Saturday, July 30, 2005

MarketStar Holiday?

Desperate stuff - http://www.ecademy.com/module.php?mod=list&lid=7015

The link to MarketStar actually helping him in this case is tenuous. The person he actually got the holiday from is not a MarketStar member.

What this actually demonstrates is networking - nothing to do with MarketStar. Note the key line - "... [Lawrence Biren] came up with a couple of possibilities an [sic] introduced me to Sandra Bruce..."

Idiot.


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MLMStar

Jim has pointed out an alarming development - http://www.ecademy.com/node.php?id=52448

Peytyn Tobin - http://www.ecademy.com/account.php?id=91097 - has been approved as a MarketStar member, despite being an MLM recruiter. Not only an MLM recruiter, but one of the worst, relying on ridiculous scare tactics to sell tat to people.

I hope ecademy now opens the floodgates in its quest for the almighty dollar. It was always the next step after the Sherminator's myriad affiliate links.

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Tuesday, July 26, 2005

Dirty Old Man

Compare and contrast Noel "Change Master" Austin's ecademy and tribe profiles. Quick before he is gone...

http://www.ecademy.com/account.php?id=19074

http://people.tribe.net/noelaustin

His choice of "friends" and tribes reveals more about Noel than BlackStar ever could. Perhaps he thought it was private, like BlackStar. Perhaps he doesn't care - in which case, good on him for being so liberal.

You have to be logged in to tribe.net to see Noel's tribes, but for the record I'll list them here... Cameltoe Fetish, DOMAI Fans, Erotic Photography, People I want to Do on Tribe.net, Sexy Athletes

What I would like to know is, why no mention of his predilection for dromedary extremities on his ecademy profile?


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Tuesday, July 19, 2005

What price Ecademy?

Ellis (Pratt) Pratt hilariously tries to compare the market value of ecademy and MySpace - http://www.ecademy.com/node.php?id=51666

MySpace has over 20 million profiles... this is useful to advertisers, and is why MySpace can run on advertising revenue.

Ecademy has 60,000 profiles... next to worthless for advertisers.

Ecademy has (approx.) 5,000 active profiles.

I know this is oversimplifying everything massively, but to give a rough answer to Ellis' question "What price Ecademy?" -

20,000,000 / 5,000 = 4000 (Member Proportion of MySpace and Ecademy)

580,000,000 / 4,000 =

$145,000

Even if we take Ecademy's "full" membership

20,000,000 / 60,000 = 333

580,000,000 / 333 =

$1,741741

But I would have thought somewhere between the two.

Considering the first figure is less than Thomas has made from BlackStar so far, is anyone feeling like a Pratt?


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Is Thomas on holiday?

Or has he been instructed to keep a low profile?

I only ask as he didn't log on to ecademy between 9th and 14th of July, and hasn't logged on since the 14th.

Also interesting to note that the man who who told us "Why we all need to blog everyday" - http://www.ecademy.com/node.php?id=45942 - hasn't blogged for well over two months.

Which brings me to this point.

How true would it be to say that Thomas "Talks the talk, but doesn't walk the walk."?

I can think of a few examples.

- The above blogging instruction.
- The "Winning by Sharing" ethic.
- Going on for years that there is no such thing as a quality network, then setting up BlackStar.
- From "Who can I connect you to?" - http://www.ecademy.com/node.php?id=23625 - to "You need to become a BlackStar to talk with me." - http://uk.tribe.net/thread/ - in less than six months



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Thursday, July 07, 2005

Conversation with Thomas.

The first part of this was in MSN Instant Messenger, the second part via Skype Chat.




(23:58:17) ste: Can I ask you a few questions?
(23:58:31) Thomas Power: go ahead
(23:59:28) ste: Is Roger Hamilton the subject of a lawsuit in Asia regarding XL Life Memberships?
(23:59:50) Thomas Power: I have no idea
(00:01:11) ste: Have you donated anything to drupal?
(00:01:28) Thomas Power: Like what?
(00:02:34) ste: Like money. You are earning partly through an open source system that depends on donations to survive.
(00:03:00) Thomas Power: You need to check with Glenn Watkins
(00:03:32) ste: So you, personally haven't donated anything to Drupal? Not that you need to, of course. It is voluntary.
(00:03:38) ste: But... winning by sharing!
(00:03:43) ste: Is Ecademy available as a white label?
(00:03:55) Thomas Power: It is not
(00:03:56) ste: http://www.ecademy.com/node.php?id=738
(00:04:54) ste: With reference to the link I posted, the ethos of open source software and Ecademy's "Winning by Sharing" ethic, why not?
(00:05:38) Thomas Power: what link?
(00:05:50) ste: http://www.ecademy.com/node.php?id=738
(00:06:39) ste: The link has you saying "Now you can white label the Ecademy platform ..."
(00:07:34) Thomas Power: Yes you can, no-one has taken up this offer
(00:08:00) ste: I'd like to take up the offer.
(00:08:03) ste: Now.
(00:08:10) Thomas Power: why?
(00:08:45) ste: Because you have kindly offered, and I would like to take up said offer.
(00:09:02) ste: Did anyone at Drupal ask why you wanted to use Drupal?
(00:10:02) Thomas Power has closed the conversation window.
(00:10:28) ste: Hello.
(00:11:05) ste: I think your connection must have gone. You were just offering me a White Label Ecademy.
(00:12:05) Thomas Power has closed the conversation window.




