A Series of Small Things
Random Thoughts on Building Venture-Backed Companies in the Midwest
Innovation Showcase – call for company pitches
5.9.13 by Dov
This year’s Innovation Showcase in Indy is coming up. Allos will be well represented (I can’t wait) – and you should be, too. Here’s a press release with the details…
The Innovation Showcase: Call for Company Pitches
Here’s what you need to know. The Innovation Showcase is July 11th, 2013. Applications are open now for companies who want to exhibit and pitch. The top presenting companies are competing for over 60K in cash and prizes. It’s free (but competitive) to exhibit and pitch. Companies sign up to exhibit and pitch here.
Now for more details.
This is a call to companies seeking to exhibit and pitch at the 2013 Innovation Showcase.
Entering its fifth year, The Innovation Showcase has grown into Indy’s premier event connecting fundable companies (of all stages) with top local and regional investors all while creating an undeniable energy fueled by Indy’s incredible entrepreneurial ecosystem.
This year’s event has grown even larger and will be held at the Dallara IndyCar Factory in the shadows of the famed Indianapolis Motor Speedway.
And this year we’re upping the stakes for our exhibiting startups. Each entrepreneur will have the opportunity to pitch to our investor panel for a chance to win more than $60,000 in cash and tangible services including:
5K in legal services from Barnes & Thornburg
5K in web development from Fox.io
5K in PR services from Blast Media
5K in Venture Coaching from DeveloperTown
5K in accounting services from Lehman’s Terms
5K in branding services from The Momentum Group
5K in video production from Neal Moore New Media
5K in web marketing services from DK New Media
5K in office space offered by Launch Fishers
5K in presentation skills training (for multiple companies) from Scientifically Speaking
5K+ in Formstack software (Max plans for three companies for a year)
5K in COLD HARD CASH!
Best of all, the top presenters from the pitch competition will gain access to the most well-known angel investors in the area. At least two presenters will go straight in that evening to make private pitches to HALO and Elevate Ventures. They (and maybe other presenters) will also gain access to guaranteed pitches to Stepstone Angels, Purdue’s P3 Alliance, IU’s Innovate Indiana Fund, Gravity Ventures, Allos Ventures and xCap Angels.
The deadline for company submissions is fast approaching. So if you think you have what it takes to mix it up with the region’s top entrepreneurial companies — we encourage you to apply now for one of the spots in the showcase. The process for companies to exhibit and pitch starts here: http://theinnovationshowcase.com/#exhibitors
Looking forward to seeing you there
The Father of Allos
2.15.13 by John McIlwraith
A few weeks ago, my partners and I celebrated the successful final closing of Allos II. Reflecting on this milestone brought to mind the important support we have received over the years from our investors and other friends. We have been blessed in many ways.
One of Allos Ventures’ most important friends is no longer with us, but his life story and role in the formation of Allos is worth sharing and celebrating. Larry Wechter, a successful Indianapolis entrepreneur and wonderful husband and father, passed away in September 2012 after a courageous battle with cancer. Among his many accomplishments, Larry was a successful restaurateur, the president of a publicly traded company, and the founder and managing director of Monument Capital Partners.
One of Larry’s many passions was connecting people. Few know that in 1999, after a round of golf during which we got to know each other reasonably well, Larry introduced me to a group he was working with to form the VC fund that became Gazelle TechVentures. I worked with Larry and the group on the structure of the new fund and was asked to join the Gazelle board. In that role, I came to know Don Aquilano. Don joined Gazelle in early 2000 as its second managing director, and we worked closely together over the next 10 years before deciding to form Allos in July 2009.
Soon after Don joined Gazelle, he met Larry, and they and their families quickly became good friends. Over the years, Don and I met with Larry a number of times, shared best practices and lessons learned, and even discussed the possibility of combining forces. He shared our passion for building companies and possessed the high integrity, work ethic and loyalty that one looks for in a partner. Sadly, we never found the right opportunity for a co-investment or other close collaboration. But we shared many glasses of wine and life stories over the years. Larry’s passion for life and people was always abundantly apparent during our times together.
At the service celebrating Larry’s life, his partner at Monument Joe Schaffer and others reflected on Larry’s full life, the compassion he had for others, and the unconditional trust he brought to his partnership with Joe and the CEOs with whom he worked. Listening to their stories made me think about the great partnership we have at Allos and the rewarding relationships we have with the management teams of our portfolio companies. In our business, trust is everything.
Thanks Larry. There would be no Allos without you.
Serve your country (in a techy way)
2.5.13 by Dov
A new round of applications is open for the Presidential Innovation Fellows program. Would love to see someone from our region in the next class!
Does size matter?
1.15.13 by Dov
According to a recent National Venture Capital Association report, the venture industry is continuing to bifurcate into smaller, focused funds (either by industry, geography, or something else) and massive funds that invest across a wide spectrum of deal types.
On one hand, the reduction in the number of overall venture firms nationally is probably a reflection of the poor returns the industry has had over the past decade plus. If a relatively small portion of venture firms are actually good at their job, then of course investors should want to give their capital to those firms, driving them to be larger. Newer firms then enter the industry with small funds (because that’s all they can raise), but grow over time if their performance enables them to raise larger funds in the future.
