The purpose of this post is two-fold. One, to provide an update on the upcoming StartupLounge.com Capital Connections event, and two, to provide some quick tips for entrepreneurs to get the most out of the event.

Currently, we have over 60 companies and over 20 investors signed up to attend. We’ll probably hit around 80 to 90 companies and 30 investors before all is said and done (space is limited for this first event - it is already getting close to standing room only). What is also equally as impressive (to me at least) is the sheer diversity of ventures that will be in attendance. There are companies from at least a dozen different industry sectors, including information technology, IT security, social media, new media, outdoor media, cleantech, biotech, nanotech, pharma, and even athletic apparel!

We’re going to be doing our first ever podcast from a live event as well, so have your pitch ready!

So if you are an early-stage entrepreneur that doesn’t have much experience with investor networking, Mike and I would like to serve up a few tips that will hopefully help you get the most out of the experience. Feel free to add your own as a comment!

1. Bring demos/laptops! If you have a demo of your product that can be shown on a laptop - bring it! We’ll have a few tables on hand. If you get into a hot discussion with a potential investor, hop to the back of the room and fire up your laptop. Show and tell, baby!
2. Perfect a concise pitch! You want your pitch to deliver value in one or two sentences. I like the old format of: “We are Company Name, and we solve this problem, for these customers, by doing X.” Example: Acme Corporation is a maker of “magic paint” for homeowners who are tired of having to paint their house every few years.
3. Don’t hog an investor’s time! Toss out your pitch, listen to their questions, and answer them equally as concisely. Nothing turns an investor off more than an entrepreneur who drones on and on about how great they are. I’m guilty of this, too - most entrepreneurs are! So you have to check yourself. Get their card, thank them for their time, and let them know you’ll be in touch with your business plan, etc. Then free up their time for someone else (and your time to move on to another potential investor.)
4. Likewise, don’t let an investor hog your time! Do you really want to talk to the same investor for two hours? Probably not. Raising capital is a numbers game, so hit and run!
5. Ask investors what they are investing in (a novel idea, I know.) Seriously, it helps to set expectations. If you are a technology company and the investor in question is only looking for a nanotech deal, probably not worth camping out there (for either of you.)
6. If an investor doesn’t invest specifically in the kind of opportunity that you have, ask for a referral to someone he or she may know that actually might be interested - networking 101!
7. Don’t overlook the the value of making connections with your fellow entrepreneurs - they are gatekeepers to capital, customers, and other resources, and are often investors themselves!
8. Dress in a manner that will make an investor comfortable in giving you lots of money. Should you wear a suit? Up to you … but definitely don’t go any lower than business casual.
9. Help others! If you meet an investor that can’t help you, but may be able to help a friend of yours, walk the twelve feet and make the introduction.
10. There will be a handful of observers in the room. You’ll be able to identify them by their red name tags. They aren’t necessarily entrepreneurs or investors, but are industry luminaries, community figures, media members, and special invited guests. Do yourself a favor and take a moment to introduce yourself to them. You’ll thank us for it later.

This first event will be held on Wednesday, May 16th, from 6-8pm, so mark your calendars. You can read more about the event here.

Cheers.

Click to share via social bookmarking sites, email, etc.

Walls are great for privacy. But they impede progress unless there are doors in the walls that allow you to move freely from one room to the next. And if you can’t build doors, then tear down the walls. It’s far easier than measuring and fitting new doors for every room in the house.

Yes, I think all of these apply to Atlanta. But not Atlanta alone.

Number 1: Base every entrepreneurial event around a speaker

“Attention entrepreneurs! If you are attempting to build a vibrant, flourishing business, come see Johnny Coolguy speak at our upcoming event. Learn how hard he had it when he first started, and listen as he tells you how much money he has now! Grow your own business by keeping a chair warm for us at our monthly meeting!”

The bottom line: speakers can be fun, but they aren’t the solution for bringing people together for the right reasons. They never have - they never will. Entrepreneurial events should go beyond the speaker. Have demo sessions, semi-private networking events for investors and entrepreneurs, etc. Speakers are inspirational, and possibly a little motivational. But they’ve never helped a kid with a big idea build a business.

Number 2: Charge fees for everything

Establishing a “get-your-hand-out” mentality early on is key here! Charge yearly membership fees, charge for admission to your events, and charge for the food, too! If you can swing it, charge for the air people breathe in the room too! Think of your bottom line, baby! If you come across a young entrepreneur who is trying to start a new business, by all means help him or her, but for a fee! $50K for a business plan and $25K for a PPM are the going rates! These are all services that most entrepreneurs really don’t need but hopefully they’re too inexperienced to know better! Don’t give any advice or introductions, no matter how trivial the effort required by you, for free! Mentoring is for losers who don’t want to get paid baby!

