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A lot of people come my way when they start thinking about raising money--either because I used to work for a venture capital fund or because my company, Path 101 just completed our 350,000 angel round.

Without fail, the first question is usually, "Who should I go to?" Many people feel that, especially in NYC, angels willing to invest in early stage deals are hard to find. The entrepreneurs attend "exclusive" networking events to meet angels only to discover that few investors actually attend these events and those that do are often not looking at things in your stage or area.

These are the last places you should look, as far as I'm concerned.

It's the same thing as trying to meet someone great in a bar...   Sure, it happens, but the odds are against you.  They don't know you, you don't know them.   You don't have any idea what the other person is looking for, what they value, or whether they're even really in the market at that moment.  Maybe they're just getting out of a bad relationship, or in an angel's case, just lost some money in a bad deal--in your niche, too.  Plus, in general, there are way more potential angels NOT going to angel events than actually going.  Similarly, the number of single people far outpaces the number of people who hangout in the hottest singles bars and clubs.

There are a few keys to improving your odds with angels, and this advice, not surprisingly, works with dating, too--the big difference is that one of these activities makes you money and the other is likely to burn a hole in your pocket.  :)

First, you want to start a lot "closer to home".  Who knows you the best?  Who trusts you?  Remember that the requirement for an angel investor is that they be accredited investors.  These are basically either insitutions, or if they're individuals, they need to make over 200k a year (300k for couples) or have a million bucks of net worth.  What they don't need is a shingle on their door or business card that says "angel investor".  An angel investor might be the person in the neighborhood you grew up in who owned the biggest house--someone who knew you and your family from a religious organization perhaps.  They could be your previous or current employer, or their boss--just generally someone who knows you well enough to think that you can be trusted, that you'll give it your all, and that you have the skills to succeed.  These should be the easiest people to convince that you're worth backing--and other angels are going to want to see this.

Should that mean family?  Eh...  I don't know about that.  I think you're going to need your family for support, emotional strength...   You're going to need someone to turn to do say, "Wow, things are going really bad, I'm really worried." and I don't think you want to eliminate the possibility of being able to say that to your family, because they've got their retirement funds in your startup.

Depending on your industry (this of course might be tough if you're a social worker), I've often said that if you don't have enough industry experience and enough of a network to have at least $150k of relationships on your own, I'm not entirely sure how successful you're going to be in starting a company.  Even in the early going, it's really obvious how much success hinges on the company you keep.  There's just too much to do, too much to know...  I don't know how any entrepreneur who doesn't know at least a handful of more successful people than them can do this job, frankly.   You need to know people in the space who are willing to go to bat for you--those are the people likely to fund you.

On top of that, I can't overstate the value of industry expertise.  If a startup has literally zero connections to money, that probably means that they don't necessarily have a lot of experience in their particular industry. Otherwise, they would have known SOMEONE who made money in it.   In my mind, that's a problem.  Even the most disruptive business models require at least a little bit of industry know-how...  of nothing else than to know exactly how to be disruptive and deliver the deathblow to the old school companies in your space.  You need to know the landscape, how money flows, how value is created... 

And you get this experience not just by having any job in your space, but by actively being a leader in it--taking on responsibility, leading people like you with similar interests...  Again, also like dating.  Instead of always looking for dates, if you're just getting out there, being active in your social life and hobbies, you're more likely going to come off as the kind of person people want to spend time with--and in the angel situation, who people want to spend money with.  If you weren't a "entrepreneurial" before you started your company, whether in your hobbies, volunteer activities, student groups, professional orgs, what are the chances that you'll be successful in this startup--your first real leadership challenge?

So, ideally, you've got some connections to successful people in your own industry.  Your target angel list should include the top 30 most successful people you can find in your space--not that you want to include all of them in your deal, but you need to talk to a lot of people because you're going to get a lot of no's.  The biggest reason why you want these people in your deal is because they can vet your idea.  If you've got an idea for a retail concept, and the founder of Jamba Juice invests in your company, clearly that means a lot and that you're probably onto something.  You still could fail, but at least and "insider" has deemed your idea not to be completely stupid.  If you can't convince any of the 30 most successful people in your industry to back you or you can't even network your way to them, I'd say that's a big issue.

When you actually get in front of these folks, don't discount what they can offer besides just a check.  We got a ton of value from meeting with successful entrepreneurs before our round.  It was great when people inquired about the potential for investment, but even when they didn't, we learned lessons that were just as valuable. 

Someone asked me the other day how to ask?  Do you just come out and say it?  What do you ask for?  A certain amount? 

We tried to avoid asking as much as we could.  If people are interested, they're going to bring it up.  We just basically said, "Here's what we're doing... here's how much money we're raising...  We'd love to get any feedback you have." 

We meant that, too... can't overstate that.  It was great when people volunteered to write checks but you can't expect it..  Even though these were folks that obviously had the money, it's still a lot to ask for and angel investing is pretty risky.  We did, of course, nudge a few people when we really wanted them in and they didn't bring it up on their own.

