Southeast VC

Internet Summit 2013

Sign up now for Internet Summit November 12 - 14 in Raleigh, NC. The popularity of the conference grows each year. I bet 2,000 will attend in November.

If you sign up now and use the code "CAPLAIN" you will save $50. 

Check out the lineup and definitely come to Startup Summit, which is part of the conference. 

I look forward to seeing everyone there.

Asking for Help? Just Follow Up.

As a small VC firm, we are challenged with balancing the time we give supporting our existing portfolio companies vs other companies that may ask for our help in the community. The people that know us, know that we love being incredibly helpful and supportive to anyone trying to grow their business. Our region needs it.

So, as part of this support, we get asked a lot to help make email introductions. The volume of requests have grown considerably over the last year. Obviously, most of this comes from our portfolio companies, but a growing percentage comes from others in the business community. This includes entrepreneurs, job hunters, other VCs and service providers.

But here is what I found interesting lately. When someone asks me to make an introduction, I ask that person to put together an email that introduces themselves and presents what they want. It can be very brief. Basically I am looking for an email I can easily just forward to the person they want to be introduced to. I am trying to cut down on the time I would have to spend putting it together myself. Plus, it helps having all the facts right rather than me screwing it all up in pitching the wrong message.

The person I am talking to ALWAYS agrees to take the first step and send me the email. But you know what REALLY ends up happening? Nothing. The person rarely takes action in following up and the ask disappears.

I would say me asking for an email like this cuts down intros by about 80%. Seriously. I hope I am not being a jerk, but I feel like it is effective in screening out people that aren't willing to put the simple effort in. And if they're not, why should I care? Most importantly, I feel like this allows me to really focus on the people that need it most.

Calling All Entrepreneurs - RTP

Its back! We're having Calling All Entrepreneurs next week - Wed, June 3. My partner David Jones and I will be camped out at Carolina Cafe on Harrison Ave in Cary, NC from 7 to 9am. We're happy to meet any entrepreneur or aspiring entrepreneur. The only thing we ask is that you have to be in one of these industries: e-commerce, software, healthcare IT, digital media or wireless. Those are the industries we focus on.

So, email me and set up time to grab a quick cup of coffee with us. To fit in as many people as we can, we are setting up time in 10 minute blocks. You will have to keep the conversation real focused, but we have done this format before and it has worked well for everyone.

For background on Calling All Entrepreneurs check out this, this, this and this.

Open Source Law

I never thought that I'd see this come from a law firm, but Wilson Sonsini built a Term Sheet Generator, which allows entrepreneurs to answer an online questionaire and build out a term sheet for financing. I went through all the questions and it includes a nice tutorial and explanations of different terms, trends and market data.

Are you a 1st time entrepreneur and want to familiarize yourself with terms? Or a repeat entrepreneur that wants to brush up? Whatever the case, this could be a really great tool to save you some $$$ when starting out.

Thanks to Altgate for posting a story about this and DJ for pointing it out.

Just curious - What do the other lawyers think about this? Any input?

New Employees Suck :)

How many times have you asked a company how many employees they have and you almost measure their success just by that number. NOT by revenue, or profits or revenue by employee. Its JUST "by employees." The higher the number with the better. The company with 500 employees MUST be more successful than one that has 50. And of course fast hiring growth can only mean one thing.... things must be going really well.

A few years ago, I remember an entrepreneur I know well said that he will have 2,000 employees by X year. I think it represented something like 10x growth in headcount at the time. People around him seemed absolutely blown away and he was viewed almost as a hero. Should that goal be rewarded? Economic developers probably drooled over the forecast. What about investors? Maybe a different story.

Anyway, I was thinking about this the other day when I had coffee with an entrepreneur that I respect a lot. Their business is going strong, scaling fast and they are still forecasting doubling revenue in 09 to a little over $3m. The great thing is they haven't raised a lot of money and they operate the company with 6 full time employees. The entrepreneur said they only hire someone when it becomes absolutely painful and they absolutely have to. And even then.... they still don't want to.

That story quickly reminded me of an entrepreneur of a really large e-commerce company DJ and I met a year ago. They are profitable, running strong and have created a recognizable brand. Anyway, he told us "new employees suck." Don't misunderstand. He LOVES his employees. But he dreads hiring MORE people which adds more expenses to the business. He prefers a scalable business model which can add revenue without having to add heads eating into their profits.

NCSU and SCV Launch Program to Showcase Local Companies

As we look to build up the entrepreneurial community here in NC, there are a couple of things I think about:

1. Recruiting more smart people here

2. Retaining more talent

#2 has really bothered me over the years.  It seems we are always trying to recruit an NC State, Duke or Carolina alum back to North Carolina. Now, they call places like Boston, New York, DC or the Valley home. They've settled, have kids, etc and pulling them back to North Carolina is a lot harder. The problem is that they never really looked at companies here in NC when they seeking their first job out of school. The awareness for college grads of local opportunities in the tech space seems to have been incredibly low.

So, to work on this, I have decided to try and make an attemp to fix it earlier. Here is one attempt at solving the problem. I would love to have feedback from Southeast VC readers on what you think or what other ideas you may have.

You may have read recently (here, here or here) that our firm partnered with NC State University to offer a program where we showcase some of the top technology companies in our region to a handpicked group of students in their Entrepreneurship Program.

