Growth Equity

Has Groupon Jumped the Shark?

2011-01-14T10:14:00.002-06:00

Apparently Groupon is now buying ad time during the Super Bowl. Is this a sign? Having lived through the dot-com boom / bust and sock puppet era, it sure makes me wonder...

I mentioned this to my wife as we drove into the city for work this morning. She does not follow the start-up scene, but I generally consider to be smart and thoughtful on things. She noted that several people she works with just commented to her that they bought a $1200 hair laser treatment of some sort on Groupon for....$100. WOW!

Now, a big goal of such offers is to generate repeat business, and so I asked, "How often does one need to go in for such a thing?" My wife replied, "Not often, perhaps a few times in your life. And besides, these people will NEVER pay anywhere near full prices for this now that they got it so cheap. In fact, they are telling everyone about the deal they got, and this company appears to be resetting expectations in terms of what this should cost...good luck selling this for a higher price!"

As a general rule, I do my best not to disagree with my wife on things...and I think her assessment is pretty spot here.

Time will tell, but given that the founders raised money for a exit so quickly after the Google deal fell apart, well....I'm just saying.

I know that early investors need their payday, but they are also operating on better data than anyone else. Sure they are now talking IPO...but when you are raising almost $1B from private investors, of course you need to show them how they will (supposedly) exit! Groupon claims they can get a $15B valuation at IPO, which will be significantly higher than the $6B that was supposedly on the table with Google. Why do they believe they can IPO at this price? Oh, yeah, because this is what investment bankers are telling them...and those guys are always above honest and trustworthy, right?

We'll save Groupon valuation for another post, but the super bowl ad thing sure made me go "Whoa, aaaye, oh!"

National Association of Realtors Invests in Ifbyphone

2011-01-04T19:53:00.002-06:00

The National Association of Realtors® has invested in Ifbyphone through its strategic investment fund, Second Century Ventures. As part of the arrangement, NAR is also collaborating with Ifbyphone to develop solutions that enhance voice interactions for its more than 1.1 million Realtor® members.

Full Press Release

Ifbyphone, a Chicago high-tech venture, provides voice applications for customer interactions. The Ifbyphone suite of applications is configured via a self service web based customer portal and works with any telephone. The cloud based services provides call tracking, dynamic inbound call routing with IVR screening, outbound call automation, virtual call center applications and a highly flexible family of API based integration tools.

GrubHub.com Raises $11 Million

2010-11-10T20:53:00.002-06:00

GrubHub.com, a search engine for restaurants that deliver food, has raised $11 million to expand to more cities. GrubHub was the winner of the 2006 New Venture Challenge at the University of Chicago Booth School of Business. Benchmark Capital led the latest round of funding. Previous investors also participated including Origin Ventures, Leo Capital and Amicus Capital. Over the years, GrubHub has raised a total of $14.1 million.

Congrats to Matt and Mike for their continued success!

Link to article in the New York Times:

http://bits.blogs.nytimes.com/2010/11/08/grubhub-gets-a-cash-delivery/

Chicago Booth Wins 2010 International VCIC Competition

2010-03-01T08:25:00.018-06:00

Congrats to Chicago Booth on winning the 2010 International VCIC Competition held at UNC Chapel Hill in April 2010!

Special congrats to the members of the team:

Matt Hankins, Ryan Gembala, Gil Haberman, Erin O’Neill, Josh Marehbian

Link to the official VCIC website:

Chicago Booth Wins 2010 International VCIC Competition

Best Questions Asked by Venture Capitalists

2009-11-20T14:22:00.002-06:00

It's been awhile since I've posted anything to this blog, but this article makes me want to start up again:

The Eight Best Questions We Got While Raising Venture Capital

Now, I gotta hustle over to the Chicago Booth Entrepreneurship & Venture Capital Conference!

Chicago Booth wins Entrepreneur's Choice Award at National VCIC

2009-04-20T08:56:00.000-05:00

Congrats to the team from Chicago Booth who won the Entrepreneur’s Choice Award at National VCIC this weekend! Here are the full results:

VCIC 12 International Finals Results

1st - UNC Kenan-Flagler
2nd - Oxford Said
3rd - MIT Sloan
Entrepreneurs’ Choice - Chicago Booth

TARP for Dummies

2009-03-25T16:24:00.000-05:00

I thought this was pretty darn funny (click on picture to see the rest):

GrubHub Raises Series B

2009-03-25T13:15:00.001-05:00

GrubHub, an online service for ordering restaurant takeout and delivery meals, has raised $2 million in Series B funding. Origin Ventures and Leo Capital co-led the round, and were joined by return backer Amicus Capital. The Chicago-based company will use the capital to expand its services to Boston, San Francisco and New York City.

I had the honor of competing against these guys in the University of Chicago New Venture Challenge a few years ago when I was an MBA student (they won). Congrats on the continued success guys!

Congrats to Chicago Booth on VCIC Win!

2009-03-20T23:13:00.000-05:00

I know that most of us are focusing heavily on our March Madness brackets right now (go Kansas and Syracuse!), but I wanted to send out a congrats to the Chicago Booth team that recently won the regional VCIC competition at the University of Colorado (see VCIC brackets above). That team will now move on to compete in the international competition in April. For those of you who aren't familiar with the VCIC, it is a great program for MBA students...it is essentially a venture capital case competition.

Congrats to all the regional winners, and good luck in the finals!

Chicago PE Firms Raising Capital

2009-03-19T07:56:00.000-05:00

The following blurbs on Chicago PE firms raising capital comes courtesy of PEHub:

CIVC Capital seeks $575 million for its third fund, with a hard cap of $700 million. The fund, called CIVC Partners Fund IV, was formed in May of 2008. CIVC Capital’s prior fund had $650 million in commitments and closed in 2003. The fund hired UBS as a placement agent in 2008. CIVC is based in Chicago and invests equity slices of between $15 million and $85 million in business services, financial services, marketing and information services companies.

Wind Point Partners has raised at least $842 million in commitments toward its seventh fund. The fund, which has a target of $1.15 billion, according to regulatory filings, has at least 43 investors. The firm was slated to hold a first close on greater than $700 million, which is greater than its entire sixth fund, around this time last year. Wind Point has offices in Southfield, Michigan and Chicago, and 60% of the firm’s deals are add-ons.

Linden LLC is in the market with Linden Capital Partners II LP. The fund seeks $300 million, a slight jump over its prior, effort, a $200 million pool of capital which closed in 2006. The firm, based in Chicago, grew out of First Chicago Equity Capital, and invests in mature health care and life sciences companies.

AIG Bonus Stats

2009-03-19T07:50:00.000-05:00

Some facts to chew on:

The top recipient received more than $6.4 million;
The top seven bonus recipients received more than $4 million each;
The top ten bonus recipients received a combined $42 million;
22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;
73 individuals received bonuses of $1 million or more;
Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million.

There are enough people on the squawk box providing their views on the AIG situation, so I'll just pass along the facts and let you form your own opinion. However, my definition of a "bonus" is that it is only contractual so far as you meet performance goals...

...oh, and by the way, the bonus plan details have been released online. It appears that the employees of the financial products group had a 30% carried interest in trading profits (and most likely did not have to put much of their own capital at risk). I guess we know now where some of the Enron traders ended up after the fall of that house of cards...

How to Tweet Your Way Out of a Job

2009-03-18T10:27:00.000-05:00

Love this...file under "things that make you go DUH!"

How to Tweet Your Way Out of a Job

Classic...

What, you mean Facebook's valuation is lower than what people previously thought? Really?

2009-02-13T07:00:00.000-06:00

Interesting snipped in one of the Wall Street Journal's blogs today:

"Remember when Facebook was supposedly worth $15 billion after Microsoft took a tiny stake in the company in 2007? According to The Associated Press, lawyers arguing over a legal settlement with another social network, ConnectU, revealed Facebook’s own appraisal had priced its privately held stock at $8.88 per share, giving it a market value of about $3.7 billion. That figure was determined in October 2007, just before the economy went into a tailspin."

A related story in the AP tells of the backstory...all pretty interesting, but all take a backseat in my opinion to "what are these guys thinking?" in terms of valuation...when Facebook has revenues in the range of $300 million (impressive, but a valuation of over 12x revenue just seems nuts).

And of course, that again was October 2007. What do you think the valuation should be now...given the state of the economy and the fact that many people still question whether or not advertising on Facebook is even effective at all? At $300 million in revenue, I can't imagine how you make a case for a valuation anywhere north of $1 billion...but that's just one guy's opinion.

Chicago Booth VCIC Competition

2009-01-29T08:09:00.000-06:00

I had the honor of participating as a judge in the 2009 Venture Capital Investment Competition (VCIC) at the University of Chicago Booth School of Business last Friday. It was an extremely well run competition (thanks to Ulrika Haug, the student who coordinated the event), with a very strong showing by both the student teams and all of the entrepreneurs. Congrats to the winning team, Bluth Venture Partners:

Greg Foster

Jasper Platz

Jim Shilkett

Josh Marehbian

Lisa Pinsley

Matt Mettler

Bluth Venture Partners will be representing the Chicago Booth at the VCIC Regional competition in Boulder, CO on February 13.

Congrats to the winning team and all those who participated for doing such a great job, and special thanks to Ulrika and her team for such a well run event!

Illinois Venture Capital Association is Now LinkedIn

2009-01-24T12:26:00.000-06:00

The IVCA recently launched the "IVCA Forum" group on LinkedIn. This group is intended for members to stay in touch with each other, send out requests for help or share information or issues that could help another member.

For more information: IVCA Website

Northwestern Law School Small Business Opportunity Conference 2009

2009-01-24T12:09:00.000-06:00

The Small Business Opportunity Conference is Northwestern Law School’s annual conference exploring various entrepreneurship and small business issues. The Conference will be held on Saturday, February 28, 2009 and will feature David "Buzz" Ruttenberg, JD ‘66, founder of the Belgravia Group, Ltd., as the keynote speaker, as well as panels and workshops covering several aspects of entrepreneurship. These include, among others, women entrepreneurs, gettig started, the state of the venture capital and real estate markets, as well as an examination of the causes and factors affecting our current recession.

The goal of the Conference is to provide its attendees with cutting-edge insight on entrepreneurship and small business issues, as well as opportunities to network with other participants in this vibrant sector of the economy. The Conference’s participants and attendees will consist of start-up executives, aspiring entrepreneurs, financiers, service-providers, thought leaders, and students from business and law schools.

Admission is free for those who registered online, or $10 at the door.

For more information.

To register.

Can you feel it?

2009-01-22T12:30:00.000-06:00

The weather is above zero degrees and the sun is out. It's a new year. We have a new president. And so I ask...how is everyone feeling out there? Seriously, I'm curious to hear...is it "Yeah, baby!" or do you still feel like you've lost your mojo? (I'd tell you how I feel, but I would hate to taint such a scientific study!)

TECH cocktail Chicago 10 Coming at Ya

2009-01-22T12:20:00.000-06:00

For those of you who have not attended a TechCocktail event before, you are missing out.

