All Articles Tagged "venture capital"
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(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.