Winners at the December Startupalooza

We really appreciate everyone who came out in that challenging weather.

The winner was iSpeech with its exciting new talking "Stickers" product
The runners up were:

Nonnatech, an intelligent remote monitoring environment for eldercare.

Evospend, a "white label" debit card service for small retailers.

Cream, a fashion retailing marketplace that monetizes fashion bloggers.

As we saw, the entrepreneur community is alive with ideas - as we expand, we are opening this up to new kinds of deals and out of town Start-ups.

Please feel free to share your thoughts.

We wish you Happy Holidays and a wonderful New Year!




















Judge taking a pitch


Winners iSpeech talking to judge

"Voice" singer Cameron Novack performs for judges

Winners from the November Startupalooza

November was one of the biggest Startupalooza's of the year with over 40 presenting companies. Winner: SaveOn Congratulations to the winner, SaveOn - the Kayak-like supermarket price and sales aggregator They will be participating at the Private Equity Forum on January at the Yale Club - a $1500 value. The first runners up were: Patients Create - The patient-centric crowdsourcing platform for healthcare development. Dashbid - The software and service to help publishers increase video ad revenue yields. Streamed-In Presenters The Second Runners Up were: Ledger - the prepaid corporate card company. HandsFree -  Quikiks Hands-Free Shoes allow people with physical or cognitive challenges to step easily into and fasten their shoes without hands. Simbiot - Cloud-enabled platform for research and collaboration for science researchers to handle Next Generation Sequencing and other genomic data. KidKlass - "Open Table" for scheduling children's classes.  Ca7h - Wearable connected camera that combines beauty, the power of smartphones and the internet.  BeautyStat - The cosmetics deal site. Rankings We will be releasing the composite Judges' rankings so entrepreneurs can see how the investor community ranks  your startup. While we run this as a contest, we understand this is often about comparing apples to oranges - nevertheless, it is  an invaluable guide.  For that reason there are many winners - each with their own funding possibilities. Back In December 9 (Virtual)  & 16 (Live!) We will be back on December 17th with a Year-end Startupalooza. We will be doing a Virtual Startupalooza pitch event n Dec. 9 that you can sign up for here. Anyone signing up for the virtual event goes to the live event free! REGISTER Alan Brody and the Startupalooza Team

Report: Entrepreneur iEvening

VC Panel led by:  

Stephen Brotman, GSA Venture Partners  

Mike Segal, Joshua Capital

John Ason, Angel Investor

Frank Garland, Investor

Dorothy Price Hill, Mid-Market Capital  

The Entrepreneurs: Fahim Mahir, Allan Pincus, Tanjila Islam, Farhan Memon, Steve Naidich, Richard Radoccia & Alan Brody  - Photo by Seitu Oronde

Herrick, Feinstein, LLP hosted the now quarterly event for Start-Ups at their fine auditorium on 32nd & Park. All attendees are invited to the Entrepreneur workshop beforehand - this is unique forum variously titled: "The Pivot Workshop" the "Positioning Panel" or even just the "Start-Up Shop." The purpose is to get your peers to give you completely unbiased feedback on how your plan is perceived. It is the skill of the facilitator to help you understand the following: are you hiding your real idea (much more common than you'd think) are you seen as investible and what can you do about that? Most of all, since businessplans change, can you identify the "Soul of your idea?" When you have to reposition a plan for different kinds of investors - this is what you need to know. It is also a place where execs can throw their resume into the panel and see how entrepreneurs would reinvent them.

Some of the issues that came up were:  

· How would you increase value for a world news digest (find high value readers such as investor or government analysts)?

· Math site for kids - will parents respond to claims of a superior algorithm, or do the kids need to be lured somehow?

· When it came to the pitching, the feedback we elicit from our panel of four judges is often worth its weight in gold - even at today's commodity prices. Not all the startups will get the gold but hearing from in the investors can totally change the life of their plans. Just listening in can help you go for the gold!

Steve Naidich & winner, Farhan Memon - Photo by Seitu Oronde

The Winner of the Start-Up evening gets a meeting with investors and a ticket to the high-value Private Equity Forum at the Yale Club in May. Last weeks winner was Farhan Memon of WikiOrgCharts - a site that combines the best features of LinkedIn and Jigsaw by using a core database and crowdsourcing to fill in all the organization linkages between government and corporate personnel. It's a great resource but I'd probably not want to see Al Qaida using it either!

The other Start-ups were:

TigerTrade presented by Tanjila Islam, who made an impressive presentation on a world trade site that offered to do what Ali Baba does - but for South East Asia which is now competing as a lower cost alternative to China. The challenge, for often foreign-averse investors, is convincing them of the value of this marketplace.

The Language Chef, polylinguist Robert Auidi's site is based on the theory that you only want to learn a foreign language so you can understand their menu. The judges didn't bite.

GigBlast Ed Johnson's site came with a room-rousing presentation and a warm recognition from the judges of the value professionals have in developing a career presence online. Making this a scalable business is another challenge though.

