Inside the mind of investors and angels

I’m a big fan of Paul Graham and had the pleasure to meet him personally when I spoke @ MIT about one of my inventions (PDF).

If you’re pondering starting up a tech company and are looking for money, I suggest you read his essay, “The Hacker’s Guide to Investors“.

In classic Graham style, he’s talking to you, the geek. Good stuff. Read it.

Paul covers these points:

1. The investors are what make a startup hub.
2. Angel investors are the most critical.
3. Angels don’t like publicity.
4. Most investors, especially VCs, are not like founders.
5. Most investors are momentum investors.
6. Most investors are looking for big hits.
7. VCs want to invest large amounts.
8. Valuations are fiction.
9. Investors look for founders like the current stars.
10. The contribution of investors tends to be underestimated.
11. VCs are afraid of looking bad.
12. Being turned down by investors doesn’t mean much.
13. Investors are emotional.
14. The negotiation never stops till the closing.
15. Investors like to co-invest.
16. Investors collude.
17. Large-scale investors care about their portfolio, not any individual company.
18. Investors have different risk profiles from founders.
19. Investors vary greatly.
20. Investors don’t realize how much it costs to raise money from them.
21. Investors don’t like to say no.
22. You need investors.
23. Investors like it when you don’t need them.

What’s really behind the attacks on act 221?

HVCA Speaks out against current Act 221 mess

No firewall? You’ve already been broken into

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If you have a high speed Internet connection and you don’t have a firewall, there’s a good chance that your computer has already been broken into. Firewalls allow you to safely get online yet protect your network from outsiders. If you don’t have a firewall, go get one right now and make sure it has wireless networking, or wifi, built in so that you can connect other devices.

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Surf the Web with your kids

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Do your kids go online at home? When was the last time you surfed the web with them? Folks, nobody loves the Internet more than me, but we all know there is a really dark side that you can easily stumble into. Spend time with your kids online. Teach them to never give out personal information and make sure they know about the very real danger posed by online predators.

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Venture Capitalism and Web 2.0 can be an antidote to terrorism

One of the best thought leaders in todays Global War on Terrorism (GWOT) is Thomas P. Barnett who has written two books on the subject that I highly recommend, “The Pentagon’s New Map” and “Blueprint for Action” .

His premise is that today’s terrorism is an extremist response to globalization, primarily because globalization’s march exposes cultures to new values and the most sensitive of those values is how women are treated. Cultures that have embraced globalization typically have women that are educated and participating in leadership roles in government and business. Take a quick look at the countries in today’s disconnected (i.e. not participating in globalization, or as Barnett says, “Gap” nations) and women’s roles are significantly limited to say the least.

So, to break it all down in the most simplest terms, globalization threatens the control that Gap nations have over their women. And as any man knows, if you really want to piss someone off, start messing with their women.

So what’s the long-term solution to terrorism? Let globalization permeate Gap nations, connecting them to the “Core” of developed (e.g. US, Europe) or “New Core” developing (e.g. India, China, Russia) nations. We beat the Soviets without essentially firing a shot because globalization took over. Barnett proposes using the same weapon (globalization) in a different way.

I like it.

So how can VC’s join the GWOT? Easy: provide investment capital to New Core nations and in some controlled cases, Gap nations. The more we invest in the Gap, the more globalized they become, and the sooner they get folded into the Core, and the sooner this war ends.

I appreciate Tom giving me a hat-tip on a link I gave to him about Kiva a web 2.0 app that lets anyone assist in microfinancing in primarily Gap nations. For example, Kiva lets you give $25 to help a woman in Azerbaijan take her beauty shop to the next level. And if she succeeds, you get your money paid back (hopefully future versions can pay back a little interest).

I see apps like Kiva allowing the masses to help get Gap businesses up and running. Get the Gap into business and you naturally get them to connect to the Core. The faster we do this, the faster globalization does its magic. A subsquent post tells me that Tom gets it.

My VC test score results: 39

Guy Kawasaki has a blunt, in-your-face writing style that I really enjoy. I took his Venture Capital Aptitude test and scored a 39, which Guy says

Call Sequoia and Kleiner, Perkins and tell them that you’re available.

Hehe..cool.

Video Market heating up

I just read the TechCrunch post on BrightCove’s launch and it looks like a pretty appealing avenue for those somewhat serious about monetizing their video content. Seems to me they just leapfrogged what YouTube+GoogleVideo is supposed become. They don’t have their content base anywhere near Goog’s but do have a tighter, more defined financial model.

If Google takes too long to get their act together, BrightCove could pull ahead. Watch this one closely for sure.

iCracked the iPod

(Well, I didn’t crack the iPod myself, but the headline was cool).

Imagine this: in 1999 you’re 15 yrs old and you are the one that cracks the DVD copy protection scheme which subsequently enables people to copy their DVDs.

So what do you do for an encore?

Well, today in 2006 at 22 yrs old you crack the copy protection of the iPod, allowing rivals to sell competing products that play music from iTunes and offer songs for download that work on iPods as they seek to take a bite out of Apple’s dominance of digital music.

Congrats Jon Lech Johansen! Wow.

Your own online startup reading libary

Doing a startup? Read through this list of excellent essays and you’ll learn a lot.