Invest in lines, not dots

– Mark Suster is a former serial entrepreneur and a partner at Los Angeles-based venture capital firm GRP Partners. This article originally appeared on his blog “Both Sides of the Table”. The views expressed are his own. –

Everyone seems to be in such a rush to get shacked up these days.

In normal times investors will look for “traction” before investing. We want to make sure we’re in love. This sometimes frustrates entrepreneurs who just want to “get back to running the business.” But if you understand it you’ll see that it’s perfectly rational and it should also influence how you form relationships with investors. And remember, if we get married you’re stuck with us, too.

The first time I meet you, you are a single data point. A dot. I have no reference point from which to judge whether you were higher on the y-axis three months ago, or lower. Because I have no observation points from the past, I have no sense for where you will be in the future. Thus, it’s very hard to make a commitment to fund you.

For this reason I tell entrepreneurs the following: meet your potential investors early. Tell them you’re not raising money yet, but that you will be in the next six months or so. Tell them you really like them so you want them to have an early view (which is what all investor’s want). When you’re with them lower the bar by telling them, “we haven’t shipped product yet, we have lots of decisions still to make, but we’d like to show you our prototype” or obviously if you’re more advanced, show what you have and what your roadmap looks like.

Most importantly tell them what you plan to achieve by the next time you see them. Hopefully by then you’ve made good progress. You’ll be able to give them an update on key hires, pilot customers, key tech innovations – whatever. Keep these interactions low-key and short. Quick coffees, whatever. Swing by their offices to make it easy for them to say yes and promise not to take up more than 30 minutes for the update (and stick to it).

Exclusive: Entrepreneurs vow to create 1,000 jobs in two days

By the time he was 30, Dan Bliss had started 10 businesses, employing hundreds of people. Now he wants to help other entrepreneurs create jobs.

Bliss is the founder of the Perfect Business Summit, a two-day event held in Las Vegas October 7-8, that brings together top CEOs, entrepreneurs and investors with more than $10 billion in capital. For the second anniversary of the conference Bliss got the participants to commit to creating 1,000 new jobs by spring 2011.

“This is like a two-day economic stimulus,” said Bliss, now 40, who made his fortune running restaurants and concert venues in his native Cleveland, before relocating to Los Angeles nearly a decade ago. “Our event isn’t one of those rah-rah conferences where it’s just a bunch of motivational speakers. We bring real CEOs, real business founders to these events that have done it.”

Hot Prospects: Alex Kinnier, Khosla Ventures

– The following profile is an abbreviated version of Venture Capital Journal contributor Deborah Gage’s piece for the the VCJ’s series on “Hot Prospects” within the venture capital industry. –

At age 33, Alex Kinnier was rising quickly through the ranks at Google, but he didn’t feel fulfilled. The chemical engineer wanted to help the world with clean technologies. A phone call with popular venture capitalist Vinod Khosla that lasted several hours put him on the path to happiness.

Kinnier took a pay cut to join Khosla Ventures, but he was thrilled to be back in the cleantech arena. When he got the urge to leave to start a company, Khosla talked him into staying and becoming a venture capitalist.

Making your elevator pitch work

LEBANON/Stuck in an elevator with a well-known investor, but not sure how to make the most of your two minute ride?

Becky Reuber, a professor of strategic management at Toronto’s Rotman School of Management, has a few tips on how to craft an effective elevator pitch.

Here are Reuber’s four main points you need to get across to get investor attention:

from Summit Notebook:

Q+A: Maria Fiorini Ramirez

I sat down with Maria Fiorini Ramirez today after she joined us at the Reuters Investment Outlook Summit and asked her about starting her own company -- the global economic consulting firm Maria Fiorini Ramirez, Inc -- her advice for young entrepreneurs, and if women can balance a successful work and home life.

Where you were you born?
Naples, Italy

When did you come to the U.S?
1960. To East New York.

