Posts from July 2013

That was my partner John's email response when the news came across our internal email list that the SEC had finally lifted the General Solicitation Ban as they were asked to do by Congress in Title II of the JOBS act.

What this means is that folks raising capital can now advertise the fact that they are doing so. I have been involved in raising close to ten venture capital funds and every time we do that, we have to be quiet about what we are doing until we've done it. That won't be the case anymore.

But the impact of this on the VC business will be tiny compared to what this means for entrepreneurs. Our investment in CircleUp was in some ways a bet on this kind of change to the funding market. Entrepreneurs that have consumer products, like Rick Field who has built Ricks Picks into a high end pickle brand, can now raise money on the Internet (he is doing just that now on CircleUp) and tell all of his loyal customers about it. Some of them will likely want to invest in a company that makes products they love.

What I just did there, promoting Ricks' raise, would have been a violation of SEC rules until yesterday. It feels good to be able to do that.

My grandmother Dotty Wilson would always buy stock in the companies whose products she used. She believed that if they made great products, they also made great investments. It worked out well for her. I do that myself. Twitter and Disqus would be two examples of that approach to investing.

So get ready for investment pitches on pickle jars, face creams, and bags of coffee beans. Entrepreneurs will be using their products as payloads for their pitches.

But as John's comment that is the title to this post suggests, this will be the wild west. Scams will be easier to execute. Buyer beware. Do your dilgence. Diversify your risk. Prepare to lose money. That's the rules of startup investing but not everyone knows that.

I would bet the SEC is not too excited about what they have just unleashed. But I am. This is a step, just a step mind you, toward the democratization of startup investing. The SEC has not fully implemented the JOBS act and even after they do, there will be more to do to make it possible for everyone to enjoy the risks and rewards of backing entrepreneurs and their dreams.

This is what I do and what I love to do. I dont' believe it should be relegated to rich people and professionals. And slowly but surely it will not be.

I wrote a bit of a rant a couple months ago about companies that want to run the table on a market. There was only one link in that rant and it was to Benedict Evans who is increasingly becoming my favorite read on the Internet.

Benedict wrote a post yesterday that continues this discussion with some important additional points, including:

One of the things you're supposed to work out some time in your adolescence is that though you're the star of your own life, you're not the star of anyone else's.  Some companies never work this out.

And

your customers' relationships with you are the only relationships you have as a business and you think a lot about them. But you're one of a thousand things your customer thinks about in a week, and one of dozens of businesses. And they probably have their own ideas about how they want to engage with you (though they wouldn't put it in those words) – assuming they think about you at all.

And

You can think of people as users or customers – but they're not yours. They don't belong to you, and they may barely even care that you exist. The old Google rejoiced in sending people away from the site as fast as possible, because the result mattered, not the search. Glass points to a risk of forgetting that.

I could keep going but I am close to crossposting the whole thing here and I'm not really into doing that so go give the post a read on Benedicts's blog. I think he's nailed it.

My friend and USV portfolio CEO Matt Blumberg has a popular blog called Only Once on which he posts about the challenges and joys of being a CEO (for the first time, thus the name).

Matt should be familiar to AVC regulars because I have written about him and his company Return Path many times and he has done several guest posts here as well.

For the past six months, Matt has been writing a book about the CEO job in a business that is scaling. I like the way he described the book in an email to me the other day:

The Lean Startup movement is great, but this book starts where most of those books end and takes you through the ‘so you have a product that works in-market – now what?’ questions

Matt has finished the book and now it is available for pre-order on Amazon (Kindle, Print). The book will ship on September 3rd. If you are looking for a how to guide on the CEO job of a rapidly scaling company, this book is probably for you.

AVC regular William Mougayar is building an education oriented community for entrepreneurs called Startup Management. He soft launched it in the past week.

The idea, as I understand it, is to aggregate and tag blog posts about startup management from all around the web and curate them into a community site focused on educating entrepreneurs on how to be better leaders and managers of their companies. William will also create original content on the site. He describes it as a "Huffington Post" model.

There is certainly a need for this kind of thing. If you want to learn about term sheets, you can go to Brad Feld's blog and click on the "term sheet" category, but you would have had to know to go to Brad Feld's blog. If you want to read my stuff on employee equity, you would have to go to AVC, click on MBA Mondays, and then into the table of contents and scroll down to find it.

Obiously Google crawls all of this content and can find it for you if you poke around hard enough, but the idea of curating all the content that entrepreneurs, VCs, and others who work in the startup sector have written on the topic of startup management is a really good one.

I hope William succeeds with this effort and I am rooting for him.

We've got two girls traveling around the world this summer. One has a pocket wifi from Xcom Global (asia) and the other has a pocket wifi from Tep Wireless (europe).

I've become a convert to the pocket wifi in the past year. I used to be a fan of swapping sim cards but these pocket wifis have gotten better recently. The cost has come down and the coverage has gone up.

I don't have a complete report from the girls yet. I will get a full download when they are back and write up something with the pros and cons of both. The one thing I know for sure from our trip to Japan is that battery life is the big issue with pocket wifis. If you get four hours, you are doing well. I always charge up two batteries so I have a backup when I'm out and about.

I am curious if there are other vendors out there that I should know about. I'm getting ready to head to europe for a week of business in four countries and I am planning to get a Tep unless there is something better out there I should know about.

My friend Cliff Chenfeld recently appeared on the Media Reporter TV show. Cliff has been in the entertainment business for over 25 years and he talks about the changes he has seen in the music industry, film, sports, and other entertainment sectors. It’s about 30 minutes long and worth a watch/listen.

Sometime in the past week, an awesome feature appeared in my Foursquare app. I was checking into our local farm stand at the beach and I saw this at the bottom of my checkin screen:

Since I was with the Gotham Gal, I typed in her name and checked in with her. Then she got a notification and clicked on it and she was checked in as well. This Foursquare blog post explains how the feature works.

Now Foursquare is going to know more about me and more about my friends so it can make even better recommendations for us and others.

I really enjoy when new features crop up in the apps I use every day. It's a reminder that the developers are continuing to innovate on the product and trying to make it better.

I realize not everyone who reads this lives in the US, but to all those who do, have a happy July 4th. This photo pretty much sums up how I'm going to spend my day today.

The AVC community has been very generous so far on the Brooklyn Castle project. 69 of you have contributed a total of $5,737 as of 6am on July 3rd. I really appreciate it and it is for a very good cause.

However, the Gotham Gal and I have promised a $10,000 match against the AVC community's gifts and so far that is only costing us $5,737. So there is another ~$4300 of the match to be spent. If you would like to spend a bit of your money to spend a bit of our money, you can do that here.

Once we get the full $10k of AVC community funding done, the project will be about half funded as these numbers don't include the value of our $10k match. There are some big name funders coming and we are going to start promoting this campaign broadly once the July 4th holiday is over.

So I think we'll get this project fully funded in the coming weeks, but I would sure like to see the AVC community provide the seed funding that gets the project off to a great start. Here's a picture of the kids this is going to help: