From the category archives:

Venture Capital

I’ve Joined the LAVA BOD! Wanna Meet VC’s? Come to LAVA’s Annual VC Breakfast Tomorrow (Tues)

by Ryan on August 8, 2011

I’m pleased to announce that I’ve joined the board of directors of LAVA, the Los Angeles Venture Association. Given my past opinions (err…rants) on Los Angeles Venture Capital, I decided that instead of sitting on the sidelines playing Monday morning quarterback, I ought to get more involved and so something to help the startup community around LA. If you’re a startup in the LA area, I encourage you to get more involved in LAVA. Here’s just a few reasons:

1. We first met and connected with VC firm DFJ Frontier, the first investors in AudioMicro, Inc. at a LAVA event (the LAVA 2008 Investment Capital Conference 2008 to be exact). You can actually get funded through your involvement with LAVA – I’m living proof!

2. There are a myriad of opportunities to connect with VC’s and mentors at LAVA events. Yes – there are a lot of service providers in attendance but if you stay focussed and hunt for the right connections – you’ll come away with great additions to your personal network.

3. Many of the events are breakfasts from 7am to 9am which don’t eat into your work day or evenings (if you like to work late or have a spouse / family events in the evenings)

4. Did I mention I’m on the board of directors? Along with myself, LAVA has a brand new president, Randy Churchill, along with another “young gun” on the BOD – Sam Jones of Formation Media. And despite my lack of event planning experience, I do have experience starting, funding, operating, and investing in startups so I’m hopeful I can help make the LAVA events more focussed on early stage startups. If you’ve got any suggestions for future events and topics, please shoot me an note or leave them in the comments below.

If you’ve never been to a LAVA event, tomorrow’s VC breakfast would be a great one to start out with. You’ll get exposure to the following local VC’s:

Dana Settle of Greycroft Partners

Leo Spiegel of Mission Ventures

Jim Andelman of Rincon Venture Partners (one of my personal faves!)

Neal Hansch of Rustic Canyon Partners, and

Monica Dodi of the Women’s Venture Capital Fund

If you’re not yet registered to attend tomorrow’s breakfast, you can do so by clicking here. Or simply show up at 7am to 9am at the Skirball center tomorrow, Tues Aug 9th.

*Please note there is a small fee to attend the breakfast which helps to pay for the venue and the food.

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7 DO’s and 5 DONT’s for Entrepreneurs (LA VC Revisited)

by Ryan on June 14, 2011

Ever since my post on Los Angeles venture capital, I’ve been getting a lot of email and phone inquiries from local entrepreneurs seeking advice. It’s not surprising because the post presently shows up #3 on Google when you search “los angeles venture capital” and the 100+ re-tweets and 20+ FB likes certainly helped solidify this position.

Typically the entrepreneurs that reach out want to meet in person and ask for advice. I try to disclaim everything in that I OFFER OPINIONS, NOT ADVICE. I’ve been compiling these opinions and figured I’d jot down the cliff note version here. Without further adieu, here are some strong opinions on various topics that have come up in my recent correspondences with local entrepreneurs.

7 DO’s:

1. Choose a freaking huge market. Don’t play around in a small market. If you can’t quantify the size of your market, that means it’s too small, especially for VC. Go big.

2. Quit your day job – sooner rather than later. If you want to build a business, it takes 110% commitment. You’re never going to get anywhere if you relegate your dream to a side project for nights and weekends. Quit now, not later or you’re only proving that you’re not as committed as you should be.

3. Learn to use an RSS reader. If you’re in tech but don’t use RSS, I fear for you.

4. Have founder vesting. There’s nothing worse than founders not having 4 year founder vesting in place, with or without outside investors.

5. Tell anyone and everyone about your idea. Ideas are a dime a dozen, execution is everything and you’ll learn far more than you could ever possibly lose by sharing your ideas with all.

6. Fire people as fast as possible. The second you think things are not working out. Fire away. You’ll never regret firing, you’ll only regret having not done it sooner. Everyone is replaceable.

7. Read Mark Suster’s blog. Pretty much every single question I get asked has an answer on BSOTT – “Both Sides of The Table”. The answer is already out there. Do your friggin homework.

5 DONT’s

1. Don’t raise money from non-millionaries. Raise from deep pocketed institutions and corporations.

2. Regardless of what the lawyers tell you, do not form an LLC. Lawyers love LLC’s. You know why? Because lawyers are not entrepreneurs.

