Faded Glory is a true story of a group of aging athletes, good friends for over 18 years, who never gave up the dream of playing baseball at a competitive level. Through the eyes of their manager Rick Cohen, Faded Glory follows the National Network team, 18 men over the age of thirty-five who have overcome life’s adversities, including injury, divorce, bankruptcy, infidelity, drug addiction, incarceration, and one life-threatening disease. It all takes place as National tries to win a National Amateur Baseball World Series title. Faded Glory is a captivating document of friendship, courage, humor, and the indomitability of the human spirit.

Through his hard work and passionate evangelism of his film project, Rick raised some angel capital for this film (partially through connections he made at one of our StartupLounge events).  I haven’t sought permission to mention the name of the investor in question, but he is one of the most successful technology entrepreneurs in the past decade here – and a good guy to boot.  Just goes to show you, no matter what industry sector your venture is in, you never know where a possible angel investor is lurking, and what motivates them to make an investment.

And interestingly enough, this investor shared this with me:

“I did invest some money in his movie as a result of meeting him at your StartupLounge event.  Not so much because I think movies are a good investment, but because I admire his passion and the way he has bootstrapped it thus far.”

There ya go.

The film has gone on to win a lot of critical acclaim:

• Delray Beach Film Festival Audience Award
• LA United Film Festival Audience Award
• ALL SPORTS LA Film Festival Audience Award
• Atlanta Film Festival Runner-Up Audience Award
• Real to Reel International Film Festival Runner-up Audience Award
• Newport Beach Film Festival – Leigh Steinberg Sports & Entertainment names the film – audience favorite.

And hey, you can’t get better endorsements than these:

ANGELO PIZZO -
Writer of both “Hoosiers” and “Rudy.”

“A compelling documentary with authentic, well-earned emotions.”

ROGER TOWNE -
Writer of “The Natural.”

“Roy Hobbs and the New York Knights live in Rick Cohen. I’ve not seen so much blood and guts, self-less honesty, despair, pathos, passion, honor, and above all, — so much bravery in filmmaking.  Rick’s poignantly invested and dramatized love for his friends and the game of baseball shows clearly in this documentary.”

LEIGH STEINBERG -
Legendary Sports Agent who inspired the character of “Jerry McGuire.”

“This is THE documentary that resonates and connects with the deepest hopes and fears of males throughout the country and is a landmark event–Rick is a truly gifted talent! Faded Glory offers an unique opportunity for women to experience the locker room environment and psyche of men in an alternative habitat. It should not to be missed!”

Hey Rick, can I get a cameo role for promoting this? :)

Sooooo ….. support a local Atlanta entrepreneur and pre-order this awesome film on DVD.  Get the original indie film before Hollywood turns it into a blockbuster that may or may not capture the true spirit of Rick’s original vision. You can visit the online store here.

Rick will be attending our upcoming StartupLounge event on March 6th, and we’ll be giving away some signed copies of the DVD there as well …

Cheers.

Update: Scoble, Fred, and Lance have since commented on it as well.

My views on the pay-to-pitch thing are pretty well known, as I’ve written about it a ton in the past, and we’ve torn the topic to shreds several times on the podcast.  And I think we (the larger community, of which I am but a small part) have done a pretty good job here in Atlanta, at least, of (A) educating the entrepreneurs, and (B) tearing down the walls that allowed that sort of thing to come about in the first place.  Many of the pay-to-pitch groups don’t even bother with Atlanta any more (because they know they’ll get a boot in the face from the community). But I will add a few additional thoughts here …

I think the fact that someone with Jason’s “web-clout” is a bit late in jumping on this bandwagon is illustrative (to me, at least), of how “disconnected” the valley-minded crowd can be from the rest of the country.  Don’t get me wrong – I want Jason to fight the good fight :)  But StartupLounge (and others) have been screaming about this, and fighting against it, for several years.

There is a difference between someone in a place like the Valley paying to pitch, and someone in Des Moines, or Tampa, or Atlanta, et al.

If you are paying to pitch in the Valley, you and/or your idea, must really blow. It’s like the handful of applications for CapitalLounge that we get from startups in California that want to come to Atlanta to find money.  Wow – really? WTF?

If you are paying to pitch in some other part of the country (i.e. an under-served capital region, like Atlanta), you may very well be sitting on the next Google, but you likely don’t have the infrastructure and support system around you to tell you that you are wasting your capital paying to pitch – you may think that you don’t have an alternative. And that is where education comes in play.

Uneducated entrepreneur + desperation = “Gee, I bet I can charge this clown $5K to come ‘pitch’ at my service-provider dry hump fest.”