John Rogers, Alan Brody & Steven Greene  - Photo by Seitu Oronde

ClipboardMD is one of those services of the future for the medical world - all your incoming data is entered through their notepad and patients lives are eased while doctors profoundly improve their ability to get reimbursed by the insurance companies. The issue is adoption and competition. Will doctors pay for this? (Clipboard already claims to have too many customers.) How do you avoid the 500-pound gorillas?

CarNova - this is a car buyer referral site that promises to offer better info for the buyer in order to attract a high price per lead from the dealer. Judges were interested but the money was sought for marketing: Adword arbitrage, linking, advertising and so on.  Check my upcoming "Prayerbook for Entrepreneurs" for tip #26 VCs hate to invest in marketing.

eGenomics, Inc Steve Naidich made a great presentation on identifying the problem - locating the origin of nasty hospital bacterial breakouts. But, from an investors point of view it came undone for lacking a cure itself. While the identifying the source is worthwhile and hospitals might pay for it - the real money is in an eradication product. That would put a bug in VC ears!

ComfortMouse by Allan Pincus is a product that has identified a problem - people with serious hand issues who cannot use a regular mouse. The solution, however, is not exactly a sight for sore eyes. While it is true there is money in custom fit and medically prescribed solutions, investors hate products that require gatekeepers and reimbursement. But at $500 a pop people might prefer iPads and motion sensitive technologies. Perhaps 10 years ago, at the height of PC adoption. Now we're all mobile.

Joy Wai with investor, John Ason   - Photo by Seitu Oronde

Sponsored by:

The Next iEvening
May 19 - iBreakfast/iEvening NJ presents Mayor Cory Booker
June 14 - visit www.ibreakfast.com

Publish Post

What’s the Secret Sauce in an Out Sourced World?

Are you a linchpin or a munchkin? We have an answer…..and its management.

David Rose’s keynote at NY Entrepreneur's Week put the question of what is valuable in a "virtual business world?" Once upon a time, Ford Motor was a vertically integrated company with 100,000 employees in the Rouge River plant making everything it needed down to the actual paper in their car manuals. Same with Fleischmann’s yeast in Peekskill, NY. Nowadays, only a fool would operate that way when you can outsource everything, minimize your overhead and start a business on a dime.

Great, but then who holds value here? The Entrepreneur, of course – you can’t outsource Entrepreneurs, said Rose. You could feel the room swelling at the thought of being the economy’s new linchpin (as defined say, by guru Seth Godin). But then they heard that only about 1% of start-ups ever get funded and, in the virtual, cloud-y, outsourced age, they don’t get that much by way of valuations, thereby making them feel more like economic munchkins. 

Despite that, the investors all say the bet is not on the idea, it is really on you, the entrepreneur and your ability to execute. You are the real talent.

Its been my experience that anytime someone calls you a genius - or linchpin, for that matter - they are definitely not paying you, or they are paying you more compliments than cash. You may be a genius Mr. or Ms. Entrepreneur but not a rich one and not with a lot of equity to hold on to.

Still, the entrepreneurs hang on to every word hoping to hear where that check is coming from. And for how much! That is obviously the purpose of Entrepreneurs Week. But should it be, when in age of 8.4 million unemployed where the cheapest resource may be talent and not Angel VC dollars?

In the outsourced world, why do you even need all this investor money when you can get most of the development on your own dime with a credit card or two and some friends and family money? One answer is that many Start-Ups think of Investors as a kind of jackpot winning. The other is that they think investment translates into sales.

It does neither.

Even Rose complains that only 1 in 10 of his investments pan out.

The thing that matters, the secret behind the sauce and the thing no-one was talking about is the management. The entrepreneur may be like Dave Brubeck, but Dave (and I have seen him play) needs at least 3 really professional musicians to make his sound come alive. That’s management. He may be CEO of his jazz band but those players are not lackeys, they are key ingredients to his extraordinary success.

Yet management, better management never came up in the conversation. It was missed in a few other panels except fleetingly in the bootstrapping one which Scott Shuster managed so well…….

This may not be oversight so much as a belief that real start-ups can’t afford good management. How wrong are they! The country is full of great executive talent thrown out of the marketplace at the peak of their experience. They are available and yet no one even hinted at the possibility! Fortunately, as savvy souls in our own right, we at the iBreakfast can help!

So here’s a modest proposal, check out Job Generation, our new program that lets Entrepreneurs interview really savvy execs to find out how they would run their company for them. Get free advice and a wealth of powerful contacts. You may hire them, a VC might pay you to hire them or they may come on board with their own money. One of these execs we know raised $900,000 for a Social Media start-up by going to his former Wall Street colleagues. Try doing that at an Angel group!

Most importantly, it is management – a superior team of high-functioning execs that sell things which, in the old days, is how people used to make money. They can also raise your valuation dramatically, not just in dollar figures but in the termsheets themselves. Inexperienced start-ups get one kind of termsheet (lousy) savvy execs get the better one.

