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Crowdfunding & Angel Investing

With the passage of the JOBS act, the increased publicity of successful angel investments, and the continued volatility and general distrust of the public markets, more people are trying their hand at private investments.  As a result, a rash of crowdfunding and other websites have sprung up to help make connections between investors and investment opportunities.  This is an ever growing list of those sites, so please add your favorites in the comments and I’ll update this post.

 

40Billion (www.40billion.com)
Says they’ve funded $67 Million to date. Works through your social network and allows gifts & loans. Free to start, then monthly fees and percentages of raised funds will be due.

AngelList (www.angel.co)
Undisputed leader in the space.  Free to list and invest.  Focus seems to be new tech, Web 2.0, and mobile.  Lots of activity by well-known angels.

Business Catapult (www.businesscatapult.com)
Free to list up to a certain point.  As of August 2012 still in beta.  Seems to focus on tech and Web 2.0 startups.

CapLinked (secure.caplinked.com)
Free basic account, then membership fees.  Full file sharing and communication system for startups and investors.

CapLinked (secure.caplinked.com)
Free basic account, then membership fees. Full file sharing and communication system for startups and investors.

Funding Launchpad (www.fundinglaunchpad.com/)
Developed out of Boulder, CO. As of Nov 2012, had raised $46k through their site…

Go BIG Network (www.gobignetwork.com)
Free to search, fee to contact investors.  Active network and many successful fundings.  Variety of industries.

Indiegogo (www.indiegogo.com)
Free to browse & invest, 4% fee on full funding, 9% on partial funding + CC fees.  Non-profits and small project focus.

Invertual (www.invertual.com)
Free for investors, membership fee for companies after a free trial period.  Seems to fit any business & investor type.

Invested.in (www.invested.in)
Custom designed crowdfunding portal, plus fundraising for charities and small projects. Free to browse fundraising.

Kickstarter (www.kickstarter.com)
Free to browse & invest, 5% fee on successful funding + CC fees.  Creative projects only, no non-profits or charities.  Must achieve funding goal (all or nothing).

Mymicroinvest (www.mymicroinvest.com)
European, heavy vetting, direct investors with voting from the social community.

Smallknot (www.smallknot.com)
Free to browse campaigns, a “sales rep will contact you” for a listing.  Focused on small, local businesses.  As of August 2012 I only see campaigns in New York, NY and Greenville, SC.

U.S. Angel Investors (www.usangelinvestors.com)
An “informal investment group of accredited angel investors”, meets in Palo Alto, CA and you make your pitch in person if selected.

 

 

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I need your nomination as one of the 25 Most Promising Social Entrepreneurs!

My company, The Paradigm Project, a startup based right here in Colorado Springs, CO, has been selected by BusinessWeek as one of the top 25 Most Promising Social Entrepreneurs!  This is a great honor, but now I need to ask for your help.  Voting has been opened to select the top five from the list, which will then be published in the magazine.  This could go a long way for bringing attention to our organization and increasing the ways in which we can help and support the people and communities we are serving.

Here is the link for you to place a vote for us.  It takes less than 10 seconds and does not require you to create a login: http://www.businessweek.com/articles/2012-06-21/vote-for-americas-most-promising-social-entrepreneurs

Also, if you would help a bit more, please post about this on any of your social media sites.  To make it easy for you, here is a sample that you can just copy and paste onto your profile:

  • FACEBOOK/LINKEDIN/GOOGLE+
    The Paradigm Project made BusinessWeek’s 25 Most Promising Social Entrepreneurs list. Vote them to the final five: http://ht.ly/bLxjv
  • TWITTER
    The @ParadigmProject made @BusinessWeek’s 25 Most Promising Social Entrepreneurs list. Vote them to the final five: http://ht.ly/bLxjv

 

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Brad Feld in Colorado Springs

Photo: Tucker Wannamaker, Magneti Marketing

Friday was a great day!

