I was reading the AlwaysOn Winter 2007 Magazine on the subway this afternoon and came across the “VC Deal Pitch� by Simeon Simeonov, a technology partner at Polaris Venture Partners. Before Simeon joined Polaris, he was the Chief Architect at Allaire and Macromedia. The article that he has penned for the magazine talks about a new way to date a venture capitalist before you get married, or in realistic terms, a new way to work together with a venture capitalist before they invest into your company.

Essentially, Simeon talks about how the founding team and would-be investors should work together, on the same side of the table, for a good amount of time to improve the business plan and test the market. This whole dating process only really works in the early stage funding realm and allows you to vet out a venture capital partner who does not share the same vision, culture, and operational expectations that you may have.

This process would only work if it was monogamous, says Simeon. As a founder, you do not want your VC partner to be flirting with other companies in your space. They ultimately will learn quite a bit about your business and have deep insight into your team, so keep it monogamous. Even though both parties will share lots of insight, Simeon also mentions that there should be “no strings attached.� If the relationship isn’t working for either party, it should be able to be terminated without any monetary compensation or consideration.

This is an interesting concept that Simeon proposes. As an entrepreneur, I can see how valuable it would be from an early stage perspective (maybe after seed funding?) but may not work for all startups due to time constraints, multiple VC’s, or other various reasons. What are your thoughts?

Web Worker Daily has a great post that lists 10 new ways to make money online. No, this isn’t the typical Nigerian email spammer opportunity but rather a few good ideas (some better than others) that are easily doable. Below is the list, but check out the full article here, for more details.

1. Offer your professional expertise in an online marketplace
2. Sell photos on stock photography sites
3. Blog for pay
4. Or start your own blog network
5. Provide service and support for open source software
6. Online life coaching
7. Virtually assist other web workers
8. Build services atop Amazon Web Services
9. Write reviews for pay or perks
10. Become a virtual gold farmer

If I were to pick off of this list, I’d go for #5 and/or #1. These are by far and away possibly the easiest to get up and running quickly and provide low to nill out of pocket costs if you have the required skills to do so. Essentially, it’s consulting. Very simple and straight forward - thought this was interesting… boy have times changed!

Do you believe that Venture Capital is the holy grail of entrepreneurship? If you do, you may be an entrepreneur for all the wrong reasons. Venture Capital is an enabler for different aspects to a business such as growth but at the end of the day, your product or service should be more important than landing venture capital.

The reason why I’m writing this post is that I meet with many entrepreneurs who are under the spell that raising venture capital automatically validates your business and almost guarantees that you will succeed. If you raise $10M in venture capital, it gives $10M reasons why you will not succeed; the odds are against you. The stakes are higher, every decision becomes riskier. You have $10M to spend and we all know how easy it is to spend money.

Venture capital is sexy. It’s like being able to drive a Ferrari. Being a member of FerrariChat.com, and actively involved in exotic car events around Westchester County, I can tell you that there are many owners of these cars who have no business driving them. It takes a certain type of person to be able to control these exotic vehicles, just look at all the Ferrari Enzo crashes. People who have $1M to spend on these gorgeous cars get behind the wheel, have no business driving them, and crash them within 36 hours of owning them. However, it is sexy to drive these cars…

Venture capital is much the same. Your goal as an entrepreneur is not to raise venture capital, but to build a sustainable business around a product and/or service. If you can do that without raising venture capital, all the power to you. Why give up equity when you do not have to? I’ve personally been on both sides of the fence and have had positive and negative experiences. It takes a gifted leader to balance a board of venture capitalists and ultimately, generating enough of a business to substantiate venture investment.

To all the burgeoning entrepreneurs out there, don’t think that raising capital is the end-all and be-all. If you can do it yourself, go right ahead. If you need to raise capital, be cautious and make sure you’re ready. Build traction and focus. Raising capital gives you minor validation to your business (someone believes in you to invest) but doesn’t guarantee success and should not be the holy grail of entrepreneurship.

TechCrunch has launched the Dead Pool, a portion of their site dedicated to websites who don’t survive. This is similar FuckedCompany of the late 90s. With an increase of venture capital coming into the market in 2003-2005, we’re going to start seeing some of the early venture backed companies die off.

Why do these such sites exist? Fred Wilson (A VC, Union Square Ventures) is a huge opponent of these sites. From his blog, I quote: “Do we really need to celebrate when companies fail? It’s hard enough for everyone involved to deal with the dashed hopes and dreams of a failed startup. But now we are counting them like notches on a sword handle.”

I agree with Fred that we shouldn’t celebrate when a company fails (as an entrepreneur who has been there, it’s not fun but you certainly learn a lot) but with such high expectations for venture-capital-backed companies combined with America’s thirst for soap operas, it’s not going to go away. We like to hear the sob stories. We like to hear when a major executive has an issue (Doer, Jobs, Skilling, etc).Â

With these high expectations, it’s almost setting the stage for most companies to fail. As entrepreneurs we do not like hearing about it, but there are certainly lessons to learn and as consumer generated content increases on the net, the Dead Pool and similiar sites will continue to exist.

