FVCC 2006, Day 1: Duffers and Dinner at Florida Venture Forum

If the 2006 Florida Venture Capital Conference is any indicator, the venture vibe is up in the sunshine state. The conference ran Mon-Wed of this week and was full of good presenters, networking and activities. I've jotted down a few thoughts from Day 1 of the conference below and will cover Days 2 and 3 in separate posts:

- Investor golf at TPC Stadium Course: Beautiful course, tight, not too long, plenty of balls in the water. I had the pleasure of playing the scramble with Gary Andresen (RBC Centura), Jonathan Cole (Edwards & Angell) and opening keynote Brian Swette. Although we scrambled the whole day, our 7-under came close to the money -- all thanks to my teammates.

And, yes, I put two in the drink aiming for #17's island green. Having a Chivas Regal sample table at the #17 tee was either a cruel prank or welcome solace, I'm not sure which. Despite the distraction, John hit an amazing shot that landed near the left fringe and spun immediately right, stopping 6ft from the hole and winning closest to the pin!

- Visiting VC Dinner: Inflexion hosted a dinner for out of town investors and syndicate partners that evening and had a great mix of funds: large and small, life science and IT. Good deal talk and general networking, I even heard an "inside" rumor that Oprah might run for President in '08?!

...more to come...

Top 10 VC Guerrilla Marketing Stunts

While reading Guy Kawasaki's post The Venture Capitalist Wishlist, detailing his top 10 list for attracting VC interest, it reminded me of some of the guerrilla ways entrepreneurs have made their presence known at past VC conferences. I miss a lot of these stunts post-bubble and hope we'll see some creative ideas at next week's 2006 Florida Venture Capital Conference. It's a great conference and I love investor golf at Sawgrass, but the entrepreneurial buzzmeter could use a jolt.

Here's my top 10 list of entrepreneur guerrilla marketing stunts I've seen/heard for getting startup attention on a shoestring:
#10: Posting company signs (like election signs) all along the drive from airport to conference center -- including arrows to help direct visiting VCs.
#9: Plastering company bumper stickers on every surface possible (poles, hydrants, bus benches, sidewalks...) outside venture conference halls.
#8: Placing company golf balls (when cartboys weren't looking) inside every cart of the obligatory VC golf tourney.
#7: When eyeballs were king, dropping hundreds of eye-ball painted ping-pong balls (including company logo) in the grass/planters surrounding the VC conference hall.
#6: Sidewalk chalking company logos, mottos etc. near conference hall/parking lot.
#5: Draping "Company X Welcomes You to the Venture Conference" sign on overpasses leading to VC conference.
#4: Spreading hundreds of company business cards throughout the conference, including every lunch table, resting wall, phone booth, lobby table, and even bathroom urinals and sinks.
#3: Similar, but with a captive audience: placing magnetic company cards/takeaways on metal bathroom stall doors.
#2: Placing small circular signs with company name/logo at the bottom of every golf hole at dawn before the VC golfers wake up.
And my #1 guerrilla marketing stunt that probably didn't involve VCs, unless they liked cooking: Crashing an on-site filming of "Emeril Live" for a national audience with multiple employees wearing company shirts and waving company flags every time Emeril said "Bam!" and cameras panned the audience for effect!

Yes, some of these are funny, some even tacky, but they all stuck in my mind and I appreciate entrepreneurs that find a way to get the word out about their company through shear ingenuity. I hope to see even more ideas next week!

Big University Foundations Yield Big Alt Returns

The National Association of College and University Business Officers (NACUBO), together with TIAA-CREF, just announced a study of university foundation returns across the country. The big takeaway: large Foundations from $100M to $500M to $1B, got larger with good alternative asset allocations.

While the smallest colleges relied upon low-risk/liquid Public Equities and Fixed Income investments, the big boys put 15%-35% of their funds in alternative assets (e.g. hedge funds, venture capital) and reaped the rewards of diversification and long-term illiquid investing. Whereas the smaller foundations garnered single digit returns, some of the largest ones yielded 22% (one year), 14% (five year) and 17% (ten year) returns.

This is noteworthy on a national level, but particularly interesting as Florida's large universities consider capital campaigns, tech transfer and overall national relevance.