Date: Thursday, February 19, 2009
Time: 6:30pm - 9pm
Place: John Barleycorn’s - 3524 N Clark (where it always is)
Cost: $0 (per usual)

RSVP Online (but hint...if you get shut out, show up anyway!)

B-O-O-O-O-O-T-H

2008-11-10T15:41:00.000-06:00

Well, I certainly have been a slacker in terms of posting to my blog recently (I'll blame the economy, since everyone else is blaming it for all their issues as well). However, last week David Booth made history by donating $300 million to the Chicago GSB (a combination of cash and equity in his fund)...worth dusting off the old blog for such news!

Alan Greenspan may have spoken up and admitted, "Um, I guess markets actually aren't perfectly efficient!", but nonetheless Booth proves that if you can apply the efficient market theories to an investment thesis, you can make some serious cash. As a result of the generous gift they have renamed the school in his honor. Apparently it is the single largest donation to any business school anytime and anywhere.

David Booth, you da man!

For more info, visit the Chicago GSB....I mean the Chicago Booth website.

Ron May gets [Journalistic] Religion?

2008-07-22T22:30:00.000-05:00

The latest "May Report" by Ron May details a meeting he had with a roomful of his readers to get feedback on him, his report, and his "brand". File this one under "be careful what you ask for as you just might get it":

The May Report 07/18/2008

Let's hope he takes the suggestions to heart...everyone seems to hate to both read and (ironically at the same time) hate to miss his newsletter. There is definitely no shortage of things he can do to improve the format and readability of his report. That should be easy. Changing the way he behaves at events...I'll believe it when I see it! For the benefit of his readers (of which I am one) and for him, I hope he changes all for the better...with his level of commitment and passion for "the scene" here in Chicago (and an amazing amount of availability to attend every function under the sun), TMR could be really valuable to all. We'll see what happens...

Is it better to choose the horse or the jockey?

2008-07-14T07:07:00.000-05:00

"When a management team with a reputation for brilliance backs a business with a reputation for bad economics, it is the reputation of the business that remains intact."
--Warren Buffet

The Economist recently had an online article highlighting Prof. Steve Kaplan's research on venture capital. If you haven't heard about his research, its worth a read. I tend to agree with Matt McCall when he says "I'd like to have both!"...but still the research does make you think (and isn't that really the point?).

Bing Takes On Consumer Confidence

2008-07-13T13:00:00.000-05:00

There's a great post over on Stanley Bing's blog about how our (negative) perceptions of the economy (driven by the media in search of advertising dollars) are making our dwindling consumer confidence and economic depression a self-fulfilling prophecy.

Keep in mind, Bing is the back-page satirical writer for Fortune Magazine...a lot of people seem to be pissed off and commenting on his blog, taking him a little too literally.

I, however, love his smart-ass style...and as often is the case with sarcasm, it is based on truth. I made some comments similar to his sitting around the lunch table at a private equity conference several months ago, and people looked at me like I was nuts.

Read it. Think about it. Spend less time watching CNBC and more time doing something to benefit the world (or yourself...hey, its your prerogative)...the sun will rise tomorrow!

As Pacino said in the great Oliver Stone football movie, "On any given Sunday, you're gonna win or you're gonna lose!" In any transaction there is going to be at least winner. Figure out how to be that guy...

2008 Chicago GSB New Venture Challenge Winners

2008-07-12T08:06:00.000-05:00

For those of you who missed it, here is a nice article the recaps the winners of the 2008 Chicago GSB New Venture Challenge winners:

http://www.chicagogsb.edu/news/2008-05-29_NVC.aspx

I was unable to attend the finals and did not see the presentations of the winning teams, so I don't have specific comments on who was picked this year, but I will say this...as in recent past years, many of the winning or finalist teams prove that it is more the ability to present, sell, and (prove that you can) executive on your idea vs. coming up with the most novel and unique concept. Lots of the winning ideas in the past few years have been less than "groundbreaking, patentable" concepts (e.g. SAT prep, an online portal for ordering food, credit card processing, etc.). I'm not knocking these companies (in fact, as a past NVC contestant who did not win, I have huge admiration for what they have accomplished!), I'm just saying that if you have an entrepreneurial idea that you don't pursue because someone has already "been there, done that", you should think twice. I mean, hey...Yahoo and AltaVista were already household names in search engines when the Google business plan was written up, and those guys have done OK....

Logitech Webcam for Mac (about friggin time!)

2008-07-10T21:15:00.000-05:00

I've always been one to have a wide variety of tech around me. Know my history, and you know that I'm a geek at heart. Last December I decided to pop for a new home computer, and went all out on a new Mac Pro desktop with the works. Spent a pretty penny, but the plan was to use this not just for working from home (in XP/MS-Office using VMWare) but also as a place to edit my home movies (using Final Cut) and making home recordings (using Logic Express). After getting it all setup to my liking, I tell you...I couldn't be happier. After years of using a KVM switch and multiple computers (so I could access a Mac, Windows PC, Linux, laptop, etc.), I LOVE the ability to have a machine powerful enough and software good enough to run a virtual environments (experience in the past running Linux via VMWare was brutal).

However, after purchasing the best that the Mac store had to offer, I made a horrifying discovery. Not only does the Mac Pro not come with a webcam (which I knew in advance), but there is no good option for adding a webcame to a Mac computer. What the f@#$! When you drop so much money on a machine, I could not believe what I was hearing. Talked to the Mac store folks. Researched it all over the Internet. Just could not believe it!

Yes, Apple made an external iSight camera at one time...but for reasons that I still cannot figure out they no longer offer it. You can buy a used one on eBay for a premium, but that just doesn't sit well with me.

Instead I opted for a Logitech camera that was "supposed" to work. I was able to find drivers on the web and get basic functions working, but quality sucks because the software that really makes the thing perform well (adjusts for light environment, cuts out sound feedback, etc.) only runs on Windows. There are a few Mac-specific webcams, but from what I've read on the Internet the quality isn't much better on those.

It should be noted that if you own one of those (cheaper) Macs with a built-in camera, you don't have this problem. Silly me, I bought their premium product...and now I'm screwed (Skype with my parents so they can keep in touch with their grandkids is one of main uses of the computer these days). I think this ranks up there with one of the bigger screw ups by Apple. Way to take a PC convert and make him wish he'd bout that souped up HP instead of the Mac Pro...

However, now Logitech has (finally) released a Mac version of one of their better and more popular webcams. About friggin time! I'm ordering one of the QuickCam Vision Pros on Amazon today...huge opportunity for Logitech if the product really is as good on a Mac as their products are on a PC. Will let you know how it works out...

July BNC Venture Capital Luncheon

2008-07-09T00:05:00.000-05:00

I had an opportunity to drop by the ITA for the first half of the BNC Venture Capital meeting today and watch the first two presenters:

Zota Green Tea Soda

Given the recent success of drink companies like Izze Soda (bought by Pepsi in 2006 for something like $75 million, which was about 3x revenue) and Honest Tea (40% bought by Coca Cola in 2008 for about $40 million, giving a valuation of greater than 4x revenue), it seems like beverages companies are being started in garages almost as often as web start-ups these days. The production side can be easily outsourced (in fact many of the new bev cos all use the same bottler up in Minnesota, Cold Springs), so what the current batch of bev entrepreneurs are really challenged with is (a) coming up with great flavor profiles, (b) setting up distribution (i.e. sales and marketing), and (c) figuring out how to stand out from the crowd. Not easy tasks...

Anyway, I think Zota is off to a good start. They are a bit too early / too small for my firm to invest in at this point, but if you are looking to get involved with and invest in a beverage company, I would take a serious look at them. I tried their product today, and gotta say that it was really, really good. My only problem with the product is that it is really more akin to green tea pumped up with some (lots of?) sugar water, as compared to something like Izze that gets its sweetness from real fruit juice. It just seems that people going for "natural" and "organic" green tea benefits won't want to load up on so much sugar (but I could be wrong). However, then again, it was actually very tasty...

J. L. Powell

J. L. Powell has the kind of clothes that most guys only wish they could wear (i.e. afford). It is really, really nice stuff. If you currently shop at Brooks Brothers, and you want to take it up a notch or two, go shop at J. L. Powell. Check 'em out...they primary sell through their catalog, but also sell online and through their flagship store in Michigan. And they are also raising money, so if you really like the product, you could also be an investor. Not only do I really dig the clothes, but when you go to the web site, all the model shots appear to actually be the founder Josh Powell himself (how's that for livin the brand?).

Thanks to Len Bland and the BNC for setting up the meeting...and also to the ITA for hosting. Len's format for these meetings is first the entrepreneurs pitch to the group, and then they leave the room so the group can discuss...and then Len brings the entrepreneur back for the room to share their thoughts. It is a nice way to practice your pitch and get some good feedback.

Hyperbole and Overstatement: The Great Credibility Killer

2008-07-08T18:01:00.000-05:00

Amazon.com was sued back in the late 1990's by Barnes & Noble for saying it was the "world's largest bookstore". Amazon may have had a longer list of books for purchase, but B&N claimed that it actually had a larger physical selection and stock of books (i.e. Amazon simply passed a lot of orders through to book distributors and did not stock the items, so B&N said that they should not count). At least give Amazon some credit for being right if you looked at it a certain way.

However, I see a lot of plans that use so much hyperbole and overstatement that it starts to damage the credibility of the plan's author. To use an example in the public domain, there was a story in PEHub today about a company called DriverSide receiving a seed investment. I know nothing of the company, so I scanned to the "About DriverSide" section that is at the bottom of the press release. It starts out...

"Founded in fall 2007 by Internet Entrepreneurs Trevor Traina, Adam Jackson, and Jad Dunning, DriverSide is the first Web site specifically designed for automobile owners."

Uh, gee...I've not been specifically tracking automobile owner focused web sites, but I'm pretty sure that without even looking that the following sites exist, are focused on that target audience, and were around before 2007:

Cars.com
Autotrader.com
Carmax.com
Edmunds.com
AAA.com

In fact, if you type "automobile" into Google, you get 159,000,000 results. Not to get all Andy Rooney on these guys, but you get my point...they may have a great service that exists for drivers, but upon finishing that first sentence my brain automatically goes "Are you kidding me?"

One of the most important things (to me, at least) when presenting your plan is credibility. You only have one chance to make a first impression. It would be much, much more powerful to start out with, very simply "Pain point ABC exists and we solve that problem with X, Y, and Z...which are superior to current solutions because of points 1, 2, and 3."

Don't try to impress by saying you are the "first", the "premier", or even the "best". You may be faster, better, or cheaper...but say why that is important and how it is defensible. Most important...be credible!

Hope that helps...

Term Sheets vs. Intent

2008-07-08T08:22:00.000-05:00

There's a really nice post on Rick Segal's website about "intent letters". Here are my comments...if that interests you I suggest you go read the original post.

