NYC EDC has been meeting with entrepreneurs, VCs and others from the startup community in New York City to figure out whether it is possible to create more startup jobs. I recently participated in a discussion on this topic and there was an interesting discussion about the availability of seed capital in New York. Several folks made the argument that there is already enough seed capital available and that if more were available it would just mean that businesses get funded that “shouldn’t.” I...

NYC EDC has been meeting with entrepreneurs, VCs and others from the startup community in New York City to figure out whether it is possible to create more startup jobs. I recently participated in a discussion on this topic and there was an interesting discussion about the availability of seed capital in New York. Several folks made the argument that there is already enough seed capital available and that if more were available it would just mean that businesses get funded that “shouldn’t.” I...

With the economy in a tailspin and a gloomy outlook, there is a renewed focus on sustainable business models for startups. One model that has come in for particular scrutiny is “freemium” with posts such as Is Freemium Really the Way to Go? and Freemium is Not a Business Model. But not everyone has given up on it. I just had a conversation with Dave McClure where he said that he has been thinking a lot about where to draw the line between free and paid features in the freemium model. A while ...

With the economy in a tailspin and a gloomy outlook, there is a renewed focus on sustainable business models for startups. One model that has come in for particular scrutiny is “freemium” with posts such as Is Freemium Really the Way to Go? and Freemium is Not a Business Model. But not everyone has given up on it. I just had a conversation with Dave McClure where he said that he has been thinking a lot about where to draw the line between free and paid features in the freemium model. A while ...

A little while ago during Web 2.0 in New York, I expressed my sense of deja vu about being at a large Internet conference while the markets were imploding. If anything, this sense has deepened over the last couple of weeks. Not so much because there has been more volatility in the markets than ever before, but because there is such a wide range of attitudes among startups about the depth of this crisis and what it means for them. During the dotcom collapse there was a surprising number of ent...

A little while ago during Web 2.0 in New York, I expressed my sense of deja vu about being at a large Internet conference while the markets were imploding. If anything, this sense has deepened over the last couple of weeks. Not so much because there has been more volatility in the markets than ever before, but because there is such a wide range of attitudes among startups about the depth of this crisis and what it means for them. During the dotcom collapse there was a surprising number of ent...

There was an editorial in the New York Times over the weekend talking about the likelihood of bankruptcies among companies that have gone through buyouts during the time when credit was flowing too freely. I agree with the column that this is highly likely as we are facing a significant slowdown in economic activity and these companies have way too much leverage (and given the credit crunch, no real option to refinance). Why did the companies wind up with so much leverage? That reminded me th...

There was an editorial in the New York Times over the weekend talking about the likelihood of bankruptcies among companies that have gone through buyouts during the time when credit was flowing too freely. I agree with the column that this is highly likely as we are facing a significant slowdown in economic activity and these companies have way too much leverage (and given the credit crunch, no real option to refinance). Why did the companies wind up with so much leverage? That reminded me th...

There have been a lot of great posts this week about what the financial crisis means for startups. There was Jason Calacanis’s epic Startup Depression and Fred’s thoughts on it, Brad Feld’s Focus on Things Under Your Control and Roger Ehrenberg’s somewhat dissenting view that there is a new group of angels that might not pull back. I attended several conferences and panels this week and was asked the question about how this influences startups and startup investors at everyone of them. If you...

There have been a lot of great posts this week about what the financial crisis means for startups. There was Jason Calacanis’s epic Startup Depression and Fred’s thoughts on it, Brad Feld’s Focus on Things Under Your Control and Roger Ehrenberg’s somewhat dissenting view that there is a new group of angels that might not pull back. I attended several conferences and panels this week and was asked the question about how this influences startups and startup investors at everyone of them. If you...

I wrote last September about the competing views around deflation versus inflation. Interestingly, about 9 months later we still seem don’t seem to have real clarity on the subject. Over that time we have approached deflation but there has also been a ton of government intervention, which has prompted op-eds predicting future inflation and even a new fund run by Mark Spitznagel (a long time collaborator of “Black Swan” author Nassim Taleb) to bet on inflation. On the other hand have been resp...

I wrote last September about the competing views around deflation versus inflation. Interestingly, about 9 months later we still seem don’t seem to have real clarity on the subject. Over that time we have approached deflation but there has also been a ton of government intervention, which has prompted op-eds predicting future inflation and even a new fund run by Mark Spitznagel (a long time collaborator of “Black Swan” author Nassim Taleb) to bet on inflation. On the other hand have been resp...

Planning to turn this into a top ten list, but here is a start. The order may take some work too.Your name becomes used as verb or noun. Biggest success here in recent memory is of course “google”, but it was nice to see a “Hail to The Twitterer” headline in the New York Times this weekend (print edition, online the article has a different title). Your friends’ grandparents are using the service. Your friends’ parents are using the service. Hackers and spammers are targeting your service. Her...

Planning to turn this into a top ten list, but here is a start. The order may take some work too.Your name becomes used as verb or noun. Biggest success here in recent memory is of course “google”, but it was nice to see a “Hail to The Twitterer” headline in the New York Times this weekend (print edition, online the article has a different title). Your friends’ grandparents are using the service. Your friends’ parents are using the service. Hackers and spammers are targeting your service. Her...

Yesterday I attended the DreamIt Ventures funding day in Philadelphia. Several things were refreshing about it. First, there was a wide diversity of teams from kids still in college to a baby boomer. Second, there was a wide spectrum of businesess from the playful phrazit to the down-to-business Tapinko. Third, almost all of the companies were looking for small sums of money to get them to the next stage (and in at least one case no immediate funding at all). These were sums that could and sh...

Yesterday I attended the DreamIt Ventures funding day in Philadelphia. Several things were refreshing about it. First, there was a wide diversity of teams from kids still in college to a baby boomer. Second, there was a wide spectrum of businesess from the playful phrazit to the down-to-business Tapinko. Third, almost all of the companies were looking for small sums of money to get them to the next stage (and in at least one case no immediate funding at all). These were sums that could and sh...

Given the financial crisis, there have been a lot of posts about trimming costs by laying people off. But there may also be opportunities to save money by hiring people. This (generally) does not apply to tiny startups but only to businesses that have achieved a certain scale and employ consultants. It is often the case that consultants are brought in to work on a specific project but wind up working on essentially a recurring basis. So in times like this it’s a good idea to look at all your ...

Given the financial crisis, there have been a lot of posts about trimming costs by laying people off. But there may also be opportunities to save money by hiring people. This (generally) does not apply to tiny startups but only to businesses that have achieved a certain scale and employ consultants. It is often the case that consultants are brought in to work on a specific project but wind up working on essentially a recurring basis. So in times like this it’s a good idea to look at all your ...

Entrepreneurs sometimes wonder why VCs are so bent on owning a 20% stake in the companies they invest in. The answer is surprisingly simple: It’s a successful heuristic. Heuristics are “rules of thumb” and they turn out to be really useful whenever you deal with a lot of uncertainty. As an investor, one might be tempted to try to optimize the ownership percentage on a deal-by-deal basis. But so much can go wrong with any particular company that such optimizations are likely to backfire – if y...

Entrepreneurs sometimes wonder why VCs are so bent on owning a 20% stake in the companies they invest in. The answer is surprisingly simple: It’s a successful heuristic. Heuristics are “rules of thumb” and they turn out to be really useful whenever you deal with a lot of uncertainty. As an investor, one might be tempted to try to optimize the ownership percentage on a deal-by-deal basis. But so much can go wrong with any particular company that such optimizations are likely to backfire – if y...