Show & Tell

One of our tasks for the Closing Seminar of the EF MNP was to bring 1 picture and 1 artifact from our travels... I must admit I haven't done too much thinking about it during the travels and also I am not a big picture takes, neither I feel sentiment about physical things... So what do I have to show & tell...?

At the end it turned out to be easy...

The picture I selected was perfect at the end... I picked a picture of Tesla's Model S prototype taken in the Menlo Park showroom... Yes, I love the car, true, but that is not the main reason I picked this picture... But if you think about it, Tesla cars represent everything that I wanted to explore in the U.S. and everything that is my passion: entrepreneurship, ground-breaking innovation, achievement after overcoming huge obstacles, financing through angels and venture capital... Tesla stands for all of it... Plus, Nikola Tesla was a European... Eastern European... Hallelluyah...

The artifact was a lot more difficult to select, and at the end I had to cheat a bit... For the artifact I selected my Kindle2 device - although I ordered it already from home... But its content actually significantly changed over the time I spent in the U.S. - and I bought many books written by, inspired by and recommended by the people I've met during my fellowship...

Time to summarize...

As my fellowship program has come to its end, it is now time to summarize a bit...

Over the course of the 6 weeks I have had 55 meetings, attended 9 events (including the 2-day NVCA conference), given out some 120 business cards and collected a similar number (I already sent some of them home, so cannot count exactly)... Also, I spoke at 3 events, including a speaking gig in Stanford (which so will go to my resume)...

It has been tiring sometimes, lonely most of the time, but exciting and inspiring vast of the time... In one word, it's been GREAT...

Last day has come...

... with the very last two meetings in my program, except for the next week's closing seminar in Philadelphia and group meeting with Tom Beach... It felt strange when I got up and dressed for meetings for the last time... But let's not get too sentimental here...

The first meeting was in Vienna, VA and I met with John May... John is a Principal at New Vantage Group, but also chair-emeritus of the Angel Capital Association, co-chair of the newly established World Business Angels Association... John is also the author of two books on angel investing (he gave me a signature copy of the second and I just bought the first via my Kindle), and through New Vantage Group he is also Managing Partner of UK-based early stage VC fund Seraphim... So there was A LOT to talk about...

John is big enthusiast of non-institutional early stage financing of startups, he has been studying and involved in many angel groups, he has managed angel groups, he's looked at different forms of angel investing, including pooled angel funds, broker models and others, in the U.S. as well as in Europe (mainly the U.K.)... Therefore he is definitely a person to listen to...

What surprised me (although it's rather anecdotical) was how the word angel evolved for somebody investing in businesses - it was in Broadway, where there were many ambitious writers and musicians who had those great ideas but no money... And all they needed was somebody who would trust them, wanted to see his name up in glittering shiny letters as a producer and paid for putting up the show... There were pretty much three possibilities of a result: it was either a disaster with all $ down the drain, or it did OK with $ returned but no profits, or it was a hit with $$$ back to the investor together with recognition as the wise men who saw the genius of Hello Dolly or Producers... And that's where the term ANGEL was first used... Fascinating...

But back to reality, what John said was necessary in order to put together a functioning angel network (group, fund, band) which could be sustainable in long term are three things:

• active angels
• investable deals
• charismatic leadership

If one of those things is missing, we get an inactive environment like Montana, Brazil, and ... Czech Republic... Therefore, John very much encouraged me to go ahead with the idea of Credo Ventures - as his vies is that the Czech market is some 10 years behind the U.S. in terms of activity of angels... We are in the "call me when you'll have a deal" phase, which I had to confirm fully... So once again, a lot of encouragement and actually an offer: John asked me to keep him in the loop on the development and expressed his interest in assistance and maybe cooperation...

What I almost forgot to describe is Seraphim... As mentioned, it's a UK-based fund which was put together by John and his UK partner Anthony Clarke (chairman of EBAN, Board Director of GLE Capital and chairman of London Business Angels) and they bid to the UK government for funding which they got - so Ł 10m was invested by a consortium of angel networks and corporate venturers and the remaining Ł 20m comes from low cost government loans... The deal between Seraphim and the UK government is a very interesting, and if I ever changed my mind and went for public funding, I would definitely try to do something similar... Another interesting thing for me was to learn about corporate governance of the fund - as it is a very unusual one... They have a consensus model for the 4 Investment Directors (Partners) and 75% affirmative vote necessary from the 9 partners (LPs)... How similar to our thinking at Credo... :-)

The time flew really quickly, so it was time to go back to D.C. to my very last meeting - so John drive me back to Metro and off I went... But I strongly believe I established a very interesting contact with John and New Vantage Group, and strongly believe there will be some cooperation in the future... Also, John recommended to me a Croatian gentleman currently looking around for a new challenge in VC / early stage capital (Sam Sezak)... And finally, we found out we had a common friend, Dusan Stojanovic - who is probably also raising a new fund as well, so I have to get back in touch with him...

Finally, I met with Frederick Provorny (Russian, not Czech name), founder and president of the Center for New Technology Enterprise - an independant nonprofit organization providing web-based trans-disciplinary education and consulting... The discussion was interesting, I sort of used professor Povorny to debrief at the end of the fellowship, but he had some very interesting comments... And at the end we agreed to stay in touch - and I promised to include professor Provorny's Center into my discussions and pitches to Czech universities... And I will definitely go through the web site and read articles, to understand a bit more how the Center works...

... and D.C.

After the LORE meeting I drove back to Philadelphia's 30th Street Station to take an Amtrak to ... Washington D.C.

Originally I didn't want to go here at all - it is just my general antipathy towards governments and public sector... But according to pretty much all what I've learned so far during my travels, governments and states are very often crucial in really accelerating development of the entrepreneurial and/or venture ecosystem... Plus Leigh got me pretty interesting meetings here...

First evening has so far been interesting - and I managed to see the White House... And as most of people who've seen it, I confirm that it is funnily small... :-) But beautiful... And Barack was not at home, unfortunately...

What to do when one retires

Today I was invited to another angel group's meeting... At the Opening Gala of EF I met one of the Trustees, Jim Zug (with roots in Switzerland) who invited me to a LORE meeting... During my preparations for the meeting I discovered that LORE stood for Loosely Organized Retired Executives (must have read it twice to make sure they were not "Retarded") and I was immediately positive about this group... And that didn't change after I found out the meeting was held in a very nice golf club - Green Valley GC...

First thing that stroke me was that I ran into Ed Harvey who I also met at the Robin Hood meeting, and it was him and Jim explaining me that actually angels in Greater Philadelphia area are usually members of several angel groups - they don't see themselves as competition, they just usually operate differently...