To me, it is all about supply and demand.  How do you kill the demand, since killing the pay-to-pitch organizers is, well, illegal? We’ve found that making more well-rounded, educated, and agile entrepreneurs is the best antidote for the pay-to-pitch problem.  If I had a nickel for every entrepreneur that we’ve collectively “converted” from the dark side through stuff like StartupLounge/CapitalLounge, PitchCamp, Startup Riot, ATDC, Startup Gauntlet, mentoring, et al, I could fund half the deals in the Southeast at least through Series-D :)

At any rate – good read – Jason’s a firebrand – gotta love it.  Kick ass – take names – peace out.

Cheers.

We made the announcement the other night at our quarterly CapitalLounge event, but here it is again for those that missed it.

AngelLounge is the angel investor community component of Startuplounge.  It is currently comprised of 80+ vetted angel investors in Georgia. The member list reads like a who’s who.

The good news is that not only have we not even scratched the surface of Atlanta, but we are also reaching out to other parts of the state as well, including Savannah, Columbus, Douglasville, Rome, etc.

“This makes AngelLounge the largest organized angel group in Georgia, and quite possibly in the Southeast.”

The group meets each month in an almost “unconference” like setting.  The goals are to have an open forum for the discussion of topics relating to angel investing, to encourage cross-pollination among investors as it pertains to deal flow, to create new angel investors by bringing in high net worth individuals seeking to explore early stage investing as a vehicle, and to create a logical funnel for these investors into the early-stage scene in Georgia.

One of the key pain points that has been constantly brought up at the meetings is the lack of exposure to investment opportunities (“deal flow”).  As evidenced by the over 160 companies that attended our CapitalLounge event the other night (over half of which were new to the event), there is clearly “stuff going on”.  So, putting our entrepreneurial hat on – we listened to the customer, and came up with a solution.  Actually, two solutions – a short term and a long term solution.

The short term solution is available today (the better, long-term solution is in development).

We have rolled out an automated deal referral and distribution system.  To distribute information on your deal, simply head to StartupLounge.com. If you haven’t done so, you’ll need to create a free community account in order to participate.

This is different from investment matching sites such as GoBig Network etc. because this isn’t just matching business plans with a blind database.

The AngelLounge members have organized themselves into vertical markets ranging from IT to consumer products to alternative energy to biotech. Each industry vertical has an angel investor volunteering to serve as an IAC (Industry Angel Coordinator). Any entrepreneur within the StartupLounge community can go online, upload their one pager or executive summary, and select the industries that fit the deal. The deal will be distributed on their behalf to the appropriate IACs. 

Every deal will get seen by the network, period – no bottlenecks – no middleman – no gatekeepers.

The role of the IAC is simply to ensure that the information received is actually a fit for the industry (or industries) that the entrepreneur selected. If it isn’t a fit for that IAC (e.g. the entrepreneur selected the wrong industry by mistake), the IAC simply forwards the deal to the appropriate IAC. Assuming an industry match, the deal is then distributed to the angel members who have expressed an interest in seeing deals in that particular market.

Devlishly simple.

Each angel is free to follow-up with the entrepreneur on their own – this is not a pledge fund, or a fund of any sort, for that matter. This is merely a mechanism to get deal flow going among local angels.

The angels have committed to delivering an initial response to the entrepreneur within within one (1) week. This takes us out of the role of gatekeeper and lets you deliver your opportunity directly multiple investors that actively want to see your deal.

This makes StartupLounge/AngelLounge the largest organized angel network in Georgia, and quite possibly in the Southeast.  This group is growing like mad, and there is little doubt in my mind that we’ll reach 100 members by Q1, and quite possibly double in size in 2009.

A special thanks to Jeff McConnell, Chris Demetree, and the others who logged a lot of time brainstorming the system.  Also thanks to Charlie Paparelli (Paparelli Ventures) who puts a boatload of effort into driving the overall effort with AngelLounge.

BTW, if you are interested in joining AngelLounge as an investor member, contact me. There is no fee to join (why should there be?), but there is an interview process.

Cheers.

Our next Capital Lounge event is next Wednesday, 8/27, and man is it shaping up to be a good one.

As it stands right now, this will be the best investor turn out to date (due I think in large part to the success we’ve had with our Angel Lounge initiative). Right now we have over 40 investors signed up, and that number will probably drive closer to 50 in the next few days. There is a slight edge in the number of angel investors, but it is pretty evenly split between angels and traditional venture capital firms.