[00:16:28] steandreassen says: So.... this white label ecademy..
[00:17:04] Thomas Power says: yes
[00:17:25] steandreassen says: How can I have it delivered. Will Julian zip it for me
[00:17:54] Thomas Power says: why?
[00:18:40] steandreassen says: I don't understand why you are asking "why?". You have just stated that ecademy is available as a white label
[00:18:55] steandreassen says: And that nobody has taken you up on the offer
[00:19:02] steandreassen says: I am now taking you up on the offer
[00:19:39] Thomas Power says: what reason would we send it to you?
[00:20:10] steandreassen says: Because you have made it available as a white label.
[00:21:28] Thomas Power says: off to bed now
[00:21:40] steandreassen says: Have you read the license under which Drupal is made available?
[00:21:56] Thomas Power says: I have
[00:22:11] steandreassen says: My email address is steand@gmail.com, for when Julian has zipped up the files
[00:22:53] steandreassen says: The license states that if the software is subsequently released, it has to be under the same terms
[00:23:46] steandreassen says: You have just confirmed that you have made that offer, so should comply by forwarding me a copy of the source
[00:23:52] Thomas Power says: You need to drop Glenn a note

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Wednesday, July 06, 2005

Non-Mechanic?

Any non-mechanics out there? Need to find out how much it will cost to fix your big end?

Ask in this handy club.

http://www.ecademy.com/module.php?mod=club&op=forum&c=2851

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Sunday, July 03, 2005

Ziad and Thomas Power

Other news... from another respected source...

"Thomas Power was VERY keen on getting into the extremely private Blackhawk S.W.A.T. team in January and had tried to join the invitation club several times. Ziad turned Thomas down flat based on Thomas' lack of any business skills and useful connections."

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Friday, July 01, 2005

Ziad K Abdelnour

Okay... everything below this sentence is as it was sent to me.

--------------------------------------------------------------------------

Team

I’ve had it with Ziad’s lies, business ethics, sociopathic personality and his total ignorance and absence of early stage investment skills or experience. After many conversations and exchanges with him, I am convinced beyond any shadow of a doubt that Ziad knows next to nothing about start-ups and early stage companies and even less about how to evaluate them and help develop them to be fundable and guide them through to an exit. The only thing Ziad does well is plagiarise other people’s work and claim it as his
own. If you look at the following list that Pol O’morain compiled, you will see my point:

---------------------

Ziad's Posting:

http://www.ecademy.com/module.php?mod=club
&t=193265#endm

"Technology Investing: 10 basic rules when buying tech stocks [ Ziad K AbdelnourBlackStar ] [ 11-Dec-04 4:06pm ]

1. Earnings matter. Don't pay for promises, pay for actual earnings.
Things change too fast to pay for next year's performances. If a company lacks earnings it's higher risk. If higher risk then debate whether or not you're comfortable with that but limit the exposure to higher risk by making it a small part of your overall investment strategy.

2. Don't be wowed with the technology, be wowed with the business model, management team, marketshare, technology and most of all, cash flow and earnings. The best technology doesn't always win. Xerox PARC developed most of the key improvements for PCs and networks but yielded none of the benefit directly to Xerox the company. Look for technologies that
companies need to make business more efficient (less cost), to replace outdated methods, to streamline operations, that fix a problem. 'Need to have' technologies, not 'nice to have' technologies.

3. Forget the peaks, study the valleys. Just because a stock is 50% off its high doesn't mean it's a bargain. Don't believe the newspaper headline. As investors we learn more from mistakes sometimes than success. Study a company's ups and downs and economic cycles -- and what is it's price to earnings, P/E, not how far has it fallen from its 52-week high. How far is it off a low and is the low in line with a 'reasonable' valuation? Reasonable being 10x to 30x earnings depending on the growth rate.

4. Listen to what the executives say, but more importantly, listen to
what customers say. Look at inventory pile up or order backlog.

5. Learn the difference between 'betting' and 'investing.' Most
investors know this by now. If you have to ask then it's betting, no
different than playing the slots in Vegas.

6. Diversify investments. Stocks. Bonds. T-Bills. Real estate. In stocks
limit exposure to high risk. Examine low, medium and high risk stocks
and know why you own any one of them. Know what the company does and how
economic cycles help or hurt the company.

