links for 2010-10-30

  • Silicon Valley, like any other industry town, has its own rhythm: vacillating between boom and bust. The severity of the bust (or boom) might change, but the cycles don't change very much. These days, Silicon Valley is feeling very optimistic. A very active angel community, a resurgent venture investment climate, and a plethora of emergent platforms … whichever way you look at it, these are good days to be an entrepreneur. With newer venture funds coming online by the week, it isn't surprising to see a sharp surge in funding and the number of new companies.
  • One of the most powerful principles that can help everyone work more efficiently is also one of the simplest: It’s called the Role of 3, and it reflects the fact that people remember roughly three distinct things from any event, lecture, meeting, book or article. This limitation arises because your memory wants to focus on interconnected facts, rather than distinct and independent pieces of information. There isn’t really a good way around this principle — it is one of those rules that needs to be respected rather than corrected.
  • “Mounting tensions” would be the journalistic cliche to describe recent relations between traditional Silicon Valley venture capital firms and the growing class of “super angel” investors—groups like Ron Conway’s SV Angel, Mike Maple’s Floodgate Fund, Dave McClure’s 500 Startups, Aydin Senkut’s Felicis Ventures, and Jeff Clavier’s SoftTech VC. The relationship between these super angels and VCs matters a lot, because it could have an impact on investment for the next generation of small, Internet-based ventures. Thanks to innovations like cloud computing, many of these Internet companies don’t really need the multi-million-dollar rounds traditionally dispensed by venture firms. So, when the super angels aren’t sniping at each other about how to work with entrepreneurs (witness the blizzard of leaked e-mails prompted by TechCrunch’s “AngelGate” kerfuffle), the VCs are circling warily and arguing that big venture firms make better business partners than super angels.
  • Stung by a drought in technology initial public offerings, venture capital investing plunged in 2010, with the number of active firms dropping 47 percent in the first half from last year, according to Ernst & Young LLP. The number of U.S. venture firms making at least one investment a quarter sank to 167 through June from 313 in all of 2009, the accounting firm said this month in a report: “The Limited Partner Venture Capital Sentiment Survey.” The decline in IPOs has led to deteriorating returns at venture-capital companies, making it harder for them to raise new funds. That’s created a class of “walking dead” firms that are only working with their existing portfolio companies and don’t have the cash to make new investments, said Bryan Pearce, Americas director at Ernst & Young, in Boston.
    (tags: vc)
  • Despite the nation’s flagging economic recovery, chief executives of venture-backed companies remain optimistic–at least when it comes to their compensation. In a small poll of its members by ExpertCEO, an online community for senior executives, 76 CEOs from venture-backed companies on average expected modest increases in salary this year and in 2011. These executives reported an average salary of $238,000 in 2009, and they expect that number to climb to $250,000 this year and $262,000 in 2011. Their bonus on average is expected to remain flat at $94,000 this year, however, well short of an average target bonus of $131,000. The average target bonus for 2011 is estimated at $130,000.
  • Brad Feld is still learning. The MIT alum has kickstarted an impressive number of tech companies in the past 20-plus years. But he says he's still striving to perfect a web of systems, from how to effectively fund start-ups to how to spend time with his wife to how to mentor across generations. Four years ago Feld co-founded the TechStars program in Boulder, Colorado, with entrepreneur David Cohen, in order to help small start-ups grow into healthy companies. Its formula: Choose 10 teams with ideas. Give them each up to $18,000 in seed money. Throw in support from mentors for three months. The result: A whole bevy of fine-tuned and fast-growing young businesses. TechStars has since expanded to Seattle, Boston, and New York. Feld and Cohen’s new book, Do More Faster: TechStars Lessons to Accelerate Your Startup, uses first-person stories from entrepreneurs and mentors who participated in the program to explore themes such as fundraising and product development.
  • In the hazy realm of cyberspace, one school district is drawing a sharp line: Virtual friendships between teachers and their students are a bad idea. Worried about the potential risks of online interactions, the school board in Norton last week urged teachers not to become friends with their students on Facebook and other social media sites and advised them to avoid friendships with former students as well. Tom Golota, a school board member, said the ban is designed to maintain a divide between teachers’ professional and private lives and send a message that becoming too friendly with students is not acceptable. “We want to head it off at the pass,’’ Golata said. “Teachers know this already, but we wanted to have something official on the books.’’
  • After nearly 200,000 customers visited PayDotCom's checkout, Google deems Trust Guard's Chrome seal the winner with a 98% confidence interval. Based on the results of the test the Trust Guard Chrome style Security Scanned seal increased sales over no-seals by 3.98%. McAfee Secure had the lowest increase of only 1.47%. This means the Trust Guard Chrome seal increased PayDotCom's sales 2.7 times more than McAfee.
    (tags: mcafee trust seal)

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