Over 150 entrepreneurs have signed up as well, and about half of them are new deals. Very cool to see that trend continue.

Of course, we try very diligently to weed out service providers, job seekers, etc. in order to create an environment conducive to having substantive discussions between innovators and capital providers.

if you want to meet the movers and shakers in the startup community (ATDC, VentureLab, regional VCs, local angels, and a veritable army of fellow entrepreneurs), you need to be there. And why not? It’s free.

We’re going to be making some cool announcements there as well. ;)

As a reminder, we are capping attendance (for entrepreneurs, at least). So if you haven’t applied, and you want to attend, you should probably apply sooner rather than later.

Cheers.

The purpose of the Angel Lounge (a part of Startuplounge.com) is to create an unstructured environment for local angels to meet each other and learn from each other. Our goal is to stimulate investment in Atlanta startups while creating the next generation of Angel investors.This is our second monthly luncheon. Last month we had about 15 angels and everybody was excited about the opportunity to come together on a monthly basis and talk angel investing. We also took a small survey to determine what topics may be of interest to discuss.

This month’s topic is “How to develop your investment profile.” Some of us will share while others will just listen. Not all attendees have made investments. Some of the attendees are just investigating angel investing.

Please feel free to invite a guest or two. The more angel investors and potential investors the better. Just be sure to tell me how many will be coming.

Cheers.

There are a lot of new angel investors out there, as well as many that lurk, but aren’t quite sure where to begin. Well, we’re here to help.

Kudos to Charlie Paparelli (of Paparelli Ventures) for suggesting this idea. Charlie is a very experienced angel investor, and the newest member of our StartupLounge.com steering committee. Sig Mosley of Imlay Investments has also graciously agreed to attend and lend his expertise to the room.

The Angel Lounge – Free Lunch!

Building the startup ecosystem in the Southeast (and in particular, Atlanta) is what the Startuplounge.com is all about. The Angel Lounge is an opportunity for our angel investor attendees to get to know each other and for us to get to know you. Our goal is to “help you help each other” get to the right investment more efficiently. In this open, lounge-like, environment, angel investors will meet prior to the Capital Conference to:

• Meet fellow investors
• Gain an understanding of fellow investor interests
• Discuss the various methods of angel investing
• Learn about the various deal structures and what to expect
• Understand how to best evaluate opportunities while attending Capital Connections
• What to expect in the first meeting outside the conference

More importantly, you’ll get to meet some very interesting people just like yourself. And it is literally a free lunch (compliments of one of our sponsors, Adams Capital). Who knows, maybe someday you’ll do a deal together.

If you are an angel investor in the Southeast, and would like to attend, please let me know. The cost is free, but space is limited.

Angel Lounge will be held on Wednesday, January 30th at the offices of Adams Capital in Atlanta. The actual Capital Connections event will be held a week later, on Wednesday, February 6th.

Cheers.

Cheers.

There was a great article today on thedeal.com entitled “Intel Capital Says Yes to Seed Investing”. Great read!

My favorite quote (attention all VCs, syndicates, and LPs in the Southeast):

Angela Biever, vice president of Intel and managing director of Intel Capital’s consumer Internet investments, explains that the venture group will invest in companies at any stage. When it comes to consumer Internet startups, it’s possible today to start a company so small that if an investor wants to get in on the deal, it must be prepared to play at an early stage. Also, many consumer Internet startups find themselves acquired before they get the opportunity to raise a Series B or an expansion round.

“If you’re not in a deal early, you frequently don’t get a chance to play,” Biever says.

So much has been said about the lack of early-stage capital in the Southeast, and there are a lot of truisms there (along with a fair amount of rhetoric). However, not much has been said about the expectations of the limited partners (LPs) of those funds.

We need to obviously plant a lot of trees if we hope to have a good harvest in the market. Perhaps we should put more pressure on the LPs to give new venture funds some leeway in making some true “early-stage” investments as a small allocation of the larger fund. For without taking risk on little companies, we don’t get to enjoy the benefits of harvesting the larger ones.

Cheers.

While I consider myself to be a business-person first, I am (or was) a software engineer by trade. So, either way you slice it, I like data. The more the merrier. So, let’s examine things logically.

Fact #1: There are far fewer sources of venture capital in Georgia than in other, more established markets. Atlanta, while large for a city in the southeast, is an island. Other areas, such as southern California, NYC, and Boston, all are “connected” geographically to surrounding areas. Let’s face it – looking down from a 747, the northeast corridor from Boston down to Washington, D.C. looks like one massive suburb. Atlanta, on the other hand, looks a lot like a young couple’s first ultrasound – when the baby is only a few weeks old in the womb. Think of Atlanta as a “zygote” when it comes to its maturity as a capital market.

