Southeast VC

Bring Your VC Questions and Come Friday to Carrboro Creative Coworking

Thanks to Brian Russell, owner/founder of Carrboro Creative Coworking for inviting me to speak to the entrepreneurs at their office this Friday at 10am.

All entrepreneurs in the community are welcome to join and participate.

I will bring the coffee & bagels and will answer any questions you may have about venture capital.

Just to make sure we have enough room to accomodate everyone, please email me - jason AT southcap.com and give me some heads up that you'd like to come.

Triangle StartUp Factory May Give Boost to NC Tech Community

The startup tech community in North Carolina could get a much needed boost soon. Chris Heivly is working on launching Triangle StartUp Factory (TSF), which is based in Durham.

TSF wants to be a startup accelerator for internet and software companies. First time entrepreneurs from all over the country could apply with the very best selected for the three month program. TSF would inject the business with a very modest amount of seed capital (20k), give the new company office space/tech infrastructure, surround the company with active mentors and take an active role in helping the new entrepreneurs raise additional capital. In exchange, TSF gets a small equity stake in each business.

The model is similar in many ways to what TechStars has done, but Chris plans multiple sessions per year and a smaller amount of companies per session.

This is a great idea for NC for a number of reasons. This area has a strong corporate base of tech companies (Cisco, SAS, Lenovo, IBM, Red Hat), top universities (NC State, Duke and UNC) and a very low cost to build a business. Also, TSF could help attract more smart entrepreneurs to move here and also may help retain the talent we have.

Here is a very specific example of retention. During the summer of 2008, I was out in Boulder, stopped by TechStars and met the founders of Foodzie. They moved from Greensboro, NC to Boulder to be part of that program. What if TSF was launched? Would they have considered it? Would a company like that now be based in Research Triangle Park? I also love the idea of playing offense and really going after trying to attract more talent here.

The idea is gaining momentum. Some well-known local entrepreneurs have joined Chris as Advisors/Mentors including Lee Buck and Jud Bowman. Lee is part of another startup accelerator, DC-based LaunchBox.

If you are interested in learning more about TSF and opportunities to get involved, let me know and I will connect you to Chris.

Venture Capital Conferences to Attend in 2010

If you are thinking about raising capital, here is a list of some of the upcoming venture conferences in the Southeast and Mid-Atlantic:

Florida Venture Forum's - 2010 Venture Capital Conference, February 2 & 3, Champions Gate, FL

Southeast Venture Conference - February 24 & 25, Tysons Corner, VA

CED's Venture Conference - April 20-22, Pinehurst, NC

MAVA's Capital Connection '10 - May 19 & 20, Baltimore, MD

Don't feel you have to apply and be selected to formally present your company to make one of more of these work for you. We know a lot of entrepreneurs that have just paid to attend like everyone else (make sure you get the discounted rate for entrepreneurs if this is an option), enjoyed networking and had some productive meetings there too. Sitting in and listening to other companies pitch investors, may give you some ideas of ways to improve your own messaging.

Also, do your homework on who is going to be there. A lot of the conferences post the list of firms that attended in the past. The smart entrepreneurs figure out who from that firm is attending this year and set up a face-to-face meeting in advance. Otherwise, it is just pure luck that you run into that firm at the conference.

This year, we will once again be attending the Southeast Venture Conference and CED's Venture Conference. I hope to see many of you there!

Increasing Company Transparency

I really embrace transparency from our companies. I think most VCs encourage it. But one of our companies took an extra step recently and I thought I'd share it here since it is different, more structured and more importantly the idea originated from the management team, not investors.

But first, I need to provide some background. 

In most of the board meetings we are part of, we hear a lot from the C-level people on the management team. If the company is smaller (say south of 2m in revs), usually the CEO is the one communicating 75%+ of the board package. But as the company grows, fills out and has more of a team, the COO, CFO are included and they share in providing an update and are active in the discussion.

What sometimes gets left out of these meetings is hearing from people like the VP/Dir of Sales or VP of Engineering. Part of this is based on time. You can't hear from everyone in the company at every meeting.

So, what ends up happening is guys like me who want to engage and build a relationship with them, have to find other ways to do that - schedule separate meetings (lunch, coffee, chat in the halls, drinks after work, etc.). I think as an investor, it is good to meet with lots of different people at a company - at all different levels within the organization - even down to the most junior people. I think that is how we can really take the pulse of a company and sometimes some of the best strategy ideas can come from meetings like that. I find these meetings enjoyable and the employees like hearing the enthusiasm of an investor.

Okay, now to what one of our companies is doing.

The CEO sent out the regular board schedule for the year. It includes the 7 face-to-face board meetings for 2010. But this year, he added 7 scheduled calls linking each investor with an exec on the team. So, I now have separate calls scheduled with the CTO, VP of Sales, VP of Bus Dev and Chief Revenue Officer. And how it works is it rotates to the next person each time. Sure, I talk with these guys regularly anyway, but the scheduled call makes it happen not only for me, but all the other VCs as well. And at the same time, 4 VC firms are updated on the company's activities and each exec is given more of a connection to investors over the course of a year. The calls will be much more informal than a board meeting and probably include a deeper dive into that person's group.

I really like this approach. I'm glad the CEO and team there were proactive to do something like this. Some of the boards we see are more active than others. I think actions like this will help create a more informed/engaged board, which I think will make this company even stronger for years to come.