Breakfast at Colorado College.  Presentations from a couple of great startups, including my friend Ian Lee at Engage Social Media Applications.  Fantastic weather here in Colorado Springs.  And the indomitable Brad Feld.  Wayne wrote a great article about the morning, so go check it out.

Lunch was hosted by UCCS and El Pomar and featured a panel of investors and entrepreneurs: Jan Horsfall of Gelazzi, Jeff Cooper of New Venture Resources, Bill Miller of PV Strategies (former chairman of XAware), and Brad Feld of Foundry Group, TechStars, etc.  40 or so business and community leaders were in attendance to hear the panel’s thoughts on capital flow in our region.  I’ll try to summarize that discussion in another post.

Afterward, my friends Tucker Wannamaker and Marcus Haggard from Magneti Marketing grabbed 15 or so young entrepreneurs and a couple of city government representatives (thanks Brandy and Donna!) for beer with Brad at The ModBo, in the center of the arts alley district downtown.  After checking out his really cool video, we asked him a bunch of questions.

One of the best questions: “Instead of trying to attract venture capital, how do we really improve the culture of entrepreneurship in Colorado Springs?”  Brad’s answer was straight forward: “Go out and do $#!%”  But it has to have the following four elements in order to succeed.

  1. Entrepreneurs must lead the activity, not government, not non-profits, not even venture capitalists or other money guys.  Real, tested entrepreneurs.  And 5 or 10 of them need to be visible, outspoken leaders.
  2. You must take a 20 year view from today (not from 15 years ago).  One day, you’ll wake up and realize the system has hit critical mass and the same 5 or 10 people aren’t leading everything anymore.  That’s a good day.
  3. Measure in terms of relative growth (year over year) not absolute growth.  Commit to starting more new companies next month than you do this month, for example.
  4. Embrace and engage everyone.  If anyone (especially entrepreneurs!) wants to get involved, find something for them to do.  Don’t judge them, make them prove themselves, segregate them, exclude them, defend your own territory, or any of that other unnecessary junk.  Just accept them and put them to work (real work).  Flakes will find their own way out and the sneakier actors will get pushed out by the system as a whole.  Worry more about having a reputation for accepting and working with entrepreneurs.

While all that sounds nice, Brad, have you seen Colorado Springs?  We’ve got the “good ol’ boys” to deal with.  We can’t just go out and do $#!% because they probably already have a committee for that $#!%.  They don’t like people messing with their $#!% without first consulting the committee who will ponder it over for 2 years.

Brad suggested starting by joining their committee (remember, be inclusive) or otherwise honoring whatever system is in place.  If they don’t respond well, then just go do it yourself (Brad called it being subversive).  You can’t be blamed for not trying to include the establishment and one of two things will probably happen:

  1. Either the structure in place is just wasting time and will vaporize and your thing will takes its place, or
  2. They’ll quickly adopt your activities because you’ve finally brought along the real content they’ve been looking for.

And when you do your thing, just get started.  Don’t find a President and a Vice President and a Vice-Vice President.  Structure adds nothing of value to your activity.  (We learned this doing the Springs Vision Forum with four “founders” and a bunch of random people who offered to help)

Brad also talked about celebrating the entrepreneurs in our community in a real way, not to give them big heads but because we need heroes.  We need examples to raise the bar for us and visibly live out their lives and their work so we can learn from them.  And then when they’re recognized, they need to humbly acknowledge that it is only because of our great community that they could be successful (and it needs to be true).

We as a community of entrepreneurs need to remember that anything that helps entrepreneurship in Colorado Springs (or even in Colorado or the United States for that matter) will help everyone.  Stop fighting over who gets what credit or title.  Also, get “fresh meat” into the system regularly, preferably by taking advantage of our great schools and keeping students here.  Brad pointed out that Colorado Springs is far from saturated with entrepreneurial activity.  Our 625k people vastly outweighs Boulder’s 225k and they’re doing ten times what we are (at least!).

That’s more than enough to get us started.  Thanks Brad.

More about these folks (in case you don’t know them):

Brad Feld: Brad has been an early stage investor and entrepreneur for over twenty years. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Intensity Ventures, a company that helped launch and operate software companies. Brad is also a co-founder of TechStars.  Brad also wrote two great books that I highly recommend: Do More Faster and Venture Deals.

Peak Venture Group: Since 2000, Peak Venture Group has provided high quality events, educational seminars, mentoring, investment opportunities, and socials to literally thousands of entrepreneurs, business leaders, and executives in the Colorado Springs region. Our goal is simple: grow and strengthen Colorado Springs business community.

I’ve been on the board at PVG for a couple of years and they’ve got to be the closest group to the kind Feld was talking about in terms of supporting entrepreneurs just for the sake of improving our region.  I’ve personally given away more free advice than I care to count through PVG and it’s been a great experience.

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The Ten Year Transfer Cycle in the U.S.

BiggsKofford had the privilege of sponsoring a presentation by private capital market prophet Rob Slee on June 23 at the Cheyenne Mountain Resort in Colorado Springs.  Among other topics, Slee presented his U.S. Ten Year Transfer Cycle concept and extended it to predict the next ten years.  Let’s take a look.

10 Year Transfer Cycle

According to Slee’s research, the United States economy experiences a recession (or other economic downturn) during the first three or so years of every decade.  The capital supply to the private markets becomes restricted, primarily because lending is restricted, which reduces the leverage a buyer can achieve and lowers valuations as well as limiting access to working and investment capital.

This begins to transition around the fourth year as companies improve profitability which leads into a period of free-flowing capital into the private market.  Humans are creatures of habit, so we quickly forget the recession we recently survived and continue to spend and invest until we are over leveraged and over invested.  At this point, parts of the economy begin to feel the strain and the economy as a whole is affected by the end of the ten year period.

Why will such a cycle be expected to continue?  Because the nature of people, namely, the private business owners, bankers, investors, and politicians in America, is to be overly optimistic in the good times and overly pessimistic in the bad times.  We also take a predictable amount of time to adjust to changing conditions and we can be counted on to react in certain ways.

Today, the catalyst for our recession was sub-prime mortgages followed by complete financial system meltdown, bankruptcies, and major fiscal policy changes.  Impending commercial mortgage uncertainty will help us to remain in a deal recession for the next several years.  Business values will remain flat or fall further as we struggle to adjust.  But adjust we will (or go bankrupt) and the survivors will profit again.

In my last post on business value, I mentioned that you can expect to achieve the highest return when selling your business at the right market timing.  If the transfer cycle holds, the best time to buy a business will be any time from now through 2013 or so.  The best time to sell a business will be toward the end of the prime selling time, or roughly 2016 – 2018.  Obviously, businesses will continue to be bought and sold every day, but a savvy business owner will look to exploit this cycle to his or her advantage.

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The Value of Your Business Depends on Your Timing

We all know the three most important factors in the value of real estate: Location, Location, and Location.

There are three factors that affect the value of your business the most: Timing, Timing, and Timing.  Assuming you’ve got a profitable enterprise with value outside of your own day-to-day involvement in the operations, your decision to sell the business will be most highly rewarded when three timings all line up perfectly.

  1. Personal Timing.

    What’s your Plan B?  What is it that you want to do next?  If you realize you won’t have anything to do after you sell your business, then you’ll be reluctant to give it up until you have to.  When you do have something to do, say, another investment or business or even taking a trip around the world, then you will be much more inclined to do what is necessary to sell your business.

  2. Business Timing.

    Ok, so you’re ready to sell, but is your business ready to be sold?  If you sit down with an advisor because you’d like to cash out in the next six months and they find that major changes need to be made to your operations or your financials then you either have to wait or understand that the buyer will discount their offer as a result.  Always be ready to sell!  Look at your business today and make the changes now because someday, you will transition your business.  You never know when someday will come, because of…

  3. Market Timing.

    This is the one that is completely out of your control.  It is also the reason why your business should always be ready for transition and you should always have a Plan B.  When the market is ready, you must be ready.  It’s not always clear when the market will be primed to provide you with the highest return although there is a general cycle in the United States economy, which we’ll talk about more in the next post.