Anyway, I again was participating in a standard regular meeting of LORE, listening to their administrative agenda and actually witnessing a change in chairmanship - the new chairman is a guy names Steve Harris who manages Midcoast Capital (they focus on buying secondary interests in VC funds, also interested in foreign funds)... And his job will not be easy... As I learned during the meeting, LORE's key challenge is that most of the members are no longer actively looking for new investors, so they are just monitoring their existing portfolios and like coming to the events - but sometimes even when a viable and interesting opportunity comes in, there is nobody to invest... Well, I still saw several people with appetite - people like Vince Schavione (serial entrepreneur and investor, founder of e-privacy company TurnTide which he sold to Symantec - BTW, it was initially backed by Ben Franklin again) or Ed Harvey who I mentioned at the beginning... But appearantly it is not enough - there was even a discussion about creating two interest groups inside LORE, one for inactive members and the other one for those who still want to make new investments - which I would see as not the best solution (does not sound like too loosely organized)...

But the absolute centerpiece of the meeting was a presentation of a company which I considered to be THE most interesting investment opportunity that I've seen in years - including anything I've seen during my U.S. travels...! And I do believe that we all can still hear a lot about this company...

People start talking about Web 3.0 as the next stage of the web development... And as Web 1.0 was all about just being visible on the Internet, Web 2.0 was about collaboration and user generated content, Web 3.0 has not yet been defined - we just know it will be "even cooler than Web 2.0"... but many people think it will be semantic web - and that is what ListenLogic is about...

ListenLogic was founded some 2 years ago, and Vince Schavione was one of the co-founder and initial investor... They are building technology which will allow anybody to "listen" to what people say about him (his company, brand, product) on the web... It is screening millions of sites, including social networks, twitters, facebooks, blogs, analyzes relevance of the "noise" (on a GoogleRank principle) and provide real-time business intelligence which will be able to help corporations (but also SMEs and startups, politicians and normal people, litterally anybody) to improve whatever they do... Fascinating... Of course, I would have many questions, but for a 15-min presentation, it was the most interesting I've heard in a long time... Let's remember the name, ListenLogic, it may be huge... Probably the only thing they're missing is a cool name like Google, Meebo, Digg or Twitter... I would suggest Blooblaa (and will be happy to take only 1% royalties :-)...

Philadelphia scores III...

After lunch I went off to the Science Center at Drexel University which is close to the 30th Street Station to meet an entrepreneur... So far most of my meetings were with investors or universities, but I was also interested in the view from the other side of the river... Therefore, Steve Welch recommended Chris Cera of Vuzit... And it was an excellent choice...

I spent almost two hours with Chris, asking him to comment my observations from the 2-month journey, checking with him my opinions or lost ideals, and Chris was extremely patient with me and communicative... Also, what needs to be said is also that I listened as patiently to his story, including the recent years with Vuzit, its fundraising process (successful, they raised from Ben Franklin, DreamIt, Innovation Philadelphia and Robin Hood)... And I will be very much interested in watching Vuzit as it grows - it certainly has the potential and Chris is excellent - BTW, he also founded Philly Startup Leaders, and I was happy to learn about this group as it is (as also Chris says) one of the few "bottom up" membership organizations (he was not too positive about some other associations and their events)...

And after Chris I went a couple of blocks to Laurence A. Baiada Center for Entrepreneurship in Technology of Drexel University where I met with the Center's Director Mark Loschiavo (as I discovered later, he will be speaking at 2007 Eisenhower Fellow Olga Girstlova's conference in NYC on the 21st, on the same panel I was invited to) and Mel Baiada, Managing Partner of BaseCamp Ventures, founder of Bluestone Software (IPO in 1999, sold to HP in 2001)...

Discussion with Mel and Mark was one of the best I've had for the last two months... We covered most of the topics I have been covering during my fellowship: entrepreneurship and what drives is, are entrepreneurs born or raised (Mel calls it "nature or nurture"), ecosystem development, universities as sources of innovation, venture financing and many more... Out of this extensive 2-hour conversation, I am picking just a bit:

1) In order to build and develop venture ecosystem, there have to be many activities, and all of them should follow one of two goals:

• Present Best Practises and create Role Models
• Create Passion for Entrepreneurship

2) In the "Nature versus Nurture" question we all agree that there is probably majority of Nurture... Whether in very early age or later, what matters are "seeds" that inseminate on the way... So when trying to make a change, we have to be creating positive seeds - back to the first point: best practises and passion...

Definitely interesting and inspiring discussion, and I will be looking forward to seeing Mel again next week as he will join the EF Closing Seminar (as he travelled to China with Steve Welch)...

Philadelphia scores II...

At the Robin Hood meeting I noticed a couple of times mentionings of Ben Franklin... First, I thought it was another angel investor, but then it clicked me - it is the organization I was supposed to go to today... Ben Franklin Technology PArtners...

I had a meeting with Terry Hicks, VP Investment Group and later on also with RoseAnn Rosenthal, President & CEO... And I got very impressed with the achievements of Ben Franklin as well as the basic model...

Ben Franklin was created in 1983 with the goal of helping economic development of Pennsylvania - and because PA at that time was very much agricultural economy, it was rather a turn around plan than just development... Ben Franklin is a network of 4 economic development agencies strategically distributed throughout PA, run on commercial principles, with significant funding from the state of Pennsylvania - I visited the Southeastern Ben Franklin (BFTP/SEP)... The focus of the agencies is to diversify and strengthen PA economy by focusing on entrepreneurial development and innovation (how similarly we should be looking at the Czech Republic), and it is doing so by direct investments in emerging tech companies, providing technical and business expertise and facilitating contacts and cooperations between private and public, including universities and research institutions; Capital, Knowledge and Networks...

The Board of Directors is the executive body of the agency, and consists of respected representatives of both private and public sector - with majority from the private sector...

BFTP/SEP usually invests in 25 ventures per year, typical size of the initial investment is $ 250 - 750k (total of $ 6 - 7m), currently having 92 portfolio companies which are then monitored with the help from external consultants who are hired by BFTP/SEP... In 2008 alone they had 12 exits, including a super-successful sale of a biotech company Protez to Novartis for more than $ 400m...

What is very important is the fact that BFTP/SEP usually provides matching funds, so it only invests alongside angels or VCs, so it really has a multiplicating effect, but it makes angels' and VCs' lives a lot easier... Their investments usually take a form of sub-ordinated convertible loan with warrants, only in limited cases they go immediately into equity...

But the overall outcome is that an agency like Ben Franklin, initiated and co-funded by the state / government, but kept independent (quasi-public) can really make a significant difference - it is interesting to take a look at the Impact Study that they published recently (showing that the investment grew PA economy by $9.3 billion, created thousands of jobs and actually returned 3.5 for each 1 dollar invested)... And that all just with a 28-million-dollar contribution from public money on annual basis (for all 4 agencies)...!

Oh, and I almost forgot: BFTP/SEP also created an angel network and have a minority stake in a GP of a VC fund where they are the largest LP... Like it was not enough already...

Philadelphia scored today...

I did not expect much today... And I was wrong... Today turned out to be one of the most interesting for the whole trip... But let me start from the beginning - and maybe divide parts of my day into several posts so it is more readable...

