Do you want to make a local impact right now?

Are you someone interested in encouraging young entrepreneurs and leaders here in Seattle?

Or, are you a young leader yourself who is interested in building a better community locally?

On June 6^th, the Young Entrepreneur Social is hosting a charity auction at the Bellevue Arts Museum in support of an innovative online platform that will incentivize young leaders to connect, share resources, mentor and volunteer to make a difference in their local communities.

YES, a local non-profit supporting young entrepreneurs and leaders, believes this platform will have a profound impact on creating resources, community and support for Seattle entrepreneurs and get these young leaders giving back at a much younger age than they normally would to support local non-profits and provide a more vibrant Seattle community.

So, please come join us at 7:30 on June 6^th for this red-carpet affair where you will have full access to the Bellevue Arts Museum, drinks, hors d’oeuvres, entertainment, great networking and a host of exciting silent auction items to help support our cause. Tickets are available at Shindigg.com/YESExp and donations are also accepted.

Get your ticket by Monday, May 20^th, and save 33% with our early bird special!

The event has been fully funded by our event sponsors so 100% of proceeds from ticket sales, donations, and silent auction items will go directly to funding the YESLeaders.org platform, which a prototype of the platform will be unveiled for the first time to attendees of this event.

Date:

Thursday, June 6, 2013

7:30 PM

Location:

Bellevue Arts Museum

510 Bellevue Way NE

Bellevue, WA 98004

Made possible by Flowroute, the best way to route wholesale VOIP.

And with thank you to BECU, Mark Wright & King 5 News, the Miss Washington USA organization, 1Hundred Bistro & Bar, Classic Helicopter Corporation and Shiatsu Balance for additional support.

There were many great things about the process and a few things that could be improved with the process. The largest improvement would be more proactive training of the new angels. Here is a photo of Rob Wiltbank giving a talk on Angel Investing at the conference. For a lot of the new angel investors, his thoughts were new information that was coming at the end of the formation of their angel investing thesis. Had they been spoon fed this information earlier in the selection process, it would have been easier for a lot of folks to apply the information to the decisions they were making. Getting more proactive access to this kind of information would have been a big improvement as many were in the very early stages of formulating their own ideas about what angel investing is and how they should evaluate the companies in relation to an overall portfolio.

Of course I shared information – much of it in the form of blog posts on my blog. Many of the investors didn’t have a solid framework to view the investment decision and by the time we entered the penthouse suite of HUB Seattle, the thoughts around what would make a good investment were fairly recently formed for many of the investors. In fact, one investor asked during the final voting session for some insight into what the more experienced angel investors thought as a way to learn from them and see if their newly formed investment thesis was spot on or in need of some work.

John worked hard to encourage independent pursuits of the information needed to form a good idea of what makes angel investing work. Many of the angels in the group have made many other decisions in their lives with much more money at stake which puts a false sense of confidence around their ability to invest well in a situation like this. For the next conference (coming up in just a few months) I will take a more proactive role in the training aspect for new angels.

At the end of the day, the top two companies that were in the running in the room at the conference were the right two companies. One with a lot of potential and a long way to go, the other a solid investment that would grow the investment at a slower pace but with darn near guaranteed returns. The group selected Daily Dollar as the winner. With Morgan behind the wheel, the investors felt confident that she would continue to pull the right players onto the team and drive for execution to rid consumers of the burden of paper receipts and improve the ability of retailers to offer products that consumers want to buy on their shopping trips. As one of the investors in SAC III, I am excited to see where Morgan takes us.

I am also excited about a couple of the side conversations I am having with some of the companies that came through and were dropped from the group investment. I found that some of the companies were in areas that enough of the investors didn’t want to be in or didn’t understand well enough that they were dropped despite what I saw as high potential and requiring a second look for an investment.

Selecting this high quality of companies though does say a lot about the training for the investors that did take place. The experience of defining which companies the group wanted to invest in the most was valuable experience for everyone. In fact, I thought the experience so valuable (even as an experienced investor) that I brought my son to the actual conference so that he could meet some of the teams and investors, watch the pitches, and think through his own ideas about what would make a good company and investment. At the end of the conference he couldn’t help but compare the whole thing to Shark Tank as I’ve found a lot of new investors and friends I tell about the process do. The interesting thing is that the companies pitching weren’t making the same connection and didn’t say they felt like they were in the shark tank.