As for size of the round, terms, etc...  we did find a couple of more sophisticated folks to guide us on things like the security, the price, and then we sollicated lots of feedback from others.  You don't want to have a 8 way (or in our case, a 20 way) negotiation on the docs, so if you can find a couple of folks to commit early, and anchor a fair round, that will make your life a lot easier. 

Number is a big question people have, too.  We had more than anyone else I know...20 people.  I wouldn't necessarily recommend it, but outside of all the paper shuffling, I'm so excited that we've got all these great people involved and helping us out.  Actually, the bigger question was how small an investment were we willing to take.  For what it's worth, we took a few 5's and 10's under the following conditions:  Did they add some kind of unique experience for value?  Or,  were they just nice people wouldn't cause us a lot of headaches to manage?  No reason not to take 5's otherwise, because they day may come when you're down to your last few grand and you'll be glad you took it.

Anyway... that's what we learned...  I'd love to hear lessons from others....

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I just got my pic on DailyIdea.tv...  wooo...   I've made it!

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Anyone who's ever chatted with Nate about BricaBox often has the same response: confusion.

Nate's a good friend, but he's a typical visionary founder in that he's hesitant to succumb to others' bastardized Web 2.0 analogies of what the product actually does.  Many entrepreneurs cringe at being called the "Wikipedia for this" or "Flickr for that" or "del.icio.us but with blogging".  It goes against the vision--the bigger picture.  They seem to think it cheapens their accomplishment, but I disagree.  People need to compare new things to things they already understand.  It helps them process new ideas.

So, since Nate doesn't have an elevator pitch, I've decided to create one for him.  BricaBox is pretty simple actually.  It is...

"A wiki with depth."

Wikis are pretty flat.  You find a webpage, you click into it and add text.  You can add links, but links just enable you to travel sideways in a flat world. 

BricaBox enables outsiders to add structured content to a page--content that has all sorts of other attributions, like restaurants that not only have locations, but menu items as well.

So... who cares?

Well, any publisher who cares about interactivity, engagement, and pageviews should care. 

There are some brilliant sites out there on the web that are what I call "rotating cubes".  Most sites are essentially databases, but these sites, through their structure, expose all the various data elements to users as separate pages.  Some of my favorites are IMDB, Last.fm, and Baseball Reference.  Every element in their database is a new page, semantically connected to all of the other various datapoints associated with it.  On IMDB, actors are in movies and movies have directors who've done other movies.  You can click sideways and up and down this side forever--and these types of sites often gets lots of pageviews.   IMDB gets 8 pageviews a visit.  Last.fm gets 6.  Baseball Reference gets almost 5.  By contrast, the NY Times gets 3 and Citysearch gets 2.5.   Those are pretty flat sites.

What structured, open content like a BricaBox does is bring your database out into the open, making it crawlable, clickable, and easily navigated.   It's something that any publisher with a structured database should think about implementing, lest all their good data stay below the surface of their web, never to be discovered by users, crawlers, or anything else that floats by.

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On the nextNY listserv, there are a lot of businesspeople who think they're just a developer away from a great web startup.  It's certainly possible, but I often find that they haven't really fleshed out their product idea too much.

I'd very very strongly suggest that, before you start paying someone to build anything, you do some extensive product spec work...   talking to as many people as possible about what you're building. 

Hold a few feedback sessions, too...   ask a few knowledgeable people to sit in a room to hear your idea and give feedback on its current state and where it might go.  Be open to their suggestions...and give them pizza!

Here's a checklist of things I would do before paying dollar one to start building:

1) Narrow down your market vertical...   Weddings or adventure sports?  Feature creep is a killer at an early stage and companies often try to do too much.  Your end product, if it comes to market, will be so much smaller than you imagine.

2) Outline 2-3 things you things you want to focus on within that niche..   You'll prob narrow down to one, but keep an open mind about possibilities, because feedback is going to make you alter your idea.

3) Find 5 sites that do at least some aspects of what your site does and use them extensively... like everyday for a week or two at least (ideally longer!)... know all the ins and outs of the service.   Group all their features into a) things they do well b) things I can do better/different c) things we can work together on and d) make a list of things you wish they did.

4) Take all the features and rank them in terms of importance...     This way, you'll realize whether you're building a new mousetrap, because all your top features are category D or a better mousetrap, b/c they're all category B or C) more of a mashup.

5) Take your list and imagine what ties this all together in one site if you can do 1 feature, 3 features, 10 features, etc...  Where are the natural grouping points... and what is the minimum amount of things that gives you a viable site.

6) Talk to 5 high level people in the industry about the smallest versions of your idea and get feedback.   After their feedback, go through this whole process over again.

6a) (Optional)  Blog this whole process openly and solicit even more feedback.

7) Then, MAYBE I'd talk to a contract developer... but only then....    Of course, if you can get someone more technical working on this process with you at no cost.... just to help shape the idea.. that's ideal.

In addition to this, you need to create a plan to be executed everyday that makes you exactly the right person to do this idea.  It will be incredibly difficult to get backing and support for your project unless people feel like you are THE person to do this startup, you understand those industries much more than almost anyone, and have publicly associated your name with those industries.  Starting out by blogging about those industries, maybe running some learning annex courses, a meetup group, etc. is a good start.... because it will sharpen your thinking on the space and attract others with similar or better yet, contrary ideas.