My first meeting was at 8.15 which meant I had to leave the hotel in Conshohacken around 6.50 if I went by train, so I asked the reception to order me a taxi for 7.30... Unfortunately, when I got out 2 minutes before 7.30, my taxi was not there... So I came to my meeting late - I believe for the first time during my fellowship... But I should have known that bad starts sometimes end up with great days...

So I met with Emily Cieri, Managing Director of Entrepreneurial Program at the Wharton School, University of Pennsylvania... After I apologised many times, we got to talking about Wharton's multiple activities to encourage entrepreneurship with both faculty and students (including alumni)... Out of the discussion my main take-aways are the following:

• Practitioners, not just academics - I learned that approximately half of the courses are tought by people who "make a living outside the university": entrepreneurs, VCs, lawyers, consultants... people from practise... and don't be misunderstood, it's not because Wharton doesn't have money to pay for professors, but because they see a lot of value in it... University compensates those lecturers (although not on market terms, of course) and only works with people they have a long-term relationship with... It is for sure that there's a long way from guest lecturing like I do back in Prague, and actually teaching a course which is a part of the academic curriculum... But certainly something I have to pitch to the Czech schools...


• VIP - Venture Initiation Program is Wharton's way to support students of University of Pennsylvania (not just Wharton), shortly an incubator... But what needs to be accented is that VIP never takes equity, only tries to encourage entrepreneurship and also gain something for educational purposes... Companies in VIP get not just space, but mainly each of them gets an advisor who helps them with business, and VIP also organizes networking events, invites successful entrepreneurs who can advise and mentor... Every year about 35 ventures get incepted and supported by VIP - they have to present a business plan and milestones, and even if accepted to the incubator, each has to re-apply every 3 months, present monthly reports with key performance metrics (5x 5)...


• Wharton Business Plan Competition - WBPC is one of the leading university business plan competition, with more than 10 years since its inception... and it really is well thought through... Wharton developed a 3-phase process which forms a very comprehensive 7-month program which is supposed to not just pick the best business plan, but mainly to promote and educate... WBPC actually helps the participants to develop their business plan in a very structured and collaborative way - and some of them persue the business plans into real companies (like the last year's winner Solixia which also went through the VIP)... Impressed I was... And similarly to Babson's FME, I will try to pitch it to the schools in the Czech Republic - because guess what, Wharton will be happy to help in creating any such competition, and even provide the online platform used for WBPC...!


• Entrepreneurs-in-Residence - finally, I learned about a relatively new activity of Wharton which is EiR... They went out to several successful entrepreneurs and executives (usually alumni) and asked them for 1 day of their time, to come over to the campus, willing to meet and chat with the students - for 12 half-hour slots which students book online on a first-come-first-serve basis... There are only two limitations: students are not allowed to raise money and ask for a job... My question whether bad students don't take over all of the slots, so the good ones don't have the chance was surprising to Emily - "no, it doesn't happen, usually it works out great"... Again, something very easily impletable in the Czech Republic (maybe with some limitation to prevent the situation in my question)...

So that was my visit of Wharton - the home of Knowledge@Wharton which inspired me back in the dotcom times... Finally I saw it live, and it was a very inspiring visit... I will for sure try staying in touch with Emily and connect her with some of the progressive uni guys from back home - it surely seemed she is interested...

And angels again...

I had to leave New York today, going back to Philadelphia, or actually to Pennsylvania, near Philadelphia... I went with an Amtrak again, which is really the most convenient way...

And after a quick meeting with Leigh at the 30th Street station in Philly, I picked up the rental car (Camry, Camry) and went off to spend the whole afternoon at the Robin Hood Ventures meeting at Mill Grove, the first home of John James Audubon (who I've never heard of before, but who is one of the best known ornitologists and bird-painter - see picture on the left)...

Just when I arrived and parked the car, Steve Welch of DreamIt Ventures arrived - 2009 USA Fellow who invited me and hosted me at the meeting... And he came by a Lexus of course... :-)

The meeting itself was very interesting, this time from the organizational perspective - it was not just a screening meeting (although it included one presentation), but it was just a standard monthly meeting, with full agenda and only 3 guests (2 prospective members and 1 stranger - me)... RHV invest as a group and always create a new SPV... The investor is always announced to be RHV... Also, they create "Benchmark Fund" (where again members can but don't have to invest) to co-invest and do follow-ups if necessary... And finally, at RHV there seem to be usually larger number of investing members, with smaller investments starting at around $ 10k... Very nice model, although it might end up with a lot of micro stakes in different companies, which might be a huge headache, so I suppose such model requires high self-control by the members...

Interesting discussion was around whether or not it is good to invest in companies which eventually need to raise more money from VCs - whether or not it is beneficial to be A-round investors when there will be "evil VCs" in the B- or C-round... Up till now I have never thought that angels could possibly feel negative about VCs coming in later - it means liquidity (or at least re-valuation) event, increases the chances of the company being sold for big $$$ and also it means there is one more partner to care about value creation at the company level... Yes, dilution and timing might be an issue, but I very much believe that everybody's motivation, including VCs and angels is the same... But will think about it...

Interesting perspective was brought by one of the members when he said that VCs sometimes just prefer 5x now to 10x in 3 years, and angels' motivation is different... Still don't understand exactly why... Also, what was mentioned is statistics from American VCs (presented at the recent ACA conference): A-round investors expect at least 10x, B-round 4 to 7x and C-round 2x... Is there any letter before an A...???

We are all New Yorkers...

Weekend in New York was just great... I met Bruno already on Wednesday (Hooters, of course), Mohammed and Camilla came on Saturday afternoon, Zsofia joined us Saturday evening... Unfortunately, Seamus, Maria Jose, Karin, Jan and many others were missing, but (sorry, Seamuson) we had a grrrreat time with those garlics (pictures to come, after a strict censorship process)... :-)

Columbia successful in selling drugs

My friend JB would probably be surprised that I even find this worth mentioning, but I actually don't want to speak about this sad notorious fact (which led among others to the murder of my dear Fellow's mother)... not Colombia, but Columbia...

But to start from the beginning: I went to visit Columbia University in the City of New York today, with a couple of meetings in two different campus'... But in this post I will break the rules and won't give more details - as I met several people and some of them asked me to keep confidential that they shared with me some of the information, others haven't - but some of the information overlap, and I want to be able to capture here as much as possible...

Fact is that I was positively surprised how active Columbia in technology transfer and commercialisation is... The negative surprise comes then from the fact that most of the commercialisation is done through licensing and selling IP early instead of trying to build more startups... Maybe Columbia should join forces with Babson, but that would be a different subject...

What I learnt from the meetings was that over the quarter century that Columbia has been doing commercialisation and tech transfer, they earned a 10-digit sum in dollars and currently they are at over $ 100 million of annual revenues from commercialisation... As one of my contacts said: "it's a great way to pay for new buildings"... And those are just numbers of income for the university, if we were to think about the total impact or total profits (including founders, scientists and/or investors), it would be several times more... billions... There are some 10 - 12 spin-offs from Columbia every year, total of over 100 (about 1/3 VC-backed and 1/6 successfully exited to date), and if we take a look at the popular statistics of job creation, it seems that only Columbia spin-offs created over 1,500 jobs...

