Thursday, August 21, 2008

How to Build a Better Startup

Our friend and consummate blogger Dave McClure (whom I've known for more than 10 years when he and Ed Ipser recruited me to help them start the SVASE entrepreneur network) is sharing his hard-earned experiences in how to build a better startup. Dave has teamed up with the girls at DealMaker Media to create STARTONOMICS, which is a one-day workshop that covers everything from funding to architecting to scaling and monetizing your startup idea.

They have assembled a pretty stellar panel of veteran entrepreneurs to keep things interesting:

- Lance Tokuda (Rock You)

- Ted Rheingold (Dogster)

- Dan Olsen (YourVersion)

- Lane Becker & Thor Muller (Get Satisfaction)

- Andrew Chen (Futuristic Play)

The all-day workshop is happening October 2nd at the Mission Bay Center in San Francisco. You can check out the sessions and register here.

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Tuesday, August 19, 2008

Beware the "VC Funding Consultant"

Last week I was invited to a party hosted by GigaOM and I had a conversation that inspired me to issue a warning to all entrepreneurs who are considering the use of a 'funding consultant' to help them score meetings with VCs.

We all know that VCs are busy people and it takes some effort to get a meeting with them. As a result a cottage industry of 'funding consultants' has sprung up. These are people who are supposedly well-connected among VCs and -- for an up-front fee -- will help you score some meetings and coach you on your pitch.

BEWARE! Some of these consultants may indeed provide value, but let me summarize my conversation from last week and you'll see why you should exercise caution:

Me: Hi, I'm Mark. What's your name?
Consultant: I'm Susie. I help companies raise VC funding using my extensive relationships.
Me: That's interesting. Do you specialize in a specific technology or industry niche?
Consultant: I work with all companies.
Me: But do you have a specialty--like mobility technologies, or storage technologies, or security technologies? You know, an area where you know a lot of investors and have connections?
Consultant: I work mostly with technology companies.
Me: Well that narrows things. With which VC firms do you work with mostly?
Consultant: I work with all of them.
Me: You must be busy! Who did your most recent deal?
Consultant: (eyes averted) Long-winded and convoluted response that never actually named a VC firm or an investor.
Me: (trying to be patient) So do you come from an investment background?
Consultant: I've done lots of things. I was once a reporter in Europe.
Me: Oh really! I work for a PR firm that introduces European companies into the U.S. press. We specialize in mobile & wireless companies. Which publication did you write for in Europe?
Consultant: A small one that you've probably never heard of.
Me: Oh. OK. Well... I'm going to go get some tacos now from the buffet. Nice to meet you.

In a quarter-hour of conversation this 'consultant' was not able to name a single company, VC firm, VC partner, or industry sector by name. Something tells me she's never actually made any useful introductions or negotiated a term sheet or anything. Here in Silicon Valley there are plenty of organizations like SVASE, SD Forum, STIRR, VC Taskforce and others that host events where you can meet one-on-one with VCs, get VCs to give you feedback on your pitch, and otherwise make the connections that you need. These events range from $free to maybe a several hundred dollars at the most. No one can guarantee that you will get a term sheet from these meetings, but if you have a good product, good traction, and know your focus then you should be able to score a meeting with a VC without the help of a consultant.

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