Tri State Ventures News & Events 2012

// Difference between Angels & VCs

Traditionally, there are two major types of investors who fund startups: angel investors and venture capitalists.

Angel Investors
Angel investors are high-net worth, private individuals who are looking for high growth opportunities. In the United States, an accredited angel investor is defined as a person or married couple with a net worth over $1 million dollars (excluding their home), OR someone with a track record of at least two years of $200,000+ income, OR a married couple's track record of at least two years of $300,000+ income. For those who qualify to be angel investors on an income basis, they must have reasonable expectations of having the same income levels in the current year. Read More...

- Stephanie McConnon. July 11, 2012
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• // Now hiring summer interns!

  You will help identify and build the next amazing batch of startups, as they grow from ideas to early stage to venture-backed companies. From entrepreneurs, to investors, to mentors, your network is about to explode beyond all reasonable comprehension. You will have the opportunity to sit in on mentor meetings--get to know the best entrepreneurs and investors in the city, up close and personally. You will also have access to full involvement in local startup and VC events with the founders and local community. Read More...
  
  - Stephanie McConnon. May 1, 2012
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• // Crowdfunding Reality and Dreams

  After hearing and reading much information about crowdfunding it became pretty clear that many have either not read the signed Bill or just don't understand it.
  
  So here are some facts taken directly from the Bill. Look for more detailed analysis on each point, time permitting.
  
  1) The SEC will have complete control over what size companies need to provide audited financials.
  2) There is a ton of disclosure and paperwork which need to be filed to the SEC before a company can list- to the point that it is almost like a mini public filing
  3) Forming one or several national organization of crowdfunding portals is nice but, there is a specific framework which needs to be followed in order to satisfy the SEC rules in regards to a national self regulatory body
  4) The SEC can limit almost any provision of this bill
  5) There are limitations on lead generation in regards to driving traffic to Funding Portals
  6) The SEC can pretty much do what it wants to shape these rules- Essentially the politicians fought over language, provisions etc and then passed a law which passed the buck to the SEC, and the SEC can shape how they see fit including limitations of pretty much any kind.
  
  There is a lot more to be said about this bill- but one thing is clear it will not be anything like the type of funding going on on Kickstarter today (more on that later if more time)
  
  - Sam Klepfish. April 20, 2012
  View Sam's Blog

• // TSV at Angels & Crowdfunding Event

  Riverside Chats: Speakers Series - Angels & Crowdfunding. Alternative funding sources for Biotech startups. Panelists include Milena Adamian, MD at Life Sciences Angel Network, and Vladimir Vukicevic, Co-founder of RocketHub.
  
  Tuesday, Mar 13 6:00p at Memorial Sloan-Kettering Cancer Center:
  
  MSKCC
  430 E. 67th Street
  New York, NY 10065
  
  This event is hosted by NYC Tech Connect. NYC Tech Connect launched in January 2011 as a public-private partnership funded jointly by the New York City Investment Fund, the Partnership for New York City and the New York City Council. Their mission is to foster the development of a stronger entrepreneurial ecosystem in NYC in the hard sciences. Through collaboration with universities and other strategic partners, NYC Tech Connect provides programs, expertise and resources designed to accelerate the development of entrepreneurs and their resulting technology startups.
  
  - Stephanie McConnon. March 11, 2012
  View Stephanie's Blog
• 

  // TyRx, one of our portfolio companies, has VC funding success

  TYRX, Inc., the leader in the commercialization of implantable medical devices designed to help reduce surgical-site infections associated with implantable pacemakers and defibrillators, announced that it has raised $20 million in venture capital funding. The funding was led by new investor, HLM Venture Partners along with previous investors Clarus Ventures and Pappas Ventures. The financing round also included $4 million in debt financing from Comerica Bank. In connection with the financing, Edward L. Cahill, Managing Partner, HLM Venture Partners, will join TYRX's Board of Directors.
  
  "This continued investment from Clarus and Pappas Ventures, along with participation from new TYRX investor HLM Venture Partners, is a strong validation of TYRX's products and business strategy," stated Robert White, TYRX's Chief Executive Officer.
  
  Tri State Ventures originally invested in TyRX in 2007.
  
  - Stephanie McConnon. March 9, 2012
  View Stephanie's Blog

• // Advertisers leaving Limbaugh: Are business boycotts good business?

  As everyone with a radio, tv, computer, newspaper and any other form of communication know, Rush Limbaugh hurled several insulting comments regarding a female activist. The uproar was (and remains) great. The hand wringing even greater. The biggest action however, was reserved for the online world. There were organized boycotts of Limbaugh's advertisers by some of the leading left leaning blogs, such as www.dailykos.com amongst others.
  
  I am not going to weigh in on whether or not Limbaugh's apology is sufficient (that is covered quite extensively by the very serious pundits in the hand wringing, finger wagging, high gravitas major and not so major media outlets, blogs, etc) The question that I am asking of the advertisers leaving the program is as follows: Is leaving the Rush Limbaugh program good for your business?
  
  Lets starts with one key assumption: Clearly, the show most likely generated a profit for all the advertisers on the show- otherwise why advertise on the Rush Limbaugh show? It's not like there is some added perk, such as sports advertising, where being able to take a client to a game, player access etc., .. Clearly, the Limbaugh show was generating direct profits for these companies and it made good business for them to be on the show because of those profits.
  