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Peak Venture Group Social Recap

Peak Venture Group sponsored a social at Hondo’s Sports Bar tonight with food, drink specials, and 30 – 40 entrepreneurs and investors to mingle with.  I was only able to stay for about half an hour and yet I made some interesting contacts:

  • A couple of guys are writing a “Google killing” search engine.  Glad they hooked up with Shaun McNerney!
  • A young man just graduated from CU with a degree in marketing was looking for opportunities.  His dad was in tow as a potential investor and owner of several businesses himself.
  • A client needed some tax advice (to which I was fortunate enough to know the answer – given that I’m not the tax expert at our firm!)
  • A couple of high powered managers were bored at their current positions and looking for new challenges.
  • Davin owes me a lunch (not sure why, but I’ll never turn down a free lunch!)

All that was in just 30 minutes and as I peeled myself away, I’m sure there were more interesting discussions and connections that I missed.  Next social is probably in the Fall sometime, so stay tuned and I’ll keep you posted!

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Etienne Hardre is a CPA with BiggsKofford Capital specializing in helping entrepreneurs answer these questions: How do I sell my business, buy a business, or grow my business?

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CSBJ Best of 2010 Results Are In!

BiggsKofford is honored to have received the following awards from the CSBJ’s annual Best Of competition, as voted on by you!

Best Accounting Firm (Runner Up)

Best Business Consulting Firm (Runner Up)

Best Business Leader: Chris Blees (Runner Up)

Best Place to Work: Mid-sized 16-50 Employees (Runner Up)

Best New or Re-Launched Website: www.biggskofford.com (Runner Up)

Special thanks to everyone who voted and if you are not yet a client, we would be happy to prove to you why we earned these distinctions by assisting you with your accounting needs.

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If You Missed the Operation 6035 Event…

It was an honor to attend the Operation 6035 event at the Dusty Loo Bon Vivant Theater at UCCS if for no other reason than that the company was inspiring. Pam Shockley and Phil Lane gathered together, by my estimation, at least 100 business men & women, community leaders, and government officials for a short presentation and fundraiser. The bulk of the time was spent mingling with one another, sharing war stories about the state of our community, and proposing a host of solutions aimed at each person’s niche.

The presentation began with the usual role call by Shockley and a rather impressive group was in attendance: Mike Kazmierski and others from the Economic Development Corporation, Dave Csintyan and his team from the Colorado Springs Chamber of Commerce, Jan Martin and others from the Colorado Springs City Council, representatives from several chambers of commerce from the surrounding areas, the full Operation 6035 Implementation Team, heads of various Colleges at UCCS, Michael Semmens and others from El Pomar, and many respected business leaders I at least recognized by name if not by face. Whether the goal was to find the people with the money or to find the people interested and able to make a difference, the right folks were definitely in the room.

Lane, the volunteer executive director of Operation 6035, spoke about why he is convinced that events are lining up to prepare Colorado Springs for a “renaissance”. His energy and “let’s just do it” attitude are infectious and I’m personally looking forward to his leadership. He mentioned the dialogue the city has been having over the strong mayor proposal and the proposed restructuring of city revenue sources as being the kind of conversations that make things happen one way or another. He vowed not to research issues to death but that he and the Implementation Team will select 5 or 6 issues to be dealt with first and then to either do them or not. He also discussed point 1 of the Angelou Report that criticized the region for a failure to collaborate effectively. After doing his own due diligence, Lane says he sees plenty of collaboration and that it’s only ineffective because people either aren’t collaborating in the right way or on the right things.

