Archive for March, 2010

We’ve been eagerly awaiting the arrival of a CheddarGetter open-source C# wrapper for the benefit of all of our .Net pals out there. Thanks to John at Confer, we can all relax. Seriously, my shoulders just left my earlobes.

John wrote a post that clearly illustrates usage of his offering to the reoccurring billing community. The code is clear and well commented throughout. The implementation is very clean and straightforward. We’re quite happy to list it as a member of our wrapper page.

Confer offers a very slick collaboration app hosted in the cloud. Intra-office social networking, customer & contact tracking, activity tracking and file management are all provided via a very well put together interface.

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Posted by Marc on March 23, 2010 SproutBox 1 Comment

Starting today, thousands of geeks, entrepreneurs, marketers, and investors will convene in Austin, TX for the premier tech gathering of the year, South By Southwest Interactive Festival.

The SproutBox crew will be there in full force. Our own Mike Trotzke has organized one of the most popular panel discussions “Who Needs Venture Capital?” and SproutBox portfolio company PocketTales is a finalist for the Microsoft BizSpark Accelerator Competition.

SproutBeers @ Lovejoy's

We’re also hosting a meetup for investors and entrepreneurs who want to learn more about midwest startup badassery.

For those of you planning to attend, and for those of you who are just curious what goes on at these kinds of things, we’ve put together a quick guide to our favorite events.

Saturday at 3:30pm

Panel Discussion: Unsexy & Profitable: Making $$ Without Hype
Hear how your business can turn more profits than heads from this handful of Internet veterans.
Hilton A/B

Saturday at 5:00pm

Panel Discussion: Don’t Move! Build a Startup Community Where You Live
Startups and innovation can happen anywhere, see what’s going on outside of Silicon Valley
Hilton A/B

Sunday at 5:00pm

SproutBeers at Lovejoy’s
Come have a beer with members of the SproutBox team. Learn about our process, our companies and startup life in the midwest.
Lovejoy’s, 604 Neches Street, right around the corner from the SproutBox SXSW HQ condo on 6th Street

Sunday at 8:00pm

TechCocktail
Drink and hang out with 30+ startups at Palm Door. Wear a black hat in honor of Johnny Cash.
Palm Door, 401 Sabine Street

Sunday at 9:00pm

The Silicon Prairie Party hosted by Big Omaha
Meet up with speakers, organizers and attendees of Big Omaha while getting to talk to up and coming entrepreneurs and innovators.
Lanai Lounge, 422 Congress Avenue

Monday at 12:30pm

Panel Discussion: Who Needs Venture Capital?
See Mike Trotzke, Dave McClure, Jolie O’Dell, Mitch Lasky, and Chris Wanstrath discuss the pitfalls of venture capital for startups.
Hilton D

Monday (All Day)

Panel Discussion: Microsoft BizSpark Accelerator
Check out PocketTales in this national startup competition.
Hilton

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Posted by Marc on March 12, 2010 SproutBox No Comments

In his recent op-ed in the Wall Street Journal, Tom Perkins claims that “Too often, there is confusion between investment banking and venture capital.” It’s hard to argue with that statement, but it’s investors like Tom Perkins that deserve the bulk of the blame for this confusion. Perkins says the difference between VC and Investment Banking (IB) is that “venture capitalists work with entrepreneurs to start new companies from the ground up”. I’m not sure how Perkins defines “the ground”, but I’m pretty sure I’d need to take an elevator to get up there.

Perkins’ firm Kleiner Perkins Caufield & Byers has certainly done its fair share of early investing. They became famous for being early investors in homerun deals like Amazon and Google, but even in those cases, they weren’t in ‘from the ground’. When they invested in Google, for example, Google already had 11 employees. That may seem really early considering the number of employees Google has today, but it’s really late compared to Andy Bechtolsheim’s investment a year earlier. He wrote a $100,000 check before there were any employees and before the entity was even filed!. That’s ground level investing.

More importantly, KPCB (and most of the other Sand Hill Road crowd) get most of their exposure from the massive returns they generate when one of their portfolio companies IPO’s. The returns are phenomenal (KPCB’s Amazon investment produced about a 55,000% return), so I can’t blame them for focusing intently on these opportunities. But, please don’t whine about the confusion with IB when taking companies public is your MO. For more evidence of this attitude, look no further than Sand Hill Road’s disappointment in the measly 5x return that Aaron Patzer produced for his mint.com investors.

The confusion is furthered by VC’s who openly offer ‘Founder Liquidity Stage Investments”. I’ve received calls this year from some of the most recognizable VC’s on both coasts telling me about these types of offerings, but apparently it’s been happening for a while. This is a really awesome thing for founders, because it allows them to realize a payday without dealing with the nightmare of taking a company public. But these VC ‘investments’ are nothing more than a clever way to buy options in an imminent IPO. Gee, I wonder why that would cause confusion.

Every investor loves the ‘no-brainers’ that produce certain returns, and every investor loves revenue and clear exit opportunities. Even traditional banks will finance many of these types of opportunities.  If some of us don’t step up and make pre-revenue investments based solely on our faith in the idea and the people involved, the bankers won’t have any ‘no-brainers’ to consider. Unfortunately, this banker-mentality investing has infected more than just the big VC’s. In Part 2, I’ll talk about how some prominent angel investors are giddy about later-stage, fixed-return, low-risk, loans. Some of these guys should call themselves ‘Angel Loan Originators’.

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Posted by Brad on March 9, 2010 SproutBox 1 Comment