I agree that this "letter" is a great approach, really in the best interest of both parties. I would also add that the later stage the company and round of funding, the more standard this practice is. It is fairly common on growth equity deals, and pretty much standard on acquisitions, for interested parties to submit a non-binding "indication of interest" letter that includes the following sections:

Valuation (often stated as a range, but people just view the high end as the same "best case" number anyway)
Structure (key points that will go into the term sheet)
Financing (when debt is applicable to the deal)
Key Due Diligence Items
Timing and Approval Process

Of course, a lot of times these letters are required because of a more formal process being run to raise money (i.e. investment bankers)...but it has the same positive effect as what is outlined above. It's a good way to get a base of expectations on the table and be judicious with everyone's time...not to set terms in stone, but if two parties are simply way off in terms of thinking, best to not waste everyone's time, or at least focus the conversation on some key "make or break" points.

Don't Forget the Executive Summary!

2008-07-04T09:41:00.000-05:00

I spend a fair amount of my time screening investments, and it continues to amaze me how many people send us a 50 - 100 page business plan with no executive summary. Venture capital and private equity firms look at a lot of deals...a TON of deals. The goal of the executive summary is not to get me to invest, but rather to make me interested enough to read past the executive summary. There is a really nice write-up on what makes a good executive summary at Garage Technology Ventures, also available on Guy Kawasaki's blog (though the content is from his colleague Bill Reichert).

Here are my favorite points from their write-up:

The job of the executive summary is to sell, not to describe (see my earlier point...it's all about getting me to go beyond the executive summary vs. shooting this thing on the spot)
You have about 30 seconds to grab an investor’s interest (again, we get a ton of plans to read)
What specifically are you offering to whom? (no point in being abstract or talking in hyperbole here...just lay it out)
No matter what you might think, you have competition (there is no better way to destroy credibility than through bravado)
Understand what your real, sustainable competitive advantage is...and state it clearly
How specifically are you going to generate revenues, from whom, why is this scalable, and what are your projections and metrics? (you'd be surprised how many people fail to articulate this...and again, wild projections are a good way to destroy credibility)
How much money are you asking for...AND what will it be used for (this is one place where a little extra detail goes a long way, i.e. a list of key marketing initiatives is way better than "we need $5 million for marketing")

Be sure to read the whole post on Guy's blog...lot's of gems in there, for example his point on "purple farts". Also, as my firm invests in later stage deals than Guy's firm, let me also throw in a few more points about growth equity or even buyout deals:

If you have historical data, provide it as far back as it goes (within reason of course, but if you are a 5 year old company and only show the last 2 years worth of data, you will just raise suspicions)
If your past financials have some sort of funkiness (e.g. a year where sales, growth, margins, etc. were "off"), give some sort of explanation...and be honest (i.e. better to say "we took our eye of the ball but learned a ton" than come up with some b.s. reason that doesn't hold up in court, i.e. due diligence)
Calculate key metrics in your financials, e.g. gross margins, growth rates, etc. We are going to have to do this, and forcing us to stop reading and pull out a calculator vs. just presenting the data is a waste of time and could be a mark against you (hey, just being honest)
If you email the plan, email a spreadsheet version of the financials (see previous point about wasting our time...not that we are so important, but that our time that we can allocate per opportunity is sliced thin...so don't give us a reason to "move on")

Hope that helps...

Winona Capital Management Invests in Dragon Alliance

2008-07-02T13:26:00.000-05:00

My firm, Winona Capital Management, has just announced an investment we've made in Dragon Alliance. Dragon is an extremely cool company and we are very excited about the opportunity to be part of the next stage of their success. To view the official press release, please go to the "News" section of the Winona website:

http://www.winonacapital.com/news.htm

An open letter to Steve Jobs...opportunity is knocking!

2008-07-01T22:59:00.000-05:00

At home I'm a dual-boot Mac/WindowsXP guy. Each environment has something that I need and/or crave, and being able to have the "best of both worlds" on a killer piece of hardware (the Mac Pro "tower of power") is just about the coolest thing that's happened to my home computing environment since I first loaded Linux on an Intel PC back in 1997. In a lot of ways, you just need to keep a Windows environment running (e.g. it's hard to work in finance without Excel...though after some time with the new version I'm wondering if that legacy will soon come crashing down). Similarly, you can't deny that Apple's new OS is just too cool and too fun...you just gotta have it! However, I'm sitting here working in Windows, using the new version of Firefox (available for both my environments), when I am prompted by Apple's software to download the latest version of their Safari browser into my Windows environment.

And then it hits me...

Steve Jobs, if you want a great way to stick it to Redmond (which I know you love to do), here is a perfect opportunity....DROP SAFARI AND BACK FIREFOX. Imagine...you could put the Apple name behind what is in my opinion far and away the best browser out there, and be a good citizen to the techno-universe at the same time! It's not that Safari is particularly a bad browser, but Firefox is just nailing it.

Do the right thing, Mr. Jobs...you could make Firefox the iPod of browsers (it may be destined to become that anyway, why not be a part of the story?).

My 2 cents...

A New Day, A New Deal, New Blog Post...

2008-06-30T15:01:00.000-05:00

Holy cow, how long has it been since my last post? Way too long...

Time has a way of getting away from you, especially when you get busy (just look at my picture...boy do I need a haircut and a shave!). However, with some downtime this week due to the holiday, I've committed to myself to start doing the following much more frequently:

A) Exercising
B) Posting to my blog

Let's hope that I can start to accomplish both of these on a daily basis. For starters, I will be posting an announcement here is just a bit on an exciting new deal that my firm has just closed...working on the press release now!

Hint: If you are into surfing, skateboarding, or snowboarding...you are going to dig it!

(Note: If you can name the person actually pictured above, you win a big prize!)

Great Chicago Networking Extravaganza

2008-05-04T22:09:00.000-05:00

5:30 – 8:30 pm
May 8, 2008
The Carlisle, Lombard IL

For more information go to http://www.duoforce.com/GC2008/network.htm

MIT Enterprise Forum Innovation Awards

2008-05-04T21:42:00.000-05:00

Meeting Details

Drinker Biddle & Reath LLP
191 North Wacker Drive, Suite 3700
Chicago, IL 60606-1698

Event Date: May 13, 2008
Event Time:
6:00 pm - 6:30 pm - Networking
6:30 pm - 8:00 pm - Program

For more information, visit the MIT Enterprise Forum Website

iVentures10 - Seeking Entrepreneurs!

2008-05-04T21:25:00.000-05:00

iVentures10 is a new kind of intern program for computer science students with a great idea for a software or web based start-up company. During the 10 week program, student teams will develop their idea into a working prototype and lay the groundwork to launch their start-up.

iVentures10 (sponsored by IllinoisVENTURES) is currently seeking brilliant, entrepreneurially minded students. They will fund entrepreneurial teams of 2 to 4 people.

For more information, see the iVentures10 website.

TECH cocktail Chicago 8

2008-04-29T11:20:00.000-05:00

Thursday, May 29, 2008
6:30 pm CT - 9:00 pm CT
Chicago, IL

The TECH cocktail Chicago 8 mixer will take place at is normal location in Wrigleyville. They have a number of fine startups ready to showoff there stuff in an expo style and they expect around 600+ RSVPed guests. So if want to make sure you reserve a spot at the mixer event you might want to consider going to the full day conference as well as it will secure your spot at the mixer where the cast of great speakers will be in attendance.

April Midwest Entrepreneurs Forum Meeting

2008-04-29T10:04:00.000-05:00

When: 4/29/2008 7:00 - 9:00 PM

Where: Rice Campus of IIT (201 East Loop Road, Wheaton IL)

More Info: MEF Calendar of Events

BNC Venture Capital Luncheon

2008-04-29T09:49:00.000-05:00

From the BNC Event Calendar:

Tuesday, May 06, 2008, 12:00 to 1:30 PM
Illinois Information Technology Association (ITA)
200 S. Wacker Drive, Chicago, 15th floor

The purpose of the BNC Venture Capital Group is to bring together serious investors — venture capital, private equity, angel, and banks — with companies looking to raise capital, and to encourage networking among the participants.

This meeting will review three entrepreneurial opportunities. More details on the participating companies will be available soon (see the BNC website).

There is a $5 fee for this meeting. You must sign up at 123Signup to attend.

Please bring your own lunch and drinks. Questions? Contact Len Bland at len_bland@conceptequity.com or call 847-317-0656.

The BNC Venture Capital Group meets the first Tuesday of every month. The next meeting on 6/3.

Go Green! AeA Midwest Council Green Technologies Program

2008-04-29T07:38:00.000-05:00

Wednesday, May 21, 2008
7:30 a.m. to 11:00 a.m.
Chicago, IL

AeA’s Midwest Council Green Technologies: “GO GREEN” is a comprehensive program to help you learn best practices, laws & regulations that may affect your company, how to implement cost savings while greening your company, and how you can make a difference by positively affecting the environment.

For more information, visit the AeANET website.

Q4 2007 VC IPO and M&A Stats

2008-04-01T11:33:00.000-05:00

Some interesting stats from the "random ramblings" section of Dan Primack's PE Week Wire today:

Only five VC-backed companies went public on U.S. exchanges last quarter, raising $282.73 million. That’s the lowest offering and raise figures since Q2 2003, and way off from the 31 VC-backed IPOs that raised over $3.04 billion in Q4 2007.

VC-backed exits via M&A was even worse, by comparison to other quarters. Only 56 VC-backed companies were acquired in Q1, which is slower than any other quarter since Q1 1999. The largest M&A exit was Dell’s $1.4 billion acquisition of EqualLogic.

Here's a link to the source: PE Week Wire

BNC Venture Capital Luncheon

2008-04-01T11:23:00.000-05:00

Tuesday, April 01, 2008, 12:00 to 1:30 PM
Illinois Information Technology Association (ITA)
200 S. Wacker Drive, Chicago, 15th floor

The purpose of the BNC Venture Capital Group is to bring together serious investors — venture capital, private equity, angel, and banks — with companies looking to raise capital, and to encourage networking among the participants.

The meeting will begin with networking followed by a presentation from Sword Diagnostics.

Sword Diagnostics expects to save lives by enabling earlier detection of biomarkers that may be present for cancer, Alztheimer's, and other diseases. They have been approved for 6 different clinical trials that should lead to revenue by the second quarter.

Headquartered near Chicago, IL, Sword Diagnostics is a leader in making diagnostic tests more sensitive. Sword's Saber Detection SystemTM is an extremely sensitive system, utilizing Raman Spectroscopy coupled with their patent-pending detection chemistry. Saber provides 1,000x increase in detection sensitivity, enabling scientists and clinicians to study and to quantify low-abundance biomarkers, as well as working with ever-decreasing sample volumes.

There is a $5 fee for this meeting. You must sign up at 123Signup to attend.

Please bring your own lunch and drinks. Questions? Contact Len Bland at len_bland@conceptequity.com or call 847-317-0656.

2nd Anuual Chicago GSB Charity Poker Tournament

2008-04-01T10:57:00.000-05:00

Click on the Image Above to Register (opens a new window)

Change of URL for The Silicon Prairie

2008-04-01T10:29:00.000-05:00

After two years of blogging on The Silicon Prairie, I have decided it is time to setup an official URL for this blog. Going forward, this blog can be accessed via:

http://www.thesiliconprairie.info

The old blogspot.com URL will forward to the new, but that is the new home of The Silicon Prairie on the web!

