I had two people at VC in the Rockies this week say that VC’s were rockstars.

I hope that’s not really what most VCs actually think. I always thought of entrepreneurs as rockstars. We’re just the groupies.

Every year the Colorado Venture Capital Association (soon to morph into the Rocky Mountain Venture Capital Association after combining with similar associations in a few neighboring states) puts on the “it” conference for Colorado venture capitalists, entrepreneurs and the lawyers, bankers, search firms, etc. that support us – Venture Capital in the Rockies. I love this event – it’s a great chance to see the best of Colorado deal flow and it concentrates pretty much everyone in the region who has anything to do with venture in one place for the better part of two days with plenty of opportunities to connect, catch up, share ideas, gossip, etc (oh – and did I mention that the conference is in Beaver Creek?). The goal of the conference is to draw out of state venture capitalists and show off the best companies in the area that are currently raising capital.

This year was outstanding. We had 30 presenting companies and attendance maxed out at around 250 people. I’ve been on the selection committee for the conference for the past 5 years and I can tell you that this year clearly stands apart from the rest in terms of the overall quality of the companies that submitted. We’ve always had an excellent group of presenting companies, but this year the bar was raised (as I described to someone at the conference, this year we had both the best overall group of presenting companies and also the best group of companies that didn’t make the cut that we’ve had in my time with the conference – there were a bunch of really interesting businesses that we just didn’t have room for).

You can see a full list of the presenting companies here. Three of these – NewsGator, Rally and Oxlo – were from the Mobius portfolio. David Cohen from ColoradoStartups has a nice presenting company recap. Also, you might want to check out what Dan Primack from PE Wire had to say about his experience at VCIR here.

 

I thought I’d highlight a few of the company presentation that I attended:

• Indicative Software – Indicative is an app management company that was spun out of HP a few years ago. I have to admit that after investments in Dante Group, Cyanea and Xaffire (all application management businesses), I have a warm spot in my heart for Indicative. They actually bought some technology from Xaffire a few years ago and I was glad to see that they were starting to put this to good use in their product. Sounds like the business is doing extremely well – revenue of $5m last year which more than doubled from the previous year and a great list of customers.
• Me.dium – I love Me.dium and have been on their private beta since it started. They’re about to roll out more broadly – be sure to watch for it. Me.dium gives context to your browsing by allowing you to see the behavior of other people (‘friends’ and otherwise) who have similar search behaviors. You can use the service to discover new relevant web pages, surf in a group and to see what your circle of friends is doing on-line. Very slick.
• Adam Aircraft – So I have to admit that I feel a little bad that I blew off the Rally presentation to go see Adam Aircraft (then again, I know the Rally business extremely well and how many times do you get to hear a pitch from a company building a new kind of jet airplane…). I don’t understand much about the Adam Aircraft business other than 1) it’s incredibly capital intensive (they’ve raised $180m in equity to date and are about to close another $125m in debt on top of that) and 2) planes are cool. For me the presentation went something like “Bla bla bla bla . . . [picture of really cool plane] . . . bla bla …” and so on. Actually what Adam Air is working on is pretty amazing (a very cheap, very light jet plane) and given the smart people around the table (not to mention the backlog slide they put up), I suspect they’ll be pretty successful.
• OpenLogic – OpenLogic has a platform for deploying and managing open source projects. They’ve “certified” 250 open source projects and their software allows companies to more safely implement open source stacks (OL takes care of ensuring the latest versions of each project is available and tests new versions for problems and adverse interactions with other programs). I’ve been following this business for a while – I looked at the Series A a couple of years ago and have been testing out some ideas on open source investing for a while. It can be a difficult area to map out venture type returns, but for those that are successful (such as GlueCode was with a very similar business model) there’s definitely money to be made.
• Outlast – Ok – this was pretty high on the cool factor as well. Outlast produces temperature regulating yarns and fabricks. These were originally developed for NASA but are in relatively wide use in outdoor gear and other clothing (while the company generated $15m in revenue last year they indicated that this translated to their yarn being used in about $750m worth of finished product). Their technology is apparently very efficient at regulating temperature and as a result keeps the wearer or Outlast based garments in a tighter temperature zone. This is one of two local companies with groundbreaking technology in the yarn/fabric business (the other is Cocona which also has groundbreaking technology but did not present). I guess you’d expect to find these businesses in Boulder given the area’s strong affinity for outdoor recreation.
• ThoughtEquity Motion – ThoughtEquity is one of those companies that took a while to figure out what it was going to be when it grew up but once it did, really started to take off. I’ve known the founder/CEO Kevin Schaff since well before he came up with the original idea behind THM and then watched for several years as he morphed his original idea behind the company into the leading distributor of stock video footage in the country (the Getty Images of video). They didn’t completely invent this market, but came pretty close and while there are few other companies that license stock video footage, THM is far and away the market leader. Kevin is one of those entrepreneurs who is going to keep at it until he’s got it right – he’s clearly done this with THM – it was one of the most exciting growth stories at the conference.

