June 11, 2007

Immigrant Entrepreneurship Boom

A new study from the Kauffman Foundation reveals that between 1995 and 2005, 25.3 percent of technology and engineering companies had at least one founder who immigrated to the United States. According to the study, “nationwide, these immigrant-founded companies produced $52 billion in sales and employed 450,000 workers in 2005. The majority of these immigrant entrepreneurs came from India, United Kingdom, China, Taiwan, Japan and Germany.”

In the article, Robert Litan, vice president of Research and Policy at the Kauffman Foundation provides some insight into the types of immigrant entrepreneurs who have helped to create some of the top startups in the country.

“These are individuals who initially entered the United States either as students or as employees of corporations that sponsored their visas, but who eventually created new businesses,” Litan explains. “These startup founders are very well educated, particularly in STEM disciplines, suggesting that research, technical education and thought leadership are drivers of new business generation.”

To read the entire article click here

How many of you have startup companies with founders who immigrated to the states?

June 7, 2007

The “Infamous” Valuation Question

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.

June 6, 2007

FundingUniverse CEO Article in American Venture Magazine

Check out our CEO’s recent article in American Venture Magazine! Brock Blake discusses Fighting the Funding Curse of the First-time Entrepreneur. Every first-time entrepreneur should read this article. It is packed with helpful information. Excellent article Brock!