Thanks,

Chicago GSB Team Takes 2nd Place in McGinnis Business Plan Competition

2008-03-18T10:09:00.000-05:00

Etoh Pharmaceuticals won second place in the Life Science track at the McGinnis Business Plan Competition in Pittsburgh on Saturday, March 15th, 2008. Etoh Pharmaceuticals is commercializing a drug for the treatment of the 17 million people in the US alone who suffer from alcoholism. The McGinnis Venture Competition, hosted by Carnegie Mellon, is a different kind of competition because it revolves around emerging industries such as information technology, biotechnology, sustainable technology, robotics, nanotechnology and telecommunications. Participants included teams from the top business schools in the country.

The GSB students on the team were Steve Fausch, David Martinelli.

CONGRATS!

Chicago GSB Team Wins Midwest Venture Summit Competition

2008-03-18T08:23:00.000-05:00

ReTel Technologies won the top prize at the MBA Business Plan Competition at the Midwest Venture Summit on Monday, March 17th, 2008. ReTel bring powerful online shopper analytics and dynamic pricing to offline retail environments using RFID technology. ReTel competed on Monday against 7 other Illinois schools, including Northwestern, DePaul, IIT, Loyola, University of Illinois Chicago, University of Illinois, and Southern Illinois University. The top prize was $50,000 awarded by Director Jack Lavin on behalf of the Illinois Department of Commerce and Economic Opportunity.

The GSB students on the team were George Aspland, Adam Rodnitzky, Scott Roberts.

CONGRATS!

Case Study: Radio Flyer

2008-03-13T07:51:00.000-05:00

Chicago GSB Innovation Roundtable
March 19, 2008: 6:00 PM - 9:00 PM

Robert Pasin, President and CEO at Radio Flyer, and Tom Schlegel, V.P. of Product Development will discuss how the company has re-invented itself and the brand we all know as “The Little Red Wagon.” They’ll describe how Radio Flyer has made the transition from a steel stamping manufacturer to a consumer products company that is the market leader in wagons, tricycles and other ride-ons.

Topics to be discussed include:
1) Re-inventing the Company
2) Re-inventing the Products and the Brand
3) Why failure should “always” be an option

For more information: Chicago GSB Alumni Events Website

Getting Publicity for Your Business -- At Little or No Cost

2008-03-13T07:48:00.000-05:00

Chicago GSB Entrepreneurial Roundtable
March 17, 2008: 6:30 PM - 8:45 PM

Looking for ways to get publicity for your business or product? Want to make a “splash” in the media without spending a small fortune?

Neil Anderson, nationally-known speaker and advisor to entrepreneurs, will show you how you can get more free exposure for your product/service and, most importantly, boost sales. Neil’s talks are not only motivating but they are practical. You will learn:

• What stories the media are looking for
• How to “pitch” the media
• Best practices for getting free publicity
• What media coverage is best for your company
• Top tips on getting known in the media

You will walk away with a mountain of ideas and tactics for making your business better known.

Neil Anderson is President of The Courage Group, a consultant to privately-held businesses. Neil Anderson is a frequent writer on entrepreneurship for publications and websites such as CNNMoney.com, The Chicago Tribune, The Chicago Tribune.Com, Startup Journal.Com/The Wall Street Journal Center For Entrepreneurs, Fortune Small Business, AOL Small Business, and USA Today.com.

For more info and to sign up: Chicago GSB Alumni Events Website

ITA CityLIGHTS

2008-03-05T08:21:00.000-06:00

ITA CityLIGHTS is Illinois’ annual celebration of vitality and innovation in the technology community. Celebrating its 9th Year, CityLIGHTS provides an opportunity to recognize some of the leading technology companies and individuals in our community whose innovation and success are driving change in Illinois. The Awards Gala is also an opportunity for the industry to connect with other technology executives, entrepreneurs, corporate executives and investors in the region for an evening of dining, socializing, and celebration.

The ITA CityLIGHTS event will be held on April 3 at the Union Station.

BNC Entrepreneur Lunch -"Where are my Customers?"

2008-03-05T08:13:00.000-06:00

Wednesday March 12, 2008
12:00 pm - 1:30 pm
Location: Weber Grill and Restaurant
Street: 539 N. State Street, Chicago

You've got a fabulous idea, a logical business plan, the necessary funding, so you're ready to go. Does anybody care?

Marketing is the key to success in business today. Susan Singer, founder of Field Trip Factory (http://www.fieldtripfactory.com), will provide insights into marketing for the entrepreneur. Susan spent over 25 years in marketing with some of the largest agencies in the U.S. prior to creating her own successful business.

On-line registration will close Noon on Monday, March 10 or when capacity has been reached.

Shark Bus

2008-03-05T08:10:00.000-06:00

Gotta love it when you see design that just "works"...very clever!
At a time when people are just bombarded with advertising, you gotta admit this grabs your attention!

Pitching Your Plan: How to Deliver the Perfect Presentation to Investors

2008-03-04T17:52:00.000-06:00

Thursday March 13, 2008
5:30 - 6:00pm - Registration & Networking
6:00 - 8:30pm - Program
University Center, 525 S. State, Lake Room
$35 Registration Fee by 3/10; $45 thereafter
Students and Faculty: Free with DePaul ID (must show ID at door)

A seminar on how to effectively craft and deliver a business plan pitch. Topics to be covered include the importance of research and preparation, what presentation skills are most critical, and to how to create an effective PowerPoint. Presented by Raman Chadha, Coleman Entrepreneurship Center.

For More Information

2008 Kellogg Private Equity Conference

2008-03-04T14:24:00.000-06:00

Date: April 2, 2008
Location: Allen Center

Pricing:
Kellogg Student: $20
Kellogg Faculty: $20
Non-Kellogg Student: $20
Kellogg Alumni: $75
Corporate: $150

More Info: PE Conference Website

G.I. Joe vs. The Squirrel

2008-03-04T13:49:00.000-06:00

A little humor for you...this doesn't have much to do with venture capital or private equity, but I sure thought it was funny!

37signals in Wired Magazine

2008-03-03T21:08:00.000-06:00

Interesting article in Wired Magazine about 37signals here in Chicago:

The Brash Boys at 37signals Will Tell You: Keep it Simple, Stupid

There seems to be two camps forming about the guys over at 37signals in response to the attitude that they exude...those who love it and those who are growing tired of it. I've seen Jason's brash and bravado on several occasions (e.g. "I can't work with anyone who doesn't use a Mac!") and personally it is a bit much for me. It's fine to be defiant, and perhaps even a little arrogant (some would say they've earned it), but I'm just not sure why he's so defensive all the time, at least the times I've see him. He just always seems pissed off about something. I guess I'm just more of the Linus Torvalds type...but then again, I don't know Jason personally so I can only go by his "public persona". Perhaps in private Fried is unbelievably mellow and behind closed doors Torvalds is a raving madman.

But I digress...because in the end you can't really find fault in the Jason Fried / 37signals "keep it simple" philosophy. Now, some argue that you can't always have it that way...e.g. it's kind of hard to keep it simple when you are developing the systems for a new jumbo airliner or something. As a veteran of several large corporate IT project I totally agree with this. However, if I understand him correctly, Jason Fried doesn't exactly say that the Boeing 777 should have simple software...he just says that you should pick your projects so that you can keep it simple (i.e. "don't sign up to develop complex, enterprise systems"). Fair enough...

Let's be clear, 37signals didn't invent "keep it simple". They don't say they did, but others make it out to be that way. Years ago when object-oriented development was invented, the whole purpose was to have basic, simple, focused building blocks for building applications. The problem is that once you got past the more purist Smalltalk or Forte applications in which this paradigm was enforced, languages like C++ and Java allowed you to write spaghetti code that still made things complex and quite messy. However, do give credit to 37signals for helping shine a spotlight back on the concept of simplicity. It's not a silver bullet, but many a developer needed to be reminded again (and in some cases a smack to the head was probably necessary to get it through). The world needs both sides of the coin (e.g. we use Google Docs at work for shared spreadsheets, but absolutely need the power of Excel to build our financial models)...and I guess it would just be refreshing for the guys at 37signals to acknowledge that a bit more.

Anyway, so I read Ron May's diatribe tonight about the whole 37signals thing, and as usually happens when I'm reading about 37signals I start to get put off by all the self-righteousness, but then Jason Fried (in his response to May) makes a comment that makes me ignore all that and puts me back in the 37signals camp:

Hi Ron-

I suspect a debate with Harp would be pretty boring as I bet we'd
agree on the fundamental point: Use the tools that work best for you.
If that's Rails, use Rails. If it's Python, use Python. If it's PHP,
use PHP. If it's Java, use Java.

We're not interested in getting involved in a debate about religion
("programming languages"). There are pros and cons to everything.
People should use what works best for them. Different strokes for
different folks.

As far as people's opinions about DHH, they are free to make up their
own mind. He's been very generous with his talents and time for the
benefit of thousands of people. David is a wonderful person and a
great leader. Great leaders have strong opinions. He's not afraid to
voice his. And I have tremendous respect for that.

-Jason (Fried)

...and I (Jason Starr) have tremendous respect for that!

Illinois Homeland Security Innovation Challenge

2008-03-03T13:37:00.000-06:00

The Illinois Homeland Security Innovation and Entrepreneurship Center at Northwestern University (HSIEC), part of the Illinois Entrepreneurship Network (IEN), announces a competition for promising homeland security technology solutions.

The Illinois Homeland Security Innovation Challenge is a competition to identify up to six Illinois-based companies with innovative technologies that specifically address the stated technology needs of the Department of Homeland Security's Science and Technology Directorate (DHS S&T). The specific topics that the applicant's proposal must address can be found in a DHS S&T document entitled "High Priority Technology Needs," or by the topics identified in DHS S&T's Broad Agency Announcement (BAA) 08-01, "Long Range Broad Agency Announcement" research solicitation.

Grant applications must be submitted by 5:00 PM March 21, 2008 and be completed in accordance with instructions established by the Illinois HSIEC. The HSIEC also requests the submission of a pre-application by March 7 which is simply the cover pages and the answer to question 1 from the full application.

HSIEC 2008 Illinois Homeland Security Innovation Challenge

Techvision 2008 Conference

2008-02-19T21:25:00.000-06:00

Charles M. Harper Center
February 29, 2008
9 AM - 4 PM CST

TechVision features keynote addresses by distinguished industry leaders as well as numerous topic-specific panel discussions. The conference aims to address the key issues and trends relevant to venture capitalists, technology executives, entrepreneurs and those who are interested in and support the high tech community. Attendees will have the opportunity to gain insights from, pose questions to and network with leading professionals from a diverse group of firms, markets and geographies.

