A few weeks ago, I blogged about the launch of TechStars and mentioned that David Cohen and I were trying to figure out a way to work together.  Over a few conversations, we decided to throw together a LivePitch and Networking event for EntrepreneurshipWeek USA in Boulder, Colorado.

In 2 days, we planned the event, got a few sponsors, and we are now expecting to have around 100-200 entrepreneurs in attendance.  Here’s the idea:

• We’re accepting applications from entrepreneurs in the community to be able to pitch at the event.  We’ll probably select around 10 deals to make LivePitches to a panel of investors and the live audience.

• We’ve attracted a panel of angels to attend to judge the event and provide feedback.  The angels that have committed to attend are:

• David Cohen, Tech Stars
• David Brown, Tech Stars
• Jared Wandry, Norseman Capital
• Bob Smart
• Bill Treadwell
• And others…

• To get the audience involved, every member of the audience will receive $100 in “play money” that they can “invest” into their favorite company pitch. (by the way…this idea was the brainchild of Carolynn Duncan and Phil Burns — want to make sure that I give credit where credit is due.)

• At the end of the event, we’ll announce 2 winners — an audience favorite and an angel favorite.  The CTEK Angel Group and Holmes Roberts & Owen have joined the sponsorship club to provide prizes to the 2 winners.

Most of all, we just want to provide a fun event for the entrepreneurial community.  If you’re in CO, come check it out — it’s free.

• Angel's Tips to Raising Money If you are looking to raise capital from angel investors or venture capitalists, this provides 5 great tips to help with your presentation.
• 100k for your business FREE application to a Utah-based funding competition to receive a $100,000 investment from angel investors for your start-up company.

Just a few random items from my inbox:

Tomorrow I will be presenting a webinar on business valuation for Funding Universe.  If you would like to participate and you are not a Funding Universe Angel Ready subscriber, you can pay a one-time fee of $19.95 to participate.

Know More Media, the publisher of this blog, is working actively to develop new tools to help companies increase their "on-line density," the number of hits you get when you search for the company.  This is not a problem for Yahoo or Google, but for small investment banks in Utah, it is an issue.  The latest effort is being tested in beta here.  BizzSpotlight provides a forum for companies to create an on-line profile with a link back to the company's home page.

VentureWire reports today that the average pre-money value of venture-backed companies has increased to $18.5 million in 2006 from $15 million in 2005.  For series A Rounds, the median pre-money valuation inched up to $6.2 million from $5.9 million, for the same periods.

I’ve had quite a bit of interaction with Jeremy Neilson at the Utah Fund of Funds and I thought that it would be good to give him and the Fund a “Shout-out.”

From what I understand, the UFoF has already made 9+ investments in various venture funds that are connected to Utah.  Here’s a list of the early-stage firms that they have displayed on their website:

• vSpring Capital – an early-stage venture capital fund focusing on information technology and life sciences.
• 5AM Ventures – a seed and early-stage venture capital fund focusing on life sciences.
• Highway 12 Ventures – an early-stage venture capital fund focusing on technology and healthcare companies.
• University Opportunity Fund – an early-stage venture capital fund that co-invests alongside local and national venture capital funds.
• RWI Ventures – an early-stage capital fund focusing on technology and life science companies.

I met Phil Reed, the general partner at Highway 12 Ventures a few weeks back and he is stoked about the Utah investment market.  While their headquarters are in Boise, ID; they are anxious to get tapped into the entrepreneur and investment market here in the state.  In fact, I believe that they have already made 3-5 investments in Utah companies.

What does all of this mean?  More Money in Utah!

Props to Jeremy & the Utah Fund of Funds.  Now if we could only get them to make investments into angel funds…

I’ve been meaning to blog about this for some time.  2 weeks ago, I attended a seminar (hosted by UTC) on “What a founder has to do to remain the CEO after raising money.”  Scott Frazier, one of the most successful angel investors in the state of Utah, provided an incredibly insightful presentation.  The highlights are below.