Beyond the high quality of the learning through doing, the connections made with other investors was great. The other investors are all smart investors that are worth knowing and several have become friends and people I would consider engaging in other business activities with. This final component of the process that was very well done was the due diligence process. The teams were all motivated, the framework for thinking about due diligence was clear and concise, and the process of actually doing the interviews with management, advisors, customers, partners, and competitors was highly valuable. Investing in much larger, well established, publicly traded companies leaves out a lot of this as the management team and advisors simply aren’t accessible for interviews when you are investing at my level.

I am definitely looking forward to SAC IV and I encourage you to come take part to grow the Seattle startup community. In the meantime – go sign up at Daily Dollar!!

Phytelligence

Nimia

Shift Labs

Staging and Design Network

Daily Dollar

Guide Analytics

The due diligence teams began their deep dive into these companies. I ended up on the Staging and Design Network team and through the many weeks of narrowing the 43 companies to these final six felt that I had friends and responsible investment colleagues performing due diligence on the other companies. This was a good feeling, even if it is only a $5,000 investment – I am not the type of person who is ok with throwing the investment away on a company that isn’t the best risk adjusted option of the group.

Through the due diligence process, we interviewed the CEO, customers, other investors, board members, potential customers, people who decided not to be customers. We also went and visited their locations if they had physical locations that mattered. We got access to all of their inside information such as patents, financials, business plans, and market projections. Then we validated all of those things that we read, conversations we had, and insights that were provided with our own research. I personally did all of the above for Staging and Design Network (SDN) along with a few other people on the due diligence team.

Each week we met over at Davis Wright Tremain and discussed what we learned. The funny thing is that every week it sounded like there were no companies that were investable. Yet as the amount of information grew and we were able to validate components of the businesses, a few began to emerge that were more investable than the others. Some really began to look like they were just too early and perhaps a future Seattle Angel Conference (SAC IV or SAC V) would be a better fit. Some were looked like they weren’t committed enough, and others looked great except for a few outstanding questions.

The final due diligence report went out yesterday for each of the companies and I spent most of Saturday working on the SDN report and then most of Sunday reading the other reports. The research and reports are certainly not as in depth as many reports on public companies – such as the PG report from Ackman. Perhaps the goal should be to improve the reports a little, but that would require some level of training the angel investors on how to perform due diligence. I think I have a good sense for the company that I plan to vote for – regardless of whether that team wins, I think the group will ultimately pick a more likely success story than if I had gone about this process on my own.

In the next post (next Monday) in the Seattle Angel Conference III series, I’ll post my thoughts on the whole process including the final conference and thoughts on who won.

A Rising Tide is a Good Gamble – Ira Sohn Conference 2013 Bill Ackman by ValueWalk.com

The semifinals were great, the pitches were well polished, the attendance from the companies was higher meaning individual investors has the opportunity to connect more deeply with the companies. We did the semifinals over two weeks allowing for six companies to present per week. This allowed for 10 minute pitches by each of the companies plus time for Q&A. This was well needed as many of the companies still had a lot of questions being asked so that the investors could get a better sense of where the team, product, & company were in their process. I attended the first of these two meetings in person and ended up liking one of the companies so much I scheduled more time with them to meet the CTO later in the week. This was a little early, but I got their business and judging from the questions in the room a lot of the investors did not understand their business so I wanted to see if I was missing something or if I could explain it a little better to the other investors.

I attended the second of these two meetings remotely. I was really glad this was an option. These meetings have been every single week in the evening and the family really begins to notice when you aren’t around one evening a week. We were on spring break vacation and I just took a couple hours over dinner to join the online meeting where we had audio & video live from the event. I wasn’t able to network with the six companies presenting… but I did get to hear the pitches and submit questions remotely which was super helpful.

After the two weeks of pitches, we reconvened on the third week for our second to last cut meeting. We met in the main HUB event space to give all the investors a sense for what was coming. We learned a little more about the format of the event, dug deeper on the convertible note and what that meant for us as a group of investors, and then got into the nitty gritty of cutting half of the semifinalists. We did the usual most favorite three, least favorite three, and everyone’s favorite the NFW (No Fucking Way) vote where we dropped two companies because too many people would never vote for them regardless of what came up in the due diligence sessions. We were trying to get to the six finalists that we would perform due diligence on. This meant that the investors would vote and eventually get to the top six favorites and then we would break into teams and perform due diligence.

