Archive for June, 2006

Best of 06 – “Don’t Believe The Hype”

Jun 30 2006 Published by under Media

I’m off tomorrow morning for a much needed long weekend of relaxing in Ontario’s cottage country. I’m worn out and need to recharge. Howard will agree that there may not be a more relaxing place in the summer and I couldn’t be more excited to read and relax.

Since 2006 is half done (scary) I’m going to count down my five favourite songs of the year so far. Same simple two rules apply as the (unfinished) top 10 of 2005:

– Albums died during my generation. It’s all about individual songs.
– The song didn’t necessarily have to be released this year. It’s about my favourite songs of the year.

In no particular order, here is the first song in Fraser’s top 5 of 1st half 06:

4 responses so far

Ken Elefant From Opus Capital Answers Some Questions

Jun 29 2006 Published by under General,Startup Strategy

Last week I spent about 45 min on the phone with Ken Elefant from Opus Capital – asking questions, scribbling answers, and getting a new found respect for interviewers/journalists.

The call was set up by the team at Rainmaker Communications after I was contacted regarding the new fund that Opus closed.

Ken seemed like a great guy. He was easy going, answered all questions, and was patient as I struggled to play interviewer.

Here’s some insight from Ken on a number of topics [along with some of my thoughts].

On the fund that Opus closed: $280 Million for early stage investing. Opus, as a lead investor, looks for market leading companies who will require 15 – 25 million in venture capital to succeed, of which Opus looks to invest ~$8 million over the life of the company.

[I think that the term ‘early-stage’ is confusingly used by VCs. It seems that they use ‘early-stage’ to mean after product/company validation, which isn’t very early-stage wrt the company life-cycle]

On services provided: Opus provides four main services to portfolio companies: (1) help with recruiting; (2) open doors with potential customers and partners; (3) marketing / product vision side – through the direct team at Opus and an informal network of entrepreneurs who can act as indirect advisors; (4) financing strategy.

On how to enter the VC job market: While it’s a difficult market to get hired into, because of the low number of job opportunities, there are some ways to improve your chances. (1) The Kauffman Fellowship program (Ken is an alumni) provides incredible opportunities along with a valuable network; (2) Develop relationships with VC parties (GPs, …); (3) Create themes, find players, and communicate it; (4) Get connected via another medium.

[I really liked the third suggestion – showcase your potential by playing the role of a venture guy. Establish themes, find early players, communicate your vision. I question how effective this method could be though]

On the type of individual who makes a good early-stage vc: real operational experience, a proven track record.

[nothing too exciting here]

On angel investors: angels and early-stage VCs collaborate all of the time. Who assumes the lead investor role in the early-stage investment depends on the angels and VC firm involved and Ken doesn’t view angels as competition for deals. Deal flow from angels is great and therefore its critical for early-stage VCs to maintain great relationships with angels.

[I suspect that due to a number of reasons – angels becoming increasingly organized, super angels, … – that competition will increase between early-stage VCs and angels]

On where the industry is going: A lot more money is pouring into venture investing. Firms are expanding into earlier stages to secure investments and are starting to compete for deals by developing competitive advantages (Opus touts their level of real operating experience).

On their ideal entrepreneur: There are many high-quality entrepreneurs who can exit at $15 – $20 Million by being bought by Yahoo. Opus wants to work with those entrepreneurs who want to be the next Yahoo.

[aside: I’ve been rethinking my earlier thoughts on partial founder buyout. I’ll share them later. But Ken’s response here validated some of my new beliefs]

On investment focus: Ken’s focus is in two areas – lead generation and mobile advertising. He views the founding team as the key data point. Domain experts and/or serial entrepreneurs are of equal importance. To get a meeting you should obtain an introduction by an entrepreneur who has a good relationship with the firm.

That’s it. I asked a bunch of stuff that has been on my mind recently. A very big thank you to Ken for taking the time to answer the questions, and to Stacy & Julia at Rainmaker for setting it all up.

4 responses so far

4 Things

Jun 27 2006 Published by under General,Media,Startup Strategy

1) Matt McCall on Warren Buffett and Bill Gates:

Successful people, having made significant money, will look for outlets to find greater meaning and connection in their lives. If innovation and entrepreneurship are key to solving many of our business challenges, aren’t they even more important in solving our societal ones?

Have you given enough thought to the impact that these past two weeks will have on the world in 20 years?

2) “Our goal: to make it more profitable to be ethical“. I love this idea. Looove it.

3) What do you think about when you’re not thinking about anything at all? That says a lot about a person.

4) You can thank me for getting this song stuck in your head.

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Escape From LA

Jun 26 2006 Published by under General,Media

Lack of posting over the past week was due to an insanely intense trip to LA.

But, much like Snake, I am back.

I came across my first candidate for song of the summer: Gnarls Barkley – Smiley Faces.

3 responses so far

Invention Capitalists / Invention Specialists

Jun 26 2006 Published by under Startup Strategy

While I was away Matt sent me an email turning my attention to Business Week’s cover story.

I’ve been familiar with Intellectual Ventures for a while – having had numerous discussions on IV’s merits with my brother. While David loves the idea I’ve been hesitant about the possible issues with such a firm (Dave does do a nice job describing a vertical where such a model could add great value).

The article sheds some light on IV – discussing the firms history, how it operates, its research sessions (these sound incredible), outlining the patent-troll worry, and describing possible future paths that the firm could follow. Definitely a must read.

While I’m still hesitant about the possibility of innovation-stifling patent-trolling I was excited to read the vision of CEO and co-founder Nathan Myhrvold.

Myhrvold views himself, and IV, as Invention Capitalists

Invention Capitalists. A specialization company fulfilling a critical element necessary for the innovation of innovation

Myhrvold has no interest in manufacturing and marketing new products. His plan is to offload all of that work to licensees.

The changing world we live in is rapidly allowing companies to specialize along business stage/process pathways – allowing firms to develop competitive advantage through niche skillsets rather than simple product sets.

The specialization market is new, the future rewards rich. Find a need. Fill it. Love it. Die doing it.

One response so far

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