5 Tips to Raising Money

1. Give your best pitch in the first 30 seconds:  The investors should know what you do and how you make money in the first 30 seconds!  This is a huge problem with most pitches.  Many times, the entrepreneur will get 10-20 minutes into a presentation and the investor still doesn’t understand the company or value proposition — big mistake!
2. Bring a customer when presenting:  There is no one better to pitch your product than your customers.
3. Offer a personal benefit:  This may seem very small, but investors love when the pitch effects them personally in a positive way.  If you have a product — give it to the investors for free.  Scott told about a company who turned off his angel group because they wouldn’t give the investors a free pair of sunglasses.  He also told about a company that offered a free annual membership to their website for listening to the pitch and a free lifetime membership to the site for making an investment.  They loved it!
4. Raise capital when capital is available:  Scott was offering strategic advice to entrepreneurs on the timing of the fund raising efforts.  He suggested that entrepreneurs start early so they are not desperate when pitching.  He also suggested that you study out various angels & VCs to know their financial picture.  For example, right now in the state of Utah… most of the VCs are in the process of raising funds so it is a bad time to approach them.  As soon as they close their funds would probably be the best time to approach them.
5. Find investors with deep pockets:  (yes… this seems like a no-brainer.  Doesn’t every investor have deep pockets?!).  The reality is that you want to work with someone that has the capability of making multiple investments in your company if needed.  It’s wise to talk to your investors up front to find our their feelings on follow-on rounds before taking their money.

Scott also gave some tips on how to get the most out of your company upon exit.  I’ll have to include that in a future post.

Recognizing that I am a little late to the Podcast party, I'm beginning to get the hang of it. Recently, I've started listening to the Entrepreneurial Thought Leaders series hosted by the Stanford Technology Ventures Program.  Each week, a speaker makes a presentation to students.  The presentations range from mildly interesting to fascinating. One notable presentation was made by Joel Peterson of Peterson Partners, who discussed negotiations. More recently, Reid Hoffman the Founder of Linked-In spoke.  Last week, Gregory Waldorf of eHarmony presented on Valentine's Day.

I remember the first evidence (which at the time I wholeheartedly rejected) I received that I am in fact a jackass. 

(By this I mean that I am a jerk or in the even more crude vernacular of the day, I am what is commonly called an a--hole.  Personally, given the difficult personality traits reportedly exhibited by actual jackasses or donkeys, I prefer the animal reference to the crude anatomical reference with little metaphoric meaning, beyond the vague, yet sharp insult.)

The evidence of my official status as a jackass was that in 1995, I was leaving a job I'd had for a year in a regional investment bank here in Salt Lake.  My boss, Ed, was a stern former CFO with whom I had a rather tenuous rapport.  When I left, he volunteered to take me to lunch as a form of exit interview.  There, he explained, "Devin, you are confrontational."

"Like hell I am!" I thought, but thankfully didn't say out loud.

In hindsight, I think this was a rather kind way of telling me that I was a jerk with whom people don't like to work.  I would certainly have rejected the criticism at the time no matter how it might have been conveyed. 

Over the last year or so, I have become acquainted with Benjamin Kuo in Southern California.  He publishes a number of venture-oriented web-sites and e-mail newsletters that I think are first rate, including his flagship publication, SocalTech.  In fact, Thorpe Capital Group sponsors his Rocky Mountain region publication, TechRockies.

Today, Ben launched a blog that I imagine will be well worth the read (and unlike his other websites and newsletters can be accessed for free).

Let's read it and see.

Occassionally, as I hear people talk about negotiating a venture capital transaction or an M&A deal, I hear bravado about taking it to the other side.  I also see these deals fall apart. The intended outcome of most of the transactions I have been involved in is rather more like courtship and marriage than they were like buying or selling a used car. While I don't think there is ever much of a need to negotiate even the purchase of a used car in hostile terms, I do acknowledge that it is somewhat harder to see why the buyer of a used car should be concerned about the welfare of the seller.  Negotiating hard for the best possible deal on a car for some may involve a range of tactics that include putting your own needs well ahead of the needs of the dealer. More to the point, when negotiating a M&A deal or a venture capital placement, I believe that those are typically intended to be long-term relationships, with almost all of the significance of a marriage.  Can you imagine negotiating the terms of a marriage the way you would negotiate the purchase of a used car?  I've seen it happen. Let me suggest that the approach to negotiating a term sheet should include a couple of dates, a nice dinner out or at least a long lunch or two.  A couple of long  romantic walks through the warehouse, the plant or the office will help.  You may also want to watch some PowerPoint together in a dimly lit conference room.

This week Venture Wire reported that Sequoia Capital took a Google, Inc. (Nasdaq: GOOG) stake worth $504 million, more than either of the co-founders, Chad Hurley and Steve Chen, who each received $326 million of Google stock. Since the deal closed, however, the $1.65 billion purchase price has effectively declined with the stock price of Google to merely $1.5 billion.  Poor guys. The video below was made by Chad and Steve when they inked the deal with Google several months ago.