And what sector are most of the projects (spin-offs or licensing) in...? I said it at the very beginning - it is in healthcare... DRUGS...

Conf calling

Originally, I was supposed to meet with Liddy Karter personally, but on a late notice, she had to cancel but offered a conf call, which I (through Leigh) accepted... Once the time for the call was getting closer, I started to almost panic... Jesus, what will we talk about, we've never seen each other, arrangements were made through another person, there was no clear agenda... well, it was going to be interesting... or not...

And it was like I feared... "Blind" conf calls really suck... But I learned a couple of things that were interesting...

Firstly, Liddy is the person responsible for public policy issues at Angel Capital Association (ACA), and I was surprised that ACA had such a person and actually so much interest in public policy issues - but I guess it is in line with what I already learnt: that there is no rapid development in entrepreneurship or financing without the governments... Secondly, Liddy shared with me some experience, and it turns out that just tax incentives can bring angel investing levels from zero to tens of millions dollars in just a couple of years - example of Wisconsin where from 0 dollars invested by angels in 1994 they got to over 12 million dollars in tax credits in 1998, and Wisconsin provides tax credits at a level of 25%, which means that there was actually a total of at least $ 48m invested by angels in that year... (we can compare with € 16m in venture capital in the Czech Republic in 2008)

Czech Republic would definitely need an active angel group or even groups, and of course smart approach by the government...

Also, I got an interesting tip from Liddy for resources and best practices, including samples of term sheets and screening docs... Definitely worth looking at...

Big Apple

And I arrived in New York City... After 4 hours in an Amtrak from Boston South Station (BTW, a lot better than a plan, you only need to be there 10 mins before departure) I landed in Penn Station in New York...

Now I am sitting in my room on the 32nd floor of the Millenium UN Hotel which is right next to the United Nations (which kind of suck) and looking out of the window (which is awesome)... Will be here only for 4 days, but very much looking forward to it...

Are Entrepreneurs Born...?

My visit at Babson yesterday was certainly very inspiring, and one of the questions I was thinking about while riding a cab back to Boston (40 mins / $ 75 trip) was "So are Entrepreneurs Born or Raised?"... I have been asking this question while guest lecturing at Entrepreneurship classes back home at VSE, but also in conferences and my BOOTCAMPs, and the people seem to be really split in halfs (not counting the politicians saying it's "a bit of each")...


Me personally, I have been a supporter of the "Raised" answer, and my visit at Babson seems to be confirming it... Genes can maybe determine how much we are generally risk averse and how much success driven we are (to a certain point), but entrepreneurship cannot be predicted... Entrepreneurship is not about WHO you are, but WHAT you do - it's the actions which determine successful business or failure, it's how you identify and tackle an opportunity, how you form a team, how you believe in the goals...


Anybody can become a great entrepreneur, even though he comes from an underdeveloped environment without the ecosystem (say, Czech Republic?), has no entrepreneurial background or genetical base - he/she just needs to learn about entrepreneurship, and ideally move to a place with the venture ecosystem... Then he can make it...

BTW, would you invest in the startup team on the picture to the left...? Was there any "Born Entrepreneur" there...?

University of Entrepreneurship

Today I had two meetings arranged: first, I was to finally meet Pascal Marmier who I have emailed with many times, and second, I was to go to visit Babson College...

Pascal is a Swiss guy living in Boston for many years, and he is Swiss Consul in Boston and Director of Swissnex Boston... First I met him some years ago over email, being introduced by Roman Stanek (whose last company was based in Cambridge - just next to Boston), which is already a great reference... And now I finally met him and also got to see Swissnex offices in Cambridge (2 floors near the main square, very nice - BTW, the 2nd floor was opened just in March by the former U.S. president Al Gore)... But what I was really amazed about was how the Swiss succeeded in build really a very useful and effective platform for science, technology and innovation, which serves as a base for Swiss entrepreneurs, universities and innovators, sort of a gateway to Boston and the U.S.; and all that as a governmental agency... It's just about people - CzechInvest and CzechTrade should really be learning from guys like Pascal, how to build something that actually makes a difference, which proactively seeks opportunities and helps in tech transfer, entrepreneurship and U.S. market access... Congrats, Pascal, very nice job...

And after a friendly chat with Pascal I went off to Wellesley to visit Babson College... Babson is not as well known as Harvard, Stanford or MIT, but I actually wanted to go because it has a reputation of business school extremely focused on entrepreneurship and raising entrepreneurs - Babson is also the coordinator of the GEM (Global Entrepreneurship Monitor) research for which my alma mater University of Economics in Prague is the Czech partner for, concretely my friends Martin Lukes and Martina Jakl... On the plane to Boston I read the last issue of the Entrepreneur Magazine, and I was delighted to find out that Babson ranked #1 in Entrepreneurship among graduate schools in the U.S. - and later during the visit I learned that it has actually been #1 for the last consecutive years - that is pretty consistent, isn't it...

Babson's campus is a beautiful one at first sight... It consists of red-brick buildings just randomly distributed in a park, in the green, across the Wellesley road there is a golf course... Out of all universities that I've visited, Babson is the most beautiful, quite, convenient and comfortable - no wonder its address is Forest Street, Babson Park... 15 years ago, I would really love to go to study there...

At Babson I met with three people: Candida Brush (Professor of Entrepreneurship - and an active angel investor herself), Daniel Marques (Manager, Entrepreneur Development) and mainly Trish Costello (Director of Arthur M. Blank Center for Entrepreneurship), and learnt many interting things... Mainly, what was refreshing to learn was that Entrepreneurship at Babson is not just one of academic disciplines, but it's a way of life for the students and professors... It's a requirement and also students usually apply to study at Babson because they do want to become entrepreneurs - some to make a lot of money, some want to become social entrepreneurs, some to become corporate entrepreneurs, but they all get to "live entrepreneurship" at Babson...

All Freshmen (1st year of college) have to take a course called FME (Foundations of Management and Entrepreneurship) where they have to form teams and actually go out and start their own "live and real" companies... It's a whole process where they first brainstorm about what they could work on, then vote, and at the end register the company and get it off the ground by producing and selling the products or services... Not a game, real business... And each of the teams actually received (small) funding from the university... Sounds like sci-fi...? Wait, it gets better... After 6 months they have to "harvest" the company = prove that it can make profits and collect them... Students don't get to keep it, it all goes to charity of their choice (so they also learn that they should be giving money back to the society) - but they can do a "re-start" which means they can buy the company from the university (pretty much for the money that was put into it as the initial funding) and continue and make it successful and IPO (or sell)... And believe it or not, there are cases like that - probably 10% of the FME student companies are bought back by the student teams or their parts... Fantastic...! And an average profit that the companies make over the 6 months is around $ 20 thousand... I HAVE TO bring this program to the Czech Republic - Trish promised to create an FME package that Babson will be able to license to other universities... Get ready, VSE, I am coming... And Martin and Martina will help me...!