Nickeling and diming struggling entrepreneurs for whatever you can get out of them is the wrong approach. Especially when you combine these fees with other event-related items in this list. There are plenty of other ways to monetize your organization. If you need help in this, just ask the nearest entrepreneur (imagine that!) Or better, if you believe, as I do, that all boats rise with the rising tide, then don’t charge anything. Just help people, and then brace yourself.

Number 3: Facilitate service-provider overload

“Exclusive networking for entrepreneurs and investors! Come on down! Oh, and if you need accounting services, legal work, web hosting, or lawn care maintenance, we’ll have a cadre of service-providers standing by to assist you!”

Nothing screams “our town sucks for entrepreneurship” like targeting a whole bunch of events at entrepreneurs, and then filling the meeting with service providers. This is why most entrepreneurs and investors don’t bother going to such events (and certainly why you don’t see the successful ones there.) Service providers are an integral part of any economy - and we need them! But anything that distracts from connecting ideas and capital is not something you should invite.

Number 4: Promote the “broker” mentality

“If you’re an entrepreneur in need of capital, this is your lucky day! For a small retainer fee, an equity stake in your company, and a finder’s fee of more than what a realtor makes on a typical home-sale transaction, I’m happy to help you find the cash you need! Not to your liking? No problem! For $5K, I’ll fill a room full of people that you can pitch your deal to!”

The fewer touchpoints you have in between ideas and capital, the faster your community’s path to startup nirvana. There is a reason that people constantly strive to cut out the middleman. It’s called an efficiency. I am of the belief that an entrepreneur should never ever pay to pitch their deal. Good deals will get funding. If you need help, ask for it - don’t pay for it.

On a related note, the “broker” mentality also helps to ensure that entrepreneurs don’t develop the remedial networking skills to eventually raise capital on their own. Remember, ecosystems are long-term projects.

Number 5: Hold your events at inaccessible locations

“Are you a progressive, cutting-edge organization that wants to shrink its membership faster than your competitors? Then hold your events solely in downtown urban areas, far from 75% of the population! Be the envy of the city! Hold events in locations that are most convenient for academics, consultants and other people with too much time on their hands. Make sure they aren’t held anywhere convenient for the people who are most likely to become fast-growth entrepreneurs and/or angel investors. They might actually show up!”

Local support structures need to evolve alongside the local economy. Not doing so will effectively render an organization ineffective by limiting growth and increasing member attrition and attendance.

Number 6: Become a Corporate Whipping Boy

Sign a bunch of corporate sponsors, and then sacrifice your vision by serving them instead! Make sure to turn your events into infomercials for your sponsors. We don’t get enough of them on cable. Make sure every speaker is a partner or manager for the sponsor, no matter how little they actually know or care about the real issues entrepreneurs face.

Not saying sponsors aren’t helpful - they are! After all, someone has to foot the bill for certain things. But be careful - this is an incredibly slippery slope. The minute you start serving sponsors more than your entrepreneurial constituents, you make yourself largely irrelevant.

Number 7: Create Elite “Clubs” that Purport to Help

“We are tired of the negative image that our town gets. We are friends of the entrepreneur! For only $10K per year, you can join our efforts to attract more business to our city! In fact, you will also get, as part of your membership, exclusive networking access to our top-shelf board members and our yearly golf outing! Stand up for your community!”

Sadly, this happens - here in Atlanta, as well as other places. This helps no one.

Number 8: Be a Laggard!

Why forge ahead and trailblaze the path for others, when comfort can be found in being the sole laggard? Why invest those state pension funds in private equity ventures, when you can earn a strong, undiversified, low-risk 2.2%? And ensure that no jobs or industries are created in the process? Make sure the state continues to give Wall Street the support it so desperately needs!

Number 9: Glorify Linear-Thinking, Serial Entrepreneurs

Serial entrepreneurship is great. However, serial entrepreneurs who only think about themselves are not. “Thanks for the $100M exit! I am now going to go off and plan my next big company. Oh, and I won’t be investing in anyone else’s startups. I won’t have the time. Pffffft! Thanks for having me speak at your next event, though. And did you see my latest writeup in the paper?”

Contrary to what you might think, parading these selfish-successes around as speakers, panelists, and spotlight artists is a sure-fire way to put an extra finger around the throat of your community. Stop glorifying the guy who built one company and letting him ride that event forever. Start glorifying the ones that want to create a better ecosystem for everyone. We need more Reid Hoffmans out there. All it takes is one in any community to drive change. I keep wondering who this will be in Atlanta. I have a short-list of candidates, but so far, they’ve all grossly disappointed me.

Number 10: Ignoring the Entrepreneur

Problems are solved by entrepreneurs, not by attorneys, accountants, politicians, and consultants. Not involving entrepreneurs as you try to attack a community’s early-stage woes will only lead to more artificial walls being thrown up. Period.

Cheers.

Click to share via social bookmarking sites, email, etc.

