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What Are the Pros and Cons of Investment From a Strategic Entity?

Q:  Can you please touch on issues associated with first round financings from corporate or strategic investors. Particularly when the strategic is a competitor. What are some of the pitfalls and opportunities associated with this type of an investor in an early stage company?

A: (Jason)  There are both potential positives and negatives taking money from a strategic investor.  And despite the arguments for and against, there is a...

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The Priorities of a Venture Capitalist

I'm baffled whenever I hear from a CEO that he's having trouble getting a response from one of his VC investors.  Unfortunately, this is a very common occurrence in VC-backed company land.

After noticing this during the Internet bubble around the turn of the century (doesn't that make it seem like so very long ago), I'm starting to notice this again more frequently.  As I pondered this the other day, I tried to discern a pattern, but ...

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Wanting Out of a Partnership

Reports last week indicated that Siemens, the German conglomerate, was looking to end its partnership with Fujitsu Siemens Computer.  According to CNET News.com, the nine-year-old joint venture could be valued at between $3.12 billion and $4.65 billion.

With numbers like that, it's crucial to have a clearly-defined exit strategy. 

Especially without numbers like that, you need to have a clearly-defined exit strategy.  Both...

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Great time to start a venture fund?

Yesterday a couple of friends stopped by to tell us about their plans to launch a $100MM fund.  Ironically, this might be the perfect time to do so (at least for people with a track record of excellent returns).  During our conversation we began talking about venture fund economics and I recalled a couple of posts Fred Wilson wrote that give a great insight into the process (I have mentioned them before).  In any event I am repost...
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Chairman, CEO, President and Founder

Why not add ‘master of your domain’ while you are at it.  Really?  Ask yourself, do I need all of those titles?  I really doubt it, especially if you are involved in a startup.  Here at Big in Japan we decided to allow employees to pick their own title (i.e. as long as it wasn’t traditional).  For example, my title is Social Ninja and our lead developer is Bento Boxer.  The point was, in a startup (especially early ...
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Jason’s demo advice for startups

Jason Calacanis (via Mike Arrington) has some wise advice for web startups interested in improving their demos.  Here is Jason’s email to entrepreneurs:

For the past 10 days I’ve sat through 200 company demos for the TechCrunch50 conference. These demos are mostly done over the phone for 10 minutes using the phone and web conferencing software like WebEx or Adobe’s wonderful new “Connect” service.

After doing 2,500 minutes of demos (40 ...

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Rackspace Prices IPO

Rackspace (RAX) priced today at $12.50 / share near the low end of a range of $12 to $16 per share through a dutch auction process. It was a tough deal to get through even with Rackspace’s high quality numbers. They ended up raising $187.5 Million in cash (down from an initial desire to raise $400 [...]
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Summary of Angel Tax Credits

One of my graduate students, Jeffrey Williams, just published a paper that examines angel investor tax credit laws through the Angel Capital Educational Foundation.  His paper looks at four state programs as examples of differing approaches. 
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Dell Trademark: Cloud Computing

Dell Trademark: Cloud Computing: There is something broken in the trademark process when a company can get a mark on a term of art that is already well established.  Dell filed this application in March of 2007 when “cloud computing” was already in use.  For instance, by simply googling for “cloud computing 2006” the first result is an article in ZDNet that has “cloud computing” in the headline.  As several blog posts point out, a...
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How I lost $20,000,000+ in 18 months!

If I had to come up with a single reason I started this blog it was to share my own ’startup’ experiences; the most cathartic of which was a post I wrote in 2005 titled “LayerOne: My Biggest Failure!“  Around 1,000 people read the post back then, but my readership has grown in the last three years to between 50,000 and 75,000 unique people; readers who never heard the story.  I believe some of the most important lessons one can learn a...