For more info:

Chicago GSB Techvision 2008 Conference Website

2008 Northwestern Law School Small Business Opportunity Conference

2008-02-14T08:43:00.000-06:00

The Small Business Opportunity Conference is Northwestern Law School’s annual conference exploring various entrepreneurship and small business issues. The Conference will be held on Saturday, March 1, 2008 and will feature Howard Tullman, JD ‘70 (a highly successful serial entrepreneur and founder, most recently, of Flashpoint Academy), as the keynote speaker, as well as panels and workshops covering several aspects of entrepreneurship. These include, among others, obtaining private equity and venture financing, leveraging intellectual property, and cutting edge real estate development.

For more info: SBOC Website

Search Engine Optimization Seminar

2008-02-04T08:26:00.000-06:00

Search Engine Optimization attracts qualified visitors and brings them through your Web site door. E-mail marketing keeps them coming back by building strong, lasting relationships.

Where: University of Chicago Gleacher Center

When: February 5, 2008

More Info: Event Web Site

BNC Venture Capital Group

2008-02-04T08:20:00.000-06:00

Tuesday, February 12, 12:00 PM to 1:30 PM, 200 S. Wacker
Sign up at 123Signup is required for building access.

This month's presentation is by Brogan Pharmaceuticals:

Brogan Pharmaceuticals is decreasing the time and increasing the number of drug products used to diagnose and treat rare diseases via the federal Orphan Drug Act in the US. The drug products produced are superior to current technologies, are used in grossly underserved markets, and are desperately sought by physicians and patients with rare diseases. Orphan drug products offer 7 years exclusivity, tax credits, and development assistance from the FDA. BP operates a 9,000 sq ft. FDA cGMP manufacturing facility used for the launch of drug product I, contract manufacturing and drug product development activities. Core competencies in FDA manufacturing, regulatory, and pharmaceutical formulation development are leveraged at the facility generating revenues outside of the orphan product development space. Ancillary operations include contract manufacturing and drug product development for research and development clients, orphan drug developers, and virtual pharmaceutical firms in support of their clinical trials. The mission is to be a vertically integrated, developer, manufacturer, and distributor of six to eight small market, low demand, orphan drug products each generating annualized revenues of $50-150MM.

Please bring your own lunch and drinks.

Illinois Information Technology Association (ITA) is located at:
200 S. Wacker Drive, 15th Floor | Chicago, IL 60606
+1.312.435.2805 | +1.312.264.0306 (Fax)

Sign up at https://www.123signup.com/event?id=tfyhj

Google Adwords Simplified and Explained

2008-02-04T08:05:00.000-06:00

Kelly Muldoon is conducting a step-by-step class that is guaranteed to jump start your online marketing efforts using Google Adwords.

Where:

ITA
200 S. Wacker 15th Floor
Chicago

When:

Saturday, February 16th
8:00 a.m. to 12:30 p.m.

Cost: $265

More Info: http://www.the-google-queen.com/

What Business Owners Should Know About Opportunities With Private Equity Groups

2008-01-30T08:01:00.000-06:00

University of Chicago Graduate School of Business Entrepreneurial Roundtable

February 16, 2008: 9:00 AM - 4:00 PM

Are you a business owner who is looking to grow your business substantially or sell it for top dollar? You may want to consider is working with a private equity group (PEG). This symposium will feature leaders of a dozen or more PEGs of various types from across the country.

For more information visit the Chicago GSB website.

$70,000 Bob Geras Grant to be awarded at the 2008 Midwest Venture Summit

2008-01-30T07:56:00.000-06:00

Geras Grant is largest to date in Midwest

Chicago, IL: January 21, 2008 – Uber angel investor Bob Geras is celebrating his 70th birthday by seeking "diamonds in the rough" at the 2008 Midwest Venture Summit (MVS) in Chicago. Geras will award a $70,000 Geras Grant to one of the early stage companies presenting at the MVS; this represents the largest grant of its kind to be awarded at a venture summit in Chicago. The deadline for submitting a business plan for consideration to present at the MVS is January 30, 2008: www.midwestventuresummit.com . The Midwest Venture Summit hopes to identify all of the local companies that seek Angel or Venture funding.

"Our Community has a long history of supporting early stage companies, which are at the very heart of our Free Enterprise system, and I encourage all angel investors reading these words to join me at one of the most fertile investing opportunities in the United States. The presenting companies that you'll see at the MVS represent the crème of the crop from 14 states. This is a great opportunity to help our Venture Community and to choose from some exciting new diamonds in the rough," says Bob Geras. Geras invites all other Midwest angels to join him at the Midwest Venture Summit on March 17th & 18th.

"To receive an endorsement of this event from an early stage investor like Bob Geras in the form of The Geras Grant is a great testimony to the confidence Bob has in this community.. The event's organizers and sponsors, which include the most important angel, VC and entrepreneurial organizations in the Midwest, look forward to a plethora of investments for companies presenting at the MVS. Bob leads by example and firmly believes that this Grant will encourage early stage companies seeking funding to present their businesses at the 2008 MVS. My advice is to get those business plans in as quickly as possible to have the best shot at being selected and going through our coaching process," says Maura O'Hara, Executive Director of the Illinois Venture Capital Association and one of the MVS organizers. "$70,000 of new cash is very significant to a young company." she adds.

Bob Geras has been successfully investing in early stage companies for over 45 years, and invites all investors to attend the 2008 MVS because of the high caliber of presenting companies to select from. Some of the Midwest companies that he has invested in include Advanced Diamond Technologies, Bias Power, Solar-Track, Video Home Tours, ShowingTime, Global Capacity, ExaDigm, NexVu, MediaRiver, Arryx, MEDX, Alexon Diagnostics, Geneve Bio, MedServ, OrthoScan, Merge Healthcare, GynTech and Micro Blade.

Innovation in Global Corporations

2008-01-28T17:58:00.000-06:00

Cultivating a Culture of Ideas and Entrepreneurship

Innovation has long been associated with really smart people working for small, nimble organizations: university research labs, Silicon Valley start-ups, high-powered entrepreneurs.

You might be surprised to discover that over 90% of technology innovations actually originate at one source:
Large, Global Corporations

On February 12, 2008 the MIT Enterprise Forum - Chicago is pleased to highlight the innovative approaches of three world-class large corporate innovators:

· Mitsubishi International Corporation
· Abbott Laboratories
· Motorola

For more information visit the MIT Enterprise Forum - Chicago.

Innovation in Action at the GSB Polsky Center for Entrepreneurship

2008-01-28T17:52:00.000-06:00

February 18, 2008: 6:00 PM - 9:30 PM

Linda Darragh, Director of Entrepreneurship Programs at the GSB’s Polsky Center, will describe the Polsky Center’s activities in the area of Innovation and Entrepreneurship, including student programs like the New Venture Challenge (NVC). The session will include presentations by some past participants in the New Venture Challenge - David Peak of Liquid Talk, and Matt Maloney of Grubhub - who will speak about their experiences in developing and launching their new ventures. Linda will also describe some opportunities for IRT members to get involved as coaches for the NVC.

For more info see the Innovation Roundtable website.

TECH cocktail Chicago 7

2008-01-24T08:19:00.000-06:00

TECH cocktail Chicago 7 was just announced. TECH cocktail Chicago 7 will be held on February 21, 2008 from 6:30 to 9:00pm in the upstairs of John Barleycorn Wrigleyville.

Expect to see local startups showing off their products to the rest of the community, meet fellow entrepreneurs, bloggers and technology enthusiasts and have a few hours of fun!

Rolta Announces Acquisition of TUSC

2008-01-24T07:42:00.000-06:00

Rolta, one of India’s leading IT companies, announced yesterday the acquisition of Broech Corporation, doing business as "TUSC" (The Ultimate Software Company), an IT consulting firm specializing in Oracle technologies and solutions. TUSC, bought for $45MM in cash, will become a wholly-owned subsidiary of Rolta and the founders / current executives will continue to lead "TUSC - A Rolta Company", at least for now.

As a part of its growth plans, Rolta has adopted an acquisition strategy. This is the second acquisition by Rolta in a span of six months. TUSC is headquartered in Chicago, with offices across the US that are staffed by over 160 consultants. Established in 1988, TUSC has served over 2000 customers and over 50% of revenues are generated from repeat business. TUSC is a profitable Company and its 2007 revenues were in excess of US$48 million, with a CAGR of more than 30% over the past 4 years. The Company has been listed twice on the ‘Inc. 500 Fastest Growing Private Companies’ list in the US.

The View from The Silicon Prairie:

There seems to be some debate about the merits of this acquisition (see The May Report) from two perspectives:

1) Acquisition of a US Firm by an Indian Company

At a time when offshoring is still often perceived to be a "bad thing" and India is viewed by many in the U.S. as a second-class citizen of the world, does this make sense? Absolutely! I say get over it and welcome to global economy. Thomas Friedman would be proud...and more importantly, congrats to the founders (again, it was supposedly an all cash deal...yee haw!)

2) Pricing

People seem to feel the price was too low, but at approximately 1x revenue it seems about right to me. My old firm, BoldTech, which is also an IT consulting firm, was bought by Perficient this past year also for approximately 1x revenue. Keep in mind that these are basically service-based businesses...and the assets walk out the door and go home every night. There is no guarantee that people will stick around post-acquisition. Hopefully they are doing the right thing and giving people a stake (e.g. stock) or simply just paying them really well...or attrition is bound to happen. These firms like to think that they have some great underlying processes, training, or intellectual property that makes them more valuable...helpful, yes, but the value is debatable in a deal like this.

For more information, see the original press release on the TUSC site.

Ticketmaster Acquires TicketsNow

2008-01-16T07:42:00.000-06:00

Ticketmaster announced that it has acquired online ticket reseller TicketsNow. According to various sources on the Internet, the sale price was approximately $300 million in cash. eBay bought rival ticket reseller StubHub last year for $310 million.

TicketsNow raised its first institutional round of funding in mid-2006, with an $8 million bridge loan from Draper Fisher Jurvetson, Portage Venture Partners and New World Ventures. Those notes then converted as part of a $35 million equity round last year, which was led by Adams Street Partners.

Lots of Chicago-based entrepreneurs and investors involved in this one, and huge congrats to all involved. Probably the most impressive thing about this story, however, is the fact that the TicketsNow was bootstrapped to about $40MM in net sales before they decided to take on some funding, first $8MM in June 2006 and then $32MM in March 2007.

Midwest Venture Summit Annouces Early Acceptance Deadline

2008-01-09T08:11:00.000-06:00

MVS presenting companies have received over $222 million in VC funding to date

As a post-holiday gift for entrepreneurs looking for funding, The Midwest Venture Summit (MVS) has just announced that the first ten business plans chosen to present at the March 17-18 Midwest Venture Summit, and submitted by this Friday, January 11th, 2008, will have their submission fees refunded. The fee for submission is $175 and the regular deadline is January 30, 2008.

"All of the companies selected to present are reviewed and approved by a panel of VCs. Early submission provides these VCs a great opportunity to evaluate potential investments and get to know management," says Maura O’Hara, Executive Director of the Illinois Venture Capital Association and one of the MVS organizers. "We have a finite number of opportunities for companies to present, and created this early entry incentive to provide motivated companies more time for coaching with venture capitalists and increased exposure to the entire funding process," she adds.