7. Cash. How much does the tech company have? Can it pay the bills for
several years without selling equity or debt? Does it have a cash-flow
positive business? Earnings to sustain itself? How much cash is on hand?
Working capital? Debt? (Debt killed Global Crossing and Enron).

8. Stock options. Many tech companies issue stock options and it may
dilute the shares outstanding (and earnings) dramatically. Typically 25%
to 30% of tech companies are owned by employees. They all want to
convert their options to cash some day. Priceline (NASDAQ:PCLN) had tons
of options issued to airlines.

9. Establish buying and selling discipline. Always employ a stop-loss to
limit your downside. Typical is making it 20% from the cost of the
shares or the closing price if the stock climbs. On selling, if the
stock has risen a set percentage -- whatever you're comfortable with --
sell some or all. Take profits. You may miss more climb but at least you
have limited downside. Or if management shuffles happen quick or
earnings fall short, consider selling.

10. Never get emotionally attached to a stock. Love the company's cash
flow or earnings but not the stock. There's nothing magical about a
ticker symbol. Just because you made x% on a stock last year doesn't
mean it's still a great stock or will continue to rise. Technology
changes. Some companies can make the change and others don't. Take
profits, buy your significant other some flowers or chocolate. Smell the
flowers, eat the chocolate. And repeat rules 1 through 10 as needed. "





Original Source (not acknowledged)

http://books.global-investor.com/pages/gurus.htm?PerIndex=3808
0000&identifier> &ginPtrCode=00000&identifier=

---------------

Ziad's Posting:

http://www.ecademy.com/module.php?mod=club
&t=83396#endm


"Entrepreneurship: How to Read a Business Plan [ Ziad K AbdelnourBlackStar ] [ 06-Jun-04 6:32pm ]

Everywhere I look, there's advice on how to write a business plan. Detailed outlines, lengthy checklists and completed example plans provide a plethora of information on what to include in a document, how to include it and where to include it. Courses offer hands-on assistance in assembling a plan, and consultants will even write the plan for an entrepreneur..... But I see little insight on how to read a business plan.

What are the critical clues that might reveal what a business is really all about and what future it actually might have? What kinds of discoveries might actually crack the code of a proposed business and help determine whether it's a viable enterprise?

When I read a business plan, I look to find the answers to three questions.

1. Is there really an opportunity here?

2. Can these people pull it off?

3. Will the cash flow?

1. Is There an Opportunity?

When deciphering a plan, I go to the marketing section first. This area of the plan should reveal whether there is a genuine opportunity with the business or merely an idea disguised as a company. A true opportunity is customer-driven. It addresses a real problem or fulfills a real need. Thus, I search for evidence of the following:

Knot in the stomach. A convincing plan effectively describes the knot in the stomach of buyers. It delineates what buyers are worried about and why they are concerned about it. It shows, through personal experience, survey data, statistics, and buyer testimonials, what keeps customers awake at night. For example, I was impressed with a plan that offered a new software package to expedite the approval process for Underwriter Laboratory certification on electronic devices. The plan detailed the rejection rate for first-time certification, outlined the costs for multiple applications, expressed the frustration of those applying for certification and provided data on the lengthy time required to get certified. Clearly, there was a need here.

Profile of the customer. A good plan provides a detailed profile of the primary customer. Too many plans assume that anyone or everyone will buy the product or service. A convincing plan clearly identifies who the primary buyer is and why that person is the primary buyer. I read a plan that offered a new kind of drawing material to artists. But not just any artists. The plan focused on commercial artists, described their likes and dislikes, delineated how they worked and where they purchased art supplies, and identified their key artistic issues. I believed the entrepreneurs behind this plan really knew their customer.

Direct interaction with customers. A winning plan shows direct interaction with the possible purchasers of the product or service. By involving customers in product development, utilizing beta sites, conducting in-depth surveys, generating purchase orders, directing focus groups and demonstrating one-on-one contact with real customers, a plan can communicate personal connection to real customers. For example, a plan for a company selling salsas and other sauces provided the results of detailed taste tests that convincingly showed customer delight with the products.

2. Can They Pull It Off?

If the plan lays out a real opportunity, I assess the people who are presenting it. I try to determine whether the entrepreneur and the team have the competence, commitment and passion to turn the opportunity into a viable enterprise. So, I'll search for clues on the following:

Talent. What kind of know-how and experience do the entrepreneur and the team bring to the venture? Since I'm trying to determine their credibility in the written document, I'll look for evidence like previous success in other ventures or projects, credentials in their areas of expertise, ownership of intellectual property and knowledge of the industry in which they want to compete. The general partner of a venture fund that I know decided to pursue a poorly written plan because the two individuals who wrote it were highly regarded scientists, owned a number of patents on their technology and had worked for several years in the industry in which they wanted to compete.

