Entrepreneurial

from Shop Talk:

Cash for creative moms

At some point -- usually in the middle of the night during the umpteenth feeding/diaper change of their child's young life -- most parents think they have come up with the greatest idea EVER that could revolutionize baby and child care.

HuggiesMomInspiredHuggies wants to give the most inventive moms a bit of a financial boost.  Just in time for Mother's Day, the diaper brand and parent Kimberly-Clark have set up a grant program called MomInspired.  The goal is to give away up to $15,000 to each woman with a great idea for a baby product.

The seed capital could help entrepreneurs grow their ideas into businesses.

There are about 10.6 million women-owned businesses in the United States and women are starting businesses at nearly twice the rate of men, Kimberly-Clark Chief Marketing Officer Tony Palmer noted, citing data from the Center for Women's Business Research.  However, it is still men who get the vast majority of the venture capital funding that is already out there.

"There's this huge unmet need for seed capital for women," Palmer told Reuters.

Moms -- actually, any women 21 years or older (they don't have to be mothers, but moms probably have a better shot) -- can submit their ideas until June 11 for a chance to win the cash, plus access to Huggies resources.

Steve Paljieg, senior director of growth and innovation for Kimberly-Clark, sees it as a way to craft a business relationship with moms who have an entrepreneurial spirit.

A VC’s perspective on healthcare investment

- Dr. Bijan Salehizadeh is a general partner at Highland Capital Partners and focuses on investments in medical device, healthcare services and healthcare information technology companies. The opinions expressed are his own. -

With the passing of the new healthcare reform legislation, there are new-found opportunities to make the healthcare system more efficient with the influx of more than 32 million people over the next several years. With this surge, there will be an inevitable paradigm shift not only for consumers, but also for businesses.

Startups will quickly fuel the healthcare space with new technologies and solutions as the industry looks to aid the expansion of hospitals and health-related companies. For instance, the concierge medicine route is being supplemented with Web-based applications created to access the needs of the consumer while providing businesses key insights so as to foster growth and targeted programs.

VCs invest in fewer startups

So far this year both the number and size of deals by venture capitalists are down over the final quarter of 2009.

A total of 681 deals for $4.7 billion were completed by VCs in the first quarter of 2010, according to a MoneyTree Report released by the National Venture Capital Association and PricewaterhouseCoopers. That dollar amount is down about 10 percent over Q4 2009, but up nearly 40 percent over the same period last year.

Dan Primack, the editor of PE Hub – a Thomson Reuters publication – told Reuters TV the decline from Q4 ’09 was mostly “seasonal” and he expected the numbers to increase over the next quarter, as VC firms secure funding from investors and more term sheets are signed.

Do U.S. VCs have visions of Canada gold?

Canada is leveling the playing field for VCs that want to do business north of the border, but a sudden influx of U.S. venture capital cash is not likely on the horizon.

Last week the Canadian government announced it will scrap Section 116, a law that withholds 25 percent of the returns from the sale of a Canadian company backed by a U.S. VC firm until each investor proved they were a foreign citizen.  This tedious process sometimes delayed the official sale many months, or years in some cases. There is no U.S. law similarly hampering Canadian VCs.

Dan Primack, the editor of Thomson Reuters’ publication PE Hub, told Reuters TV some U.S. VCs created Delaware corporations — companies registered in the state of Delaware, without having to be based there, to take advantage of more business-friendly tax laws — and kept their portfolio company’s “R & D” in a Canadian city to try to skirt the legislation, but this measure could cost as much as $400,000, a significant chunk of change for most startups.

The mother-in-law stress test

– 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’ll never forget my first marketing class at business school. Our professor peered at us with an intense glare as he pushed back on our standard “chip shot” comments. At one point in the class he asked the guy next to me to opine on the case we were discussing, which involved launching a new consumer product. “Well,” my neighbor answered confidently, “I think it will be a hit because I can see my mother-in-law buying it.”

“I see,” replied my professor dryly and then turned to the class with a withering look on his face, “Steve appears to have fallen into that fatal trap of ‘Mother-In-Law Market Research’; believing this new product will be a hit just because his mother-in-law likes it. Instead, let’s look at the data, shall we?”