The Midwest Venture Summit is the premier venture capital event for entrepreneurs and investors in the 13 state "Greater Midwest" area and draws attendees from IA, IL, IN, KY, MI, MN, MO, NE, ND, OH, Western PA, SD and WI. Prior year MVS presenting companies have received over $222 million in VC funding to date.

During the 2008 Midwest Venture Summit, Chicago March 17th & 18th, 2008, entrepreneurs can expect to meet:

Nearly 100 angels and VCs from the 13 state Greater Midwest area
Numerous business intermediaries: lawyers, accountants, investment bankers
Professional coaching for presenters
Extensive Media exposure leading up to the event

Opportunities are available for companies in various stages of growth, from early to series A+. Complete entry details are available on the IVCA/MVS website.

Economic Development Council Luncheon

2008-01-09T07:58:00.000-06:00

Entrepreneurship, Innovation, and Technology Commercialization at the UIC College of Business Administration

Join the Economic Development Council at our monthly luncheon on Wednesday, January 30th entitled, "Entrepreneurship, Innovation, and Technology Commercialization at the UIC College of Business Administration." Our featured speakers will be Stefanie Lenway, Dean of the College of Business Administration; Rod Shrader, Associate Professor of Managerial Studies; and Tim Brunke, the new director of the UIC Innovation Center.

The luncheon is at noon, at The Tower Club, 39th floor, 20 North Wacker Drive, Chicago. The cost of the lunch and program is $35 for EDC members, $50 for non-members, and there is no charge for EDC Corporate and Sustaining members.

Visit the EDC website for additional information.

Battle of the Innovation Authors

2008-01-09T07:49:00.000-06:00

Innovation drives business success. And yet, how innovation works in practice is still a mystery to many people. On Saturday, 1/19/07, IIT Midwest is hosting what should be an interesting debate on innovation best practices and techniques. This is your opportunity to talk about innovation with four thought leaders.

For more information, see the IIT Midwest website.

Integration 2.0: A Benefit for MoveSmart.org

2008-01-08T14:32:00.000-06:00

Tuesday, January 29th, 2008 from 5:30-7:00pm
Sonnenschein Nath & Rosenthal (Sears Tower, 78th Floor)

Until now, information on neighborhoods has been buried in the back of academic reports, pinned to community center bulletin boards, and locked in data sets only available to planners, inaccessible to those who would benefit from it the most: housing seekers looking for a better neighborhood. MoveSmart.org plans to leverage the power of this information by combining these and other data sources into a single mapping engine built into a full-featured site that includes guides, tools, calculators, forums, and social networks, all designed to foster racial and economic integration.

Join MoveSmart.org on January 29th for their inaugural event, a wine reception and silent auction which will include an exclusive sneak peak of MoveSmart.org and it’s innovative features. Find out what prompted Aurie Pennick, executive director of the Field Foundation, to say, “This is where fair housing needs to go.”

Tickets are priced at $30, with a limited number of non-profit and government tickets at $15. Proceeds will benefit MoveSmart.org, a not for profit organization operating under the fiscal sponsorship of the Chicago Lawyers’ Committee for Civil Rights.

Purchase tickets at http://movesmart.eventbrite.com. For more information, including sponsorship opportunities, contact Justin [at] MoveSmart [DOT] org.

MITEF / CEC 2008 Technology Forecast

2008-01-07T08:24:00.000-06:00

Get a glimpse into our technology future with a panel of Chicago’s most knowledgeable technology prognosticators on January 15th as the Massachusetts Institute of Technology Enterprise Forum and Chicagoland Entrepreneurial Center jointly present the 2008 Technology Forecast event.

For more info, please see the MIT Enterprise Forum website.

How to Buy a Business

2008-01-07T08:15:00.000-06:00

The Chicago GSB Entrepreneurial Roundtable is hosting an event on January 19th titled "How to Buy a Business". The event, to be held at the Gleacher Center, is described as:

"If you are thinking about buying a business, you will not want to miss this seminar. This all-day program features leading authorities on every aspect of buying a private business -- by yourself or with a private equity group."

More information is available via the Chicago GSB Alumni Website.

Silicon Prairie Social 2 Tech Networking Event

2008-01-03T13:15:00.000-06:00

Suburban Tech and Internet Industry Mixer

Thursday, January 24, 2008
6:30-10:00pm
Mullen’s Bar & Grill
3080 Warrenville Rd., Lisle, IL 60532

An opportunity to connect in an informal setting with like-minded people in technology; Silicon Prairie Social is specifically for upwardly mobile tech professionals, tech executives, tech entrepreneurs, technology service providers, Internet professionals, Web 2.0 and startup companies, and the mobile industry. (Note: No professional recruiters, staffing agencies, or active job seekers permitted).

The event is free to attend, free drinks and food will be provided. RSVP is required at http://siliconprairiesocial2.eventbrite.com.
For more information see siliconprairiesocial.com or contact Tim Courtney at tim [at] siliconprairiesocial {dot} com.

Celebrate the New Year with TiE and Google

2008-01-03T07:54:00.000-06:00

Google will host a networking party for TiE Midwest at its offices on Thursday, January 17th, 2008.

This party will bring together business leaders, investors and entrepreneurs to meet and create new partnerships. Attendance will be limited to 100 people, so register before it is too late.

Event Details

Organization: TiE - Midwest

Event Name: Google New Year Celebration

Date: Thursday, January 17, 2008

5:00 PM - 6:00 PM Google entrepreneurial showcase
6:00 PM - 9:00 PM Open networking, including food and cocktails

Location:
Google
20 West Kinzie Street
9th Floor
Chicago, IL 60610

Fee: TiE Midwest Members: no charge, Non-Members: $20.00

To register please go to http://www.tie-midwest.org

Business Network Chicago - Entrepreneur Luncheon

2008-01-02T10:01:00.000-06:00

The BNC Entrepreneur Group is for small business owners looking to expand their network for resources, information, and ideas for growing their business. The next meeting is Wednesday, Jan 9, 2008. The agenda for the meeting is as follows:

After brief introductions by all attendees, Business Coach Jason Rosado will be speaking on setting 2008 goals. As time permits there will be informal networking at the beginning and end of the meeting.

Many entrepreneurs set high sights on their success only to get stalled by a lack of direction, motivation, time, money, or energy. In this interactive session, Jason will demonstrate how highly successful entrepreneurs plan and strategize their business goals to get past these common blocks.

For more info and to register, visit the BNC Registration Page.

January ITDA Monday Morning Meeting

2008-01-02T08:49:00.000-06:00

The ITDA (Illinois Technology Development Alliance) Monday Morning Meeting is a quarterly networking event aimed at preparing early-stage technology companies to seek professional investment.

The event features two or three companies presenting their investor pitches to an audience of investors, service providers and entrepreneurs. Presenting companies receive constructive feedback on their presentations and business models and assistance in addressing questions and concerns that prospective investors would likely raise. In addition, the event is an excellent forum for any organization to build strategic partnerships, expand business development opportunities, and meet with investors.

The upcoming ITDA Monday Morning Meeting will feature Jade Biomedical, Secure Data Imaging, & Tula Foods. For more info and to register:

ITDA Website: Register for Monday Morning Meeting

TiE Midwest Introduces Entrepreneur Mentorship Program

2007-12-13T07:19:00.000-06:00

TiE Midwest has released the inaugural "pairings" for its new mentoring program. The entrepreneur-mentees and their ventures are:

Mary Smith (RevStor)

Aashish Dalal (ParkWhiz)

Karan Goel (PrepMe)

View from the Silicon Prairie:

I don't know much about RevStore (but see my comments on Cleversafe, as they appear to be in the same relative category). As some of you may know, I'm a little apprehensive about ParkWhiz...haven't used the service, but seen Aashish present several times. To his credit, he is a great presenter, and it is novel use of technology, but I just don't see enough need driving widespread use (and I've lived in downtown Chicago, NYC, and Boston). Just too many issues in regards to "real time data" (i.e. availability of actual parking spots)...and is it really that tough to drive around the block a few times and look for parking (is it easier to take one hand off the wheel and look up parking on your mobile phone)? I'm a big fan of PrepMe, partially because I've used the prep material from "the big guys" (most recently for the GMAT a few years ago) and they are generally not that good. I should also note, however, that I'm admittedly biased because Karan is a good friend and a fellow Chicago GSB alum...but out of the three I'd put my money on him. My 2 cents...

It also appears that Tom Churchwell has taken over from Adarsh Arora as TiE Midwest president.

More info in a related Forbes.com article.

Chicago-based Cleversafe Raises $5 Million

2007-12-12T09:02:00.000-06:00

According to PE Week:

Celeversafe Inc., a Chicago-based developer of dispersed storage appliances and software for deployment of dispersed storage networks, has raised around $5 million in Series C funding. Harrison Street Capital led the round, and was joined by Presidio Ventures and return backers New Enterprise Associates, Alsop Louie Partners and OCA Ventures. In other company news, Cleversafe announced that former Motorola CEO Christopher Galvin was joining its board of directors.

The View from The Silicon Prairie:

It has been reported that Cleversafe has lost several key people recently, which is never a good thing...though I don't know why people left (could it be that they no longer buy into Cleversafe? internal turmoil? or perhaps they just got hired away by better offers...which happens all the time). As someone who has spent a lot of time on the both sides of the "buying and selling of IT services and products" table, I think the jury is still out on this one. I think its a cool product and a whiz-bang innovative technology...but will the market buy and at what price?

The pain point is clear. The pain point is fear (i.e. security, which is something that should be feared). However, as far as I know Cleversafe still hasn't really rolled out their pricing (and thus the business model) and the market has yet to accept this product. SANs (EMC, Hitachi, etc.), DB replication (e.g. Oracle), monitoring tools (e.g. Tivoli), and high security network devivces (Cisco, Alteon, etc. etc.) have been around for quite some time...often security is more about the adoption and proper use of technology vs. the availability of it.

Here's a simple example: automated PC backup solutions have been around for a long time, but when is the last time you backed up your PC, let alone used a sophisticated tool to automate that process? Apple is trying to change this with the new Timewarp feature for Macs...but it would be interesting to know how many people actually have set that up and are using it (though I think Apple's marketing machine has finally made this an issue for more then just those people who have experienced a hard drive failure in the past). But I digress...

The problem is that a lot of companies -- and even big companies -- pay a lot of lip service to security but don't spend the time and money to "do it right". Sure, IT budgets can be big, but it is a cost center and more and more IT is about ROI (and it is hard to calculate ROI on an insurance policy). Cleversafe is a way to "do it right"...but just because they (Cleversafe) built it, will they (customers) come?

I wish Cleversafe luck and hope they are ultimately successful. Only time will tell...but either way it is great for the Chicago tech scene that they have closed this round of funding. I say CONGRATS!

Disney buys Evanston's iParenting

2007-12-09T23:30:00.000-06:00

Evanston's iParenting Media, which operates the iParenting.com Web site, was purchased Tuesday by the Walt Disney Internet Group for an undisclosed sum. Full story on the Chicago Tribune website.