Brad Feld and Jason Mendelson have launched Ask the VC, a new blog and information resource site for people wondering about venture capital and the inner workings of the industry. Both Feld and Mendelson are venture capitalists at Mobius Venture Capital which has investments in a companies such as Judy’s Book, eCast, Sling Media, Technorati, Start Sampling, and others.

We’ve started this blog to discuss relevant issues in the venture capital and entrepreneurial ecosystem. As you may know, we’ve spent a lot of time over the past three years writing about venture capital and entrepreneurship on Feld Thoughts. We’ve had great feedback regarding our regular posts on matters that effect people in our industry, as well as our blog series on topics such as term sheets, letters of intent, and 409A. We’ve also had a lot of fun and learned a lot from the questions that people have asked us.

Brad Feld has been quoted on DarrenHerman.com in the past (alongside Raj Kapoor, Alan Kelley, Nick MacShane, and Keith Benjamin) with his contribution to the posting, When to Approach a VC. Their new resource already covers topics such as How to Incentivize Employees, How To Deal with Founders Who Leave, and other interesting topics…

A great topic that I would like to suggest (and will suggest eventually) is, “What should early stage compensation look like for co-founders and pre-revenue employees? What is normal and what would scare a VC?”

Great site guys!

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I’m usually skeptical of “networks” and aggregators, but aftering meeting David of MindPetals.com this past week for lunch, I’m a fan of what he is building. MindPetals.com came onto the scene (according to this Alexa graph) in June 2006 and has been a community site for entrepreneurs. Bloggers who cover entrepreneurial topics are found by Mind Petal scouts and have the opportunity of having their blogs listed on MindPetals.com. Their respective posts are fed thru RSS to MindPetals.com and summaries appear on the site. MindPetals.com acts as an aggregator of entrepreneurial posts but then sends the viewer to the respective blog the posts exist on… which is what sealed the deal for me.

I want to own my content (I’m not selfish, but if I put time into writing it, my site should benefit), not have it indexed elsewhere for other people to monetize. I’m happy about the stance MindPetals.com has taken in this regard and am proud to not just have my blog indexed for users to view, but have been extended an invitation to the MindPetals.com Advisory Board. When I met with David at lunch, we talked about how MindPetals.com was founded, where he wants to take it, and how he plans on getting there. We mutually agreed on many different aspects of this and am excited to help guide MindPetals.com strategy.

Feel free to check out MindPetals.com and leave your comments. I’d love to know how I can help make it a better place for the entrepreneurial scene.

Mark Suster, Koral’s Chief Executive Officer, and recent Valleywag topic-of-the-moment recounts in anecdotal style about his fund raising process for his current company, Koral. Suster talks about how he was courted by a certain VC and then invited back to his office to pitch to the other members of the firm… the rest, well, I’ll let Suster tell you.

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Business strategy is extremely important; just look at all the MBA’s graduating from HBS, Kellogg, and Wharton. Defining, analyzing, and executing on strategy is fundamental to any business and usually it pertains to the original vision of the company.

When launching a product or service, or selling to a sales channel, or even hiring a new candidate, you must be dynamic. What you expect to happen and what actually happens usually varies quite a bit and getting creative with different approaches is a common occurrence. How many times have you released a product to the market and the reaction has been different than you anticipated (for good or bad) and have had to make a change to the strategy? Some would say that Microsoft’s Zune is going to have to change it’s strategy if it wants a shelf life longer than the next month.

Being dynamic means that you must be ready for change and embrace it. When you’re doing your financial modeling, you do them on a spreadsheet and change up the cells as you see fit. How many times have you visited the spreadsheet and made changes to your original document? Essentially, the spreadsheet is an underlying example to your organization that it must remain dynamic – the cells in a spreadsheet are editable for a reason. Numbers tend to run companies and if they can be edited, you can edit the strategy as well. No number is ever set in stone – and neither should your strategy.

Over time, I’ve founded numerous companies and have advised many others. I primarily work with early stage companies and have seen many grow and blossom, and others sink to the bottom of the ocean to never appear again. A topic that constantly comes up in meetings with founders of early stage companies is, “Why add co-founders?� While there are many reasons to add them to your team, I’ve listed five of them below.

These are not the end-all and be-all of reasons…. However, from my past experience, these are some top reasons why to add co-founders to your team.

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In most cases of starting a business, you cannot do it alone. Too many tasks need to be done, and expertise is needed across the board which could be extremely daunting for only one founder. I’ve been there- let me tell you it is not easy and it was a mistake I made by not bringing in a co-founder. One thing to note is that it’s not just to spread out the work of starting a business, but you bring a co-founder in to help with your weaknesses, add alternative view points, and to leverage ones business accumen. Read more »