All Articles Tagged "venture capital"
Brian Shields started IncubateNYC, an educational community and incubation program for entrepreneurs, with co-founder Marcus Mayo in January 2012. “We designed our incubation program specifically to help aspiring entrepreneurs get started the right way and to continue to make progress. We accomplish this through the power of community,” reads the group’s website. The organization currently has 60 alumni who have gone through the incubation program, and is planning to expand more in 2013.
Shields spoke to Madame Noire about diversity within the technology industry and among entrepreneurs, advice for starting a business, and his personal journey with IncubateNYC.
Madame Noire: Tell us more about IncubateNYC and your role there.
Brian Shields: IncubateNYC is an entrepreneurial education organization that provides people curriculum and content through experiences. We’re really big on learning by doing and everything we do is tailored adult education that helps people learn in the most effective way. To learn sales, we make them pitch, which is obvious. Or to teach market research fundamentals, we make participants go out and talk to people. We make people learn things by executing it and we provide content around it.
Marcus and I have known each other for 10 years and tried to start a bunch of businesses, but we weren’t super passionate about any of them. We’ve been angel investing for a long time and decided that, because we’ve seen so many great things through entrepreneurs, learned a ton from working with and advising them, and funding them and seeing great exits, we decided to create an academy that provided people the education they needed to be successful.
MN: What are the goals for Incubate?
BS: From a business standpoint, this year is really about rocking out with the companies that we have. We’ve had about 60 founders come through so far in our six months of existence. So it is about enriching the alumni program and continued incubation.
And for next year, our goal is to roll out a la carte classes for people in three areas: business, product development, and industry expertise. One of the most important things is you have to know the industry you’re in and people who are entrepreneurial really thirst for learning more from people. We bring in new people once a month to talk about different industries. We’re going to be doing music in January.
MN: You said there are 60 alumni so far. What are some of the success stories from IncubateNYC?
BS: One example is a company called The Women’s Age, which is a media business for women to have a conversation about their ages and aging gracefully. This is a woman who is about 33 but most of the people in her family have died really young. She’s created this platform to celebrate women aging gracefully, through a combination of written media and a ton of guest bloggers and video content, like talk shows and interviews.
When she first came to the program she had a business idea that she wasn’t totally connected to, but [the experiential learning] eventually got her to this. She’s been doing this for two months, taught herself HTML and CSS, and started her own website.
MN: What is the percentage of blacks and women in your program?
BS: Our program is about 70 percent minorities, meaning not white males. It’s not by design. We are open to everybody and aren’t minority focused, but it is partially because Marcus and I are minorities and people gravitate to people they know. There are great programs like NewME, which are specifically minority focused. But we have the belief that the best want to work with the best, so we hope to attract the best.
MN: What can be done overall to get more minorities into technology and digital fields? How can the industry attract African Americans?
BS: You have to make tech cool. “Cool” is a relative term and “cool” is different for people who have grown up with two parents or parents who were doctors or teachers or bankers. They understand the fundamentals of business or math and science, and where that can take your career. But for a lot of minorities, in particular African Americans, our culture isn’t defined totally by that, [particularly] if there is a separation in the family foundation.
It would be great to elevate role models who people can relate to. That’s a big part of it. If I were to rewind the clock, I don’t know if I would relate to Mark Zuckerberg. Think about the impact that Barack Obama’s election had on people’s vision of what’s possible in this country, race-agnostic, and I think that can be applied to a business industry that is meritocratic in and of itself.
MN: What about diversity within investors? Is that something that is changing or on the rise?
BS: It’s changing. It’s the chicken or the egg thing when you are trying to get people in. It’s the same thing with women. Do you need more women investors or do you need more women entrepreneurs? Can you have one without the other?
If you look at the way the VC market is going now; it’s going more heavily operational. Entrepreneurs want to work with a funder or investor who understands what they are dealing with and who can help them think through questions, not just somebody who is about money. Entrepreneurs want to work with somebody who understands them and you can cut that down any segment or line: women, minorities.
MN: What is your advice for people who are starting out with their own business and how to jump in?
BS: My general advice is, look, it’s going to be hard and you aren’t going to make the right decisions. There’s a lot of research that says 2/3 of business decisions, either in new business or corporate, is going to be wrong. So just go do it; you’re not going to be right. But being wrong is the fastest teacher and you’ll learn the right answer sooner. And just stick with it. The hardest thing we find is getting started and then sticking with it. We tried to start like eight businesses, but we couldn’t stick with it because we weren’t passionate about it. So find that thing that really matters.
Quote that inspires you: “Life’s battles don’t always go to the stronger or faster man; But sooner or later the man who wins is the one who thinks he can.” – Walter D. Wintle, “The Man Who Thinks He Can”
Favorite Website: LinkedIn’s News Section
Current Read: The Start-Up of You, by Reid Hoffman
Who Inspires You and Why: My Mom. Whenever I think about where I am today and the viewpoints I have on life, I have always appreciated my mom for that.
