InnoVentures Awarded 2015 Innovative Small Business Lender

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InnoVentures Capital was recognized as the 2015 Small Business Lender for its innovative practices by Salt Lake City Award Program.

Five Star Franchising Receives $250,000 From InnoVentures

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October 10, 2015

InnoVentures and Five Star Franchising have a long positive history.  Five Star Franchising sold one of its key franchises at the end of 2014 and not ready to sit back on their laurels, the founders came back with their latest franchise strategy.  We were happy to partner again with these great entrepreneurs.

www.fivestarfranchising.com

 

Utah Small Business Loan Fund funds Hong Phat Market

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October 1,2015

Steve Grizzell

InnoVentures, Utah Small Business Loan Fund in collaboration with First Utah Bank funded the acquisition of the Hong Phat.  The Utah Small Business Fund provided funding to help facilitate the business acquisition by providing capital to strengthen the borrower’s application.  Working together with First Utah helped make sure that a great local ethnic supermarket keeps growing.

When will the valuation bubble pop?

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PitchBook Data Logo.png

PitchBook is a great resource on valuations for both investors and entrepreneurs.  Based on the data in their latest blog, valuations for later stage stage companies are way up.  My opinion is that the exits for investors will not be profitable with this level of valuation.  Is it time to short unicorns?

http://blog.pitchbook.com/u-s-vc-deal-flow-slides-for-three-quarters-for-first-time-since-2009/

Crowdfunding: A Potential Cash Source for Business That Could Make a Well-Intentioned Company’s Financial State Worse

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Thomas Woods at (916) 319-4748 or thomas.woods@stoel.com
Connor Olson at (916) 319-4672 or connor.olson@stoel.com

Crowdfunding has long been a resort for those with bright ideas and little capital to bring an inspired cause to market. However, the introduction of the Internet and smart technology has generated a boom in the practice, as innovators and start-ups increasingly look online to generate crowdfunded financing. Perhaps, unsurprisingly, we’re now starting to see some of the downsides of turning to crowdfunding to bring ideas and products to market.

With the advent of low-to-no-cost viral marketing, and websites such as Indiegogo and Kickstarter1, inventors, entrepreneurs, and lay people alike are able to generate substantial sums of money, in short periods of time, with seemingly illusory obligations expected in return. Through any online crowdfunding campaign today, an innovator with little more than a noble cause and plans for a prototype can generate the capital needed to carry the innovator’s plan to fruition. Heck, up to a month or so ago, it was seen as a money tree planted in the proverbial Garden of Eden. But starting in July 2015, litigation has shown us the “ugly” in the tree’s apples.

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The Complete List of Famous Growth Hacks That Every Startup Needs To Know

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The Complete List of Famous Growth Hacks That Every Startup Needs To Know

 

By Lauren Holliday Sep 24, ’15

Ever wonder how startups with no marketing budgets pop up overnight?

Old people would tell you it’s through sales and marketing. Shane Snow would call it smartcutting, and Sean Ellis would say they growth hacked.

All of the above are correct, but growth hacking has become the popular term; therefore, we’ll stick with growth hacking.

Growth hacking is how startups like Tinder grew from 5,000 users to nearly 15,000 users virtually overnight. It’s how Product Hunt became, well, Product Hunt and how Airbnb became Airbnb.

The list of well-known startups that utilized hacks to rapidly grow their user base is endless.

From this post, you will learn how to leverage the 20 best known growth hacking concepts, tactics, strategies and scripts we’ve found to attract more users and earn more sales for your business.

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Venture Debt Is Not Always The Best Choice

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steve

by Steve Grizzell, Managing Director InnoVentures Capital

September 25, 2015

I received a couple of comments about my post WHY VENTURE DEBT IS BETTER THAN EQUITY FOR ENTREPRENEURS, which was published at www.beehivestartups.com and www.innovationamerica.com.  I agree that in some cases equity or convertible debt can be a better choice and I plan to discuss some of the situations where entrepreneurs might consider other options to venture debt.  I chose my title to be somewhat provocative rather than as an absolute statement about financial strategies for entrepreneurs.

Have a great weekend!  It is supposed to be 90 this weekend in Salt Lake.

New domain names: strategies for brand owners to protect their trademarks (part 3)

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John Rees

New domain names: strategies for brand owners to protect their trademarks (part 3)
By John H. Rees
September 22, 2015

Parts 1 and 2 of this series introduced new generic top level domain names and the concerns they are creating for brand or trademark owners. Part 3 addresses specific strategies that brand owners may adopt to help protect their brands. To view all three parts of this post, visit jhrees.com.