The real opportunity is like no other – thousands of savvy execs are waiting around to meet you. For now, and for now only. When the economy picks up you can pretty much forget about them, they won’t be taking your call. If they do, you won’t be able to afford them. Today they are like your server, a part of the cloud…..

So do yourself a favor, get those savvy execs on your side and then talk to the VCs. Not the other way around. The execs can make you the genius you really are because they benefit by increasing your value, the investors only care about improving their odds and downplaying your value. Sorry, but it's true.

So while everyone was hyping the cloud and open source and the low cost wisdom of the crowd, they forgot to tell you about the real talent that's available: the once-in-a-lifetime firesale of Harvard, Wharton, Columbia, Fordham, Kellog and you-name-it, MBA’s who like to share with you, a minute or two of their time. 

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Additional notes:  One audience member actually complained, in a long-winded way, that investors never give him enough time to hear his story.........

Job Generation - Report from 1st Live Event

Job Generation went live last week and it resulted in this amazing report on NY!

Thanks to all of you who followed this new event, Job Generation. There will be more and in many cities because the need is so all-encompassing: 8.4 million jobs lost, 2.1 million gone forever.
 
Our experience with the first live event is that executives realize the need to reinvent themselves. This is an ideal forum to make a case for their expertise in public where they can display how they think on their feet.
 
Start-Ups are less certain. As we discovered, many Start-Ups are leery about reaching out to veteran execs. Part of being a Start-Up is doing your own thing - until you need to raise money or just grow the business. That's where the savvy set kicks in.
 
In return for getting great advice and chance to acquire talent, the Start-Ups get to tell their story to the business community which increases their chances of raising capital and building their businesses. The sooner we get the message out the quicker we generate opportunity.
 
Investors, were also an interesting case study. The objective of JG is to find the exec and start -Up combination that offers the best increase in value. Of the executives they picked for working together, the VCs tended to go with the most thoughtful and analytical while being averse to the more outgoing and sales-y. Are the VCs right? Or do they just prefer the studious type on a personal level, perhaps viewing them as more "coachable".  
 
Come to the next Job Generation and you be the judge.
 
Thanks to the feedback, we've figured out how to tweak this model so it will really crackle with creative tension - we'll be doing several more events as iEvenings, at Business Schools and in other cities.

The VC Outlook - Report from June 24 Event

Charlie Federman, Crossbar Capital • Jeanne Sullivan, Co-Chair, StarVest • Owen Davis, NYC Seed • Ben Boissevain, Agile Equity • F. Morgan Rodd, Milestone Ventures

We usually do a VC Outlook iBreakfast once or perhaps twice a year – and they are good. But somehow the June 24th event was special in an extraordinary way.

Maybe it’s the strange times we are in. People really needed to understand where we are headed and so Investors, by telling us where they are placing their bets – are also giving us a view into the future.

It is also a tricky time because, on the one hand, there appears to be a rising tide of private equity. On the other hand, we see a lot of entrepreneurs but for all their enthusiasm, also lack a vision about the future. Most of all, entrepreneurs may not be thinking of what the Venture marketplace wants – only what they want to do.

We understand that deals have become cheaper and investors can cherry-pick them in a way they may not have been able to do in the past. But what are they looking for?

So this iBreakfast was a wake-up call to “game” the Venture marketplace – getting your plan in line with what the market wants instead of wondering what’s wrong with the market…...

According this iBreakfast - here is the lay of the land:

Most of the exits are closed – the IPO market is all but dead, few investors speak of building a great profitable company in the old enterprise-building sense of the word. M&A is the main exit. Fortunately, many companies have strong balance sheets and after having laid off staff, they are finding that buying start-ups is the cheapest form of R&D. Great. Perhaps even better, foreign companies too, are eyeing the US market and they will often pay a premium if they feel they can get market entry.

So what are investors looking for? According to Jeanne Sullivan, the companies they look for include tech-enabled service businesses, platforms and any high perceived value service that once required custom tailoring, that can be delivered in a mass format is in demand.

Charlie Federman of Crossbar, a noted early stage investor looks for the first new idea in a marketplace. First to market is big deal and if properly executed, usually carries over in the long term. He especially likes ones that "export deflation" - i.e. offer a really low-cost alternative to a current business under price pressure. More importly, he looks for entrepreneurs who can adapt, since most start-ups find their real opportunity later. The business they end up is never quite what they started with. Somewhere, they’re going to have to take a left turn. Will they be ready to respond to that…..?

Owen Davis has analyzed various investment deals and has laid out a kind of roadmap that would be an invaluable guide for an entrepreneur to determine which sector has the highest probability of raising capital in the New York area. Hint: social media and communities highest pitch topic – least invested in.

(Note to Entrepreneurs: check back with us for the best bets.)

Morgan Rodd noted that Milestone Ventures was increasingly interested in tech-enabled medical services.

Based on the surge of investor/entrepreneurial interest we will be producing a new series of Start-Up bootcamps, business and deal structure sessions and more investor meetings.

View Presentations
Ben Boissevain - Agile Equity