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The other night, well over a hundred people packed Antarctica Bar to celebrate the 2 year anniversary of nextNY.  In two years, our ranks have grown to 1500 people, with probably close to 1000 different people attending our events at one time or another. And the group is a neat story in itself.  Anyone can start an event.  There are no titles, everyone is a participant.  The listserv buzzes with questions, comments, recommendations, from a wide spectrum of tech and digital media folks in NYC...  entrepreneurs, investors, designers, developers. And yet, no NYC based reporter has ever written about it. I just read this Investors Business Daily article about how networking groups in L.A. are helping to put that city on the map as a tech center.  We'd love something like that. Besides Caroline McCarthy, we never even see tech reporters at our events...  yet I always get calls from people asking me for intros to cool companies and wanting to know the latest buzz. What gives?    

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Matias was institutionalized after trying to set a car on fire with his children inside in Pennsylvania, police said. Family members said it was only after one of his sons said goodbye to his sister that Matias changed his mind and decided not to torch the car.

It was not clear why he continued to have visitation rights.

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From the NY Times...

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Tonight, at Antarctica Bar, is nextNY's 2 Year Anniversary.  Yup, that's the place we first got together back in February of 2006.

Come and catch up with people you haven't seen in a while, people you've never met, or people you'll be hanging out with for the 4th time this week because of all the other tech parties going on in NYC this week.

Antarctica is located on Hudson Street, between Dominic and Spring.   The closest subway is the Spring St. C, E.   We'll start showing around 7PM.

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• The Problem with Social Media Marketing - Bokardo
  Social Web Design by Joshua Porter
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Michigan and Florida decided to move their primaries up ahead of Super Tuesday, against the wishes of the Democratic party.  So, the party decided not to count those primaries and all the candidates decided not to campaign in those states. 

After she won them, and now that she's behind in the delegate tallies, now Hillary wants those primaries to count. 

Obama's name wasn't even on the Michigan ballet!!

She says she worries about disenfranchised voters, but then when the casino workers in Nevada officially endorsed Obama, she filed suit to prevent them from caucusing inside casinos during that state's primary.

And then there's the issue of superdelegates.  WTF even knew these people even existed before this election?  Here you are thinking that your vote counts for something, and then you find out that a bunch of political insiders can outvote you come convention time. 

Obama wants superdelegates to vote along with the people of their states.

Hillary wants superdelegates not to vote for the candidate that the people in their state voted for, but to "vote their conscience."

To me, that's just about the most objectionable stance you could possibly take on this issue.  It's less democratic. 

She thinks that superdelegates should not"be swayed by current trends"...   You know, like the trend of people not voting for her.

Her campaign strategist, himself a superdelegate, said that superdelegates should vote by keeping in mind "their best judgment in the interests of the party and the country."

I hope they do just that.  

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I found out the other day that Alex has started naming our servers after famous chefs.  It made me wonder what other naming conventions people might use, so I Twittered a message asking for people's responses. 

So far, here's what I got:

Rick Stratton writes, "We always had super heros... Batman, robin, superman... Got down to grn lantern."

Mark Ghuneim writes, "our naming convention for boxes uses people who got away with murder : shug, oj, philspector etc..."

Zelnox added, "We name ours after energy drinks, like redbull and guru. ^_^"

Jason Baptiste chimed in as well.  "famous spaceships. ie- apollo, voyager,etc."

C.C. Chapman names his after, "characters from Shakespeare."

What about you?  What's your hardware nomenclature?

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  In the early days of blogging you could go to the Technorati Blog Index, enter some identifying terms for a particular niche topic and discover what the top ...
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Starting next Wednesday, I'll be teaching ITAC's Fast Trac business boot camp program. 

What is Fast Trac?

Fast Trac is a 12-week comprehensive business boot-camp that helps companies develop a well-honed business plan, solidify strategies, understand the investor mindset and better position themselves to attract capital. The program is suitable for NYC businesses in a variety sectors - technology, new media, green...

The cost is usually $1000, but is $800 for anyone who comes through this blog and mentions me.  It includes all materials, weekly reviews, one on one session with finance pros and a final review of the Full business plan.

Why should you go?

Could you just read a bunch of startup blogs or books and do a bunch of informational interviews with folks and get a lot of the same content?  Maybe.  Are you actually self-directed enough to do that?  Eh.  Are you going to get one on one reviews of your business plan with people who have no other interest than to just make sure graduates of the program turn out to be as successful as possible?  Not likely. 

ITAC has a track record of having over 300 companies attend over the past few years and those companies have, gone on to raise over $90 million.

FastTrac runs for 12 consecutive Wednesdays from February 20th to May 7th, 2008, 6:00 p.m. to 9:00 p.m.

The following two forms are due this Monday. 

Business information form

Application

Please send them to Veronica Price at vprice@itac.org.

Full disclosure, I am being paid to teach this course, but my compensation has nothing to do with how many people sign up for it.

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