As background, NCSU runs an annual trip to Silicon Valley (led by Tom Miller and Steve Walsh) where students meet execs at companies like Apple, Google and Facebook. They have been running the trip for 5 years. The students get real excited about the Valley which stimulates their interest in moving there. My thought is that as a VC firm here in North Carolina, we want to help build more awareness for the students of what is happening in their own backyard and hopefully, help retain more talent here in NC.

So working together with Tom Miller, Steve Walsh and Autumn Teal at NC State, we (NC State and Southern Capitol Ventures) launched an inagural event to help bring local entrepreneurs and execs together with top NC State students.

We ran the first event last Tuesday and will run it again on October 7. The goal was to mix in companies from different industries and size. Here is a list of companies that I invited to participate:

• Southern Capitol Ventures

• ChannelAdvisor

• Canvas On Demand

• Council for Entrepreneurial Development

• Cisco

• Cree

• eTix

• Hutchison Law Group

• iContact

• Inspire Pharmaceuticals

• ReverbNation

• SciQuest

• Square 1 Bank

Half of these met with students last Tuesday and the other half on Oct 7. The full day event focuses around driving to each company, meeting with the execs, learning about their success and if relevant what opportunities exist for NC State students when they graduate. It is a pretty packed schedule. Last week, we wrapped up the day at the Council for Entrepreneurial Development for a dinner for all the students and participating companies. It was a great way for them to informally network. Thanks to John Fogg and his firm Hutchison Law Group for picking up the tab for dinner.

I went around with the students during the day and the feedback was incredibly positive. There are definitely some things we will need to tweak, but this was a great experience for all the students and that's what this was all about.

My guess is that based on the immediate feedback we have received so far, we're highly likely to repeat this program with NC State. And as I think about expanding it further, maybe next time we can include Duke and Carolina students as well.

Startups247.com Launched by CED

CED announced this week the official launch of Startups24/7, their new on demand resource for entrepreneurs. The content on the site is updated regularly and based partly on CED's conferences, forums, roundtables and workshops. It includes content like videos and presentations.

I have committed some time to Startups24/7 and am moderating the "Raising Capital" section. The site gives entrepreneurs the ability to easily ask questions, share experiences and get answers from experts and other leading entrepreneurs.

Although it was built for CED members, I really think this will emerge as a great resource for entrepreneurs everywhere. Access is $14.95/month or $119.95/year, but is free to all CED members.

Calling All Entrepreneurs - Charlotte

Over the last 9 months, Southern Capitol Ventures has held Calling All Entrepreneurs in RTP (twice), Atlanta and in Reston, VA. The turnout has always been great and we have enjoyed meeting so many new entrepreneurs in the process.

Next, on February 13, thanks to help from Terry Cox from BIG, we will be holding Calling All Entrepreneurs in Charlotte, NC.

The goal is to give ANY entrepreneur that fits into one of these industries (software, e-commerce, digital media, healthcare IT or wireless) the opportunity to meet with us for 15 minutes and to be heard. The entrepreneur can share their idea or company with us and get instant feedback. Just like past formats, we promise that no one will get screened out.

For additional background the media has followed Calling All Entrepreneurs for a while too. Here is a story about it. Here is another.

Anyway, if you'd like to meet with us on February 13 and are in Charlotte or close by to Charlotte, email me. I will follow up with you to let you know the location and email you some times that morning that are still available.

Chris Klaus, founder of ISS and current CEO of Kaneva offers Prediction for 2008

I asked 4 entrepreneurs to provide their tech predictions for 2008. Chris Klaus, founder and former CTO of ISS is the 4th and final one that I will post here. ISS sold to IBM back in '06 for $1.3 billion and now Chris is the CEO of Kaneva.

Chris, thanks for taking the time.

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Just as web browsers and web sites were in 1994, 3D browsers and virtual worlds are now manifesting as a viable platform for explosive growth. 

Along with the convergence of high speed Internet, graphics cards, personal avatars and a deep desire for people to connect face-to-face on the Internet, virtual worlds will provide the nexus of bringing all those elements together.

Craig Newmark, Founder of Craigslist, Shares Predictions for '08

This is the 3rd in a series of predictions for '08 from entrepreneurs. I asked Craig Newmark, founder of the wildly popular site Craigslist to provide his input for '08. Thanks Craig.

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Ordinary people are starting to use the Net to create grassroots movements in ways in ways that will change the nature of society and government.

There have always been many people of good who will have some clue regarding positive change. However, there has never been a medium which allows a lot of people to organize in large numbers, until the widespread use of the Net.

We're now seeing that happen, with power flowing from very small groups of privileged people to much larger groups. In politics, the Dean campaign got that going and now we're seeing lots of participation in efforts like those of Ron Paul and Barack Obama. On Wikipedia, we're seeing that ordinary people with voice and vision who are writing the history of our times. People in Palestine and Israel are uniting, in large numbers, at OneVoiceMovement.org to tell their leaders to make a deal.

One counter trend has traditionally damaged grassroots efforts, which we're seeing on the Net. That is, so called "front groups" pretend to be grassroots efforts but are actually run by shady politicians or corporations. (This is documented elsewhere.) However, investigating reporters, both professional and citizen, are now exposing such groups and neutralizing their effectiveness.

I think we're seeing massive grassroots-driven change this year, unlike anything in history.