Skin in the game. It's awfully easy to spend someone else's money. Consequently, I look to see whether the entrepreneurs have invested any of their own money in the venture. Putting their own money into the business indicates a level of commitment that shows genuine seriousness in the venture. I see a lot of business plans today written by graduate students who want to start companies. Many indicate that they can't put money into their venture because they don't have any to put in. I always encourage them to find a way to put something into it. The amount of money is less important than the fact the entrepreneurs are willing to invest more in their venture than their own sweat equity.

Passion. Although passion cannot be quantified, I do believe that it can be communicated in a plan. I want to bet on someone who has the energy, enthusiasm and zeal to pursue what to that person is a worthy, challenging and uplifting purpose. Consequently, I look at how entrepreneurs tell their story, to understand why this business is an important endeavor and to sense what really motives the founders. I read a plan from one entrepreneur who was downsized, set up a business in his basement and then, through persistence and hard work, discovered that it could grow. That fellow had passion for what he was doing.

3. Will the Cash Flow?

Finally, I assess whether the entrepreneur knows enough of financials to effectively evaluate the cash flow position of the company. Projections of revenues are too often misleading. They always project success. No plan ever predicts failure, or shows an upside-down hockey stick for revenue loss, or tells investors that they're sure to lose their shirts on this one. In fact, in my experience, all projections are "conservative," no matter how incredibly optimistic they may be.

More telling than projections is the cash-flow statement of the company. If the entrepreneur can accurately and completely tally actual expenses and income in detail, then the plan presents a realistic perspective on critical milestones and on whether and for how long the company can stay above water until an infusion of capital is necessary.

Deciphering a business plan requires a bit of detective work. Analyzing information, detecting clues and interpreting findings are all part of determining the viability of a venture. Even after that, there is no guarantee of success for the business. But looking for the right signs may clarify the mystery of identifying truly promising enterprises.

Opportunity, committed people, and cash flow are the keys that crack
the code of an entrepreneur's business plan. "



Original Source (not acknowledged)

http://www.entreworld.com/Content/EntreByline.cfm?ColumnID=197

-------------------------

Ziad's Posting:

http://www.ecademy.com/module.php?mod=club
&t=307562#endm


"Capital Access: Dealing with venture capitalists [ Ziad K AbdelnourBlackStar ] [ 23-Jun-05 10:57pm ]

Simply put, the basic reason a start-up company contacts, venture capitalists is to obtain funding.In addition, the entrepreneur may realize that his or her true objective is to obtain a quality lead investor or investors to either fully sponsor or help put together a balanced syndicate of co-investors for the current and subsequent financing needs of the company.

The emphasis on the "quality" aspect of the lead investor(s) is intended to underscore the importance of the non-financial assistance that venture capitalists can provide. In differentiating between venture capital sources, a key concern should be to also obtain the benefits of the counsel, contacts, assistance and experience of active financing partners who will share the entrepreneur's vision of how he or she wants the company to grow. The reputation, financial resources, and other strengths of the lead investor(s), as well as its willingness to commit time and effort to the start-up company, will have a substantial impact on the company's ability to raise funds, its credibility and, hopefully, its likelihood of ultimate success.

The reference to the lead investor or investors "helping put together a balanced syndicate of co-investors" is intended to emphasize what has become common operating procedure in the venture capital industry. Frequently, one or two of the investors will take a leadership position of more active involvement with the start-up company, certainly including, but more extensive than, participation on the Board of Directors. The lead investor or investors may actively assist in attracting the participation of other venture capitalists with whom they have relationships. While successful venture funds are increasingly capable of providing the entire financing for a given round without the need for additional investors, there is still a tendency to have at least two venture firms co-invest in a company to share the work load and diversify the risks. It is and will likely remain somewhat uncommon for a single venture fund to provide all the financing for a company through multiple investment rounds. Accordingly, the prototypical venture capital investment in a start-up company would involve a number of venture firms co-investing, with one or two investors taking the initiative both in terms of acquiring a larger percentage of the total venture investment and in their willingness to act as principal advisors to, and investor liaisons with, the company.

The reference to "subsequent financing needs" in the expanded statement of objectives is in recognition of the characteristic of staged venture investments and the need to look upon any given financing as merely one step in a continuing, comprehensive financial plan. The investors in the early rounds of financing should be expected to continue to participate in subsequent rounds, often in concert with additional new investors, as the start-up company's financial needs grow. The inability of the initial investors, because of financial limitations, to continue to invest as the enterprise grows may make it more difficult for the start-up to attract new, investors in later rounds. This can be due either to the perception that the former lead investor(s) is unwilling, rather than unable, to invest, or to the difficulty in attempting to attract new lead investors at a stage (and company valuation) beyond the early rounds. Where possible, many would advise that the optimum first round venture capital financing would include venture capitalists with both the financial ability and potential willingness to provide all necessary capital for subsequent rounds. While these investors may choose not to, the company will surely gain some comfort in the knowledge that this capability is present.

