If you didn’t make it to The Combine, you missed out. You can’t beat hundreds of tech enthusiasts, developers and volunteers getting together to make great things happen in the best town in the Midwest.  As a sponsor of the event, SproutBox is dedicated to building an environment of talent and innovation for a startup hub in Bloomington.

Participants experienced some of Bloomington’s historical and cultural hotspots, including the Buskirk-Chumley Theater, the Farmers Market, B-Line trail and Indiana University. The event was the perfect opportunity to showcase Bloomington as the perfect oasis for focus and creativity aspiring entrepreneurs need to start a successful business.

The weekend kicked off with an open pitch session at the Box where participants, including ScheduleThing and MyJibe, pitched ideas and recruited extra help for their projects.

Everyone headed to the Memorial Stadium Hall of Champions for TECH cocktail, a networking event featuring our sprout family and their founders. The evening made for great mingling among techies and developers with a little taste of Hoosier football.

The speakers series on Friday was packed with talent and laughs. The lineup included:

Sloane Berrent, Founder of Answer with Action

Ben Huh, CEO of Pet Holdings, Inc. (FAIL Blog, Can Has a Cheezburger?)

Frank Gruber, Co-founder of TECH Cocktail

Neil Patel, Guerrilla Marketer, Co-founder of KISSMetrics & Crazy Egg

Christian Lander, Author of “Stuff White People Like”

Micah Baldwin, CEO & Chief Community Caretaker of Graphic.ly

Chris Wansworth, CEO & Co-founder of GitHub

Brian Gorbett, Architect, Microsoft Developer & Platform Evangelism Division

Michael Showalter, Comedian, Host of CollegeHumor.com’s The Michael Showalter Showalter

Michael Ian Black, Comedian, Chief Content Officer at WitStream.com

“More Than Corn,” led by Brad Wisler, was a discussion about the benefits and challenges of tech in the Midwest. Panelists discussed why Bloomington is the place to be to start a web-based company and why it is much more than your average college town.

DevDerby was a day-long challenge for teams to develop an app to serve a need using the programming language of their choice—PHP, C#, Ruby, Python and Java. The rest of the weekend was reserved for hands-on training from experts in Adobe ColdFusion, followed by talks on “Experience in Design for Startups” and “Conversion Optimization” led by James Paden and Kristian Andersen.

I’m thrilled to see such an amazing event held here in Bloomington. All participants and volunteers worked very hard to inspire growth and creativity to the Bloomington tech community. You don’t have to be on the West Coast to be a part of the startup action, and I think The Combine proved just that.

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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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Interview with Proposable Founder James Kappen from SproutBox on Vimeo.

I recently interviewed Proposable founder James Kappen about the upcoming launch of Proposable, the current Sprout-in-development. Proposable is a web-based proposal system that will soon be revolutionizing the way sales people interact with their partners, co-workers, and prospects. For updates and more info about the launch, visit http://www.proposable.com.

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