Reflections & analysis about innovation, technology, startups, investing, healthcare, and more .... with a focus on Minnesota, Land of 10,000 Lakes. Blogging continuously since 2005.

Tag: VC (Page 9 of 10)

Gary Smaby: VC Turns Artist

I don’t know too many people as remarkable as Gary Smaby. And he proved it again last night. More than 100 of Gary’s friends were invited to an artist’s reception to kick off the showing of his art at the Douglas-Baker Gallery in downtown Minneapolis.
Garysmabyshowcard It’s a project, I learned, that Gary’s been actively engaged in for about two years now. Gorgeous, striking work…as you can see.

The story of Gary’s career goes like this: he basically spent his 20s as an entrepreneur, his 30s as a technology analyst (starting with Piper Jaffray) and supercomputer consultant, his 40s as a VC, and in his 50s, he’s continued as a VC and also become an academic of sorts — and, yes, now an artist. As I said, remarkable. I’ve known him since 1982, respect him highly, and continue to be amazed at his talents.

The story of how he became an artist is really not so surprising when you read the story on his blog. He had some remarkable parents, too, and his mother was an artist.

In his VC life, Gary is part of Minneapolis-based Quatris Fund. Lately, he’s also been serving as VC-in-Residence at the Carlson School of Management’s Ventures Enterprise MBA program at the University of Minnesota. You can read more about Gary here in his bio. He’s shown in my first photo taken last evening explaining the techniques he uses in his print making.

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Congratulations, Gary. You give VCs a good name! I would love to hang one of those beauties in my house — soon as my next venture pays off, that is… 🙂

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Venerable VC Firm Says Model Is Dead

The biggest news over the weekend for me, besides the developing story about the Google-YouTube deal (now looking like it wasn’t just a rumor!), was definitely this one in Saturday’s New York Times: A Kink in Venture Capital’s Gold Chain. Goldeneggbroken Turns out Sevin Rosen, with a 30-year history in the venture capital business, is throwing in the towel on its latest fund and declaring the VC model is broken.

Fred Wilson — who writes the blog “A VC” — provided some further perspective on this news in his post on Saturday: Is The ‘Traditional Venture Capital Model’ Broken?.

All of this is actually a great preamble to my next post, which is about how another breed of early-stage investing is lately coming into its own: angel networks. I’ve been trying to get this one written and now it’s almost done — and the timing as relates the above news turns out to be propitious. Stand by….

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Kicking Off My DEMOfall Coverage

You say the event hasn’t started yet? You’re right, it’s September 25-27. But that doesn’t stop me. I blog pre, during, and after such major conferences that I attend as a press registrant. [See my coverage of DEMO ’06 in February in Phoenix here.] Demofalllogo This is just my first post of what will be many for DEMOfall, and I’m looking forward to it.

So, what’s the buzz on this one as I sit here in Minneapolis, less than two weeks from my flight to San Diego? Well, not much that’s hit my radar so far. The DEMO folks like to keep a lid on things till it’s closer to showtime. [And why would they compete with all the Apple media hype going on right now, anyway (peaking today)?] These folks do know how to build the buzz quite well as they approach their conference dates, however, to hype both attendance and media coverage — which is considerable.

Coolest thing I’ve heard so far is the Widgetbox Competition, sponsored by one of the presenting companies at DEMOfall, one of about 70 chosen from hundreds of hopefuls. Demo06widephoto Haven’t seen the official list of all the presenting companies yet from the DEMO PR folks (and it may actually still be getting finalized). But if you search on “DEMOfall 2006,” you’ll see some companies are already promoting their selection to pitch at this event — names such as 4INFO, Simple Star, Add Me, MyPW, Headplay, Koral, Scrapblog, Mvox, and SiteKreator, to name a few.

How does DEMO select companies? Check out this recent series of podcasts from the show’s producer.

Watch this space for much more soon…

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Startups in the Middle of Nowhere

Caught a great front page article in the August 7 issue of Network World: “Middle of Nowhere: The burden of the Midwestern network start-up”. Ah, yes, the incredible burden of being in the sticks. Something we know a lot about here in Minnesota (even though we live in the one of the top 15 metro markets in the country, very often ranked as one of the best places to live and work). Writer Carolyn Duffy Marsan picked up a lot of nuances in this piece, which is based largely on looking at the stats for the 12 states considered “Midwest” from the latest PwC MoneyTree report. [Note: most of the examples she cites are in Ohio, but the article is instructive for any Midwestern startup.] Midwestmap

The biggest news was that Minnesota got a #2 ranking. But don’t look for that in the online version linked above; it’s in a sidebar that appears only in the print version. This sidebar ranked VC funds received by the 12 Midwestern states so far in 2006 (only for “network startups,” considering the focus of this publication). Minnesota, at $32M, was second only to Illinois, at $44M. The next closest, Wisconsin, was way down the list at only $7 million. A pretty solid ranking for the Land of 10,000 Lakes. Actually, there are at least 15,000 lakes here, and we border on the largest one in the world, but I digress…

A few stats from the article: there have been only 25 network startups in the Midwest to sign venture deals so far in 2006, compared to 822 nationwide (of which California alone had 371). The average deal size in the Midwest was $3.7 million. compared to $7.7 million for deals in California, Massachusetts, and Texas, the three leading states for network startups. [According to the aforementioned sidebar, however, Minnesota’s average so far this year is a heady $8 million.]

As more proof that those on the coasts don’t get it when it comes to the heart of the country, Tracy Lefteroff, managing partner of PwC’s VC practice in San Jose, was quoted as saying. “They have research institutions. They don’t have the venture capital and the experienced entrepreneurs to help build those companies.” Wrong on the last two counts, Tracy: we have plenty of entrepreneurs who’ve done it before and are not about to move elsewhere. And we have tons of VC money, too; the firms just choose to invest it elsewhere while giving lip service to how wonderful Minnesota is! [Sorry, my Minnesota VC friends — couldn’t resist.] Lefteroff goes on to say, “The first thing a venture firm will do if it’s investing in a Midwest startup is to move the company.” Wrong again, oh California one. There have been many notable tech startups funded here in recent times that have no intention of moving: HotGigs and Jumpnode (per my previous post), Travanti Pharma, and such other earlier notables as Paisley Consulting and Compellent. Smart VCs from elsewhere are discovering Minnesota, and startups here are discovering ways to go find them, and I think that’s very encouraging. Okay, so our locally based VC funds keep going where they think the grass is greener…let em go. It’s a national market.

The article mentions PrairieGold Venture Partners in Sioux Falls, SD, which still likes the Midwest, although they focus only on investments of less than $2 million. Partner Paul Batcheller says, “Life here tends to be a little easier. For a focused entrepreneur who doesn’t want to deal with traffic, high competition for talent, and expensive cost structures, there are a lot of advantages of doing business in the Midwest. Companies tend to be more focused. Employees tend to be more loyal.”

Another Midwesterner quoted in the article, who’s also worked in Silicon Valley, was Jeff Mills, VP-channel development for Bluespring Software in Cincinnati: “We’re much more grounded here in the Midwest. The venture capital community is tougher on us from the standpoint of due diligence vs. more faith on the coasts. The advantage is that we’re selling less vaporware here.”

Take that, rest of the world! 🙂

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