The combination of being super busy with client work while getting ready for a Kauain vacation was enough to keep my plate full but we (Altus Alliance) have been evaluating whether there's an evolution of our model that further addresses the apparent gap between typical angel funding and institutional funding. Though VCs sometimes get demonized, there are plenty of situations where their funding/value-add are the right mix but there are also plenty of situations where there isn't a fit for any number of reasons. The most common is the growing minimum size investment that most VCs have to put to work. Paul Graham outlines this in his "VC Squeeze" post along with other useful observations about the challenges VCs face. The short version is that most VC funds these days need to be at least $100M since their investors ("limited partners") don't want to invest less than $10M and don't want to own more than 10% of a fund. Given that VCs don't have unlimited resources, they can't do 50-400 $250k-2M investments or they'll be stretched way too thin. The resulting issue is that many companies don't need the size of investment that VCs want to make - particularly the kind highlighted at the Web 2.0 conference and discussed in the VC panel.
We believe that there is a new model that can address this gap/opportunity as a result of a budding alliance we have to a complementary firm that has done much of the heavy lifting to getting this innovative approach to this point. Since I buy into the notion that the Entrepreneur is our Customer, we're now at the point in the process where the concept is baked enough to get some feedback from entrepreneurs. We're reasonably confident of the receptivity that investors in this model and follow-on investors (if required) will have. It's all moot if it doesn't make sense from the entrepreneurs' standpoint. If you are an entrepreneur who'd be willing to provide us feedback, I'd love to chat with you and find out whether this thing has legs or not. If it does, I'll share more of the details on this blog. [My contact/email is posted on my blog]
For those of you interested in knowing more about Kauai, here's my quick take...
- My first trip to Kauai. Having visited all the other big Hawaiian islands, I'd say Kauai is my favorite. If you read the profile on my blog, you know I'm an active guy so sitting on the beach isn't my idea of fun and though I enjoy the game, I don't consider golf to be exercise since it's free of adrenaline rushes and/or doesn't make my lungs burn. If/when I have limitless time, golf will come back into my mix but it takes too dang long for the payback at this point in my life.
- In a word, it's beautiful. I've been fortunate to have visited 30+ countries on 5 continents and would say that Kauai has some of the most beautiful terrain I've seen anywhere.
- The rain factor is overblown (note: I subscribe to the belief that there's no such thing as bad weather just bad clothes so take my comments in that spirit). There's virtually always some part of the island (and it's not that big) that is dry if that's what you are looking for.
- Bring your hiking shoes. We were constrained by little kids and no one to look after them so our hiking was limited. We got a small taste and will come back for more when the kids are a bit older.