Another Day, Another Set of FL Venture Numbers

PWC/NVCA/VentureEconomics/[insert brand here] MoneyTree report came out just after E&Y/VOne with same Florida story, different numbers. Florida venture investing hit $361M for 2005, up from $318M in 2004 -- not as big a jump as reported by E&Y. Deals were just a nudge down, with 55 in 2005 vs. 58 in 2004. It was the largest year for Florida venture investing since 2002 and after a 2004 of zero VC-backed IPOs, 2005 saw three reach the public markets.

MoneyTree numbers show continued strength in FL venture investments, although expansion/growth deals continue to outpace seed/early. Greed is slowly catching Fear on the chart -- hopefully fast enough for those entrepreneurs with great ideas, pursuing first institutional dollars.

E&Y/VentureOne Shows 2005 Florida Boost

Interesting VC stats show 46% increase in FL venture investments, but in fewer deals. Likely cause: a couple more later/larger stage investments. We're seeing good activity on the early-stage front, but institutional dollar supply still doesn't meet demand.

"Venture capital investment in Florida in 2005 soared 46 percent to $389 million versus the previous year -- its best showing since the dot-com days of 2002, according to the Quarterly Venture Capital Report released Monday by Ernst & Young and Venture One. Despite the uptick, investors closed on just 35 deals in 2005 -- one less than in 2004. Nationally, venture capital investment was up 2 percent at $22.1 billion in 2,239 deals -- the best showing since 2001."

Source: MiamiHerald

Are the Dots Painting a Picture?

This article from the Miami Herald, about biotech/Scripps, makes another mention of legislative interest/support for more local venture capital:

"Atwater believes legislation will be offered in the next 60 days to help remedy the problem. It will come in the form of state-supported venture capital, subsidized laboratory space or some modification of existing incentive programs, he said."

Let's hope these dots connect to form a picture of more seed/early-stage money for Florida entrepreneurs. We shall see...

VC Guberteaser?

It looks like Jeb has something coming for entrepreneurs. In announcing a FL Space agenda, there was this VC snippet:

"Not in today's budget proposal but coming soon: a request to expand a current $10 million "closing fund" the governor has broad discretion to use to lure new business ventures to Florida, and a venture capital fund to help launch new companies."

Details to come...

ClariFI clears $3.5M

Brad and his team over at ClariFI landed a quality finance-sector partner -- who also brought some dollars. TL Ventures is putting in $3.5M and getting a couple board seats: William Guttman and Robert Keith.

I've seen ClariFI's ModelStation product for portfolio managers and it's impressive. I wish I had it for my personal stock market dabbling, but it's geared for large institutional asset managers -- particularly those with a quantitative bent.

Congrats guys and let me know when I can have my own ModelStation...I wonder if I could have avoided that YHOO dive....

See press release at: http://www.clarifi.com/jan17_06_news.htm

2006 Predictions, Part II: Entrepreneurial Vision

This is Part II of my 2006 Predictions series, with the spotlight falling on entrepreneurs this time. I asked some of Florida's top entrepreneurs for their predictions and got some pretty bold ones. Here's what they said:

For starters, Jeff Gallino, the guy who owns more ebooks than anyone I know and CEO of speech analytics leader Callminer (Inflexion company), has his head in video and audio for 2006:

1) A flurry of spending on HDTV over the past year will lead to a revolution in auxiliary products to "mobile"ize the recorded video content for ipod video, pc, and other devices causing a huge roar from tv/mpaa over piracy. [it's coming, fast]
2) Anti-surveillance technology will see a surge as more people realize they don't want their conversations, emails, chats listened to and used for spam or other nefarious reasons.
3) Netflix will cut a deal with NBC, CBS, ABC, Comedy Central to offer to burn recent and current season TV shows on DVD for rental -- one show per DVD.

Next up, Isaias Sudit, CEO of LBS enabler LOC-AID, can't get his head out of his bread-and-butter location, location, location:

1) LBS will be the biggest wireless enabler for 2006.
2) Wi-Fi Location Services becomes a major player for local content delivery (Cisco to be major player).
3) Wal-Mart and McDonalds will launch the first SMS/LBS-based marketing campaigns. [can I SMS-order/pay for pickup at closest drive thru -- sweet!]