  Another key assumption: Businesses are in business to make money ( at least they should be- otherwise they can certainly register as a nonprofit) . Businesses advertise because they want to make money. Even the "do no evil" types of companies are all in business to make money. I have yet to see any business - even the warmest, fuzziest, do good company, donate all their profits, or even a substantial amount of their profits to charity. So it's quite simple: Business want to make money and business decisions are based on one simple calculation: will this action make my company more money ?
  
  So therefore one can assume, that the key reason that advertisers left the Limbaugh show was because those companies that left felt that: leaving the show would offer them more profits, and continuing to be an advertiser on the show would offer them less in profits.
  
  So the question now is: was it a good business decision to pull the advertising on the Limbaugh show. The short answer is : nobody knows. This is why: I think it is widely understood that the key reason that the advertisers pulled their show was the organized uproar among the various company interaction points regarding the continued advertising on the show: Company blogs, websites, facebook pages, twitter feeds, emails were all flooded with anti Rush sentiment.
  
  There seems to be no question that there was a clear "anti Rush" leaning amongst all the communications that the many advertisers received. So, I am assuming, that those companies, like www.proflowers.com , www.carbonite.com , and others made a business decision that it made good business sense to pull the plug. But, this is where I think they possibly could have erred.
  
  Here is why: In today's instant world the rule is simple : He who screams loudest gets the most "Facebook likes" or "Twitter Followers". In the absence of any organized pro Rush "anti boycott" the "boycott Rush" message carried the day. ( an "anti boycott" never really gets people geared up) Advertisers got scared, thought they would lose money by being associated with Rush, and they cut ties. Ditto times 7- advertisers , who had been making a profit advertising on Rush Limbaugh suddenly thought they would make more money if they continued to advertise. ( I am assuming that they did the right thing and made their decision based on profits)
  
  I think they likely made a very wrong business decision. Let me illustrate: If you recall, there was an uproar over Netflix and their newfangled plans, qwikflix ( oops I mean Qwikster) thousands of customers complained, thousands cancelled. Netflix backed down. Netflix made the right choice . Why is that any different the Rush Boycott ? Here is why:
  
  Netflix listened to its customers: People who were complaining because they had a personal financial stake in the matter. They would have to pay more for DVDs. Two plans. Very confusing etc. These customers had been influenced by: drum roll.... their own personal pocketbook. Those customers made a business decision which included complaining to Netflix and potentially cancelling their account. It was clear that if Netflix did not act they would in fact lose money. So Netflix did the smart thing.
  
  But, a business can not confuse "Customers" = those who have a financial stake in an outcome, with "Activists" = those trying to push an agenda and have no financial stake in the outcome.As with any emotionally charged issue, Activists tend to be disproportionately represented in today social media world. They scream the loudest, bang the table the hardest, and email and post the most. In short, Activist activity, similar to the activity around the Limbaugh boycott is a moment in time, flash in the pan mob snapshot. It probably does not make good business sense to make decisions based on moment in time, based on activism from people that currently have no financial stake in the matter. Sure, the activist say: we will now support Proflowers more, we will be big time Proflower customers, now that they left the Limbaugh show.
  
  However, the reality is, with the exception of a zealous few, there will be likely little customers to be had amongst the activists - certainly not the amount of customers that were reached by the Limbaugh show. By the time next Valentines day rolls around will the money spent by the activist come close to money spent by listeners of Rush- likely not even close.
  
  One more thing : I don't know if boycotting Limbaugh was a good business choice and I think, no one else knows either. What I do know is: making decisions based on the loudest screamers of the moment, does not usually bring about good business results.
  
  - Sam Klepfish. March 6, 2012
  View Sam's Blog

• // NetFlix Revisited

  I still strongly believe that netflix will get netflixed. The barrier to entry which existed when netflix built their business on new technology is just not there. The VOD business is slowly becoming a commidity business- no longer based on technology the way it was a few years ago when netflix "flixed" blockbuster- its an even playing field and it is all about content right now.
  
  - Sam Klepfish. February 12, 2012
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• // GroupOn

  It is not surprising that Groupon was required to do a restate on it's revenues. What is surprising is that the restate took so long to happen... I don't know who decided not to take the 6 billion from Google but, I do wonder if the decision was made without a full understanding of the very real revenue recognition concerns. I doubt it.
  
  - Sam Klepfish. September 26, 2011
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• // NetFlix Revisited

  In January 2011, ( in my predictions for 2001 ) while Netflix was seemingly at the top of it's game, I predicted that Netflix would become increasingly irrelevant. Some people scoffed at that notion ( some people actually agreed with me) ,,,I also predicted that Groupon would not succeed as well I figured it would be a good time to revisit Netflix. It's quite simple : Netflix simply does not have content to compete with the other players. It used to be that Netflix had an edge because of it's unique streaming and content management technology. This is no longer the case. Netflix no longer had any significant technology edge and they still dont have content. What is likely to happen IMO is that Netflix will either merge or be brought out ( or buy) a major content provider.
  
  - Sam Klepfish. September 16, 2011
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• // S&P Rating Agencies

  This "downgrade" just is another reason that ratings agencies are really not that useful- every investor should do their own due diligence and the US credit worthiness is not something that actually should require or have any relevance to a rating- After all - what exactly did a rating committee at S&P tell worldwide investors that they did not know already.? Or is S&P just a reality wake up call that our debt is really something we need to think about.
  
  - Sam Klepfish. August 8, 2011
  View Sam's Blog