In addition, venture firms tend to be staffed leanly and must allocate the limited time of their principals. Consequently, it is more difficult to attract a substitute lead investor willing to devote the necessary efforts at the second or third round of financing, when the potential returns on investment may have considerably decreased (due to increased company valuation) and much of the development strategy has already been formulated and placed into action.

Beyond an understanding of the objectives in attracting venture capital, the entrepreneur should consider the process. This process can be broken down into segments such as initial contact; presentation; due diligence; negotiations; closing; and on-going relations (including subsequent financings). Throughout the process, the entrepreneur should appreciate that the relationship he or she is seeking to establish will extend well beyond that of a mere financial backer, and he should be prepared for the time frame involved from initial contact to closing (recall that two to four months is typical).

Initial Contacts

For the start-up company eager to initiate discussions with venture capitalists, the first step is to accumulate information about various venture firms: their strengths, reputations and particular interests. Certain venture firms will be primarily focused on specific industries, or will have preferences towards a certain size of investment, geographic location, or stage of company development. It is important to know which firms are interested in taking on new financings, as opposed to working with their portfolio companies, as well as have a sense of the investment capital resources available for subsequent financings. It is also important to have an understanding of their track records, available management assistance talent and reputation within the venture capital industry.

Knowing the orientation and potential receptivity of the various venture firms should increase the likelihood of locating an interested investor while avoiding the negative impression of having "shopped" the start-up company. By directing his contacts to venture firms selected as potentially most interested, the entrepreneur can limit the number of venture firms approached, devote more attention to the firms targeted and address the presentation to those firms armed with the benefits of the knowledge acquired through his or her investigation.

Once a prospective venture capitalist has indicated substantial interest in the start-up company, management should devote considerable attention to nurturing the developing relationship. The entrepreneur wants to encourage the interest of the receptive venture firm or firms-- a delicate touch is required in simultaneous courting of a number of venture capitalists. Any attempt to play one venture firm against another should be approached with caution, as there is substantial risk of alienating both firms if there is any sense of unethical behavior or excessive gamesmanship.

To optimize the success of the initial overtures to a venture firm, the entrepreneurs should have prepared a well-developed business plan. Many venture firms will only meet with entrepreneurs after having reviewed a business plan or similar written material; in their view, the meetings are then typically more productive.

Mailing a copy of the business plan to selected venture firms may not be as likely to ensure careful review and consideration as transmittal through an attorney, accountant or other mutual business associate of the entrepreneur and venture firm. Venture capitalists receive a many financing proposals through the mail, and many venture firms are likely to be more receptive to, and devote more time to reviewing, a proposal forwarded by someone they know and respect who has subjected the plan to a certain degree of prescreening.

Presentation

After making contact with a venture firm and obtained a receptive preliminary review of their business plan, the entrepreneurs will have the opportunity to meet one or more principals to discuss the proposal in greater depth. The entrepreneurs should be aware that the venture firm is interested not only in exploring further the business plan, but also in meeting and taking a measure of the start-up company's management. Most venture capitalists stress that the most important factor in the investment decision is the quality of management. Perhaps more than any other subject addressed in the business plan, the character of the entrepreneurs--their integrity, drive, ambition, experience, personality traits, business knowledge, scientific or technical skills, managerial talent, and the like--will be gauged subjectively through personal contact with the venture investors.

The start-up company management should thoroughly prepare for the presentation, armed with the intelligence gathered from their due diligence investigation of the venture firm; being prepared to evidence a clear understanding of their business proposal; and being able to inspire confidence in their ability to perform. If possible, people familiar with the venture financing process and the particular venture firm should be contacted for useful background information and advice. The initial presentation will greatly affect the decision by the venture firm to either invest the time necessary to investigate the proposal in greater depth or pass on the investment opportunity. At the close of the first presentation, it is also helpful to establish a rough timetable for receiving a "first expression of interest" from the venture investor and the subsequent steps to follow in the decision process.

Each meeting with the venture capitalists is also an opportunity to learn from their experience and observations. Many business plans undergo substantial revisions during the venture financing process as investigation and analysis of the company and its plans are conducted. If both parties communicate well, the concerns, questions and areas of greatest enthusiasm may lead to valuable ideas or insights, regardless of the outcome of the discussions.

Due Diligence

After reviewing the business proposal and meeting with the management of the start-up company, the venture firm will make an initial determination whether to proceed with further consideration of the financing. If the venture firm decides to move forward, it will then undertake to investigate the feasibility of the proposal and its technical viability; the backgrounds and reputations of management; the potential market for the product; and the competitive forces in that market.

