Businesspundit has a post on networking for introverts.

So you're really not much good at networking. You keep a drink in one hand and the other in a pocket. You stand against walls. You avoid direct eye contact. You pretty much suck at it and since you suck at it you hate doing it. You're constantly standing around trying to look pretty and hoping that someone you're interested in meeting will come and talk to you. 

Me too.

It's interesting to watch the dynamics at a networking event. I've attended many but there's often a sense of being disassociated from the main conversations. The worst are the hard sellers.

The Hard Sellers: These guys are there to pitch. For the most part they're talking to themselves. Whenever I'm near a hard seller I'm tuning them right out and trying to scrape them off my shoe asap. The Hard Sellers listen little and talk much. They've done this and that and would appreciate it if you validate their existence by doffing your cap. 

I hate that and respond poorly to it as most people probably do.

Poor networking is usually cause by embarrassment and fear of rejection... hey , it's just like dating. (Here's my eminently readable post on Horizontal Networking)

I have a good friend Chia in NY who's a photographer. She's about 4'8" and 73lbs (I'm 6'3" and 260) Chia used to be an actress before she became a photographer and now she's the most sought after actor photographer in Manhattan.

Chia lives down in the Flat Iron district (The triangle shaped building in Spiderman). A boxing gym opened up next to her building and  Chia thought it would be great exercise to take up boxing. (Here's her boxing photography)

Interestingly, the gym owners thought this was kind of cool so Chia hired a trainer and started hitting a heavy bag. It was a scene straight out of Million Dollar Baby except that Chia was much shorter.

Of course Chia never actually wanted to fight. In fact, the gym ordered her a pair of pink boxing gloves which, I have to say, were really cute.

Anyway, Chia hit like a girl. She'd prance around and make 'hitting' noises while she punched at the air.

Chia wanted to be more serious. She wanted to move and hit like a boxer, not like a girl. When she talked to her trainer he looked at her like she was as stupid as a bag of hammers. "Chia", he said, " Just act like a boxer." That was it... Chia knew how to act and she was a boxer after that.

The point being: It's always something you can act through. If you're not a great networker... act as though you were.

Works for me. 

Boulder Colorado has a new startup program: Techstars 

Techstars (ala Y-Combinator) is a invitation program where your startup team moves to Boulder for the summer, gets 5k per founder, and works your tail off. Evidently boulder has a thriving tech startup community where everyone runs around with their Macbook Pro and meets at Starbucks.(Damn that sounds fun. I'm going to have to talk to my wife and see if she'd let me go. She could just ride the horses all summer.)  I'm not really kidding either.

The program functions along the line of Junto Partners but I actually think there's more upside for the entrepreneur and the team. Techstars is looking for a 5% stake. 

Here's a video of the Techstar instigators making their pitch.

I've been listening to a number of podcasts the best of which is the Entrepreneurial Thought Leaders lecture series from Stanford University.

Stanford has the access and they've produced the best podcasts for entrepreneures on the net.

• Stanford Entrepreneurial Education Resources Site

• Entrepreneurial Thought Leaders series podcast

From Charles River Funding: QuickStart Seed Funding

Charles River Funding (Boston & Silicon Valley) is launching a new program looking to move them down the food chain and get into companies while the gettin's good. Read the NY Times article: Venture Firm Is Giving Loans A Try. (registration required)

Here is how the loan works:

Redeye VC thinks the move is to address exit trouble:

It also is a recognition of some of the challenges that larger venture funds face.  Take a hypothetical traditional $400M VC firm.  In order to achieve a 20% IRR, the fund must return 3x their initial capital over a 6 year term -- or $1.2B.  Now say this hypothetical VC firm typically owns 20% of their portfolio companies at exit (an industry average).  That means that at exit their portfolio needs to create $6 Billion dollars worth of market value (ie, $1.2B / 20%).  Assuming that their average investment size is $20M, that means that they invest in 20 companies -- this assumes an average exit valuation of $300M PER COMPANY.  Given the tight IPO Market and an average M&A exit value of less approximately $150M, this math creates some real challenges.

From VentureBeat

The advantage of a seed round is that it done as a “convertible” loan, which means the $250,000 is essentially a no-strings-attached loan to an entrepreneur. There is no equity stake claim by the investor at the time, which is good for the entrepreneur, who can see how good his idea is first. If the idea gains traction, he can raise money in the series A and negotiate a high valuation for his company. If he can command a $5 million valuation, for example, the investor’s $250,000 seed money converts into only 5 percent of the company.

Zachary  says he sees too many entrepreneurs giving away between 10 to 20 percent of their company in the seed round. They have fewer shares to give to employees, and they’re less attractive to venture capitalists.

There is almost no liability for the entrepreneurs, because the loan is made to a corporation formed around the entrepreneur. If the company fails, the company goes away, and the founders aren’t liable. “We’re all big boys,” says Tai, explaining that CRV doesn’t mind when this happens. “We go into this with eyes wide open.”

Fred Wilson of Union Square shares his analysis

I think that's a very fair deal. The loan is structured very similarly to what some angels are doing these days (loans that convert at a discount) and Charles River gets to take up to half of the round on the same terms as the other new investor.

Read the first bullet: There's also no personal liability. Something that Utah investors could take note of. 

Paul Graham writes insightful essays on... 