If anyone has any scoop on details of this deal, please post...I'm curious to know!

Finding the Best Strategy for Your Business

2007-12-09T23:03:00.000-06:00

DePaul University and the Coleman Entrepreneurship Center are presenting an event on "Growth Options: Finding the Best Strategy for Your Business" on Thursday, December 13 from 8 am to 11 am. For more information and to sign up visit their website:

http://cec.depaul.edu

Chicago Entrepreneurial Networking Event

2007-12-09T22:57:00.000-06:00

Host: Marci Chapman
Location: Red Ivy, 3525 N Clark St, Chicago
When: Wednesday, January 16, 6:00PM to 9:00PM
Phone: 773- 472-0900

This is a FREE networking event for entrepreneurs or people who want to network with entrepreneurs. Please RSVP so we can make sure the bar has enough staff to assist us and invite others who you think would be a good addition to the group.

Red Ivy is just off the Addison stop on the Red Line. Watch for the signs on the building - the door is North of the signs. We will have the back room to ourselves - so head straight back when you arrive. The bar will have a few drink deals and has a nice menu as well.

If you want to be included, please email Marci at marci_chapman@yahoo.com

Subscribe to The Silicon Prairie!

2007-12-07T08:16:00.000-06:00

I ran into Jason Jacobsohn from the CEC last night and he gave me some good feedback on this blog...that I should allow people to subscribe to get posts via email. Done! Now you can click the link on the right side of the page and subscribe to get posts via email, or if you prefer you can subscribe to Feedburner feeds (which has existed for some time).

Enjoy!

And please comment if you have thoughts on any posts, I appreciate the dialogue!

Next BNC VC Group Meeting

2007-12-06T07:27:00.000-06:00

Mark your calendars...the next BNC VC Group meeting will be on January 8th. More details to follow...

2007 IVCA Awards

2007-12-05T07:36:00.000-06:00

I had the honor of attending the 2007 Illinois Venture Capital Association (IVCA) Awards Dinner on Monday night, which is truly one of the top notch events of the year in the industry in my opinion. Not only was it a chance to meet and catch up with various people in the venture capital and private equity world, but it was great to see so many people from the Chicago GSB...from professors and folks from the Polsky Center to fellow alumni who have gone on to work in the industry. It is really amazing to go to an event like this and see just what an influence and power the University of Chicago is in the private equity world...makes me very proud to be part of that group!

The 2007 award recipients were:

Richard J. Daley Medal
Steven N. Kaplan, University of Chicago GSB

Fellows Medal
John R. Willis, Willis Stein & Partners

Stanley C. Golder Medal
Samuel B. Guren, Guren Capital Management, LLC

Again, it was truly amazing to see how pervasive the University of Chicago's role is in this industry. John Willis has an MBA from the Chicago GSB, as do many of the event's presenters/speakers (e.g. Keith Crandell, Ellen Carnahan, etc.). Steven Kaplan is on the faculty at the University of Chicago, as was the person presenting his award, Jack Levin (I was fortunate to have each of them as a professor). Kaplan read off a number of IVCA member firms with former students of his, and the list was quite long and impressive. Obviously there are many other great schools that feed this industry such as Harvard, Wharton, Stanford, and Kellogg...but at least in the Chicago area, the Chicago GSB seems to be at or near the top in terms of playing a role in the development of the industry and people in it.

For more information on the awards and recipients: www.illinoisvc.org

Business Network Chicago Holiday Party

2007-12-04T10:46:00.000-06:00

Tis the season for business networking.

The next BNC event is the "Deck The Halls" Holiday Party on Tues., Dec. 18th from 6:00 to 9:00 p.m. at Swirl Wine Bar - 111 West Hubbard Street.

Other important details:

All are welcome to attend so please feel free to invite colleagues and friends.
It is a cash bar arrangement with no cover charge.
Drink special: glasses of house red or white wine only $7
Dress code is business to business casual.
There is no need to RSVP.

For more info on the BNC, go to www.bnchicago.org

For more info on Swirl Wine Bar, go to www.swirlwinebarchicago.com

Free Burritos at Boloco

2007-12-04T07:49:00.000-06:00

I've had the pleasure of working with the entrepreneur who founded Boloco Inspired Burritos. I've also had the pleasure of eating their food...it is outstanding, and if you live in Boston, I suggest you give this restaurant a try! In fact, they have a great deal going until December 24th that results in a free burrito...what on Earth could be better?!?!

OK, so not news about a start-up in the Chicago area...but, the venture is FUNDED by a firm in Chicago!

Business Network Chicago (BNC)

2007-12-03T13:27:00.000-06:00

Business Network Chicago (BNC) is a professional networking and career development organization which currently serves over 1500 members in the downtown Chicago area. Their next event is the BNC Venture Capital Luncheon, which is this Tuesday, December 04. I had an opportunity to attend the last BNC Venture Capital Luncheon and see a presentation on Embodi Beverages.

The meetings are held at the Illinois Information Technology Association (ITA), located on the 15th floor of 200 S. Wacker Drive. It's a nice opportunity to see a venture pitch its company and ask questions, provide feedback, etc.

For more information:

http://bnchicago.org/

December 2007 MITEF Annual Holiday Party

2007-12-03T00:08:00.000-06:00

The MITEF - Chicago invites members and guests to celebrate on December 18 at their annual Holiday Party. Come on out to share the holiday spirit with your friends and colleagues as we enjoy the exquisite hospitality of Drinker Biddle Gartner Carton. Hope to see you there!

http://www.mitefchicago.org/

i.c. stars TechBash Event and SmartBet Follow-up

2007-12-02T23:59:00.000-06:00

I was unable to attend the i.c. stars TechBash event last week (I was on the road for work), but I heard that a highlight of the event was the presentation of $20,000 raised from the SmartBet Charity Poker Tournament held last summer (which I did attend and had a blast at).

Congrats!

Motorola: Shoo-Zander

2007-12-02T23:35:00.000-06:00

For those of you who have not yet seen the news, Ed Zander is out at Motorola. Motorola's board of directors announced Friday that the chief executive would be stepping down from his post to be replaced by president and COO Greg Brown.
Zander, who said he welcomed the opportunity to spend more time with his family, will remain as chairman until May 2008.

"(It was) my date, my doing, my time frame," Zander told Reuters.

Ton's of articles on the web on this one, but my thought from a Silicon Prairie perspective...if Motorola would have grabbed Navteq when they had a chance vs. letting it fall in the hands of Nokia (related story), would that have changed things?

Capex: Chicago Association of Private Equity Executives

2007-12-02T21:31:00.000-06:00

For those of you in the Chicago private equity community, I suggest you check out an organization called Capex. I recently joined and had an opportunity to attend an event...lots of great networking, a chance to catch up with some fellow Chicago GSB alumni, an amazing dinner (at N9NE Steakhouse), and a really interesting speaker (Dr. Charlie Wheelan, an economist from the University of Chicago).

On the web:

http://www.capex.org/

Chicago GSB New Venture Challenge Winner GrubHub Raises $1.1M

2007-11-16T09:59:00.000-06:00

Exciting news, both for Chicago GSB'ers and entrepreneurship in the Midwest...GrubHub, who I had the honor of competing against in the GSB New Venture Challenge a few years ago (they won!), has raised $1.1M from Origin Ventures. Great work, guys! I had a chance to lift a pint with the founders, Matt Maloney and Mike Evans, last night at TechCocktail and say congrats...best of luck as they continue to grow their company!

Chicago Sun Times Article

TieCon '07 Midwest

2007-11-13T23:30:00.000-06:00

A few reflective thoughts on TiECON '07:

1) Nice Job on Marketing

There was a lot of momentum and buzz behind this conference...lots of people talking about it, emailing about it, etc. As a result, it had great attendance (at the beginning, at least...more on that below).

2) Too Much Marketing

I'm fine with hearing about an event through lots of unofficial channels, and also OK with getting the occasional emails from TiE prompting me to sign up. However...HOLY COW!!! It seemed like at one point I was getting daily emails from TiE and related parties encouraging...no, wait, IMPLORING me to sign up. Even after I signed up, I kept getting these...in fact, I think I was getting even more! Enough already...realize that there is a tipping point, after which I go from looking forward to the event to (almost) dreading the event. Take it down a notch next time...I get it, and I'll sign up if I want to go (and I did want to go...you just started wearing me out before I got there).

3) Attendance

In the beginning, as mentioned, the attendance was really good...very impressive, actually. However, as the day wore on, it got worse and worse, until bythe end of the afternoon the group was just a shadow of its former self. Why, you ask? Read on, McDuff...

4) Lack of Networking / Downtime in the Schedule

The event was 1/2 a day and the schedule was jam packed. That's fine...more bang for the buck. However, sessions were literally on top of each other, and at the beginning of the event they actually announced "We didn't build any time into the schedule for moving from section to section, so please move quickly and save any networking to the end of the event!" Are you kidding me? The #1 reason that people come to these events is to network! To rush people from one session to the other is just silly...give people some time to mingle and say hello to people they know (or want to know)!

Because there was no opportunity to network during the day, I think many people just left...which ironically meant that there were fewer people left at the end of the day for the scheduled happy hour and networking time.

Bottom line...they got a lot of people to the event and lined up some decent panels (I say 3 out of 5 stars), but again...people come first for the networking, and the lack of time for that drove people away (my opinion). Next time, relax the format a bit. If you have what you think is such a great array of breakout sessions, make the event a whole day...or, just put more sessions in parallel and let people choose which ones to attend. Like Frankie said..."Relax" (remember, this is an afternoon away from the craziness of work!).

That said...overall nice job. Minor, easy changes next year and this could be one of the better conferences of the year!

Back in the Saddle (Again)

2007-09-05T21:15:00.000-05:00

Well, I have to admit it...I have been horrible about posting to the blog the last few months. It has been a crazy summer between travels, moving, and starting a new job. My two years at the Chicago GSB getting my MBA were outstanding, but I'm very happy to be back out in the working world again. I'm now focused full-time on venture capital / private equity and have moved on (about a month ago) to a new firm here in Chicago...a great group of guys, and I'm having an absolute blast! More on that later, for now I have a backlog of things to post and will do my best to get caught up and start bringing you the latest and greatest news from the world of The Silicon Prairie!

