Startup Matchups

The WSJ's Startup Journal has an interview with serial entrepreneur Wil Schroter, of GoBigNetwork, which bills itself as the world's biggest community of startup companies.

Other entrepreneur/investor matchup sites mentioned were RaiseCapital and FundingUniverse.

Organized groups that bring together investors and entrepreneurs include Astia, for women technology innovators; HYSTA for Chinese entrepreneurs and investors in Silicon Valley; the BrainGain Network, a world wide network of Philippine technopreneurs; the Northwest Entrepreneurs Network, dedicated to helping entrepreneurs succeed in the Northwest.

Paul Graham's Wisdom on Investors

Snippets from Paul Graham's Hacker's Guide to Investors:

... the angel investors are probably the more critical ingredient in creating a Silicon Valley. Where do angel investors come from? From other startups.

... VCs like publicity. They need to market themselves to the investors who are their "customers"— [those] whose money they invest. What they're good at is reading people, and making deals work to their advantage. Think twice before you try to beat them at that.

Investors always say what they really care about is the team. Actually what they care most about is your traffic, then what other investors think, then the team. If you don't yet have any traffic, they fall back on number 2, what other investors think.

In principle investors are all competing for the same deals, but the spirit of cooperation is stronger than the spirit of competition. So you will not, as of this writing, be able to get investors into an auction for your series A round. Note: See Prosper for a different take on this for small investments.

Instead of acting tough [with investors], what most startups should do is simply always have a backup plan. Always have some alternative plan for getting started if any given investor says no.

My advice is to err on the side of safety: when someone offers you a decent deal, just take it and get on with building the company. Startups win or lose based on the quality of their product, not the quality of their funding deals.

See also Graham's 2005 piece on How to Fund a Startup.

A VC on Investors

David Homik of Venture Beat has a long piece on participating in the recent Web 2.0 Expo panel "Venture Capital 2.0: Bright Future or Broken Forever"

Moderator Mike [Arrington] tried hard to get the traditional VCs (me included) to fight with the angel guys (Josh [Kopelman] and Jeff [Clavier]). His thesis was that angel investors will ultimately get all of the returns because there is so little money required to build a big internet business these days. The panelists disagreed.

The TechCrunch 2007 Conference scheduled for September has just been announced.

NASVF State Comparisons

The National Association of Seed and Venture Funds has released a state-by-state comparison of venture investments comparing the 1st and 4th quarters of 2006 with the 1st quarter of this year, from the PricewaterhouseCoopers and National Venture Capital Association's Money Tree report. Virginia currently ranks number 18, with investments of $75,518,300.

In the first quarter of 2007, venture capitalists invested $7.1 billion into 778 deals, the highest quarterly dollar amount since the fourth quarter of 2001, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association based on data by Thomson Financial. Deal volume actually declined in the quarter compared with the fourth quarter of 2006, indicating venture capitalists’ willingness to put more dollars into each round. Snippet from PricewaterhouseCooper