• How to Start a Startup.
  Build something users love, and spend less than you make.
• Hiring is Obsolete.
  The market is a lot more discerning than any employer.
• How to Make Wealth.
  To get rich you need to get yourself in a situation with two things, measurement and leverage.
• Ideas for Startups.
  The initial idea is not a blueprint, but a question.
• Why Smart People Have Bad Ideas.
  A hacker who has learned what to make, and not just how to make, is extraordinarily powerful.
• The Hardest Lessons for Startups to Learn
  Some things about startups are kind of counterintuitive.
• How to Fund a Startup.
  Venture funding works like gears.
• How to Present to Investors.
  Explain what you're doing and why users will want it.
• The Venture Capital Squeeze.
  Why not let the founders have that first million, or at least half million?
• The Other Road Ahead.
  You may not believe it, but I promise you, Microsoft is scared of you.
• What Business Can Learn from Open Source.
  There may be more pain in your own company, but it won't hurt as much.
• What the Bubble Got Right.
  Even a small increase in the rate at which good ideas win would be a momentous change.
• A Unified Theory of VC Suckage.
  If you're not one of the very top funds, you're condemned to be the bad guys.
  

From Canadianbusiness.com: Read the entire article here.

To solve the mystery of the underpaid entrepreneur, Wasserman collected data from 1,200 executives at more than 500 U.S. high-tech companies. After controlling for numerous variables such as experience and company size, his findings were stark: founders earn about $30,000 (U.S.) a year less than hired-gun managers doing pretty much the same job. In fact, 51% of founders earn less or the same as their employees.

The good news: the founder discount isn't forever. It shrinks over time and with the growth of the company. The bad news? Founders' compensation is inversely related to their control over the organization and their own job satisfaction. As I read it, as a company grows and gets more complicated — with more layers of management, boards of directors, outside investors and stricter management-performance metrics — founders get paid more because their jobs get harder.

But why does the gap exist in the first place? In simple terms, it's because founders tend to care too much about their own creations. Outside executives have to be paid market rates or more to join a company, and if their compensation doesn't keep pace with the outside world, they have little incentive to stay. Founders take a longer view. Like Cullen, they often put the company's financial needs ahead of their own. And their boards of directors don't worry that founders will bail out, because they know that founders are emotionally committed to the organization.

And there's this:

Paul Britton, a compensation consultant to businesses big and small, sees this problem again and again. The founding partner of Crossford Consulting in Toronto says there are two stupid reasons why entrepreneurs underpay themselves.

First, he says, some entrepreneurs think they can use their own lousy compensation as a lever when negotiating subordinates' pay. By pointing to their own pay packages, they think they can convince their employees to accept less, too. The problem, of course, is that your best people have lots of job options and know you have an ownership stake; it's generally only less valuable employees who will agree to work for below-market pay.

The other reason entrepreneurs underpay themselves is bad budgeting, says Britton. Instead of factoring in an appropriate salary for themselves ahead of time, founders will wait and see how much money the business makes over the year, and draw from that. When he asks groups of entrepreneurs if they have built a rate of return for themselves into their forecasts, Britton says only about one person in 20 will raise their hand.

Here is a partial list of the local business, entrepreneur, angel and VC RSS feeds that I subscribe to. Post your own list and link through the comments. Does anyone know how to export a list from Bloglines so that the links work?

Click to read more ...

Phil Burns and the Tag Jungle crew gave me pizza today for lunch. That always makes me feel kindly.

Phil was trotting out Tag Jungle again before he tries to find money for more than pizza. That's always a good idea and especially for Phil. I'm generally geek-i-fied enough to follow discussions about blogging in general by I actually had to listen to follow some of the whatchamacallit goes in the gobblygook and comes out here stuff.

Phil et al are going on a roadshow to get more pizza money. Guy Kawasaki recommends watching this pitch by Majora. (Watch it online here.) Who am I to argue. 

I spoke briefly with Phil about building a pre-pitch dinner where Phil can pitch and receive feedback from investor types. I have a few people in mind. If I call you you'll get to see Phil gesture wildly and probably come away with a free T-shirt.

From Noam Wassermans "Founders Frustrations" Blog. Noam Wasserman is a professor in the Entrepreneurial Management unit at Harvard Business School.

Noam's blog is a great read for entrepreneurs looking to understand how to structure ownership in a startup or why investors think they're adding more value than the entrepreneurs running the business. Here's nifty chart.

Table 6: Entrepreneur Expectations
(traces the trend between the entrepreneur’s perception and expectation of
the value-add potential of the investor throughout the various funding stages)

Entrepreneur's perception of investor

 

 

Guy Kawasaki's blog has some excellent '10 Question' interviews with authors. So what if he makes a little money with the Amazon link.

Ten Questions with Polly LaBarre

Barre spent almost two years writing this book. Taylor is a co-founder and founding editor of Fast Company. LaBarre was a senior editor at Fast Company for eight years (and was one of the best reporters on the topic of entrepreneurship and marketing, in my humble opinion). She has made media on Good Morning America, CNN, CNBC, and PBS’s Nightly Business Report. She is also a co-author of The Big Moo: Stop Trying to Be Perfect and Start Being Remarkable. She is a graduate of Yale University.

Turn that model on its head and you get Pixar’s version of the right way to make movies: a tight-knit company of long-term collaborators who stick together, learn from one another, and strive to improve with every production. A key component of that model is Pixar’s no-contract policy. Famous, talented directors like Brad Bird, Peter Docter, Andrew Stanton and Lee Unkrich all of whom could secure lucrative contracts with any studio—are salaried employees of Pixar who contribute to all of the studio’s projects rather than just their own pet projects.