3. Don’t have a 50 / 50 co-founder (or 33 / 33 / 33 for that matter). One of you needs to be in charge and be in control and if you’re the leader…the real entrepreneurial one bringing this thing to life, then it should be you. Founder shares must have vesting (i.e. be restricted) and be subject to a buy-sell agreement (aka pre-nup).

4. Don’t get caught up in all the press and attention your competition gets. It’s truly meaningless and in no way indicative of financial success.

5. Don’t raise a round of convertible debt (exception: if the terms are so Y-combinator style crazy in your favor that you’d be a dumb-ass not to take the cash). If someone wants to invest, they should set a price and take an equity stake. If you want a loan, you’d be asking for one or you’d go to a bank / credit card company.

Now each of these points could be a blog post of their own backed up with experiences and circumstances to help you understand why I’ve formed these opinions. Maybe I’ll get around to doing a deep dive on each item but for now, the cliff notes will have to do.

Now it’s time to get back to what matters most – executing.

Related articles:

Why Startups Should Raise Money at the Top End of Normal (techcrunch.com)
The Entrepreneur/VC Dynamic (informationarbitrage.com)

p.s. I use stock photos from Photoxpress.

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Every Day I Try and Get Rejected

by Ryan on April 12, 2011

Being an entrepreneur isn’t easy. You get rejected a lot. Whether it’s trying to chase down a new customer, pitching investors, recruiting new content providers, sending cold emails / cold calls to partners, journalists, and colleagues, there are just so many times when you’ll be rejected. Rejection itself can take many forms. A more polite rejection would be a terse “No thank you” response or the more frequent no reply. Sometimes it takes on the more harsh form of “Go f@ck yourself” or some variation thereof.

It’s certainly common to take a rejection as an indication of failure, and it’s the fear of failure that serves one of the primary reasons that people shun away from starting a business, engaging in a new relationship, or otherwise “hanging out their shingle”. It’s this exact fear of failure that so that often prevents good people from being entrepreneurial. They’re afraid of the daily moments of rejection that come along with creating something new and / or working for oneself.

To make it as an entrepreneur, YOU HAVE TO LEARN TO EMBRACE REJECTION.

I’m lucky in that somewhere along the road I developed thick skin. Perhaps it was growing up with an older brother or maybe it’s something I just picked up along the road. Wherever I got it from, I learned to embrace and welcome rejection. Rejection started happening to me so often that instead of letting it get to me, I decided that I should use it as a motivator. Allow me to give an example…

Back in late 2004 I wanted to be a photographer. At the time I was working for the world’s largest celebrity photo agency, WireImage, as Controller. But I wanted to do more than just crunch numbers, I wanted to shoot celebrity events. Because I’m a CPA, it’s often overlooked that I’m creative. Somehow the CPA designation (which took me just 2 years to get) overshadows the fact that I majored in Art History in college (w/ a minor in Studio Art) and that I’ve been studying and creating art (oil paintings, sculpture) since I was 10, and have received a number of awards and displayed in national museums. Nevertheless, when I asked the assignment desk at WireImage if I could shoot, they rejected me.

Instead of letting this rejection get to me, I used it as a motivator. I went out and found events that the desk wasn’t already covering. At the time, no one was shooting book signings. My first book signing was with Jack Welch, the former CEO of GE. I went to Borders on Wall St, just down the block from my apartment in NYC. I bought Jack’s new book and got in line for an autograph. When I got to the front of the line not only did Jack sign the book for me, but he also let me take a few quick photos of him and his wife Suzy. Following the event, I showed the pics to the assignment desk that had rejected me, and they agreed that because I was the exclusive photographer at the event, I could load them to WireImage.

The images were quickly picked up by 60 Minutes who was in the process of doing an interview with Jack. It’s the image you see at the beginning of this post. I went on to photograph hundreds of events over a 3.5 year period and it got to the point where I’d routinely be requested by publicists to cover and in certain circumstances I even had better access than WireImage’s own staffers.

It’s in these moments of rejection that you can truly learn and grow. That’s why EVERY DAY I TRY AND GET REJECTED. I push the limits as much as I can and do things that have a high likelihood of rejection. I enjoy the challenge of a rejection and I use rejection as a motivator. When I get rejected, instead of feeling sorry for myself, I actually feel sorry for the person that rejected me and I yearn to change their opinion or otherwise win over their business.