That company I mentioned earlier… I tried hard to keep them in the final six, at one point after they were completely out of the running and no one would take the lead to perform due diligence on one of the other teams I tried to get them back into the top six considering I would have been happy to lead due diligence on them. Alas they were voted out and my extra couple of hours wouldn’t translate into anything more fruitful for them.

The other company did get a due diligence lead and the six finalists look pretty good. I joined one of the due diligence teams in a supporting role vs. a lead role. The team consisted of four people and we would all take on some aspect of due diligence with the company (market, team, financials, product, etc.).

In the next post (next Monday) in the Seattle Angel Conference III series, I’ll post on what took place during due diligence leading up to the actual conference on May 16th.

Hey guys,

I came across this list of lessons that definitely come from life experiences. I personally have learned these lessons and thinking back on some of my career decisions when I was younger, if I knew and believed these lessons were true I could have rapidly accelerated better decision making and been able to do a lot more with my career.

While I have gotten better with most of these such as focusing on the people and relationships, looking at my business endeavors as long term marathons, and handling screw ups and moving forward after screw ups. I still struggle with some of these such as finding mentors, focusing on a smaller number of projects, and asking for help. I hope that you boys can save this list as you go through school and start your careers. If you refer to it every year or so and reflect on how well you leverage these lessons you will be much further ahead than even most executives in the world.

Love,

Dad

When the group of investors piled into the Davis Wright Tremain conference room for the quarterfinal cut meeting, the energy was pretty high. People were anxious to defend their favorite companies and fight to cut the companies they liked the least. As the meeting got started it was obvious that everyone had an opinion about the companies and most people just wanted to get their opinions out in the open. They had a side conversation with a CEO and they really wanted to relay what the CEO said or they researched the patent and thought it was good or bad. Most of the thoughts people were putting out in the open were just that though, thoughts to get out in the open and weren’t a complete story of why someone should or shouldn’t invest in one of those companies.

The obvious lack of focus around why someone should invest in one of the companies opened the conversation up to what the group investment thesis was or if the group as a whole should even have an investment thesis. I would love to sit around all day and talk about what an investment thesis should contain, at the end of the day though it is less important for all 33 investors to be investing for the exact same reason. It is more important that the reasons each of the investors is investing begin to point to the single best company out of the group or potential companies.

The need to skip building complete consensus and simply get to picking the best companies began to take over the meeting. John led the group through the discussion and into an array of different votes to help refine which companies the group loved for whatever reason or didn’t like for whatever reason. This focus on group selection was a somewhat democratic process and we quickly picked the top four, then dropped the bottom eight. Between a few companies leaving on their own after the quarterfinals and dropping the last eight we were already down to 17 potential companies and we really only needed to cut the list to 12.

With only five more companies to cut, it was obvious there were a few companies that the group was unsure about so the opinion voicing started again. Some about the companies themselves, some about the potential for an exit, and one interesting comment about the relatively small amount of money each investor was investing means that we should all be picking a company that was shooting for the moon.

At the end of the day, there was one company that I liked in the quarterfinals and after the group discussion I abandoned them. I’m sure the same thing happened for a lot of the other investors. As the voting resumed… pick your top three favorite, pick your single favorite, etc. The group began to abandon companies for good reasons or due to crowd participation. At any rate, we did finally get to 12 companies that would be coming in to present again for 10 minutes each. The 12 that made it to the semi-finals was a great group and now the investors were a little more primed with what types of information may influence the group at the semi-final cut meeting.

Personally, I took a liking to one of the companies as I thought their strategy was pretty good and their team seemed to have the right background. I set aside some time to do a little research ahead of their 10min pitch. In the next post (next Monday) in the Seattle Angel Conference III series, I’ll post on the two sets of ten minute pitches in the semifinals.