Yet another Southy (e.g. SoFL), Craig Pisaris-Henderson, CEO of Miva and former Florida E&Y Entrepreneur of the Year, showed the wisdom of a guy who has braved the public tech company route and has the bruises to show it.

1) Online marketing ad dollars, fueled by keyword-based pay-per-click ads, migrate towards behaviorally targeted ads.
2) Traditional publishing and media companies restrict the use of their content by others online and begin to take online market share.
3) The burgeoning population of skilled "baby boomers" moving to Florida will ignite corporate and venture investments that both cater to and employ this segment of the state's population. [I like how you're thinking]

Leave it to a guy who knows blogs (and many other content-types), Peter Pezaris, CEO of Multiply.com, to come up with some attention-getters:

1) Bill Gates' identity will be stolen and linked to a multi-million dollar fraud.
2) News Corp will develop a portal which becomes a viable alternative to Yahoo and Google, with Disney following close behind.
3) In an effort to boost sagging market share, Google will redesign their home page, completely dropping the clean interface in favor of a sea of links. [yes, it is starting www.google.com/ig]
4) The year will see a major revolution in PC hardware: not CPU, bus or memory, but in interfaces such as keyboards and mice. Logitech's enterprise value triples.
5) ISPs will finally win the war against spammers, and email will be useful again. (Perhaps this is just wishful thinking)

Finally, I return to complete Rich Swier's top 10 for 2006, for some final doozies:

6) The first "Internet-based News Channel" will launch using podcasts, video uploads from "people on the street" as reporters. [do it Rich, I like it]
7) Cell companies launch the first cell phone with a new battery that lasts over a month.
8) There will be another major merger of the top cellular companies, reducing the number of major carriers.
9) The government will come close to first tax on internet services -- sparked by growing number of VoIP users.
10) Dan won't ask me to post 2007 predictions... [you should be so lucky]

Again, thanks to all contributors and I'll be kind with any end-of-2006 scorecards...enjoy and comment as you like.... especially if you've got some life-science predictions (none of the life science entrepreneurs I contacted had a clue what was coming in 2006 -- scary)...

2006 Predictions

What would a new year be without some wacky predictions? After twisting the arms of some of Florida's top entrepreneurial minds, I got a number of bold (and not so bold) bets on what's in store this year. Before sharing some of them, I'd like to thank all contributors for putting their mind and keyboard to the task.

For fun, I'm going to spread the predictions across this week -- with the venture ecosystem (topic for another post?) folks first and the entrepreneurs later. That should give me enough fodder for venture predictions of my own next week...

First up, David Day, Director of UF's Office of Technology Licensing and the Sid Martin Biotechnology Incubator. There's a saying about age before beauty but I've got to stay on David's good side.

1) Florida's spin-offs will lead the Southeast in new investments.
2) Florida will lead the Southeast in the opening of new offices by
established Northeast and West Coast VCs.
3) The Southeast's venture investments in 2006 will double those in
2005.
4) The venture investment landscape nationwide will faintly start to
resemble the feeding frenzy of the late 1990s.

Next up, David Felman, tech counsel extraordinaire (he does our deals) from Hill, Ward & Henderson. Although not promising the moon, 2006 looks good to David with the following thoughts:

We were pleased to have been involved in over 15 closed venture transactions for companies and investors in 2005. We expect the strong market for venture financings in Florida to continue. We are also assisting fund clients exit portfolio companies through acquisition transactions at strong valuations, which further strengthens our market.

Here are a few predictions for 2006:
1) The market continues to be one of "haves" and "have nots" for companies raising money. Established companies with track records and strong management are funded at strong valuations and on favorable terms, but investors continue to be selective, a legacy from past experience.
2) Florida gains more capital for investment. Several existing funds raise more capital after completing exit transactions and establishing a track record. This reinforces a recent trend of sponsors raising new funds in the more difficult market of 2003, including Banyan Mezzanine, Ballast Point, and Inflexion.
3) Sponsors complete fund-raising for a few new institutional funds, one of which (HealthEdge) was already mentioned on FloridaVentureBlog.
4) Venture and mezzanine funds in North Carolina, Georgia, and Tennessee continue to increase their emphasis on the Florida market, often joining with Florida firms to provide funding for local companies.

These are my thoughts -- not bold or striking, but pretty optimistic for the new year.

Booker Schmidt, Executive Director of the