Academic Day... part II.

As I already wrote, after Harvard I was to go to MIT - yes, the legendary school for tech entrepreneurs and appearantly the best university in the world when it comed to science and technology... So I started off in MIT's COOP store and bought a cap for Max, just in case he wanted to do an Internet startup... :-)

My meeting was with professor Ed Roberts, Chair of MIT's Entrepreneurship Center, very dynamic and energetic person... He started off with a clear statement that any technology transfer to practise costs many millions of dollars and several years, in despite of what the professors think - because there is such huge gap between having something in an academic lab and being actually able to deliver a product to costumers... Immediately I was professor's fan - and it was just the beginning...

Because I come from Europe, professor Roberts started a discussion on cleantech and how huge interest it is now getting from VCs... Although nobody yet discovered anything that would be cheaper and more efficient than the traditional "dirty energy"... Currently more than 170 out of 1000 academic staff at MIT is somehow involved in "something cleantech", but it is just hyped out - similarly to the 70s when there were first solar and other alternative technologies were pushed... Professor Roberts was involved in the very first solar panel startup in MA, which was sold after the hype burst (and after 1 year of operations) and "he made litterally $30 on it"...

Last part of our conversation was about my fundraising activities towards a startup fund for Central Europe, because as it turned out professor Roberts founded and managed as the General Partner his own VC firm called Zero Stage Capital - where he raised 4 funds for seed and startup stages (first one with $ 4.8m), to leave just after the firm raised its 5th, 100-million fund which was extremely successful during the dot-com bubble, to fall down and disappear after the bubble burst...

Professor Roberts was also the first person who was unhappy about president Obama - well, he's a republican... He fears that the change Obama is bringing will pull America towards a socialistic mindset ("that Europe has had for years already"), and it will cause a significant weakening of the U.S. market, its companies and generally will have a huge impact on American entrepreneurship and also competitiveness... I hope he's wrong... But I worry he could be right... It won't take too long to judge - maybe a year, maybe two...

Academic Day... sort of

Yesterday I got to visit entrepreneurship centers in both super famous universities in Cambridge: Harvard University and Massachussets Institute of Technology... I've already read and heard a lot about both professors I was about to meet, and was very impressed - impressive bios, nowhere close to any of Czech academians... So I may finally find definitive answers to my questions about what drives entrepreneurship and how to create entrepreneurial ecosystem in the Czech Republic...

My first meeting was at Harvard Business School and started at 07.15am... I thought it was common in Harvard to start the day so early, but when I arrived (taxi, of course) it litterally seemed I was the only person on the campus - which is BTW a beautiful set of Georgian buildings on the Boston side of the Charles river (unlike the rest of Harvard University which is across the river in Cambridge)... Professor Lerner explained to me that it was not normal starting as early, but it was really the only time he could meet me, and I felt very grateful he did...

Professor Lerner seemed especially interested in the question of the ecosystem, and reminded me that although most of Silicon Valley people don't like admitting it, that ecosystem actually could be created due to governmental funding and support... The roots go back to the beginning of the 20th century and generous funding of research (mainly high-tech for military use) of the government... The unfortunate thing is, says professor Lerner, that most of the governmental funding is wasted, misused or used ineffectively, unfortunately the history showed us that creation of any innovative and entrepreneurial ecosystems had to be also supported by the government - see examples of Israel, Singapore, San Diego... This for me was a very interesting observation as I have always been rather opposing governmental influence, but it seems (from what professor Lerner said) that there is no viable example of ecosystem withought governmental support...

Also, he mentioned an assignment for his MBA class back in 1992 which was put together in cooperation with one of rich Jewish family offices - the class was supposed to do a market research for Brothman, how to design a fund of funds which would invest in venture capital in Israel... The recommendation of the students at the end was NOT to do the fund (although they discovered many reasons to do it, they thought it would still last many years before the market would be ready)... They were wrong... The family office went ahead and started the fund (they even offered some of the students to work for the fund, which they all declined), in the same year as the Israeli government started also a fund which would invest in VC, they invested in some of the pioneering VC fund managers, and became very successful... The ecosystem was accelerated enormously, also thanks to the governmental support...

The story of Israeli ecosystem of innovations, entrepreneurship and venture capital can be found for example in this interesting study...

Finally, professor Lerner outlined a 3-point action plan of how he recommends to go forward with a VC fund in the Czech Republic:

1. Entrepreneurial Outreach & Education


2. Building Attention and Buzz, create a Topic out of VC


3. Start with Seed & Attention Rounds

I will certainly think about it, thanks professor...

More Than Money...

I have never seen venture capital as just financial service, sort of a more evil banking like some people do... When I think of VC it is for me always a tool for entrepreneurs... to help them reaching their goals... It may sound naive, but certainly I am not the only one... Sitting in a dark room, watching a parade of legendary VCs like Bill Draper, Dixon Doll, Pascal Levensohn or Tom Perkins, saying very similar things... 2009 Annual Meeting of the National Venture Capital Association (NVCA) just started - and I am there...


To make the long story short, the main message of the conference was that the venture industry is facing the worst slump since the dot-com bubble burst, maybe even in history... VC investment activity fell down by more than 50 per cent in Q1 2009, only 3 funds were raised in the same period, and there is not very optimistic outlook for the rest of 2009... IPOs litterally disappeared and currently represent only 13% of exits (compared to more than 50% in the 1990s)... Conference Chair Kate Mitchell (Managing Partner of Scale VP) started the conference with the following words: "this is a fantastic industry... we're just not feeling that fantastic right now", which speaks for the whole tone of the whole 2 days...


What I really admire about Americans is that the atmosphere was nowhere close to surrender or pessimism, quite the opposite actually - cheering and arousing, optimism and belief... Very much different from the Czech Republic and Europe actually... No bad mood, really...


At the very beginning of the conference there was an interesting discussion between Kate Mitchell and Mark Heesen (NVCA President) on the New Congress and Obama administration and their impact on Venture Ecosystem... Of course, a bit political issue, so we can question openness of Mark's statements, but he was not all just positive, so it may well be really true... Mark said the way he looks at it is that "the glass is three quarters full"... On the positive side, he feels Obama and his administration understand innovation, technology, Internet - actually he was to a large extent elected thanks to technology, also it seems there is a new mindset towards small business administration there... It seems that the new president feels the necessity to support innovations, put more accent to healthcare, cleantech, research in general - it seems science is sexy again (I guess that's true)... On the negative side, what might be a bit disadvantagous and limiting the performance is a lack of 2nd tier administration - mainly due to Obama being overcareful regarding lobbyists and people who have worked for any lobbying groups (which leaves a good portion of real experts out of the play)...

Also, one of the risks for the near future is possible tougher regulation of the financial markets which might hit the venture industry as well - although there is no reason why it should... Venture capital certainly is not an industry which would put the economy at risk... There is no leverage, no small savers, no mortgages for people who cannot pay them...