The first StartupLounge.com Capital Connections event is really shaping up! With very little promotion we’ve managed to get RSVPs from a dozen investors and over 40 entrepreneurs. That number is going to climb quite a bit here soon, as we ramp up our marketing efforts.

There are at least 5 or 6 attending companies that I think have a very good story to tell (in terms of traction.) I don’t know all of the attendees, so I don’t really know their stories yet.

If you are a Georgia entrepreneur, a high-net-worth individual investor interested in doing angel investments, or are a venture capitalist looking to scout the Georgia market for early stage entrants, you’ll definitely want to make this event.

Admission is free (as it should be - shame on people that charge for capital networking!) However, you will need to apply for attendance, be approved, and then RSVP with the # of people in your party.

To reiterate: service providers and job seekers will not be allowed to attend this event. We are taking some fairly exhaustive measures to make sure that the focus of the event remains on putting ideas and capital in the same room - free from as many distractions as possible. We define a “service provider” very broadly. It is anyone who charges a fee to conduct a service that would logically be aimed at any of our attendees. Service providers include consultants, attorneys, capital brokers, agents, marketers, etc.

This first event will be held on Wednesday, May 16th, from 6-8pm, so mark your calendars. You can read more about the event here.

Cheers.

Click to share via social bookmarking sites, email, etc.

Thanks to Scott for allowing me to “guest blog”.

I’d like to note and comment on the passing of Boris Nikolayevich Yeltsin, the first President of the Russian Federation, and a key architect in the destruction of Communism and the ending of the Cold War.

Mr. Yeltsin was as responsible or more than Mikhail Gorbachev for the dismantling of the Soviet Union. In 1991, it was Yeltsin who, as the President of the Russian Soviet Federated Socialist Republic, gathered the leadership of the Ukrainian S.S.R. and the Byelorussian S.S.R. and formally dissolved the Soviet Union from within. Gorbachev only resigned about three weeks later when he no longer had a country to preside over.

Why is this relevant to an entrepreneurship blog? On a personal note, the social and political change that Yeltsin initiated enabled me to get my start in entrepreneurship, providing technical assistance and capital to entrepreneurs in Russia, Belarus, Ukraine and Kazakhstan. Those are memories I will carry forever. If I happen to know anything about entrepreneurship, if I got any inspiration, it was my spending 6 years in that region, trying to help rebuild the economy one business at a time. Any advice I provide to help a client or just an entrepreneur in need today stems from my experiences there.

If you think it’s hard to raise seed capital in Atlanta, try it in Minsk.

On a broader note, the social change that Boris Yeltsin ushered in has enabled the following:

500 million people in Central Europe, Eastern Europe and Central Asia can now start and own their own businesses. Entrepreneurship was a crime only 20 years ago under anti-”speculation” laws. The entire economy was run centrally. (Imagine the production of your favorite consumer product being managed by an unfirable government functionary).

Millions of people from the region have emmigrated to the Western countries and Israel where they have established businesses of their own - often in fields completely unrelated to their original fields of expertise. Plug: If you’re interested in Russian food, I love the New Odessa on Clairmont Road.

Russia, Ukraine and Belarus are all prime technology outsourcing destinations, providing some of the best programming and scientific talent on the planet.

Local and foreign-backed venture firms continue to expand operations in the region.

Russia is actually an attractive tourist destination.

Even the Russian “oligarchs” are entrepreneurs. They played by rules that were different from ours and even their fellow countrymen, but they invested capital and acquired assets (often at great physical risk) and have demonstrated the powerful potential of the Russian economy (much of it lost to diffusion by the chaotic environment.)

Finally, the end of the Cold War that Yeltsin enabled by first destroying the Soviet Union and then embracing friendly relations with the West, enabled us to move money away from defense spending and into the private sector. That extra cash was a big factor in enabling the dot-com revolution (and bubble, but Boris Yeltsin didn’t tell us to invest billions in vaporware companies using eyeballs as a valuation metric).

Boris Yeltsin was a very flawed leader in many ways. The movement to democracy and rule of law in Russia is a work that has been suspended, partially because he didn’t fully understand the very institutions he was championing. The corruption Yeltsin vowed to defeat was simply shifted from Communist bureaucrats to other Communist bureaucrats. His economic policies were much less ineffective than they might have been because he didn’t stick with any one policy long enough. He drank too much and didn’t eat enough cabbage and cucumbers.

But he stood on a tank and waved a flag that he could have been shot for waving in August of 1991. He helped make the world a much safer place, and Russia is now better off economically for the reforms he launched, and the impact of those reforms are felt here in ways subtle and obvious. And they fundamentally changed my life and made me a better person, entrepreneur, and friend.

Spasibo Boris Nikolaevich i vsevo nailuchsevo.

– mike

Click to share via social bookmarking sites, email, etc.