Did you go to high school there?
Yes, St. Michael’s. An all girl’s Catholic school.

Where do you live now?
Far Hills, New Jersey

Did you ever think that you were going to start your own business?
Yes. And a global one because I always liked geography and history.

Michigan VC’s Top Ten list

Mina Sooch is one venture capitalist who knows how to captivate a crowd.

The chairman of the Michigan Venture Capital Association took a page out of David Letterman’s playbook by introducing her own Top Ten list at the Michigan Growth Capital Symposium, an annual event hosted by the University of Michigan in the small college town of Ypsilanti, about 20 miles west of Detroit.

Sooch, a managing partner for Michigan-based VC firm Triathlon Medical Ventures, talked about some of the challenges her state faces in getting deals done with entrepreneurs and boosting the amount of VC dollars invested locally. The latest report by the MVCA showed Michigan had fallen slightly from No. 16 to No. 19 overall in 2009 and that overall VC investment had dropped by nearly 50 percent, from $246 million in 2008 to just $131 million last year.

In an attempt to accentuate the positives, Sooch debuted her list of “Top Ten Reasons Michigan Will Succeed”:

Does size really matter to women entrepreneurs?

The results of a new survey show that nearly 90 percent of women business owners want to grow their companies, but few of them see hiring as a way to do it.

Nell Merlino, the founder and president of Count Me In, a not-for-profit organization that includes 70,000 online members, commissioned the report that polled 250 women small business owners and another 700 non-business owners nationwide. Merlino said the survey shines a light on why women-owned businesses don’t grow at a similar rate to those run by men and why broader societal misconceptions are preventing many women from expanding their businesses.

“There is a perception on the part of the public in general that women are in business to bring in a little money, as opposed to women are in business because they are supporting their families and they want to grow a business,” said Merlino, quoting the study’s findings that just 38 percent of Americans believe women entrepreneurs care about making a lot of money, compared to 63 percent who said male entrepreneurs care about the same.

Do entrepreneurs need education?

Mark Zuckerberg created Facebook from his Harvard dormitory, but after the social networking website exploded in popularity, he promptly quit school and became a full-time entrepreneur.

An informal roll call of Fortune 500 CEOs that dropped out of high school or university and went on to become self-made billionaires, includes the following: Bill Gates (Microsoft), Larry Page (Google), Michael Dell (Dell), David Geffen (Geffen Records), Steve Jobs (Apple), Richard Branson (Virgin), Ralph Lauren (Ralph Lauren), Jerry Yang (Yahoo) and the aforementioned Zuckerberg.

Most on this list received a modicum of post-secondary education, before bailing and pursuing their entrepreneurial dreams.

from The Great Debate UK:

Vikas Pota on ten business icons in India

VikasAmid jitters about uncertainty in the financial markets over the past 16 months, many investors have continued to look toward the BRIC countries -- Brazil, Russia, India and China, which by 2050 are expected to be wealthier than most current major economic powers.

In all four countries, GDP has more than doubled since 1998, and in China and India it has trebled.

The Confederation of Indian Industry, a non-profit non-governmental, industry-led organisation, estimates India's GDP growth rate at 6.1 per cent in 2009-10.

A lost generation of entrepreneurs?

Jeff Bussgang is a General Partner at Flybridge Capital Partners, an early-stage venture capital firm in Boston. This post originally appeared on Bussgang’s blog www.seeingbothsides.com. The views expressed are his own.

I’ve been worrying lately that we are suffering from a lost generation of entrepreneurs.

That was my first reaction when I read what Sequoia’s Doug Leone said a few weeks ago about innovation and age at a recent talk with MIT Sloan students visiting Silicon Valley. Leone claimed only people under the age of 30 are truly innovative. Over 30 folks can manage innovation, Leone observed, but you need to be under 30 to create it. He cited people such as Jack Dorsey, Twitter’s founder who was 30 at the time he started the service.