Traditionally the negotiation of a term sheet for an investment followed the completion of the investor's due diligence. While that remains the preferred order, investors now often seek to negotiate the investment terms earlier in the process and condition the investment on "satisfactory completion" of their remaining due diligence. Many investors are simply unwilling to allocate the time and effort necessary to complete their due diligence investigation in the absence of assurances that they will be able to invest on mutually agreeable terms if their evaluation is positive. To reinforce this point, investors are increasingly asking for "stand-still" agreements as part of these preliminary term sheets assuring them of the right to invest (in reality, an option to invest which lasts a brief period of time, such as thirty to forty-five days) on specified terms if their due diligence is satisfactory. The key issue this presents to the start-up is the need to rely on the honor and reputation of the venture firm for fair dealing. The earlier in the due diligence process a start-up is compelled to "commit" to a venture investor, the greater the chance that the venture investor may yet uncover information that may discourage him or her from making the proposed investment. Careful and complete communication between start-up and venture investor is required to reduce the risk of a financing aborted in mid-process when the due diligence does not confirm the information suggested by the start-up.

The due diligence process of investigation and analysis varies with each financing and among venture firms. Indeed, as each prospective new investor is introduced to the start-up company, that investor will bring to bear its own manner and approach to the due diligence efforts. Consultants may be brought in to evaluate the scientific aspects of the proposed product, or to help evaluate the capabilities and knowledge of the technical personnel. Independent parties familiar with the company's management, business sector, and competitors will often be contacted. Potential suppliers and customers may also be approached. The financial projections will be scrutinized and the assumptions underlying them tested. Meetings will be held between various professionals at the venture firm and all key members of management at the start-up. At times, there may be requests for revisions to the business plan to take into account the results of the investigation and analysis.

If the start-up company has developed valuable trade secrets (proprietary information) or other intellectual property rights, some efforts should be directed towards avoiding excessive, detailed dissemination of that material. This can usually best be accomplished by careful screening and selection of the venture firms to be contacted, but if concerns remain, the issue should be discussed with an attorney familiar with the venture financing process and intellectual property rights issues.

While the precise scope of the due diligence investigation will vary from company to company, a start-up should anticipate a time-intensive and thorough investigation. It is useful at the outset to determine the time frame involved, so that management can budget its time and adjust its plans and business development schedule accordingly. Four to six weeks may be considered typical, but management should not be surprised (or dismayed) if more time is needed. Certainly it would be wise for the start-up company to stay in close contact with the venture firm throughout this process and be attuned to subtle nuances suggesting the likely decision, and if favorable, the depth of the investor's enthusiasm.

If the indications are not favorable, careful consideration will have to be given when ascertaining how to avoid a similar result with other prospective venture investors. Those venture firms who ultimately decline the opportunity to invest should be debriefed in order to learn what they perceived as the weaknesses or flaws in the company or its plans. Management should be aware that any new venture firm approached may want to know why the proposal was rejected by others who investigated it and may contact the previous venture firms to discuss their decision and analysis.

Negotiations and Closing

At some point in the venture financing process it will be necessary for the start-up company to engage an attorney familiar with the process. An attorney knowledgeable in start-up financings can often provide valuable assistance with developing the financing strategy, preparing and reviewing the business plan, gathering background information on the attributes of various venture firms and arranging introductions to prospective venture investors. It is essential that such an attorney be contacted at the time the basic terms for the investment are to be established, if not sooner.

Ideally, this should occur before the first discussions so that the entrepreneur can understand the significance of the various aspects of the investment terms to be negotiated and be prepared to knowledgeably discuss the issues of importance to his or her company. Preliminary negotiations with venture capitalists to establish the basic investment terms are typically done directly by the principals without attorneys present; in such a context, the venture capitalists have the advantage of understanding the various terms based upon their past investment experience. The start-up company management often lacks such familiarity with the important investment terms, and without preparation and some coaching, will often be in no position to appreciate their significance. Note also that the terms of the initial venture financing will usually form the basis for, or at least strongly influence, the terms of subsequent rounds of financing, so the importance of the initial structure extends beyond its immediate significance.

Below is a sample term sheet for a venture capital investment involving convertible preferred stock. The venture capitalist will usually approach any negotiations on the basic terms of a preferred stock investment with such a term sheet in mind. Familiarization with the elements of the term sheet, particularly those relating to vesting schedules for the founders, board of directors composition, antidilution provisions, the stock reserve for employee incentive programs, and protective provisions for the various series of preferred stock, should be considered part of the start-up company's preparation for its negotiations.