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3 lessons on switching from bootstrapped to VC-funded

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Entrepreneur

3 lessons on switching from bootstrapped to VC-funded

Image Credit: Shutterstock

Every entrepreneur must choose whether to bootstrap a company or use venture capital to fuel it. I’ve traveled these two drastically different paths. I spent more than a decade building a bootstrapped, profitable cash flow business, only to put all my chips back on the table with two venture-backed companies. My journey began with an interactive agency I founded in college called Cie Digital Labs, which then went on to incubate two successful venture-backed spin-outs. Last year, Cie Games was acquired by Glu Mobile for $100M, and my current venture Nativo recently raised a $20 million Series B round.

Getting More Than I Expected

In the case of Cie Games, we had a limited window of opportunity to take a Facebook game to market. External funding was the only way to make our Car Town game, a reality.

While there was an immediate goal that justified VC funding, the transition from a bootstrapped to VC-funded proved significantly more life-changing than I could have ever anticipated. Invaluable lessons transformed my entire view of how to start, manage, and operate businesses. These learnings extended well beyond the boardroom.

Here are three lessons that became instrumental to surviving the harsh but extremely rewarding experience of being an entrepreneur. While everyone’s individual experience varies, these pieces of advice will help accelerate your growth into a more mature, seasoned leader.

1. Time, Not Cash, Is King

When Cie Games received its first round of external funding with Signia Venture Partners, all of a sudden cash wasn’t our most limited resource, time was. We had six months to launch our first product and we wanted to be first to market with a car-themed social game.

This turned on a lightbulb for me—growing startups wasn’t about investing cash, it was about investing time. For entrepreneurs, a consistent, growing stream of stakeholders–board members, employees, clients–constantly pulls their attention in different directions. Should we do this or that marketing activity? What features should we build and in what order? Which challenge or opportunity should we focus on? These questions can be overwhelming, and the sheer volume of decisions that have to be made can be tiring or even paralyzing.

Shifting one’s frame of mind to time as an investment can significantly add clarity to an entrepreneur’s decision making. Time is like cash, and making decisions is like selecting investments. Each has different potential returns and risks, where the goal is to increase the odds of greatest return and to reduce the greatest risks.

To maximize your ROI on time, you must ask three questions with any decision, large or small: What are the upsides? What are the downsides? And, what are the odds of each? With proactive, mindful practice, you’ll gain the ability to quickly translate and weigh information to suss out where you should be investing your time and your company’s time.

In stock portfolios, not every stock is a winner. Similarly, not every decision you make will be correct. But an entrepreneur who understands that time is a key, finite resource and applies it in a way that maximizes the odds and size of the upside will have a winning portfolio of decisions.

2. Raising Capital Is Only Half the Value from Venture

During our bootstrapped days, I averaged two new contacts per month to grow Cie’s business. After Cie Game’ first raise, that increased to two to three new contacts per day. I learned that funding isn’t just about tapping into capital, it’s also about tapping into connections. The right VCs give entrepreneurs a vast network to grow an idea into a company.

Greycroft didn’t offer Nativo the highest valuation, but offered the greatest value by demonstrating their domain expertise and ability to make high-value introductions. Within three months, Greycroft introduced us to senior contacts at publisher prospects that would have otherwise taken us a year to reach. Looking back, their involvement was a big part of our early success.

3. The Difference Between Building Purpose Versus Profit

VC’s forced me to think of the long game and playing to a future vision. While I thought I understood vision, every decision at my bootstrapped company came back to profit and that limited my ability to achieve full buy-in from the team. Shifting to a broader mission–focused on transforming a category or space–significantly expanded my ability to engage employees, industry peers, and customers.

There are always shortcuts to generating revenue. But building value, not cash flow, is the ultimate foundation for building a sustainable business. Our Series B funding at Nativo enables us to take the long view and solve the hard problems while we scale revenue and profit. It has afforded us the runway to make decisions based on more strategic, defensible and sustainable criteria. Referencing Gretzky, I always remind my team, “skate to where the puck is going to be.”

Through the years, I learned that delivering value is what drives meaningful businesses and relationships and that relationships are vital to our success. By applying these lessons of investing time, growing connections, and building purpose, you’ll not only enrich your professional life, you’ll enrich your personal life as well.

Justin Choi is CEO at Nativo, a native advertising platform provider. He is also the Founder of and Strategic Board Advisor at Cie Digital Labs.You can follow him on Twitter: @JustinCie.

How to Read and Understand a Cap Table

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How to Read and Understand a Cap Table
The Ultimate Shorthand Guide

Cap table picture

 

Hyde Park Angels
The largest and most active angel group in the Midwest, www.hydeparkangels.com
Understanding all of the technicalities of investment — how you should calculate your valuation, what your term sheet actually says, and what a cap table is, let alone should demonstrate — can an often feel like the most difficult part of the process. Even more than pitching and finding the right investors, understanding the technicalities of investment requires learning and applying what is likely completely new information. But just because something like reading or building a cap table is new or unfamiliar doesn’t mean it’s inherently difficult.
A capitalization table, at least in theory, is pretty simple to understand. It’s an actual table that takes all of the shareholders in your business and lays out who owns what, how much each one owns, and what value is assigned to the stock they do own.

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