Everyone Funding Startups

Today I was joined by Cassandra Phillips, entrepreneur and organizer of several conferences, most notably FailCon. Concentrated on learning from failure, FailCon is a unique event that offers a humble learning atmosphere where possibly all mistakes won’t have to be repeated by every entrepreneur. More details on FailCon10 can be found at: http://failcon2010.com/ Listen to the episode in the player below. This episode includes a special offer included for our listeners. Member highlight for this episode: Qubrit “a revolutionary approach to creating, exchanging and keeping business cards.” Here’s some quotes from the episode: “to do a conference specifically on failure, was quite different. I was surprised by how many people actually wanted to speak.” “.. so, a lot of companies I fear, when they entrench themselves in Silicon Valley culture, they don’t understand their real users. They just hear an echo effect from everyone around them, who understand life exactly like they do.” “If you don’t let your people fail, they will never innovate, they will never try anything new.” “There’s a common statistic tossed around, that about 7 out of 10 startups will fail. A lesser tossed around statistic, that I’m starting to spread, is that 10 out of 10 startups will at least encounter a failure.” “‘I don’t know if this is going to work, no one has ever done it before, it might fail terribly, but my community is going to accept that and they’re going to support me through that failure because I tried something new’. Which is a much healthier outlook on things that, well this sounds kind of cool, but I’m not going to do it because if it fails, no ones ever going to support me again. We should be much more willing to support someone who is adventurous and thought provoking and pushing boundaries, than someone who just stays in the box that they know is safe.”

Startupbootcamp has kicked off in Denmark and the start has surpassed everyones’ expectations, including the expectations of founder Alex Farcet. Alex joined us for the second time on our podcast, to give an update on what’s been going on in Denmark and how the program has launched! Listen to the episode in the player below. We talked about the itinerary, the mentors, routines, teams and more about the teams. Startupbootcamp teams can be found on the Startupbootcamp blog, but in a short while they should be also found in our community, with our partnership in place. There you can follow their progress and watch then develop! Registration for the Investor Day is now open! On November 9th, watch 10 international startup teams present their ventures to a vast crowd. More info available here. Another day at Startubootcamp!

What are startups in the Midwest made of? To help me answer that question, I was joined by Brian Mayer and Jon Pasky, two of the three founders of midVenturesLAUNCH, the biggest startup event in the Midwest. midVenturesLAUNCH is organized on 27-28 September just outside downtown Chicago. We talked about the conference, the development of the entrepreneurial climate and happenings in the US, among great insight into the Chicago startup scene. For more information, check out: http://midventureslaunch.com/ Listen to the episode in the player below. Member Highlight: Heppnigames “We’ll change the way social games are played. Literally.” Here’s some quotes from the episode: “We sort of jokingly refer to Chicago as ‘fly-over country’, because a lot of VC’s, even though they’re based here or a lot of VC’s from Silicon Valley or New York will fly over Chicago to get to where they’re funding their companies.” “We joke here, that a lot of that talent is sitting coding for banks and financial institutions, but not really going out and starting an entrepreneurial company.” “.. I looked at Tech Cocktail and said ‘if they can get 800 people to come out on a Thursday night for drinks, to just talk tech, there’s really a need here in Chicago and the Midwest to shine a spotlight on that.'” “Bringing Chicago to the attention to the country and the world as a leader in entrepreneurship certainly wouldn’t hurt!”

In this episode we were joined by the insightful Francine Hardaway, serial entrepreneur on a mission to expand the entrepreneurial ecosystem in Arizona. Some relevant points and great perspective on developing a healthy ecosystem in the modern world. Francine organizes the Arizona Entrepreneurship Conference on November 17th, for more details, visit: www.azec10.com Listen to the episode in the player below. Here’s some quotes from the episode: “.. I felt like, I had to fund this non-profit somehow and I wanted to fund it through a business, so the business is the conference.” “What we need is collaboration, because that’s how you make things happen. You make things happen by aggregating good people and creating an environment in which they can collaborate. Because if you do that, they all find ways of helping each other.” “I believe there is no such thing as a safe corporate job anymore.” “Arizona right now is in a recession, where in the real estate environment people have lost a lot of money and they’re saying ‘oh, woe is me, woe is me’ whereas I’m trying to say ‘No! This is creative destruction!’ And what we have now, is an opportunity to diversify an economy that should have been diversified years ago.” “We have plenty of companies start in Arizona. The startup culture isn’t the issue, it’s the scaling of companies in Arizona that’s the issue.” “Silicon Valley is having a problem getting talent now, because the talent can’t afford to live there..” “Venture Capital has a herd mentality.” “That’s why I actually think that you can build as rich an online community as an in-person community.” “If you think that this is less than a 50 year goal, you have another thing coming.”