So mark your calendars for next year (sometime in late February – the exact date hasn’t been set yet) and come join us – I promise it will be worthwhile.

Let’s say you have some bad news to deliver to your board/investors. For example, you lost a huge customer or your software has a major bug that’s going to set you back 6 months or your CFO just got arrested for cheating on his taxes, etc. Should you:

1. Take out an advertisement in the Journal announcing this and then send out a note to your board with a link
2. Rent one of those sign trucks and have it drive by your investors offices repeatedly
3. Bury it deep inside a board book and hope no one notices it
4. Don’t say anything – your investors/board are too involved in your business already and ask way too many questions as it is
5. None of the above

This won’t come as a surprise to regular readers of this blog, but my suggestion (strong preference, actually) is that the companies I work with be direct about news – good and bad. If you’re just before a board meeting, include the news in your CEO letter that prefaces the board material (see my post on running better board meetings for more detail). If you’re not, either call your board directly or send an email around updating everyone. Better yet – do both.

I received a board package the other day (not for any of the companies listed on my left nav bar – this was for another company I’m helping out with) that contained material bad news (they lost an important customer and as a result, significantly changed their cash outlook for 2007). However this news was completely buried in the board package. Everyone found it and called it out before the board meeting, but I wonder how it might have come up if the board hadn’t been diligent and picked up on it. The company clearly wasn’t trying to completely hide it (it was there in black and white) – they were just trying to somehow obfuscate the issue by making it hard to find. The irony was that losing this customer was not entirely unexpected and we’d already discussed contingency plans. I have no clue why they didn’t highlight it as a major topic for the meeting …

I was on a call recently where I had to ask someone 4 times to repeat what they were saying using more exact terms.  It’s a major pet peeve of mine and so prevalent I’m losing my ability to be nice about it.  Perhaps it’s a result of being a kinder, gentler society or maybe it’s just because we’ve all sat through too many PowerPoint presentations or maybe we’re all testing our political-speak skills, but whatever it is the result is the absolutely maddening trend of people not saying directly what they mean and forcing the rest of us to play 20 questions to tease it out of them.

Here’s an example:

Direct description:  This is a red circle

“Business” description: The object displays certain characteristics that you might find in areas that were prone to liking colors that were deeper and brighter in tone.  I also note that the object is rounded on four sides.

UGHHHH!  I know you know exactly what I’m talking about…

When you know it’s not right, it isn’t.

A fellow board member said this to me the other day and I wrote it down as something I wanted to remind myself of every once in a while. She was referring to the human tendency to act slowly in the face of clear evidence and in particular to venture capitalists’ reluctance to be decisive. A good thought to ponder.