As for Allos, we remain unconvinced that bigger is better. Those massive funds must out of necessity invest across a whole swath of industries, geographies, and deal stages in order to put so much capital to work. It seems to me that there are two basic ways they can do that. Become complete generalists or effectively act internally as a collection of smaller firms. In either case, I wonder if their performance can possibly continue to keep pace with the returns that presumably drove investors to give them so much capital in the first place. If they have become generalists, they lose the expertise they presumably had in their earlier models. If the become siloed, then it’s as if their investors were diversifying across a number of small funds. Perhaps their internal teams really can be the best in each of those areas. But it seems more likely that some of those silos will probably not be “up to par” and thus the firm overall would be better off dropping them from the strategy.
Would we like to have a $1 billion fund? Of course. Am I just a bit jealous of those management fees? Sure – maybe more than just a bit. But we also remain convinced that those smaller, $30-100 million funds will continue to outperform (oh, and here’s more).
The state of The JOBS Act
1.9.13 by Dov
Despite all the hype surrounding passage of the JOBS Act last year and the implications it had for investment in the startup world, nothing’s changed. Much of that is due to the SEC’s delay.
As William Carleton writes at VC Experts, however, the underlying legislation is responsible for much of the problems – and no SEC rule making process is going to be able to fix that.
Still more work to do for the crowd-funders…
Here, Oracle, Oracle…
12.4.12 by Dov
Come and get it! IDC thinks we could see $25 billion in SaaS acquisitions in the next 20 months. We’ve got some companies who’d be willing to discuss allowing Oracle or SAP to benefit from owning them.
We’ve been discovered
11.28.12 by Dov
So CNN/Money has released a new list (just what the world needs, right?) of 6 non-coastal “cities where startups are thriving”, with our own Cincinnati listed second. While it’s unclear exactly what the selection process was, we certainly wouldn’t overlook the other great startup cities in the region – from Indianapolis to Pittsburgh to Ann Arbor to Cleveland to Columbus to Detroit to … At the same time, we’re proud to call Cincinnati home to half of Allos, and can’t help but agree that it’s a startup scene on the move.
How to hire a head of marketing
11.12.12 by Dov
Filling out a young company’s management team is often one of the most difficult tasks we face as board members. In my opinion, that’s doubly so on the sales and marketing side.
With that said, Derek Singleton of Software Advice, has written a nice piece providing some good tips for early-stage companies thinking about hiring a head of marketing.
Here comes the bride
9.21.12 by Dov
Great clip from an interview with Elon Musk below, where he discusses the importance of working with the right venture partner as an entrepreneur. We wholeheartedly agree. Life’s too short to work with people you don’t enjoy spending time with. And within young companies in particular, everyone is always under so much stress, that the importance of having trusted partners (on your team, on your board, in your investor syndicate, etc.) becomes even greater.
At one point, Elon says that taking an investment is “sort of like getting married”, an analogy that we’ve used repeatedly as well. In fact, we chose a similar line more than two years ago as the headline for the description of our investment criteria on the Allos website.
While entrepreneurs probably won’t spend as much time with us as they do with their spouses, and we are all hoping for a successful ending to the process sooner than one would hope for a marriage (though longer than many), it’s still a relationship that’s critical to the success of the new venture.
We had a long debate when we launched the Allos website over whether the somewhat irreverent tone would turn some people off. Ultimately, though, we decided that anyone who didn’t appreciate our personalities as expressed through the site probably wouldn’t like working with us anyway, and it would be better for everyone to figure that out sooner rather than later. Just looking for the next entrepreneur to marry into our polygamous portfolio (OK, that may be stretching the metaphor a bit too far).
We want to be your LiquiGlide
9.20.12 by Dov
With all due respect to my alma mater, thank goodness for MIT. As I’m sure many of you eagerly followed in the news early this summer, those brilliant minds have finally addressed a longstanding problem with western society. Getting the ketchup out of the bottle, using a new coating they’ve named LiquiGlide.
I can’t tell you how frustrating the traditional approaches (knife, shake, or bang) have been to me over the years. That’s why I immediately understood when a CEO recently told me that he found fundraising for early-stage capital in the Midwest to be like getting ketchup out of the bottle. That is, the capital starts off all stuck in the bottle. It’s difficult to find investors who will take the time to dig in, perform the due diligence, and then draft a term sheet. Once you find that lead, though, there are lots of folks who will join a syndicate at the end of the process. At that point, the capital all comes loose, spilling all over your hamburger.
Our commitment to you is this – Allos will never wait for others before digging in. We always do require a co-investor – because we think it’s helpful for companies to have multiple investor perspectives, multiple networks to tap into, etc. But we are more than happy to be the first mover in your capital raising process. We’ll work with you to determine if we’re a fit for you and vice versa, put together an investment structure that makes sense, and then help you build out the best syndicate from all of the available ketchup.
In short – we’ll be your LiquiGlide.
P.S. For those of you who are old school ketchup consumers, you might try this earlier approach from the University of Illinois to optimizing the bottle angle/motion when attempting to shake the ketchup out.
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