Term Sheet Series wrap up

I've posted here before on the term sheet series that Brad Feld of Mobius Venture Capital has compiled. Here's the summary of the series with shortcuts to each area. Whether you are a new entrepreneur or a veteran, there are good points and reminders.

Building team trust

Brad Feld has a good post about the importance of building trust on teams. Small teams can be like families. Without trust, a family falls apart. Startups aren't much different.

Are female sales pros staying at home an untapped gold mine?

My answer is yes. I know there are many women who were previously top notch sales pros at places like Sun, Time Warner, IBM, Pfizer, Oracle, etc. who have chosen to hit the Pause button on their career while they have young children. I applaud them for doing that in a world where value is often ascribed to how much money you can bring in the door. However, as kids get into grade school, there are often some spare hours available. My belief is that these spare hours and the desire to earn income and/or have non-parental goals are a big reason why you see the explosion of "Direct Selling" (aka multi-level marketing) companies. There are also many women who go into real estate. However, if you have skills in high tech or pharmaceutical sales where the selling process can be quite sophisticated and you received tremendous training, direct selling and real estate may not appeal to you.

This dynamic combined with entrepreneurs needing to be creative and run a lean operation creates an opportunity. Take Jet Blue. A CBS segment highlights how they leverage "stay at home moms". I have a couple client companies that are both exploring this opportunity. They'd like to find accomplished sales pros who would be willing to work on an uncapped commission-based compensation program. Like Jet Blue, they would be happy to accomodate sales pros who would prefer (or require) a more flexible work schedule/load. Typically, big corporations don't want to deal with those kinds of work arrangements -- at least amongst the high tech companies I've worked with/for. Their idea of flexibility is often that you can work from home a couple days a week but they still expect a full-time load.

Brad Feld is on the board of the National Center for Women & Information Technology and recently commented on why he's involved with that organization given their focus on bringing more women into the IT field. While they appear to be more focused on the computer science part of the IT industry, it's not without precedent to have former sales & marketing people move into product development teams (I saw this at Microsoft a number of times). Perhaps this could be another angle to achieve their goal. Another organization I've heard of is called WorldWIT (WIT stands for Women Insights Technology). They have some blogs related to the topic of balancing work and life issues including Jessica Niehaus' that pointed me towards an article about the "have it all" myth which highlights the number of women in the aforementioned situation.

How would you tap into this "untapped gold mine"? I know they are out there but it's not obvious the best avenue to reach out to them. Send me your thoughts or post a comment here.

Is Microsoft a "biosphere"?

From Wikipedia's description of Biosphere II, "It was used to test if and how people could live and study in a closed biosphere, while carrying out scientific experiments." After spending 12 years working at Microsoft, this sounds pretty similar to what it's like working at Microsoft. It's easy for an employee there to live an existence that is like living in a self-contained planetarium. It's even easier for this to happen if you are in product development (vs. sales & marketing). Like inside the Biosphere II, you can see the outside world though the view is distorted and you aren't often looking outside.

The fortunate/unfortunate reality for Microsoft is that so much is going on inside the company that it's hard to keep track of it all. If you are interested in making the most of what's available internally, it can be a full-time job to track what's going on. Look at someone like Robert Scoble. The guy is fanatical about trying to keep everyone up to date on what's going on inside Microsoft and he regularly admits he can't keep track of it all. Scoble commented recently on how Ray Ozzie was one of the few C-level execs at Microsoft to attend a non-Microsoft event. Microsoft would benefit if there were more Scobles and Ozzies getting outside the Microsoft biosphere to see what's going on in the "real" world. They'd be blind-sided much less frequently if that ethos was a part of every product development group. As a side-benefit, it would also reduce many of the myths about what Microsoft is up to and what drives it. Having been inside the company as long as I was, it was often entertaining to read about the Oliver Stone-esque conspiracy theories about what people thought was going on at MSFT.

Healthcare expenses for small companies

Like most of my clients, I am an owner of a small business burdened with ever-rising healthcare expenses (it's brutal). Forbes has an article about what some small businesses are doing about their healthcare costs which highlights the struggles/trade-offs being made.

Having spent considerable time working in the healthcare field (primarily on the business/technology side), I've seen first-hand the idiosyncrasies and inefficiencies of our healthcare system every year that spends over $300B (yes, billion) on administrative costs alone. It's one of several factors that pushes corporations towards offshoring and outsourcing since the cost of having an employee is very high particularly when factoring in healthcare.

Being an optimist by nature, I think that corporations are going to force reform on the healthcare system that will eventually reduce costs. More controversially, I think you'll see corporations be more invasive with their employees when it comes to life-style choices. I've already read stories of smokers being denied employment. With the growing obesity problem, I wouldn't be surprised to see something like body-mass-index being a hiring factor since there's a direct correlation between weight problems and healthcare expenditures.

Cliche of the week: Meeting the numbers

Fred Wilson has another good "cliche of the week" -- Meeting the numbers. A few excerpts I like:

• I have never felt that venture capital was a particularly quantitative business. And that's coming from a quantitative guy.
• I've heard people use many different metrics in talking about the value of businesses... But for me, there is only one real measure of value and that is cash flow.
• The first thing you must do is instill a culture of meeting the numbers in a Company and it has to start at the very top. If the CEO/founder/entrepreneur doesn't care about meeting the numbers, then nobody else will.

Tales of Enterprise Software's demise are exaggerated

VC Bill Burnham has a good post on why he thinks Enterprise Software still has plenty of legs.

Most startups should avoid venture funding, not pursue it

At least that's what Greg Gianforte, CEO of RightNow Technologies, thinks. I don't think it's that black & white but the points he makes are good.

Here are some links to past posts about fundraising and venture capital that can shed additional light on the issue:

• The Cost of Fundraising
• VC & Angel relations
• Is Venture business a seller's market
• Entrepreneur's view of venture investment
• Fixing Venture Capital
  

If you do end up fundraising, check out this series on deal terms, etc.