What I believe is very important and positive is that the venture industry is not coming to the Capitol Hill with any request for a bailout (unlike many other industries)... neither I suppose are NVCA representatives flying there in private jets... The message of VCs is fairly simple: "do what is good for the entrepreneurs, that will do for us"...

During the course of the 2-day program, the outgoing NVCA Chairman Dixon Doll (General Partner with DCM) introduced a 4-pillar plan to restore the Venture-Backed IPO Market... It is a plan aimed at both private sector (VCs, IBanks) as well as government (capital gains tax and other tax incentives, review of the current one-size-fits-all regulatory approach)... The 4-pillar plan is really a very interesting one and it could work... We'll see in a year...

What stroke me during presentation of the plan were the numbers showing how important venture-backed companies for the U.S. economy are - in a report to be released in May, Global Insight estimates that in 2008 public companies that have been VC-backed accounted for more than 12 million U.S. jobs and $2.9 trillion in revenues (21% of U.S. GDP)... No wonder that Pascal Levensohn (Founder and Managing Partner of Levensohn VP) says that he is in the business of creating jobs - which is one of the greatest descriptions of venture capital that I've heard...

As I was waiting for my plane to Boston on Monday, I spent some time with Mbali of South Africa as we were on the same plane... And she was asking me about venture capital, and she said "it sounds dangerous, almost evil"... No no, Mbali (and everyone)... Venture capitalists are not in this for money (at least the good ones)... We are in the business of creating jobs, fostering innovation and entrepreneurship, bringing efficiencies and solving needs... We are not bankers or brokers who only deal with money - there is more, a lot more...

Entrepreneurship, Russia, Pilsen, Social Media... and a lot more

My first day in Boston - after a long travel (4.5 hrs on the bus + 2 hrs waiting + 3 hrs on the plane to Chicago + 31 mins for changing the plane + 2.5 hrs on the plane to Boston = TIRED) I had only 1 meeting scheduled today... But as the afternoon got closer, I almost thought of call in sick and reschedule - it was really hot out there (again in mid 90s) plus my stomach didn't feel well (swine flu?)... But finally, I got up, walked to the North Station, took a train (first time in the U.S.) to Concord for one of the first meetings I was really not prepared for - all I remembered was that I was meeting with Firehouse Capital and that they had something in common with Yandex (the largest Russian Internet company with similar market share in the Russian market like Seznam in the Czech, but with over 25 million unique visitors monthly, $ 300m in revenues, 1800 employees and about $ 100m in profit)...

Luckily, the meeting was very informal and turned out to be one of the friendliest and most relaxed meetings so far... I met with the President of Firehouse Capital, John Boynton who turned out to be a very relaxed angel investor (or normal private investor, I forgot to ask...) and serial entrepreneur, with a long-lasting relationship with Russia and also a lot of business experience with the Czech Republic (well, it didn't quite work out for him in Pilsen then, but let's just say he remembers the $ 6m he could have made there)...

John was also the first one to question the "old truth" of VCs that a failed entrepreneur is better than a first-timer (see for example here)... It will certainly be an interesting discussion with professor Josh Lerner from Harvard who I am meeting next week...

Not only was this meeting fun, but also there are 3 concrete outcomes to be followed: (1) we will try to discuss potential cooperation between Yandex and Geewa, (2) John will connect me with Scott Shleifer of Tiger Global Management (who I wanted to meet for quite some time now), and (3) I will take a look at John's project which failed to raise capital and advise on what next... Oh, and one more: I will probably buy an iClub - product of one of John's companies - how awesome..

Leadership is when...

There was actually one "official" part of the Grand Canyon retreat - Sunday evening workshop to discuss our outtakes from meetings in the first part of the Fellowship... So pretty much what we learned about leadership and change...

I will not go into describing other people's views on this, let me just conclude that our discussion ended with drugs, their traffic to the U.S. (from Colombia) and possibility to legalize them as a way to solve the problem...

When I thought about what my 2 weeks in California gave me with regards to leadership, this is the conclusion: as pretty clear from my objectives and interests, leadership to me is very much connected with entrepreneurship, and I was really happy to spend just a couple of days in the most entrepreneurial ecosystem in the world... And I strongly believe, that what fosters leadership is the environment of not fearing the failure and not blaming for failure... And that also applies for ability to make changes...

Grand Hole

Bye bye, San Diego, time for the mid-term retreat which traditionally takes place in Grand Canyon - which, as Seamus expressed, is supposed to be a "pretty big hole"... So I flew from San Diego to Phoenix where I met some of the fellows (I won't describe the Hooters evening too much, let's just leave it at "they've got really great chicken wings") and on Saturday morning we took a bus over to the Grand Canyon...

The weekend was great... First, because the fellows were altogether after what seemed like a long time, and second, there was no Internet connection in the rooms... So no emails, no blogging, no checking websites for news from home...

All the time up until Monday morning when we got on the bus again and headed for the Phoenix airport where we split to depart for our next destinations - in my case to Boston...

Angel?

Oh, I almost forgot... At the end of the meeting one of the more active members named Dan stopped by me (I was asked by Bob Fried, VP Membership who invited me to give an introduction to the rest of the group, so they know there are no insiders - at the end of the day I am a fellow angel) to exchange business cards (well, he forgot to give me his), but more importandly to tell me that he had no idea that in the Czech Republic there are angels or VCs...

I tried to reply more or less in a light and friendly way because I thought he was just teasing me... But he continued saying something along the lines that developing countries shouldn't need angels or VC just because they need to first build basic infrastructure and there is no space for innovation... So I kicked his balls and left... No, seriously, I made the mistake of starting a dispute on whether or not "emerging" (not developing) countries can or cannot be ground for innovations, and also about definition of angel investor - as he kept saying "in those cases angel investor is not suitable, but normal private investor"... I still don't understand, maybe just because his English was so bad, with strong accent... :-)

Angels drive Lexus'

I am sitting now at a Tech Coast Angels' (TCA) meeting... I was invited to one of their standard screening sessions which they hold every month, with usually 3 - 4 presentations of companies which already have a supporter among their members who has worked with them, prepared them for the presentation and also introduces them to the others... After a 15-min presentation there is usually a 10-min Q&A - and guess what, the entrepreneurs never talk back to the angels saying the usual (in the Czech environment) "no, no, we can surely handle it" or "you don't understand, Microsoft isn't able to do this"... Entrepreneurs very carefully listen to the question and then usually start with "oh, that's a great question"... Do you think it's lame...? No no, you're wrong...

After the 4 presentations (today there were 4), it is time for a working lunch, already without the entrepreneurs where members of TCA discuss each of the opportunities and at the end express their interest to participate in a post-screening meeting which is usually scheduled for the following week, which will start due diligence process and should lead to an investment...

I was happy to see 4 projects which I think are (to some extent) all investable, and according to the interest of the TCA members I believe that at least 2 of them will be...

And what about the headline...? When I came to the meeting, all I saw in the parking lot were Lexus cars of different models... Well, after the meeting was finished I saw some of the people leaving in BMWs or Porsches, but why wasting a nice headline, right...?