Getting word out, scale are obstacles for software startup

A couple years ago, while working for a large engineering consulting firm, Kristen Carney was hired to complete what she thought was a straightforward analysis: directly connect two roads that were currently joined by an intermediary road. More than 100 hours later and thousands of dollars over budget, a frustrated Carney felt there had to be an easier solution.

The Austin, Texas entrepreneur complained about her ordeal to friend and software whiz Anthony Morales, who offered to design a program that could drastically reduce the time it took her to gather and format her data. Morales’s software worked so well, they founded Cubit Planning, a Web-based platform that provides cut-and-paste ready environmental data.

“A lot of people say, ‘Hey, you’ve lived my nightmare,’” said Carney, who launched Cubit last year with just $2,000. She said their open-source technology operates in similar fashion to that used by stock websites. “They go out and they grab information from a bunch of different resources and they compile it nicely for you, so you can make a decision based on that data. That’s what we do, but for environmental engineers.”

High-end water filters a tough sell

Manuel Desrochers and his sister, Noemie, are the founders of Aquaovo, a Montreal, Canada-based startup that designs unique water filters, aimed at reducing the environmental hazard from billions of plastic water bottles filling up landfills (see original story here).

Their trademarked Ovopur unit is a 23-pound ceramic egg-shaped apparatus that holds 11 liters (2.9 gallons) of water and uses the combination of gravity and a glass filter cartridge to purify ordinary tap water.

“Our target market is really 30-50-year-old young professionals, who really like the design of it and they’re thrilled to hear that it’s actually functional,” said Noemie (read her journal here), who added they raised the price for the filters from $560 to $660 after their first six months in business. “We really came to this price thinking this clientele is willing to pay for quality, so they’ll spend around $700 for the Ovopur.”

Small Talk: Elephants and entrepreneurs

Mark Suster’s blog – “Both Sides of the Table” – has become a hotspot for people seeking an insider’s glimpse into the world of venture capital investing.

This week Suster wrote about the things in entrepreneur pitches that give VCs pause when considering whether or not to invest. Suster likens it to the elephant-in-the-room adage, more specifically: “those things that the VC would automatically be thinking about when you’re speaking but he/she may not immediately ask you about either for legal reasons or out of courtesy.”

Suster’s blog goes on to list some real-life examples of pitches he’s heard with Elephant-sized problems, such as the founder is no longer with the company or having Google as a prime competitor. Suster advises entrepreneurs to deal with their issues before they seek funding, as they will inevitably be addressed in their meetings with VCs. Suster says it’s better to be pre-emptive in this regard.

Angel investor makes a Mint

From right to left: Dave McClure with Rob Hayes and Mark Goines at TechCrunch50, courtesy of Dave McClure

At 5-foot-8, Dave McClure calls himself “one of the smallest” venture capitalists in Silicon Valley, either “by height or by wallet size”.  But he was walking tall after Intuit announced it was buying Mint.com recently for $170 million.

That means McClure, who invested $25,000 in Mint two years ago as part of a Series A funding round, is in line for a healthy payout. At the time McClure was actually on Mint’s payroll as a consultant, but was so impressed with the startup’s founder, Aaron Patzer, that he took the money they were paying him and “turned it right back around and wrote them a check.”

Mobile gaming firm MegaPhone seeks funding in a recession

MegaPhoneImagine being in the middle of Times Square in downtown New York and using your cell phone to play a video game on a giant screen against the throng gathered there. MegaPhone, a digital advertising company launched in 2006, does just that, providing its clients a unique way of interacting with consumers.

“I think all of us who work in the advertising industry have to ultimately admit to ourselves that people don’t like most advertising,” said co-founder Dan Albritton. “What we’re trying to do is to bring a genuinely fun experience and then you’re getting a little advertising wrapped inside of it.”

Albritton and partner Jury Hahn have created a software platform that allows anyone with a cell phone to call a number and play a video game against thousands of complete strangers on giant digital screens at concerts venues, sporting events, or in urban centers like Times Square.

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