(NY Times) — An entrepreneur’s first pitch meeting with venture capitalists is many things — risky, nerve-wracking, potentially lucrative if the idea sells. But is it good television? Daymond John hopes so. He’s a co-star of ABC’s “Shark Tank,” a reality show that is giving venture capital the “American Idol” treatment. In each episode, a handful of entrepreneurs pitch their business ideas — which range from magnetic collar stays to single-serving wine containers — to a panel of angel investors, or “sharks,” who decide whether or not to back the start-ups with their own cash in exchange for stakes in the businesses. The series, produced by Mark Burnett, is based on “Dragons’ Den,” a British series that was first broadcast in 2005.
(Wall Street Journal) — For acquisitions of private companies backed by venture capital, it’s becoming increasingly complicated to collect cash after the deal has been signed. In contrast to a decade ago, when many such deals went through with little trouble, today’s venture-backed acquisitions are fraught with landmines that can result in delayed payments and reduced purchase prices long after the deal has been struck, say venture capitalists, entrepreneurs and deal attorneys.
Such complications were evident in the $125.2 million acquisition of privately held surveillance-technology firm Era Systems Corp. by SRA International Inc., a tech supplier to the federal government. While the deal was struck in mid-2008, Era’s shareholders took a haircut on their purchase price and didn’t collect their reduced amount until last year, partly because of a disagreement during the escrow period.
(Entrepreneur) — You may want to explore the viability of partnering with an angel investor or an investment group such as a venture-capital firm. These types of investors can offer industry expertise and a strong network of contacts which could help your business grow and provide the opportunity to form strategic partnerships with larger companies. Keep in mind that it can be very difficult to obtain financing from these investors. But if you succeed, these relationships can be very helpful.
(VentureBeat) — In his best-selling book “Blink,” Malcolm Gladwell made famous the natural human reaction of quickly judging other people. This behavior is especially true of VCs and angel investors. The first few minutes of an interaction are crucial. The way an entrepreneur starts an investor pitch meeting can actually determine their success in that meeting. Those first 10-15 minutes, where the entrepreneur presents himself or herself – before they even present the idea – establish not only credibility, but the right to continue to pitch to an engaged audience. Yet, it is amazing to me how few entrepreneurs start investor meetings crisply and confidently. The formula for the start of the meeting is almost always the same – you are trying to answer the simple question on the mind of the investors: Who are you and why are you here? But when asked to review their backgrounds, entrepreneurs often fumble through incoherently, or ramble on tangents that aren’t relevant to the situation.
(Bloomberg) — Stung by a drought in technology initial public offerings, venture capital investing plunged in 2010, with the number of active firms dropping 47 percent in the first half from last year, according to Ernst & Young LLP. The number of U.S. venture firms making at least one investment a quarter sank to 167 through June from 313 in all of 2009, the accounting firm said this month in a report: “The Limited Partner Venture Capital Sentiment Survey.”
(Black Web 2.0) –Black Web 2.0 has discussed at length some of the unique challenges that African-American tech entrepreneurs face in an increasingly overwhelmed marketplace. One of the most frequently mentioned hurdles is a (suspicious) lack of funding from traditional sources such as angel and other investors. Commenters on our site (and other sites) often discuss how to go about receiving startup capital in an industry where the odds aren’t stacked in our favor. Some say get a loan. Others say talk to friends and family then try to make it work from there.
(Entrepreneur) – If your face was on the ten o’clock news, how many people would look up and say, “I know that person!”? The list is probably longer than you’d think–and includes more prospective investors than you’d imagine. They need not be millionaires, and they need not be loyal relatives.
If you’re like many small-business owners, you first reaction to the topic [of raising money from friends and family] may be, “But I don’t know enough people with money, much less people I’d feel comfortable asking for money.”
(Entrepreneur) – The venture capital community has an image problem. That’s right. Most people think venture capital is just for high-tech startups, but it turns out that way of thinking is so very last century.
The real deal is that only a small percentage of private equity (institutional fund investments in mostly privately held businesses) goes to “seed stage” startup entrepreneurs.
Busting VC myths
According to Thomson Reuters, the amount of funds that go to startups is consistently below 10 percent. “Early stage” companies, or businesses that require funds to fully commercialize their products or services, receive about 18 to 25 percent of invested capital.
(Inc) — Recently I asked Sam Ifergan, a venture capitalist who invests in tech companies, fresh off his $75-million exit of Visualsonics, to detail what goes on inside his head when he is asked to invest in a business. You may not have any plans to raise money for your business but understanding how these consummate capitalists think can sharpen your entrepreneurial skills. Here are six thoughts he offered up.