I suppose this is a pretty obvious statement, but children really need (and deserve) homes. This hits close to the heart when you visit an orphanage and are immediately surrounded by kids yelling “mommy? mommy? mommy?” as they look up at you with their arms raised so you can pick them up. I wish I could find a way to explain in words what it’s like to step out of a van into a sea of smiling children, all with their arms outstretched. Obviously my wife and I are inclined towards children, as we were there to adopt our daughter, but I think it would be hard for anyone to experience this and not want to leave with every child that they came in contact with (note: in most adoption programs you do not arrive at an orphanage and choose your child – you are matched with a child by your agency and travel to pick him or her up; this was the case with our adoption as well). I’ll post more about this soon, but these experiences made knowing how difficult (and expensive) the adoption process is even more upsetting (clearly it would be best if there was no need for adoption and every child in the US and the rest of the world had a loving home, but until this happens it sure would be nice if more of the tens of millions of children who need a home could find one more easily).

Watching children play in a country where there is so much poverty is pretty amazing. We passed gatherings of kids all the time with makeshift soccer balls (“footballs”) and tetherballs – often just a wad of shirts or in some cases towels filled with dirt. The great thing about children is their ability to look past the obvious (which is where most adults I think would stop) and enjoy the moment. I can’t post pictures of any of the children in the care centers for confidentiality reasons, but I wanted to put up just a few pictures of some of the children we met in Hosanna, a town about 200k south of Addis Abeba. While these children were poor they were bubbly, happy and proud. You can see it in their faces below.

In a recent post I pointed out how autonomous the venture business can be. If that’s the case, then, who do I work for?

Brad hired me and I spent several years working directly for him (i.e., supporting him in his investments). He’s still my boss, although we don’t have a traditional reporting relationship (I’m a junior partner – a Principal in our nomenclature – and he’s a senior partner – a Managing Director). I use him as a sounding board and advisor a lot but we don’t really have much of a boss/employee relationship. To some extent I work ‘for’ the other Managing Directors of Mobius but more in the same way someone at a company works ‘for’ their board of directors or their investors. Certainly I work for our investors – my job is to return them more money than they gave us and I have a direct responsibility to be a good steward of their money and trust in us.

More than anything, though, I really work for the management teams of the companies I manage and sit on the boards of. This may seem counter intuitive – as a board member, technically they work for me (and the rest of the board – something that is certainly clear when we’ve made a management changes). I don’t get the feeling that this view is shared particularly widely across the venture community, but I think it’s the right way to look at it. I spend more time with the management teams of the companies I work with than I do with any other group and ultimately everything I do is judged by their success – and by extension, my ability to help them become successful.

Ever notice how indecisive many VCs are? Maybe I’m just quick tempered, but it bugs the hell out of me that so many of my venture colleagues can’t seem to make a decision. Sometimes this shows up in overanalyzing a prospective investment (just to turn it down later for a completely unrelated reason which came up in the first week of their diligence); sometimes in the line “we’re waiting to see if any other investor is interested in this deal before deciding to pursue it”; sometimes in a delay taking an action with a CEO when its clear something needs to be done; sometimes in simply not having a definitive opinion on any issue – ever – until someone else has spoken out. You get the picture (and I’m sure many of you have lived through it). I’m not at all saying we should say ‘yes’ to everything; nor am I suggesting that sometimes its not ok to simply have no opinion. But sometimes. . . perhaps most of the time . . . being definitive (even if you are definitively wrong) is better than being non-committal (and therefore noncommittally neither right nor wrong). Grrr.

Random question, but I have received e-mails from readers across the word. I’m going to be in Addis Ababa later this week and was wondering if I had any readers there. You can e-mail me here

The world is full of people who have gone out of their way to be helpful to me over the years. I’ve been reminded of how powerful kindness can be in the past few weeks as a relative stranger – a ‘friend of a friend’ who I’ve actually never met in person, just over e-mail and phone – has gone out of their way to help me out and as a result is making something extremely important to me much easier.

This truly is what makes the world go around.