Related Articles:

This post from Ben Horowitz (of Andreessen Horowitz) on CEO psychology

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Hop Off the Train at the Right Time

by Ryan on March 21, 2011

Louis Gray recently posted a great piece about Digg and it’s founder Kevin Rose. I’ve been a fan of Kevin since I first saw him on The Screen Savers on TechTV a little before Digg was even live. I think that there’s really one over arching takeaway from all the talk about Kevin and Digg this week.

HOP OFF THE TRAIN AT THE RIGHT TIME!

What I mean by this is that a financially successful exit is a lot about timing. Just think of how many companies that are on the downswing or no longer even exist today, yet they made such great returns for their initial founders and shareholders because they sold out while they were on the top of their game. On the flip side, there are many circumstances when companies have sold out to early, only to have their acquirers go on to grow the business 10x after the acquisition (still a better position to be in than having not exited at all).

Businesses and industry move in cycles and technological progress happens extremely quick these days. Companies, particularly those on the web, can so quickly fall in and out of favor. It’s crucial to exit at the right time.

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Fotolia Invests in AudioMicro

by Ryan on February 1, 2011

Today marks a major milestone in our company’s history.

AudioMicro has taken on an investment from Fotolia, the leading micro stock photo library in Europe and the # 2 / # 3 player in the world. Fotolia, which is backed by private equity firm TA Associates, also owns Flixtime.com, a movie maker site that turns photos into videos, and Photoxpress.com, a subscription stock photo service. Full details on the investment can be found in the press release below.

In collaboration with Fotolia, we plan to incubate and launch new web projects, as well as cross promote our products and services. At the end of this month, we plan to launch 4 new websites, each targeting a specific new content licensing vertical. We’ve been working hard behind the scenes on these new sites for many months now. Stay tuned for a launch announcement on the 4 new sites!

I’m also doing a little business development for Fotolia. If you or your company ever have a need for stock photos, we can supply you access to over 12 million images at unbeatable prices and with un-paralleled service. If you presently license photos from another supplier, contact me ASAP to start saving. We have a number of packages from free, to low priced subscriptions, to full on custom API access, depending on your size and needs.

I hope that 2011 is your best year ever!

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AudioMicro Receives Fotolia Investment

AudioMicro and Fotolia To Partner in Content Licensing Ventures

LOS ANGELES, Feb. 1, 2011 – AudioMicro, which offers the world’s largest collection of user-generated royalty free music and sound effects, announced today that it has received an equity investment from Fotolia, Europe’s leading micro stock photo site. Existing investor DFJ Frontier, a West Coast seed and early-stage investor, also participated in the financing. In connection with the financing, Oleg Tscheltzoff, co-founder and chief executive officer of Fotolia, has joined AudioMicro’s board of directors.

Fotolia and AudioMicro will collaborate on new projects, each targeting a different content vertical. They intend to launch four of these projects by the end of next month. Fotolia, which is backed by TA Associates, also owns Flixtime.com, a site that turns photos into videos, and Photoxpress.com, a subscription photo service.

“AudioMicro is a leader in crowd-sourced stock music and sound effects,” said Tscheltzoff. “We’re pleased to partner with them to accelerate their business.”

“Fotolia’s investment and partnership is a great endorsement of our vision, and recognition of the traction we’ve gained,” said Ryan Born, founder and chief executive officer, AudioMicro. “We’re delighted to work with the Fotolia team.”

About AudioMicro

An industry pioneer in licensing music and sound effects through credit-based and subscription packages, AudioMicro acts as a discovery and distribution platform for stock audio content. Its collection of royalty free music, stock music, sound effects, and free sound effects includes over 225,000 tracks of both crowd-sourced and premium, record label-owned content. AudioMicro also operates the Audioo voicemail sharing service. The company is venture-backed by DFJ Frontier. For more information, visit AudioMicro.com.

About Fotolia

Over 2 million people prefer Fotolia for affordable, royalty-free images, graphics and HD videos. With the introduction of the Infinite Collection, Fotolia became the first worldwide microstock organization to offer both crowd-sourced and professional images on one site. Founded in New York City in 2004, Fotolia spans the globe with websites in 12 languages and offices in 14 countries. With over 12,000,000 files to choose from, find it on Fotolia. www.fotolia.com

Media Contact:

Brian Danella

Prequent, Inc. (for AudioMicro, Inc.)

+1 (408) 275-6455 office

+1 (650) 743-6606 mobile

brian[at]prequent.com