In approaching negotiations, it is important to note that the start-up is negotiating the beginning of a long-term relationship and not a singular investment transaction. Efforts should be made to convey an appreciation of the start-up company's concerns and objectives and to understand equally those of the venture firm. The negotiating style should be one of persuasion based on fairness and logic, rather than ultimatum and leverage. It is a high risk undertaking to attempt to play one venture capitalist against another in negotiations. While competition encourages some venture capitalists, others may be turned off at the prospect of participating in an "auction" and may withdraw from the financing. If fortunate enough to have several quality venture firms interested in the start-up company, the co-authors would recommend encouraging them to join together as part of the financing effort; ideally there will be a certain synergy of their respective enthusiasm.

From the point the due diligence has been completed, the investment decision has been made and the essential elements of the term sheet settled upon, the preparations for the closing of the investment should occur quickly. Assuming the start-up company and the investors are each represented by counsel familiar with venture financings, two or three weeks is often sufficient time to complete the preparation and negotiation of the necessary agreements and related documents, the performance of the necessary attorney due diligence, and all arrangements necessary to close the transaction.

By the time the decision is made to proceed with the investment, the typical start-up company is fairly anxious to receive its funding. The factors which most often cause a delay in what should otherwise be a rapid timetable are: (1) necessary clean-up and correction of legal problems with the start-up company, (2) preparation by management of the schedule of "exceptions" to the company's representations and warranties contained in the stock purchase or other investment agreement, and (3) delays occasioned by the committed investors seeking to bring one or more additional investors into the deal.

While this last factor is outside of the control of the start-up company, the other two factors are not. While the prospective venture investors are completing their due diligence, company counsel can review and begin work on any needed corrections of legal problems (such as contract provisions in need of clarification, confused shareholder records, or inadequate corporate authorizations). Management can do its part to expedite the process by beginning preparation of the "schedule of exceptions" with the assistance of its counsel.

Happily, once the venture capitalists make their decision to back the
start-up, there is rarely an insurmountable problem in closing the investment transaction. Indeed, it is not uncommon for the prospective investors to advance funds (usually in the form of simple demand loans) to the company in advance of the actual closing if warranted by a compelling business need of the start-up. For having gone through the investment analysis and decision process, both management and venture investors will appreciate that they are not about to merely close an investment transaction, but rather are embarking on a long-term and hopefully successful common enterprise."



Original Source is contained within this page: (not acknowledged)

http://www.geocities.com/ibr_remote/reference/Venture_Financing_Process.htm

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Ziad's Posting:

http://www.ecademy.com/module.php?mod=club
&t=304621#endm

"Capital Access: Investors' Power in today's Start-up situations [ Ziad K AbdelnourBlackStar ] [ 18-Jun-05 11:14am ]

As you may or may not know, startups are a comparatively new phenomenon.

Fairchild Semiconductor is considered the first VC-backed startup, and they were founded in 1959, less than fifty years ago. Measured on the time scale of social change, what we have now is pre-beta. So we shouldn't assume the way startups work now is the way they have to work.

Fairchild needed a lot of money to get started. They had to build actual factories. What does the first round of venture funding for a Web-based startup get spent on today? More money can't get software written faster; it isn't needed for facilities, because those can now be quite cheap; all money can really buy you is sales and marketing. A sales force is worth something, I'll admit. But marketing is increasingly irrelevant. On the Internet, anything genuinely good will spread by word of mouth.

Investors' power comes from money. When startups need less money, investors have less power over them. So future founders may not have to accept new CEOs if they don't want them. The VCs will have to be dragged kicking and screaming down this road, but like many things people have to be dragged kicking and screaming toward, it may actually be good for them.

Google is a sign of the way things are going. As a condition of funding, their investors insisted they hire someone old and experienced as CEO. But from what I've heard, the founders didn't just give in and take whoever the VCs wanted. They delayed for an entire year, and when they did finally take a CEO, they chose a guy with a PhD in computer science.

It sounds to me as if the founders are still the most powerful people in the company, and judging by Google's performance, their youth and inexperience doesn't seem to have hurt them. Indeed, I suspect Google has done better than they would have if the founders had given the VCs what they wanted, when they wanted it, and let some MBA take over as soon as they got their first round of funding.

I'm not claiming the business guys installed by VCs have no value. Certainly they have. But they don't need to become the founders' bosses, which is what that title CEO means. I predict that in the future the executives installed by VCs will be increasingly be COOs rather than CEOs. The founders will run engineering directly, and the rest of the company through the COO.

Your thoughts are greatly appreciated"



Original Source (not acknowledged) Extracted from:

Paul Graham, Hiring is Obsolete.

http://www.paulgraham.com/hiring.html

----------

Ziad's Posting

http://www.ecademy.com/module.php?mod=club
&t=246936#endm



Original Content to start the thread now missing (Probably he was rumbled on
this one.......?)