Watch your step...

I don't want to be rude or inpolite in any way, don't get me wrong... but what the heck is up with Americans and shoes...??? I am not a super posh person, and for sure not a fan of formal clothing (see my first posts about dress code at the League)... But I admit, I like nice shoes... Unfortunately, I haven't seen any here - or at least not on people's feet, or course if I don't count French and Germans who I met on the plane... Surprisingly, even men in expensive black suits and BlackBerries in their hands, when you look down, have just bad shoes...

There actually must be some sociological or psychological reasoning... Maybe they just hate their fathers and their shoes... Or want to sleep with their mothers and ugly shoes would help to get more attention...? Or is is one of those Europe versus U.S. things...? Well, I'm just an amateur, I better consult with Maria...

CONNECT yourselves...

My program in San Diego is very much rounded around the UCSD - University of California San Diego, so I thought it would be a bit boring after the Valley... But I was wrong...

San Diego used to be rather sleepy and not very dynamic and vibrant, and back in the 80s it was in a big trouble due to simultanous changes in local economy... and then a group of individuals, thought leaders, innovators and businessmen sat together and decided to do something about it... something to improve competitiveness of SD... initiate and facilitate communication between the universities and business... stimulate clustering of high-tech and generally of high value added sectors... ensure sustainability of the economy in SD and its companies... That's when CONNECT San Diego was born...

CONNECT is a non-profit organization with member support from research community and universities, the private sector, investors and government... Now, about 25 years after its inception CONNECT really is a conglomerate of activities, which include the Springboard program which helps companies to receive funding (there were over 350 companies which received investment directly out of the program, and over 1,500 companies which went through the program and at the end became successful in fundraising), research, several industry clusters (cleantech, stem cells etc.)... There are also activities which CONNECT initiated but were spun out later, like the Tech Coast Angels group or Global CONNECT network...

I spent the whole morning at CONNECT, meeting with the co-founder of Global CONNECT Greg Horowitt (who is also a partner of Victor Hwang at T2VC), met also Director for Program Partnerships Peter Thomas and Lada Rasochova of Rady School of Management (originally Czech who studied in SD and has lived there since)... It was very inspiring talking to them about linking Research with Talent and Money and how it works in San Diego... One of great quotes by Greg: "we don't consider it innovation until it goes through commercialization"... Czech academics should hear this - actually not just academics, majority of people just don't understand the difference between SCIENCE and TECHNOLOGY or IDEA versus BUSINESS (examples at web site of Czech Dragons' Den - only in Czech, unfortunately)...

BTW, did you know that there was over 2 billion dollars of venture capital invested in San Diego last year...? FYI, San Diego county has just over 3 million people... Comparison to the Czech Republic...? Forget it - see my post from Stanford about the Czech stats...

My afternoon meeting was then with another guy with a UCSD business card, Raymond Smilor, Director of Beyster Institute which is the UCSD's institute for Entrepreneurship... And it was a great meeting - not only is Ray a passionate golfer, but mainly he is a guy with extensive experience from academic environment, trying for all his professional life to enforce entrepreneurship, tech transfer and commercialization, and... however unprobable it may seem... successfully...

And he also brightly discovered the problem in the Czech Republic - "if there is no leadership at the universities, it cannot be done", which unfortunately sounds simple but true... another thing that cannot be easily changed - too many inhibitors for such change and still no leadership...

When talking about role models and their necessity, Ray told me about the "Tall Poppy Syndrome" and he related it to Australia... Unfortunately, I know that syndrome very well, just didn't know the term - but will use it from now on...

I spent over 1.5 hours talking to Ray, and meeting him surely was one of the brightest points on my journey so far... Also, I got a copy of Ray's book: Daring Visionairies, How Entrepreneurs Build Companies, Inspire Allegiance and Create Wealth, with a signature - very much looking forward to reading it...

San Diego, baby...

It was a terrible flight by United - the plane was on time, we boarded, and then the unfortunate news came... The whole crew including pilots were women... Just kidding, that was not the bad news - that was that there is technical assistance necessary and the plane would be delayed by 5 - 10 minutes... It ended up being almost 2 hours during which we were sitting in the plane... And that I can tell you was stressful... So I got to San Diego after 11pm... But that was just because I had to be compensated for all the good stuff to follow...


I went to pick up the rental car, and this time I did finally get a convertible... Yay... :-) I checked in the amazing Grand Hyatt at the Seaport Village which was litterally minutes from the airport... And all the fun was just about to start...




BTW, San Diego is my third destination city on this trip... and it is again greatly walkable and very beautiful... I am really changing my view of the U.S. cities...

Leaving Silicon Valley

It had to come, I am leaving Silicon Valley today... Checked out the Half Moon Bay Lodge (after a lot of packing, hate it), said good bye and headed towards San Francisco where my last two meetings were supposed to be...

The first one was really accidental... I noticed on Facebook (remember, one of the hottest companies in the Valley) that my friend Roman Stanek, one of the most successful Czech entrepreneurs (and the only "Silicon Valley-like") just came to San Francisco... I first met Roman when he started NetBeans (he sold it 2 years later to Sun Microsystems), actually he was the speaker at the first First Tuesday Prague event which I organized back in 1999... After NetBeans he started another company, focused on web services and SOA, Systinet and sold it 4 years later to Mercury (just before HP bought them).... And also, it is the guy I lended 500 crowns back in 1999 so he could buy drinks at Lavka - so I can be saying that Roman borrowed money from me before he became rich...

Anyway, so when I learned that Roman was in SF, I had to at least see him for a coffee - who knows when will be a good time to meet in Prague, I thought... Well, what turned out during the coffee was that Roman was actually moving over to SF... A bit of a shock before leaving the Bay area... Why should I care...? Well, Roman is one of the few Czechs who's walked that path, made it happen, took an innovation, idea and turned into a business worth a 9-digit figure in dollars... And it would be great having him back home as a role model for the wannabe entrepreneurs, someone who made money, yet from scratch, with no frauds or cheats... We should be able to keep such guys at home, not giving them reasons to go to California... Shame... Well, at least he bought me a latte (BTW most probably the best latte in California - make sure you go there)...

Off to my very last meeting in the Bay area - a guy who I met through Yoav Leitersdorf, his partner in YL Ventures Rob Goldberg... Rob is a very interesting guy, who previously served as a Managing Director of IdeaLab, the famous incubator in Pasadena, CA, and now works with Yoav as well as his own company CrossRoads Ventures... We had a very informal chat about slowing down the investments in this economic environment (which I didn't agree with) and then mostly about his close cooperation with Zynga, one of the most dynamic and successful companies in online social gaming (another one is SNG) - and actually one that my investee Geewa was looking at closely, unfortunately they (unlike Zynga) lost the window of opportunity and their current social networks activities are just me-too... When I learnt Rob worked with Zynga, all I wanted to find out was whether there could be a chance of cooperation or even acquisition... We'll see - let's just say there will be a follow up...

That's it, bye bye San Francisco, you've been very good to me...