Think I’m kidding? See for yourself!

Note: for the purposes of this discussion, I am not including capital brokers, angel syndicates/investors or private equity groups.

Consider that there are only a handful of large-stock “pure” venture capital firms in Georgia. Here are the current “major” players:

• Noro-Moseley Venture Partners
• H.I.G. Ventures (not even based here, just an office)
• Live Oak Equity
• Cordova Ventures

Then you have a few smaller boutique funds, such as:

• 5 Paces Ventures
• Kinetic Ventures
• Imlay Investments (Sig Moseley)
• Croft & Bender

There are a few others, but my point is this:

There are that many players on one floor of the average office building in Silicon Valley. Okay, I’m exaggerating a little bit, but you get the point.

Over 35% of the nation’s venture capital money is centered in northern California (Silicon Valley, San Francisco, etc.) The number of venture capital firms there is somewhere around 175-200.

Fact #2: The funds here in Georgia are very small. If a VC firm here raises a $50M fund, it is a big deal here. If a west coast VC invests $50M, that is a big deal there. With a small fund, you have even fewer chances to swing and miss.

Noro Moseley is the biggest venture capital player here in Georgia. They recently announced the raising of their latest fund, which is a $200M endeavor. A $200M fund is gargantuan for Georgia. Massive. Compare that to NEA’s (D.C. area) recent announcement of their raising of a $2.5B fund, or even Norwest Venture Partner’s (California) current fund, which sits at $650M.

Perhaps when investors here stop putting their money into real estate, we can plant the seeds for some larger funds of our own, but that is a story best reserved for another blog entry.

What does this mean? With more money to invest, more deals can get done. Bigger deals get done as well. You see a bigger diversity in the types of deals as well. Remember, venture capitalists have investors behind them as well, and they aren’t serving those investors well if they are just sitting on the cash and not investing. And this pressure level goes up proportionately with the size of the fund being managed.

Fact #3: The chances of the average entrepreneur raising venture capital is (based on my exhaustive scientific calculations) is roughly zero (.000).

I say this a bit facetiously, but also a bit realistically. Most ventures are not venture-backed. Very few are, actually. If 1,000 deals come into a VC, 100 will get looked at because they generally have their act together. 10 will go through due diligence, because they have all of the right elements in place. Out of those, one will get funded. The proverbial pyramid.

Fact #4: If you talk to three investors here in Atlanta and get rejected three times, you are batting zero (.000).

This is just simple mathemathics. If you pitch anywhere three times, and get rejected three times, you are batting zero. However, this is a logical segue into my next point.

Fact #5: If you walk down Sand Hill Road in Menlo Park, California (Silicon Valley) and pitch to three venture capital firms, and get rejected three times, you are still batting zero (.000). The difference being that you can pitch in Georgia a handful of times and quickly be out of options. In other markets, you can simply walk down the hall and pitch three more times to three different firms. Welcome to the numbers game.

If you pitch here in Georgia, and you don’t raise funding, all it means is that the handful of firms based here passed on your deal. If there were more venture capital firms with a presence here in Atlanta, your chances would go up, much as it would in Silicon Valley, New York City, Boston, or other such markets.

So, here is my advice to you entrepreneurs who live in an area with a limited capital market:

Look outside your state: Raising money is a numbers game, as I’ve said. The more times you can pitch, the better. If you want to pitch locally (assuming you can get an audience), then do it. But do so with an eye on the larger picture.

Think of raising money as fishing. To catch a fish, you need to go where the fish are. If you are one of 3 dozen fishermen all chasing the same 3 or 4 fish in the pond, it is time to move your quest to a bigger pond.

There is a LOT of capital floating around out there, you just need to find it. One of the many hats you get to wear as an entrepreneur is the one of “archaeologist”. The cash is out there, buried. And it is up to you as an entrepreneur to get out there and uncover it. Good luck!

Cheers.

I stumbled across this post today from Mark Christian Doerschlag:

Pete Cashmore over at Mashable! just wrote about iBloks and I just can’t keep quiet on this one. This got both angel and VC funding. What. The. Heck. I am at a loss for words.

This new desktop application is being called a “3D multimedia slideshow tool” – it allows you to combine photos, videos and music into an odd media mashup that you can send to your friends.