First up, for those who haven't seen it, here is the list of the winners from the Chicago GSB New Venture Challenge this past spring:

First
Braintree Financial
Bryan Johnson, Chris Kaltenbach, James MacEachern, and Wes Thompson

Second
The Perfect Dinner
Karen Gruber, John Jasper, Chetan Joshi, Sue Klaus, Sara McVey, Mike Sorrentino

Varna Research
Richard Jenkins, Derek Robinson, Vikram Vuppala

Fourth
Peekaboo Intimates
Ryan Blask, Carrie Chan, Nida Kamal, Rachel Williamson

Finalists
HydraStats
Luis Carlos Gonzalez-Rosas, Martin Garcia, Koichiro Nakamura

Albion Software
George Aspland, Phil Schwarz

Jaya
Vinod Kesavan, Brad Romney

Catalogic
Ben Abelson, Jesper Andersen, Vijay Gautam, Doug Kohen, Adam Rodnitzky

Septet Systems
Alexandre Brown

More info and past winners can be found at http://www.chicagonvc.com

I sat in on the presentations, and everyone did a great job. However, I have to admit that I was somewhat surprised at who was picked for the winners. I think the challenge in a competition like this is really being clear on the criteria. For example, should the winner be the team who has done the most so far in starting a company, or the idea most likely to get venture funding? These can be two very different things. Last year I think we had a mix...the winners were both big ideas and had done a good job to date in terms of execution. The winners this year were much more about execution, i.e. people who had built a solid business so far (and should be commended for that), but not really big ideas that a VC would invest in per se. For example, Braintree Financial has done a great job of building their company...but they are primarily reselling other companies products and providing an additional level of service. No real intellectual property and not a very scalable business (i.e., not a VC investment). Again, I'm not criticizing either the judges or the winners...just saying that the criteria this year was more conservative, picking companies that were "farther along" and less innovative (and risky). I mean, hey...credit card processing services and meals to-go vs. a breakthough technology for testing the hydration levels in people? Which one to you sounds like one you would read about in VentureWire?

My 2 cents...but the New Venture Challenge shouldn't be so conservative. The winners as picked just seemed to run contrary to what you learn, for example, in Professor Schrager's New Venture Strategy class or Professor Meadow's Entrepreneurial Finance class. However, as usual, the folks running the competition did an outstanding job.

TiE Midwest: Open Source, Why Pay for Software?

2007-05-16T00:35:00.000-05:00

With the current rash of venture-funded open source companies, the open source movement has entered mainstream software business with an innovative business model. Is it possible to make money selling software that anyone can download? On May 9th, TiE Midwest hosted a panel that discussed what makes it possible to have a successful business model with open source software, who invests in it, and why customers buy it. The panel consisted of the following:

Deepak Rao, Director of Sales at Microsoft

Keith Crandell, Co-Founder and Managing Director at ARCH Ventures

Chris Gladwin, President & CEO, Cleversafe

Roger Liew, CTO, G2 Switchworks

I found the panel to be very interesting, especially since I started a company back in 1999 that was both based on open source and was working with commercial Linux providers to "build a better distribution". Without getting into too much of the detail, here are some key points from the panelists:

Open source is definately in wide use, from the small start-up shop to the big IT department. This is not surprising. What was somewhat surprising was the reason. Though groups like the software because it is relatively inexpensive, the goal is not to get the software "for free", but rather to have the ability to go in and fix any problems themselves (either by patching the software or working with the vendor to patch it). In a time when uptime of our online world is king, abilty to play doctor and make housecalls to sick software is queen.

Open source is allowing software companies to have radically new and improved relationships with their customers (see previous point).

Except in extreme examples of core and widely used software (e.g. Linux, Apache, etc.) open source has not really resulted in "outside" people contributing much code to a project. In cases like Linux and Apache, big corporations have dedicated people to work on those projects, and in other cases where there is a "clear demarcation line" in the architecture (such as the Neuros OSD platform) there has been some significant contribution, but for the majority of commercial open source vendors this just hasn't been the case. Gladwin said that Cleversafe estimates that 95+% of their code is written in house, with the majority of outside code coming in the form of suggested bug fixes.

For venture capital investors, open source still seems to be a mixed blessing...you still have to find a way to monetize and build a profitable company. Many companies are doing this by giving away the software and charging for support. Others, like Cleversafe, are coming up with more creative models where you get some level of service for free but pay for premium components (Chris was still somewhat vague as they haven't launched their commercial application yet).

I think special props go out to the guy from Microsoft, both for having the guts to come to an open source panel and for being a pretty good sport about it. He got roughed up pretty good and kept from getting too defensive (though to be fair he did have to stand up for his company and its model, and as much as I'm an open source pundit we have to admit that Microsoft has made a ton of contribution to technology and software). Interesting thing to note...he said that he things Microsoft will eventually move towards more of a component and usage-based pricing and licensing model. For example, pay one fee to use the basic version of Excel, and another fee for a plug-in (e.g. chart wizard)...possibly even a fee per usage. Personnally I can't imagine having to drop in a quarter every time I want to create a chart in Excel! I think this illustrates what is wrong with Microsoft...instead of focusing on how to make better software, they are trying to figure out how to nickel and dime the customer. They are stating to sound more like the big airlines, with their "pay $2 for headphones" and "pay $5 for a snack" approach to fixing their company, when the more fundamental problem is simply providing better service like Southwest. Microsoft should figure out how to push its software into the online, collaboration frontier (anyone used Google docs to work on a spreadsheet as a group? it is very cool!)...now that is something I may actually consider paying a premium for!

The Chicagoland RPX Group Innovation WhiteBoard Challenge

2007-05-15T19:56:00.000-05:00

Are you a scientist or researcher at a university or corporation with a world changing technology? Perhaps you're an entrepreneur with a product concept that just needs some recognition to take off. Or maybe you just have been inspired by a novel way to solve a big problem.

Would you like to take home $3000 cash for 5 minutes in front of an audience that can get your idea off the ground?

The RPX Group Innovation WhiteBoard Challenge on June 19 is for you.

Sponsored by RPX Group in association with the MIT Enterprise Forum - Chicago, the Innovation WhiteBoard Challenge will enable you to express your idea, product concept or business idea to over 150 of Chicago's business leaders, entrepreneurs and new venture specialists. You will have 5 minutes to explain your idea or technology using a pen and a whiteboard - no PowerPoints, no interruptions - and the winner will pocket $3000 cash at the end of the evening and two runners-up will win $500 each -- if they're good enough.

Everyone is eligible to submit their own innovation concept for consideration, and presenting finalists will receive presentation coaching compliments of RPX Group.

While the evening promises to be entertaining, you will also be able to network with a broad cross- section of movers and shakers active in Chicago innovation and business growth circles. Last year’s inaugural Innovation Whiteboard Challenge was the highlight of the spring season.

Intrigued? You have nothing to lose and $3000 to gain.

Fill out the application form at the MIT Enterprise Forum - Chicago website

The deadline for submission is June 1.

All applications will be screened and a list of finalists will be announced. Finalists will then have 2 weeks to prepare their Innovation WhiteBoard Challenge presentation with the assistance of RPX Group. On June 19, you'll have the chance to tell the world about your idea…and maybe take home $3000 cash with no strings attached.

Freshwater Venture

2007-05-08T01:04:00.000-05:00

For those of you who have not seen it yet, check out the Freshwater Venture site...they've developed a nice directory of start-ups and movers / shakers in the Chicago entrepreneurial community. If you are an entrepreneur, you can submit info on your venture and they will add you to the list. Nice work, guys!

http://www.freshwaterventure.com/

BARcamp Chicago 2007 is set for June 23-24

2007-05-07T21:10:00.000-05:00

BARcamp is an event for technologists, designers, entrepreneurs, investors, etc. to get together and discuss, demo, and experiment with the latest ideas and technologies. The date and location now appear to be set. For more information:

BARcamp - Chicago

The Chicago GSB Renames the Hyde Park Center to the Charles M. Harper Center

2007-05-06T09:08:00.000-05:00

The Chicago GSB announced on Friday that it will rename the Hyde Park Center, i.e. its recently constructed building on the main University of Chicago campus in Hyde Park (pictured at right). The new name of the building will be the "Charles M. Harper Center" after the prominent alumni of the same name.

Read the Story in the Chicago Tribune

Note that the Tribune article incorrectly has "Snyder" in several places where it should say "Harper"...though they may have that fixed by the time you read this.

This "renaming" is wonderful news to me, both because I am happy to see the Chicago GSB get a big donation, and because I'm happy to see the honor go to Mike Harper -- I actually grew up in Omaha in the same neighborhood where Mr. Harper and his wife Josie lived (yes, I'm the one mentioned in the Tribune article). Mind you, this doesn't mean I grew up in high society...the Harpers lived in a nice, upscale but modest house in a little neighborhood on the edge of town surrounded by lots of trees and even more corn fields. After all, this is Omaha, Nebraska we are talking about...where people are very down-to-earth and Warren Buffet still lives in the same house he purchased four decades ago for $31,500. My mom was even on a bowling team with Josie Harper in a local bowling league (Homer Simpson, eat your heart out!).

That's not to knock Omaha, it was a wonderful place to grow up. The rest of my family continues to live there, and I go back often (not surprisingly, I try to coincide my trips with Nebraska football games). Living near a Fortune 500 CEO had its perks, for example the Harpers let the neighborhood kids play tennis on their tennis court (the only one in the neighborhood), and I once got some great advice from Mr. Harper, "if you ever go for your MBA, you should go to the University of Chicago...that is where I went." As I wrap up my MBA at the Chicago GSB this month, I can honestly say that's some of the best advice I've ever received!

So, thank you Mr. Harper, both for being such a great and generous alumni to the Chicago GSB, and for the sage advice those many years ago.

For more information on Mr. Charles M. "Mike" Harper, read about him in the Nebraska Business Hall of Fame (note, Mr. Harper was one of the first people inducted...four years before Warren Buffet!)

An Evening at the Metropolitan Club

2007-05-05T12:57:00.000-05:00

On Friday evening the private equity / venture capital / entrepreneurship clubs from the part-time programs at Kellogg and the Chicago GSB held an event entitled "Private Equity Deal Flow in the Midwest: Past, Present and Future". The night consisted of social networking time plus a Q&A panel made up of the following:

Andrew Cittadine, Entrepreneur
John Hoesley, Prism Capital
Matt McCue, Hopewell Ventures
Raj Pai, CID Capital
David Weinstein, Chicagoland Entrepreneurial Center

My key takeaways from the event (i.e. based on comments from the panel):

Later stage deals are getting even more competitive, with almost all deals going to auction. Traditional PE firms are even starting to lose some buyout deals to hedge funds.
Midwest firms continue to do more and more syndicated deals, which has both positives and negatives. However, the firms represented said that one key difference about doing club deals with Midwestern firms is that they are generally very open and collaborative. Also, many Midwest firms have evolved from regional to national in scope (and even international, e.g. Raj had just flown in from the West Coast and was getting on a flight the next day to India).
Though it seems like more new ventures are getting funding these days, according to these guys it isn't easier (i.e. for early stage companies to raise money) as the bar continues to get set higher and higher. David Weinstein made a great point in regards to this in that so many early stage companies forget that their best source of capital is getting customers, and often these days he is coaching start-ups to either not take money until they have made more progress selling, or to take less money at a lower valuation (he shared his experience at Blue Meteor as a case in point).
Firms compete more and more on earlier stage deals based on what they can bring to the table after the deal is done. David made another great point here, which was that when choosing investors you should find people that can not only bring you talented people to hire, but (more importantly) can bring you customers.

Congrats to Navneet Miglani (Chicago GSB) and Chrissy Amosson (Kellogg) for putting together a really nice event. Not only was the panel great and the venue first rate, but I commend them on doing something that we should do way, way, way more often...that is, getting the Kellogg and GSB folks together!