Incubated by a VC

Today I only had one meeting and quite frankly, I was pretty happy - had to do plenty of other useless stuff like go to the post office and send books and materials as well as gifts (especially for Max) to Prague (pretty expensive thing here), get a haircut, meet one of my partners in Credo Ventures who came for a conference in SF, et cetera...

But the meeting which for the last time brought me to the Sandhill Rd turned out to be a very interesting one... I met Susan Mason, General Partner with ONSET Ventures, one of the older VC firms in the Valley with over $ 1b under management and over 100 companies backed since 1984... Their motto is helping transform great ideas into successful business, and that means they try to work with the entrepreneurs even before they start the companies - and actually, one of the modes they are used to operate in (and actually do about 6 - 7 deals like that per year) is so called pre-seed... If they like the idea, but there is no business plan, or business model picked, or management team in place, they can offer simply a loan up till $ 750k, invite the team in their offices ("ONSET Incubator") and make the assignment to work with the team to verify the product / technology, finalise business plan or even line up executives to complete the management team... If everything works well and the team delivers what needs to be delivered by the time they promise to deliver it, ONSET converts the loan into equity and makes additional investment, even finds a co-investment partner... Very interesting and inspiring model, definitely worth thinking about...

What I also liked about ONSET was that they always aim to co-invest, invest in consortiums... In their view it's not about competition or having all the future profits for themselves, but about having more parties involved and more smart people at the table... Absolutely agreed...

Finally, a bit of numbers for today - Susan mentioned that ONSET receives about 4,200 business plans every year, out of which about 300 teams are invited to talk to ONSET, out of which about 6 or 7 they decide to invest in... Definitely a totally different world... In the Czech Republic I get probably 300 emails / exec summaries every year, but only like 1 of 10 makes it into a "business plan stage"... So I have to be looking for the suitable companies myself and convincing them to start thinking big and expand with external financing... Probably funny for Sandhill Rd VCs...

S as in Stanford

"... so I was invited to speak at Stanford the other day...", that surely is a catch phrase, isn't it...? Well, I am now entitled to use it from today on... But let's start from the beginning - for some time already I have been in touch with professor Burton Lee from Stanford's School of Engineering, I believe we met on LinkedIn... Burton is generally very interested in exploring European Entrepreneurship and he created a weekly series of lectures (which actually serves also as a class Mechanical Engineering - ME421) where he invites interesting people around entrepreneurship in Europe... Interesting thing here in Silicon Valley...

And this time, because I am in the Valley, Burton also invited me to say a few words on innovation and VC in the Czech Republic... Quite funny for me because 1) this time the event was focused on Finland as one of the partners is Finnode, 2) the main focus was supposed to be on universities (not my favourite topic)... Anyway, this was what it was, and I was certainly not to lose my once-in-a-lifetime (well, who knows) opportunity to be able to be telling to people the first sentence of this post... :-)

Anyway, I should also mention the other speakers - I was happy to meet two Finnish guys (again, it was a "Finnish day"): Jouko Salo of Tekes/Finnode introduced the agency and mainly their Silicon Valley presence... The second speaker was then presenting a Finnish startup with global ambitions - I don't remember exactly what makes them so exceptional because a part of the presentation was a video... and it didn't work... which took us about 7 mins to discover (a lot of trying and silence) and so he just lost my attention... But I believe the company, apart from their silly domain MultiTou.ch (it is called MultiTouch), is very interesting, with ability to produce very large touch screens...

The best part of the event was the following - Burton was lucky to get as another speaker professor Alberto Sangiovanni-Vincentelli who now teaches at UC Berkeley (another famous university in the Bay area), but before that he was an entrepreneur - he founded and managed Cadence Design Systems and Synopsys... two huge names from the EDA world, actually I believe they are now the largest two EDA companies in the world...

Professor Sangiovanni talked about innovations and innovativeness in Italy - and I actually found many similarities to the Czech Republic situation... Undeveloped ecosystem, rigorous univeristies' environment, lack of entrepreneurship, lack of innovation in corporations... One thing different in Italy to the Czech Republic is the growing activity of venture capital in Italy (which unfortunately we cannot say)...

Professor had some very interesting remarks and points, let me briefly pick a couple of them:
- funding from the government usually rather distracts the market instead of stimulating it,
- top-down approach in supporting entrepreneurship and innovation cannot work,
- how can anybody even think that some governmental activity can enforce innovation,
- too much VC also destroys innovation as if there is too much of capital, too much crap gets financing, too many "me-too's",
- studying MBA is interesting, but never leads to innovation; just a lot of talking about it...

Very interesting gig, really...

And my presentation...? I believe slides should be available soon at the EEITL web site, as well as part of the event on video... Just a quick note replying to Alberto's point about VC in Italy... During his presentation I looked up statistics for VC in the Czech Republic in 2008... Total money invested in VC and PE (so including buy-outs) was € 57 million... Out of this number the total invested in seed and startups was ZERO... Total invested in growth: € 16 million in 3 deals (out of which 1 should be "my" INVIA.CZ, the other two I really don't know)... Oh My God...

Facebook...? Again...? Or still...?

In my last Friday's post I wrote that Tesla Motors seems to be the hottest startup in Silicon Valley... Well, today I accidently came across this topic in a meeting with one of the top VCs and he, after a couple of seconds of thinking said: "I think it would have to be Facebook"... I almost fell off the couch (oh yes, in some hippy VC firms in the Valley you actually sit on a terrace with couches)... Does he mean THE Facebook that was hot a year ago...? THE Facebook that was voted the world's most overrated company in 2008...? That is really surprising... Either this VC spent a couple of months on vacation, or I must be missing something... So who is really the hottest startup...? From my discussions with people it really seemed Tesla was the one, but isn't it just in wrong people I met...?

I did a bit of searching and surveying people and I found 3 candidates, let's see who they are:

Tesla Motors - well, not exactly fresh startup, with almost $ 200m of angel and VC funding, but with them actually delivering the cars and revealing the sexy sedan, those guys are surely in press and talks...

Facebook - oh yeah, they still get a lot of coverage and it seems that they succeeded in building and now maintaining momentum... and, oh yes, the user base is still growing madly...

Twitter - but it seems Facebook is no longer as hot as Twitter... Yup, the microblogging app, simple and easy is really hot - Ashton Kutcher reached one million followers (maybe), Oprah tweet in her show, ... a lot of traction...

My personal guess is that Facebook is less likely to be the one than the other two, but again, that's me... What would your guess be...? (please, leave a comment if you have an idea)

But, let's remember, sometimes not even a search on Google or 2 weeks talking to people in Silicon Valley can reveal who the real "hottie" of the industry is...

And also, let's remember that sometimes even the hottest startups become huge disappointments...

(added 2 days later) Well, actually I almost forgot one company which shouldn't be missed out here... Not exactly a startup either, but certainly something people here in the Valley know about and talk about a lot... I have mentioned it already twice in this blog alone... And the mysterious company is ... Plug and Play Tech Center...