--------------------

Ziad's Posting:

http://www.ecademy.com/module.php?mod=club
&t=285051#endm

Entrepreneurship: Connecting the dots [ Ziad K AbdelnourBlackStar ] [ 16-May-05 1:36pm ]

Looking at today's landscape in the money world, the number of venture capital firms dropped from its Internet bubble high of 2,500 to 1,000. The technology investment banking industry has gone through a similar shakeout. The shakeout in the VC community and on Wall Street has concentrated power back into the hands of a small cadre of established players.

"Connecting the dots" seems to have been and continues to be today one of the KEY factors in building sustainable businesses; whether you are a financier or an aspiring entrepreneur. It is also known as one's sense-making framework. Or one's intuition -- that which adds to or subtracts from one's intuition.

# How do you get grasp of on a scale of 0 to 100 where you and your stakeholders are? Where 0 = beyond repair and 100 is superb


# How do you best connect the dots to reach your goal and maximize shareholder value?


Your thoughts are greatly appreciated.

Original Source (not acknowledged)

http://www.alwayson-network.com/comments.php?id=316_0_2_0_C%20%3Cbr%3E

-------------------------

In the absence of any acknowledgement of the original sources of those articles Ziad posted on GCAC, the above is overt copyright infringement and has some serious legal implications, particularly in light of the US Supreme Court decision issued yesterday about copyright infringement on the Internet.

I confronted Ziad privately about this a few months ago when he ripped off some of my copyrighted material and passed it off as his own to some people who I later met quite by chance. He first denied it and then promised that he would not repeat it again, but you can see from the above he lied to me.
He has made himself look ridiculous with his post about his supposed $100 million art collection and then edited his post when it was exposed that it was a well known fraud that had been investigated and prosecuted by the SEC in the past. Either he is incredibly stupid, naïve or a con man himself. I don’t know which or really care anymore. I no longer believe his claims of multi hundred million personal assets since he has lied about everything else. If he amassed that kind of a fortune and knew anything about start-ups, he would have seeded Blackhawk with $10K - £20K, a pittance compared to his supposed fortune, to pay people to do the feasibility studies and create the website instead of making empty promises to people that is now obvious that he will never keep.

Therefore, Silver Fox TeroVentures™ will be cancelling a meeting with Ziad that has been scheduled and terminating all discussions with Ziad concerning his becoming a general partner in Silver Fox TeroVentures™ and we will be resigning from any connection to anything named “Blackhawk”. Ian Coburn and I have worked too hard and long to risk connecting Ziad’s tainted name to our firm. We have funded four companies since the start of 2005 at about £5.5 million and we have access to capital to fund any business opportunity that we choose to put through our process. We are also in discussions with some ethical investors concerning raising a dedicated fund for Silver Fox TeroVentures™.

I am not copying Ziad with all the above until Thursday evening so that you can all look at the above evidence before he follows his normal form when he is exposed and edits the GCAC forum and tries to deny everything blaming and abusing everybody else.

I will not go public with this information on the GCAC club forum, and I will not post any more of my IP on that forum. Instead, I will submit any articles and other material we develop on early stage investing to the e-book that Richard and Tia will be publishing which will not be under the Blackhawk Productions label. I hope the actions that I am forced to take will not impact my relationship with any of you or any members of GCAC.

Silver Fox TeroVentures™ focuses on helping develop and funding start-up and early stage companies that can meet our investment criteria and we will be delighted to work with anyone that can do so.

Thank you for your understanding.

Regards

Gerry

_____

From: Ziad K. Abdelnour [mailto:ziad@i-2000.com]
Sent: 19 June 2005 14:58

Team:

Gerry and I had a long discussion along with Ian early this month about Blackhawk Partners, Inc. and the direction we’ll be taking over the next few months and beyond.

It was mutually agreed that Blackhawk Venture Partners, Inc. and Blackhawk Productions, Inc. will be 2 separate entities.

Blackhawk Venture Partners, Inc. (BVP) will basically be my “family investment fund” which I am seeding with $25 million of my money and Blackhawk Productions, Inc. (BPI) will be the group’s services company which will be funded by all of us and outside investors if need be. Richard Banfield is completing the latter’s business plan as we speak and which will be presented to us all as soon as it’s ready.

Just to set the record straight, BVP will not be competing with Silver Fox Ventures but will be co-investing with it in some early stage deals. By the way, BVP will also be investing in both private and public deals along with bridge financing opportunities; not just early stage deals.

As to Silver Fox, it was also agreed that I become a General Partner in the group and help it raise its first institutional fund.

To close, you’ll also all have the opportunity to be involved in a reality TV show built around my upcoming book “The Dream Maker” …..Stay tuned for the full details coming from Richard Banfield.

Hope y’all enjoying this great weekend…..One thing for sure: We’re all in for a heck of a ride….you wait and see.

….and one more time, thanks a million for your consideration and support throughout the process.

Best regards, Ziad


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