Yet our society continues to avoid failure and think that somehow we can be highly successful without it. At the same time, our heros, our sports stars, the people we hold above all others in the spotlight are continual failures. Nathan Myhrvold believes people and firms failures are required to advance society as a whole. Yet only the in the people we admire are the people we accept for their failures. While our own failures are viewed as bad. Here Michael Jordan – perhaps the most loved sports star of our time – talks about his failure (of course as a paid advertisement for Nike)…

With the quality and excitement of the companies, the dizziness quickly wore off and all the investors began diving in with questions that went to the heart of the businesses being presented. The room was filled with incredibly intelligent people who have backgrounds in technology, business, the medical field, etc. and the questions that filled the two minutes almost always provided enough insight for the investors to understand where the company stood relative to the co-presenters that evening.

I previously mentioned that the whole vetting process started the week before where we discussed the 42 companies that submitted and we narrowed the list to 30 companies before inviting any of the companies to pitch. This first quarterfinals night will be followed by another, then another cut round, then the semi-finals with 10min pitches, another cut round, and then the finals with only six companies presenting at the actual conference (that you should attend Seattle Angel Conference III btw, if you want to see six fairly well vetted early stage companies).

Back to the companies in the quarterfinals. The companies were drastically different than each other from tech to genetics to devices. They also were coming in at various stages, some with customers and some without. Some with actual products and some without. Some with great business models and others had only great ideas. The key for the group of angels was to sort out which companies had which components. Further, the angels were trying to decide which companies had great potential in an industry that the investors wanted to be in.

As the pitches continued, the beer consumption slowed to a snails pace and the note taking was much more furious. There were some obvious highlights to the process. Some of the investors loved the products and founders, while other companies languished in the two minutes set aside for questions searching for an investor to show interest.

By the second night of the quarterfinals, the investors were ready for action and prepared to for the fire hose to shower them for the night. The questions were more refined and the investors much more confident. Luckily, the companies presenting were also prepared and forced the investors to think carefully about the potential failures and successes the presenters would endure in the future.

I took a lot of notes during the presentations and after talking to some of the companies afterwards. There is an amazing amount of information that you can get in a five minutes from a company presenting and twenty minutes of conversation afterwards. After two nights (over two weeks) of pitches, the quarterfinal competition phase was over and the investors would be meeting to make some cuts. In the next post in my Seattle Angel Conference 3 series, I’ll cover the cut meeting for the quarterfinals.

If you are counting, this is the first event of the year! We’ve been busy (as you may have noticed if you are a regular reader). We still love putting on tech events in Seattle though!! If you are itching for great events in between TechCafe events you should check out the events at Surf Incubator and Hub Seattle. We feel great that the community is growing here and are honored to be a part of it!

At TechCafe we work with awesome startups and technology companies to offer brilliant technologists a few things for free. Sure you’ll be stuck in Appature‘s slick offices. Yes you will have to participate a little in the technical talk at the event or at least listen to the discussion that Derek Slager (VP of dev at Appature) will lead.

Derek’s talk will explore “Life in the post-jQuery world”, and some of the challenges of evolving a very large client side application. This should be an interesting topic for anybody building modern web-based applications at scale.

You will also meet some other interesting developers, program managers, designers, entrepreneurs, etc. So there is a price to pay to drink the free beer and eat the free food. You will also hear about a job opening or two at Appature… Did I mention that Appature has announced their sale to IMS? Well you’ll likely hear more about this as well.

In case you haven’t been following TechCafe over the years, Appature has sponsored an even EVERY year for the last five years of TechCafe’s existence. That means they have been giving free food and beer to startupers and technologists for years and are doing it again. Over here at TechCafe – we can’t imagine the Seattle technology community thriving without companies like this supporting the community.

So join TechCafe for an early happy hour at Appature to talk tech and meet some great peers in the industry.

Registration details are on the Attend the next event page.

This year, TechCafe is also partnering with the Seattle Angel Conference. If you are a new Angel and are not participating (you should be). If you missed the deadline to pitch to the group – there will be another opportunity in the fall. If you want to attend the conference (May 16th)itself where the six finalists will pitch go sign up . If you are interested in sponsoring a part of the event, there is always room for more sponsors.

If you are interested in hosting/sponsoring a TechCafe in the future, don’t hesitate to reach out. Please forward this invite to great people in the community that you think would be interested in attending or sponsoring in the future, our tech community is growing and you are a part of it.

We are looking forward to connecting with you at this TechCafe event or a TechCafe in the future.