In this episode we take a peek at the entrepreneurial ecosystem in Spain. Javier Rincon, an active individual in the startup scene, guides us through the startup world in the Spanish speaking community.

This more personal episode on the growth of entrepreneurs highlights many social aspects of entrepreneurship. Serial entrepreneur and founder of the Diverse Entrepreneur Network, Joel Graham-Blake serves as our life coach and guides us through five different aspects to consider when growing your fantastic venture. Listen to the episode in the player below. The five points we covered: How does a passion for business fit into your personal life? Entrepreneurism in the educational system – what’s missing? The missed potential in the grass roots Widening services of mainstream businesses to wider communities Mentoring and who should mentor. Here’s some quotes from the episode: ” .. don’t stop believing that you’ll achieve your business goals, but understand the impact and that there are consequences into every action you take, and you’ve got to be prepared to manage all of that. .. what I’m about to say really may.. well, will undermine education in the western world.” “.. when you come out of school, you are almost having to start again if you want to be entrepreneurial.” “Let’s be frank. There is a negative underbelly of enterprise as well, which lies in many grass- root communities, because a lot of times the finance is not there to execute an idea that they have.” “.. it’s about people understanding the wider concepts of entrepreneurism, not just seeing the modern fancy side of it, but also understanding the passion and the reason why..” “In business for me, if you cannot connect with that person you are doing business with, then the business you are doing won’t work, because people do business with people that they like.” “.. if we cannot connect with each other, how can we move forward?”

Startups face a variety of challenges and in this startup survival guide, we focus on five big pitfalls startups experience and how to avoid them. Bob Walsh, author and IT veteran, narrates our way through these five different scenarios and how to survive in the harsh startup landscape. For example, look up the book Web Startup Succeed Guide by Bob Walsh. Listen to the Podcast in the player below. Check out our member highlight from this week: AdNeedle Here are the Five Pitfalls we covered: All I have to do is get money from a VC and I’ll be rich! I know what the market wants, I don’t need to do customer research. Everyone is going to want this solution! I can compete on price and win. I’ll work on my startup in my spare time. Some quotes from the episode: You have to come up with an extremely good idea, that can make enough money, so that it can pay for the other 19 companies that the VC is going to invest in, that fail. If you’re doing this as a first time startup, tackle something other than changing the entire world, you can do that with your second startup. Get over the discomfort of doing something that you’re not normally comfortable doing, and that’s going out and talking to customers – before you start coding. This is a “doing” thing, rather than a “researching” thing Creating a startup is a significant life event and it’s going to take a lot of time and effort. While you may get your startup built, if you lose your marriage or your significant relationship, and everyone you know drifts away in your life – that’s not exactly a good exchange of value.

Our model has several components and we have noticed that there have been misunderstandings about our commission. Of the membership fee, we keep 25% to run our operations – but it doesn’t mean we have 25% commission. It would be a skyrocket high commission, no way. Instead of keeping whole membership fee as our revenue, we use 75% of the membership fees for community fund investments, so it goes to startups, and community members decide, how it is invested. We then reward members for these selections, if the investments are good. When a member has paid the fee, the one with funder role (investors) can then make direct investment without any commission and entrepreneurs can raise money to their startup without any commission. To clarify; there are no traditional commission, only the membership fee. We made some calculations to see an effective cost per investment level by using the 25% of the membership fee as a fixed fee. You can see the results in the table below. The first three cases are for monthly membership, i.e. if an investor or entrepreneur make or get the full investment in a month, the last two cases for a year. Fee Investment cap To Community fund Effective fee Effective cost per investment Remarks $110.00 $500,000 $82.50 $27.50 0.01% for montly investments $30.00 $50,000 $22.50 $7.50 0.01% for montly investments $20.00 $25,000 $15.00 $5.00 0.02% for montly investments $950.00 $50,000 $712.50 $237.50 0.47% for annual investments $400.00 $100,000 $300.00 $100.00 0.10% for annual investments As you can see, the effective costs are always less than 0.5%. Of course, if an investor or entrepreneur doesn’t use the full amount, the effective cost is higher. But that’s why we have those steps that everyone can find her or his right level and pay an optimal membership fee. Grow VC is really a costs effective model to make and look for investments. We also work to find standard models for investment agreements, due diligence and other needed services, to keep those costs down too. The Grow VC model is cost effective compared to any investment service, but especially the costs structure is totally different from the traditional VC model. Our aim is really to create an effective market for startup funding. Startups and investors need it. Update: You can also read the related blog post about our model in full detail and listen for related audio below.

