A Series of Small Things
Random Thoughts on Building Venture-Backed Companies in the Midwest
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!
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).
Home, sweet home
9.6.12 by Dov
Nice to have some data to support what we’ve known all along…
Forget Silicon Valley — build your startup where you live | VentureBeat.
That’s .000000001GB to you youngsters
3.31.12 by Dov
Life was so much simpler then. Relive the good old days with Google Maps, 8-bit edition.
“Powerpoint presentations are a serious threat to the global economy.”
3.26.12 by Dov
And one estimate has put the drain at $250 million of lost value PER DAY. And if it was said in a TED talk, it must be true.
So, for the sake of our children, please stop creating, walking through, and listening to these horrible menaces to our future.
The Little Red Hen – A Venture Capital Fable
12.7.11 by Dov
Remember the fable of the Little Red Hen? I’ve been hearing stories from entrepreneurs lately about their interactions with various investors, and I was struck by the similarity to this wonderful childhood story. For those who can’t recall, the story goes like this:
The Little Red Hen found some extra wheat seeds lying around on the ground. She goes around to all of her ‘friends’ in the barn and asks if anyone will help her plant them so she can bake a loaf of bread. Unfortunately, they’re all too busy to help (or perhaps they can’t see the value of the future loaf?) When the wheat grows, she asks if anyone will help her harvest it. Same story. This goes on and on until she finally bakes the loaf of bread.
“Who will help me eat this bread?” she asks, and guess what – now they’re all more than happy to help! And then, depending on the storyteller, she either shares it anyway or eats it herself. Funny how there’s a lesson there no matter how it turns out, isn’t it?
It struck me that many investors act like the animals in the yard to the entrepreneur/hen. Early-stage investing is hard work, and people (even me, sometimes) are lazy. But to lead an investment in a young company, you have to be prepared to do a lot of work. There’s due diligence, term sheet negotiation, management team and compensation issues, operational questions, strategic turning points, and so much more. And who wants to do all that?
When the due diligence is done and a term sheet is negotiated, it’s not infrequent to find investors starting to increase their interest level in the “baked” deal. And when the company has proven its business model and needs some expansion capital, there’s no shortage of folks ready to come to the party.
So, here’s to all the Little Red Hens out there, along with our assurance that we at Allos love to get our hands dirty and won’t stand by waiting for others to finish the baking.
Google v Facebook, continued
10.11.11 by Dov
So, I recently signed up for a Facebook account. Yeah, I know, welcome to the 21st century.
I was doing just fine without one, though. In fact, the only reason I did it know is because I was forced to in order to comment on some website.
Once in, though, I figured I’d see what all the fuss is about – after all, 800 million people can’t be wrong, right?
As those of you who regularly read this blog know, I’ve also experimented with Google+, which I actually like – though I’m certainly not a power user by any stretch of the imagination. I use it about as often as Larry and Sergey, though, so I figure I’m in good company.
In any case, now that I’ve at least logged into both, I feel that I’m qualified to compare, and I know you’re all dying to hear the results (by the way, “Facebook vs Google Plus” returns 10.5M hits in Google for those of you who actually want a thoughtful comparison).
I’m going with Google+. Facebook makes my head hurt. Yes – I’d have WAY more friends in Facebook, from what I can tell. For just having logged in, it did a great job of figuring out people I know, etc. And I am going to keep the account, so I can post comments across the web (and links to this blog – maybe that’s how you found this post?). But it seriously makes my head hurt.
When I post, I have no idea who’s getting to see that post. When I edit my profile, I have to idea who’s going to see that I made a change. I tried to look at the privacy settings, but there are literally hundreds (thousands?) of different checkboxes to be set, along with videos explaining what does what. I’m sorry – but if I need to watch a video to figure out how to keep total strangers from seeing my birthday, it’s too complicated. And yes, I know you can’t actually see my birthday – but you get the idea. And as a result, I’m not going to post anything except the continued links to this blog (which are created automagically). And I’m not even sure if anyone can see those.
So, Facebook continues to grow, while Google+ is struggles. You can sort of tell where this is headed (i.e. Google giving up), and, apparently, I’m the only one who will miss it.
Happy Returns in 2011
12.23.10 by Dov
I recently received a holiday greeting from my alma mater. The president began his letter with a New Year’s message from Albert Einstein, delivered upon his arrival in California in December 1930:
“To you all, my American friends, I wish a happy 1931. You are well entitled to look confidently to the future, because you harmoniously combine the joy of life, the joy of work, and a carefree, enterprising spirit which pervades your very being, and seems to make the day’s work like blessed play to a child.”
We couldn’t have said it better ourselves. Happy holidays from Allos Ventures, to everyone in the Midwest early-stage venture community. We wish you all a happy, healthy, and fruitful 2011.
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