Each iBlok starts with a “mod” – a basic element that you can customize. For example, you can begin with an animated “dancing man” figure made from a number of gray squares. You can then drag photos and videos from a library and drop them on to the squares – if you drag a video, it will play repeatedly on the surface of the square. You can also add music to the mod, and make the character dance. Other mods include a sudoku game, TicTacToe and an animated loveheart. To confuse things even further, they’ve thrown in Mix Master, a music mixing tool.

The question is: why? Why the heck would anyone want to create these things in the first place? And why would I want to download yet another piece of software that has virtually no utility? The fact that it’s nigh impossible to explain the concept is also a concern: how do you sell someone on your product if you can’t even communicate what it does?

First, let’s look at the angel round of $500K. Any monkey with a Powerpoint deck can raise angel money. What is angel money anyway? Some guy (or gal) that has more money than the entrepreneur who is willing to roll the dice on something that is “different”, “desired”, and/or something that addresses a problem. The world is full of such people.

As far as the $3M institutional round goes, again, I go back to the business plan. Maveron was one of the investors in e-Bay. Maveron’s Howard Schultz is the current Chairman of Starbuck’s, and formerly served on the board of e-Bay as well. Maveron’s portfolio also appears pretty balanced. These aren’t trust fund babies with an itch to get on the train. This is big boy football.

Not all investments are going to pan out – we all know this. iBloks could very well turn out to be a bust. Perhaps their technology is outmoded. Perhaps their market projections or assumptions are out of whack. Who knows? But unless I’ve seen the business plan for iBloks, and am able to conduct due diligence, I can’t feasibly criticize the components or structure of the deal.

Remember – the goal of most investors is not to “change the world” or “make the world a better place.” Most of them simply want to get a 7x to 10x return on their capital. This can come in a variety of ways. You don’t have to invest in a company because you “believe in their product.” You can choose to invest in them because you simply see the opportunity to achieve that desired multiple. Perhaps such an opportunity was identified with iBloks. Again, who knows?

History is rife with “dumb ideas” that produced significant wealth generation.

If I told you in 1993 that I wanted you to invest in a “web site” (assuming you even knew what a web site was in 1993), and that this web site was going to have a name that was nebulous and not indicative of its purpose, and that its mission was to sell books to people online, you probably would have bounced me out on my ass.

A side note (but somewhat related): As fellow military veteran and entrepreneur/investor Alex Muse shared recently (by way of Diane Mulcahy), here is Jeff Bezos’ path to capital success with Amazon:

• 3rd Quarter 1994: Jeff scraped together $10K of his own cash and borrowed $44K more.
• 2nd Quarter 1995: Jeff’s parents invest $246K
• 4th Quarter 1995: Two angels invest $54K
• 1st Quarter 1996: 20 angels invest $47K each ($937K total)
• 2nd Quarter 1996: Jeff’s siblings invest $20K
• 2nd Quarter 1996 Two Venture firms invest $8MM total
• IPO 2nd Quarter 1997 – 3MM shares sold raising $49MM

In 1996, if I approached investors with a “virtual pet” idea (Tamagotchi), again, I would likely found myself quickly lying face down on the asphalt in front the VC’s office building. However, within a year of launch, they were available in 30 countries, and on nearly 400 different licensed products (t-shirts, hats, etc.) Over 11M units were sold in Japan and the United States. This spawned an entirely new industry segment, populated by players such as Nintendo and Tiger Electronics.

In 1975, if I approached investors with the idea of taking a uniformly rounded, smooth gray stone, wrapping it up, sticking it in a cardboard carrying case, and selling it as a low-maintenance “pet”, I would have been the recipient of a swift boot in my behind. However, Gary Dahl went on to sell over 1M units of his “Pet Rock”, at a unit price of $3.95 each.

My own grandfather bought a boatload of swamp land in Florida. Everyone thought he was nuts, and rightfully so. Imagine the greed-inspired smile on his face the day he sold it to Walt Disney for the expansion of the theme park in Orlando. Again, the presence of an opportunity, rather than a valuable product or service.

Finally, in his post about iBloks, Mark goes on to say:

Here I am trying to grow a services business in a viable market, going at it alone, but everywhere I go it seems I read more about half-baked software product ideas with zero-utility that get millions in funding. There is something wrong with this picture. This is proof that there are investors out there who have the money, but have perhaps been brainwashed into thinking that crap like this is worth funding. I seriously need to consider taking my case on the road to find people who want to invest in something that has a stable future.

Note: this piece is not a knock on Pete or Mark. I don’t know them at all. I’m just sharing my thoughts on this one. I will even go so far as to say that I understand their frustration (especially Mark’s).

Cheers.