stand the fact that the entrepreneurs dodge the question — they want to know the valuation up front.

The reason that they would like to know the question up front is because they want to know if the investment is in their ball park.  If it’s not in their ballpark, they won’t want the follow-up meeting no matter how strong the deal is.

So the REAL question is… is there a way to accurately respond to the valuation question (to please the investor) without pinning yourself on a certain valuation?  Maybe you could give a ball park answer so that they know that your deal is affordable, but then include a caveat that you would like to discuss in detail at a future meeting?

After yesterday’s luncheon, it has become apparent that we should suggest a different approach to our entrepreneurs so that our investors don’t get so frustrated.  I’d love to hear your suggestions.

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How would you handle this situation if you were in my shoes?

Over the past year, we’ve noticed quite a few people copying different features and models from FundingUniverse.  Of course, we have taken notice and been a little bothered, but didn’t think that it was that big of a deal.  However, this situation takes the cake and so I thought it deserved a blog entry.

Over the weekend, I found out that 2 “members” of the FundingUniverse network have blatantly copied a ton of the FundingUniverse model to try and start their own competitive company.  When you check out Plan Heaven, you’ll notice a lot of really familiar features.  For example, you’ll notice their sorting features and table… plan name, state, industry, rating, comments, and VideoPitch — that all sounds VERY familiar.  You’ll see that they have “real-time alerts” for their investor network.

What’s even more interesting is how they have found all of that information.  It appears that the 2 have been active members of our site since February.  One of them has signed up for our entrepreneur network and has conveniently been asking a ton of questions about FundingUniverse.  The other has joined the angel network and has reviewed over 100 plans on our website.  Hmmmm… smells fishy to me.  This last week, he sent me an email to find out how he can contact the rest of the investors in our network — pretty funny, huh?

To be honest, I kind of like to see other people try to copy you.  As mentioned above, we’ve seen it quite a bit with some of the innovations that we have created (VideoPitch, SpeedPitching, Weekly Chats, etc.).  We’ll just keep doing our thing and take it as a compliment when someone copies our stuff.

A few weeks back, we hosted a Dixie SpeedPitching luncheon in partnership with the new Dixie Angel Group and the Vegas Valley Angels. It’s exciting to see some of the angels in St. George become more structured and organized.

After the SpeedPitching luncheon, we facilitated an investor-only meeting for the 2 groups to discuss the deals and decide on interest. It appears that they’ll be taking a closer look at 3-4 of the deals that pitched at the event including:

1. uPillar.com (coming soon)
2. Browz
3. D.A.M. Truck Tools
4. In2Networks 

Chris Knudsen wrote a blog entry about a year ago about the difficulty of being a CEO. While I don’t argue that being a CEO is difficult, it’s the “specialists” and the “monday morning QBs” (as he puts it) that really allow the company to grow and be successful (Chris: I still love ya :)). Here are a few of the people in my life that work their tails off to make FundingUniverse (and me as the CEO) look good:

1. My wife: I don’t want to get too personal here (because I could go on all day about her), but my wife is truly amazing. Her support, encouragement, patience, and love is what motivates me and keeps me going.

2. My partners: Trent, Jeff, Briana, and Josh are incredibly talented. They have made a ton of sacrifices to make FundingUniverse into the company that it is today.

3. The team: when it comes down to it, you always need people on the ground (specialists) that are making things happen. We’ve got fantastic employees, partners, contractors, and advisors that know how to execute.

Sometimes the CEO will have a lot of people telling them how great they are and they soon begin to believe it. They forget that there are a whole lot of people at their side that are making things happen and ultimately results in them (as the leader) getting recognition.