I hosted a discussion at BarCamp Boulder over the weekend on common startup issues and questions. Thanks to David Cohen of ColoradoStartups.com for recording and posting the podcast, which can be found here.
Topics covered include:
P.S. - check out the ColoradoStartups.com ClickCaster archive also..(here)
Sphere: Related Content
BarCamp Boulder happened yesterday. Thanks to me.dium for hosting and all of the sponsors for contributing to a great event. BarCamps are a cool thing, this is the first one I have attended. Its billed as a “un-conference” where the attendees set the agenda and topics.
Certainly some good stuff today and interesting discussions. Some of the highlights below (personal filter applied, of course)
Attention start-ups! If you are thinking about, or have recently launched a new web property take a close look at Media Temple’s new Grid Server offering. It might be the most cost-effective and scalable managed hosting offering available on the market today. Media Temple has recently replaced their Shared Server (SS) product with the Grid Server (GS). This means that rather than sharing resources with an unknown number of other sites on a single hardware platform, your site is now part of a compute grid. The grid can distribute processes and I/O around to any of the hardware nodes associated with it to ensure performance is optimal and bottlenecks are avoided. Pretty cool. It also means you can launch a new public-facing website and not have to lose sleep over handling the traffic spikes or spending $1k or more on a dedicated hosting or co-lo setup. (that will come later once you are outrageously successful)
There are many cases where a managed, virtual infrastructure will not meet requirements for a sophisticated web property. You don’t get root access, scripting is limited, can’t create NFS mounts from NAS storage or other boxes, etc. But for $20/month and 1TB of data transfer, if you can make this work for you it’s almost a no-brainer. TIP - if you need more data transfer, just sign up for another account and move some of your large files over to the 2nd server.
For $20/month you get:
Many a website operator has jumped off of a shared hosting setup to a dedicated host to gain better performance and control over their site, but have also seen their bills increase 5x. The cost/benefit of this platform is so strong, it might even make sense to try to architect a new site/service around the platform if you can. Sure, there will be cases where requirements just don’t fit…but if you can make it work, you get enterprise quality infrastructure at a corner-store price.
Related Articles:
TalkCrunch (podcast with MT)
CyberCafe (talks about 100% uptime verified on the MT grid server)
Note: Newman Venture Advisors is not a MT customer, nor is newmanva.com hosted @ MT. We are promoting this because it is a phenomenal hosting solution at a kick-ass price. In case you are wondering, newmanva.com is hosted at Rackspace (who we highly recommend also)
It shouldn’t be news that the cost of starting a tech company, especially in the online space has come down dramatically in the last few years. There is an interesting thing happening in the tech/venture world right now where VCs are putting together smaller funds and doing more and more early stage deals. At the same time smart entrepreneurs can get their companies off the ground for less $$, and have less of a dependency on venture dollars in the early stages. Great opportunities for both investors and start ups to get things going.
Great article that sums it up today in the New York Times:
For Startups, Web Success on the Cheap
A friend of mine emailed me the other day asking what I thought of the Charles River Ventures announcement that they were creating a seed-stage investing arm (Quick Start). Great topic - it’s been widely covered already so we are not exactly breaking the story here. However, this news is a good starting point for a discussion on venture capital and the metrics and forces that drive the business.
It seems the trend of “going seed stage” has been going on for awhile. Perhaps it is not so much a trend as a strategy to broaden the reach and open more doors for larger funds. It is also an indication of VCs playing with the model to improve IRR and enhance the ability to impact more companies. There are many differing opinions out there today (some say angel investing is broken, others say the VC model is broken). There is certainly something to be said for being able to place smaller bets and get in early enough to help the founders get on the right track. There are pros and cons to pure early-stage investing, but doing a seed-stage fund in conjunction with a more traditional one seems like a very smart move if you can find harmony between the objectives of the respective funds.
Bigger funds have higher demands on the IRR and have to inevitably place bigger bets. It’s all math at the end of the day, and a large VC fund typically has to produce a 20% IRR over 5-6 years. So every investment has to be large enough and cultivated to potentially produce a “home run” level exit to absorb the ones that return marginally or even crater. The bigger the fund, the higher into the billions the total market value has to be for the fund to perform. NEA is an interesting example. Great firm, impressive track record. Their latest fund, # 12, was announced at 2.5B. Yes, that’s Billion… For a 20% IRR on that fund, the companies they invest in will have to create about 37 billion in market value, assuming NEA owns around 20% of each company. So it’s go big or go home…
Smaller funds still have to perform, but a 50M fund can deploy 250k-500k into very early stage companies relatively quickly, and every investment does not have to be cultivated to produce a 300M-500M exit.
While there have always been seed-stage VCs, the recent increase in news and activity around seed-stage VC investing may be a cyclical trend. I suspect many of the firms that are huge today started with much smaller funds and did smaller, early-stage investments back in the 80s/90s when they got started. A few big hits, the next fund raised is bigger, and the return demands are that much bigger, and the next thing you know, the minimum investment a 500M fund can make is 5M…the inevitable intersection of effective capitalism and business discipline.
Additional coverage:
Redeye VC blog
A VC (Fred Wilson)
TechCrunch
Sphere Results <-cool blog search tool
Funding News from Filtrbox