Pike Powers, the man credited with the vision that helped Austin, TX become the city it is today and now the consultant hired to impart some of that same structure to the revitalization efforts of Colorado Springs, shared the highpoints of a good vision. In his opinion, a community must connect globally, statewide, and locally to be successful and he offered some inspiring video clips to drive his point home. He also called out some of the present leaders to discuss a couple of good projects in the works such as the joint summit of the areas chambers of commerce and the conference on energy. His presentation was commanding and yet humble and self-deprecating.

Shockley closed with the fundraising call, asking that donations be limited to $1,000 per person or company to allow more people to become tangibly invested. The fundraising goal is $100,000 to match the original funds pledged by El Pomar and will pay expenses for another year. Shockley is convinced that one or two of the issues currently being discussed by the team could be solved within the next 12 months.

I am inspired by the healthy turnout and that the focus of the Implementation Team is not on “fixing” the existing groups but instead on fostering collaboration between them and on filling the gaps that exist in our community’s connections globally, at the state level, and even locally. By checking their agendas at the door, I hope they will succeed in surmounting these challenges.

I am personally involved in several groups offering solutions to some of the issues raised in the Angelou Report. The Peak Venture Group’s Blue Spruce Project and Middle Market Entrepreneurs are both helping businesses grow and communicate with one another. Additionally, I’ve been reaching out to my peers in the “young professional” category to help them connect and find that transcendent cause in which to invest their intellectual and social capital. Small as these efforts are, I hope they will contribute to building a great community in Colorado Springs.

If you want to get involved, even in a small way, please don’t hesitate to call me at 719.579.9090.

___________________________________________

Etienne Hardre is a CPA with BiggsKofford, P.C. specializing in helping entrepreneurs answer these questions: How do I sell my business, buy a business, or grow my business?

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Peak Venture Group Events for May 2010

Peak Venture Group

MIT ENTERPRISE FORUM

The Clean Energy Revolution
Monday, May 3rd
2:15 p.m. to 5 p.m.

Part of the MIT Global Broadcast Series held at the Colorado Springs Technology Incubator. Registration includes the broadcast and a light dinner.

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PVG BREAKFAST

Alumni Session
Friday, May 14th – networking begins at 6:30 a.m.

What happens to companies after their 5-Minute presentation? Where are they now? Where are they going? Imagine what you could learn from those who have been there, done that. Reserve your seat.

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M-ME BREAKFAST PANEL

Product Pricing in a Challenging Economy
Friday, May 21st
7:00 a.m. to 9:00 a.m.

Economic value is a key component in the entire marketing mix of price, product, promotion and place. Take an in depth look at the process for modeling economic value. Advance registration required.

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Vote CSBJ Best of 2010!

Please take a couple of minutes and vote for us in the Colorado Springs Business Journal’s annual Best Of survey.

You must enter at least 25 options for the vote to be counted, so here is a list to get you started.  Feel free to choose your favorite if you have one!

Best Business Leader: Chris Blees
Best Women Owned Business: Sales Department
Best Place to Work – Small Business under 15: The Doodler
Best Place to Work – Mid- Sized Company under 16-50: BiggsKofford
Best Place to Work – Large Company over 50: Reach Local
Best Photography Service: Megan Hardre Photography
Best Business Consulting Firm: BiggsKofford
Best Staffing Service: AccountAbilities
Best Executive Search Firm: AccountAbilities
Best Document Copying, Scanning Company: DocuCents
Best Accounting Firm: BiggsKofford
Best Electrical Contractor: Foster Electric
Best Telephone Equipment/Systems Provider: West-Tech
Best Nonprofit Organization: Peak Venture Group
Best Property Management Company: London Group
Best Employee Benefits Provider: Moody-Smallwood
Best Insurance Brokerage: Six & Geving
Best New or Re-launched Local Web Site: BiggsKofford
Best Blog: Springs Real Estate Network
Best Twitter: TweeterBargains
Best Facebook: Springs Bargains
Best Internet Service Provider: TW Telecom
Best Business Bank: Chase
Best Corporate Financial Services: Strategic Financial Partners
Best Networking Group/Event: Strictly Business

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