With all the media coverage Grow VC has got, we thought it would be appropriate to address central arguments and criticism regarding our model, as it comes up in discussion on a regular basis. In this episode, we focused on the article “Meet Your New Competition” in July’s edition of the Venture Capital Journal. We covered legal aspects, the SEC and regulatory issues, online fraud, representation and shareholders and so much more. If you’ve ever wondered about the model, sceptic or optimist – listen to the episode to get an insight into how the model actually works. Listen to the Podcast below. Here’s some quotes from the episode: “We spent a lot of time on legal due diligence, about a year or so..” “If everything is legally fine at that point, it’s only when the actual investments happen” “Valto, do you think it’s a realistic outcome, getting screwed?” “A lot of the conversation is around the US market and US legislation, but the fact is that the world is a lot bigger than only the US market..” “.. it lives in a theory of how it can work, but it doesn’t really exist until it starts to happen..” “.. having been too early many times with a couple of my startups, sometimes years before when the actual market started to grow, I have the same feeling with Grow VC and crowd-funding.. luckily we have already used two years..” “if you think about how venture capital actually works.. I think it’s just a huge bottleneck of innovation..” Read the related post: Grow VC Model In Full Detail

We have just launched Grow VC India and we thought it would be appropriate to elaborate on our vision for the local networks in general and how they connect to our global vision. I was joined by Jouko and Valto we discussed our local networks, what's next and how they will come together globally.

t being summer and all, we thought it appropriate to talk about summer and startups. As a matter of fact, today's guest, Ramine Darabiha, an active entrepreneur, founder & CEO of MySites, is the head coach for a student formed entrepreneurship summer bootcamp, called Summer of Startups.

With Jouko and Valto trotting the globe in India, I was joined by our chief experience officer Christoffer Langenskiold on our Podcast. We talked about usability, user experience, design and Chris’s own research on mobile user data and emotions. Make sure you give this episode a listen, to hear from one of the people hands-on involved in the design and development of the Grow VC platform. You can listen to the episode in the player below. Member Highlight: HopeVote Free fundraiser for many good causes Check it out at www.hopevote.com Look Chris up on Grow VC Here’s some quotes from the episode: “visual design obviously sells a product, and sometimes it even makes people forgive a product even if usability is not where it should be” “you can’t also focus on the whole gray mass..” “Markus: ..is it possible to create uniform solutions that please everyone? Chris: Well… Yes, it’s possible (laughs)”

Here's something new for our listeners! Our guest for today, Randy Mitchell, Senior Advisor for Entrepreneurship and Chairman of the OECD Working Party for Entrepreneurship in the US Department of Commerce, was glad to take our questions and give us solid answers.

This active episode of the Podcast featured entrepreneur Sramana Mitra as well as Jouko from Grow VC and we discussed what entrepreneurship is all about. Also topical points were the development of the global economy, as well as the many challenges startups face, especially during the very early phases.

UPDATE (Sat 26th of June): It seems that the conference is canceled. Waiting for more information. UPDATE 2 (Mon 28th of June): Cancellation is confirmed. There is no PGI conference of any kind this week. Today we’re talking about the importance of actors from all over the world, coming together and building a vast network and therefore we’re calling this episode “Connecting Continents”. We had our lovely guest Tanya Noel, founder of Partners for Growth and Innovation on the Podcast and discussed the conference on the 28th to the 30th of June in Viareggio, Italy, where Valto also will be speaking and the underlying reasons to why conferences like these are so important. You can listen to this brief Podcast below in the player. Here’s some discussion points: Conference program Slowing down the pace and getting away from the ‘white noise’ Creating deeper connections Getting entrepreneurs to “slow down” and the value of pausing