Varud

This is kind of funny.  I was quoted on page 12 of a slideshow produced by the VC group North Venture Partners.  I think what’s most amazing to me is that people still have time to write all of this stuff.  I’m thankful somebody is doing it and I hope that somebody also follows my call for a Walmart approach to VC.

Being that it’s a Web 2.0 world, I would be more inclined to see something along the lines of Prosper.com but instead of loans and lenders, this would be for shares and investors.  The only truly necessary thing to do on a custom-basis would be to have audited books.  Everything else could be automated including the legal forms, escrow, etc…  For the most part, Prosper.com has already done much of the heavy lifting.

The company that does this would make money by charging a percentage of the investment.  Because investments would be done on a bidding basis, going around the system would be extremely difficult and not efficient.  Minimum bids would be really low (i.e. $100) in order to get traction.  All businesses would have to have a C Corp set up – the site could even force that C Corp to be a Delaware corp for consistency.  The thing I’ve noticed is that people just want to be told what to do – they don’t want alot of custom choices.

The one choice that might need to exist is whether the investment should be East Coast style or West Coast.  That option would probably introduce enough complexity for the VC groups to justify charging their investors for their services

For anybody in New Orleans, here’s a great post from Chris Schultz about tax breaks for startup investment in there.  Montreal has similar tax breaks for investment as well.  These types of things can really help out an economy although I think they need to be well targeted and they need to have an expiration date.  Otherwise, the government starts getting deep into moral hazard.

NY, in it’s infinite capitalism, has things like NYC Seed for which we just applied.  They want to make money though, nothing for free

There is a group called ITAC which will help out all sorts of technology companies in New York City with getting government money in addition to help with business plans and such.  I met the head of that group a few Friday’s ago, Franklin Madison.  He seemed like a very nice fellow.

This fantastic post was submitted by David Rose on the NY Tech Mailing list, although I can’t find a link to it so here it is in full.  It really sums up what is needed in the city, coordination of all the resources available.  I don’t think this is anybody’s fault – it’s just that there’s so much going on that there really needs to be a solid team of people working on putting it all together for people to read and understand:

The Council of the City of New York
October 27, 2008

Committee on Economic Development jointly with the Committee on Small Business
Oversight: Encouraging the Growth of the City’s Technology-Based Business Sector

Testimony of David S. Rose, Chairman of New York Angels

Good afternoon. My name is David S. Rose, and I am a serial entrepreneur-turned-early-stage-investor who has been founding and financing technology companies in New York City since 1983.  I testify today as Chairman of New York Angels, the largest and most active organization of professional technology angel investors in New York City. Our 75 members, including many of the best-known high-tech investors on the East Coast, have invested over $35 million into more than four dozen early stage technology companies during the past six years.
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