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Posts Tagged ‘Venture Analysis’

NorthSharkTank

North was recently quoted dropping some knowledge in the article, Real-Life Lessons From Shark Tank on Entrepreneur.com.

Here’s an excerpt:

Know when to pitch. Entrepreneurs with a well-developed product and proven financial success have the best luck with the “sharks,” says David Brody, a managing partner at the venture analysis firm North. “Nothing builds momentum like demonstrating you know how to make a cash register ring,” Brody says. Krinzman cited the entrepreneurs who failed to net funding for their “fun house” in Times Square as an example, saying they sought capital in the idea phase of their business planning.

READ THE FULL ARTICLE HERE

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entlogo-2009North was recently quoted dropping some knowledge in the article, 5 Lifelines For You Startup on Entrepreneur.com.

Here’s an excerpt:

Evan Solida was stuck.

Solida, founder of Cerevellum, which sells digital rearview mirrors for bicycles, had posted his business plan on several websites promising to connect him with investors in exchange for a few hundred dollars.

Time passed. Investors never came.

It’s a familiar dilemma for many startup companies: Solida knew he needed help but didn’t know where to find it.

“You almost feel like you’re at a used car dealership,” Solida says “You’ve got all these people who know you’re out there looking for something–in this case, money from investors–and they prey on that.”

Solida eventually found North Venture Partners, a consulting firm that helped him streamline his product offerings, set up an advisory board and take other steps to professionalize his business plan.

North is one of many resources available to startups seeking direction and funding.

CLICK HERE TO READ THE FULL ARTICLE.

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logjamcanoe

The following excerpt is taken from Breaking Through The Broken: The Transparent Guide To Overcoming The Inefficiencies In Early Stage Venture Capital.

A good presentation with a good PowerPoint given by an individual with a strong personality can easily sway a room full of investors into cutting a check. Investors need to be sure they’re not getting charmed out of their hard earned cash and that the great presentation was great because of what was being offered. Investors need a better mechanism for filtering investments, a standardized venture “combine” if you will. There are simply too many new ventures looking for help and money, and the process for filtering these opportunities is still based on a complex network of personal relationships that will never scale to meet the market needs. As the global economy expands and moves forward, new systems and technologies need to be implemented to accelerate American innovation as well.

As we mentioned, trust is key, so an investor may make a move on a deal because it was given to him or her from a trusted individual (as a favor, for example) even though it may not be the best deal for them. Angel networks provide some buffer between enthusiastic entrepreneurs and investors, but more often than not the Angels are the ones who are doing all the screening work anyway; it’s not as if they can just show up with the confidence that all the pitches they see will be high quality opportunities.

The answer to this problem is pretty simple; look at the entire investing ecosystem and see where there are constraints. Then we need to collectively implement plans that remove those constraints. The systems and technologies are at our fingertips, it’s time we stepped up and innovated ourselves.

Entrepreneurs need to stop jumping in just upstream of a logjam and wondering why they aren’t floating downstream to paradise. Here’s a tip; paddle to shore, load your canoe onto your back, and hike around the blockage, and then put in downstream. Ignore the reams of angry entrepreneurs clamoring on and on about how the market is this or how the market is that, or go ahead and join the masses pushed up against the dam who are wondering what will happen next.

If you’re interested in learning more about how a Venture 360 due diligence engagement can make you a more effective and efficient investor or entrepreneur, please contact us by sending a short email introduction to northventure360@dontgosouth.com and we’ll set up some time to discuss how we can help you avoid the logjam.

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The following excerpt is taken from Breaking Through The Broken: The Transparent Guide To Overcoming The Inefficiencies In Early Stage Venture Capital.


kickingtiresBuying a used car is an exciting process, but coming home with buyer’s remorse is easy if you don’t do your homework. To avoid a financial disaster, not to mention having a two-ton paperweight parked in your driveway, it’s prudent for any buyer to bring an experienced mechanic with them to look at the car before an offer is made. Why not do it yourself? Unless you’re a gear head with extensive knowledge of the vehicle you’re looking at, you’re better off shelling out the 300 bucks to make sure you’re not going to have to sink thousands into the car as soon as you get it home.

A quality mechanic with experience in checking out used cars will have a systematic inspection process that will cover all the bases in terms of the integrity of the car. Their trained eye will surely find the spots where the previous owner slapped on some Bondo to cover up where they were sideswiped, and can sniff out the sawdust in the engine.

“When excited buyers get emotionally caught up in the vehicle purchase, they often miss mechanical, cosmetic, and safety issues during visual inspections and test drives…to eliminate much of the anxiety and get an accurate picture of the condition of the vehicle, many buyers choose to have a pre-purchase inspection (PPI) done before the sale is final.” – JD Power & Associates.

Did you know that 1 out of every 10 used vehicles has hidden problems from its past? This well-known fact has led to the building of two successful businesses that assist the consumer when making a decision about a used vehicle. If you’re in the market for a used car and haven’t yet heard of CARFAX and AutoCheck, take notice. For just a few bucks you can perform your own PPI over the Internet.

carfaxCARFAX’s pitch is that you don’t have to rely on a stranger’s truth in advertising to find out about the mechanical and driving history of the vehicle they want to sell you. A CARFAX Vehicle History Report includes: 1) Title information; 2) Accident History; 3) Odometer Readings; 4) Lemon History; 5) Number of Owners; 6) Accident Indicators (like airbag deployments); 6) State Emissions Inspection Results; and 7) Service Records. All the critical information you need to avoid driving home with a lemony scent. AutoCheck tries to differentiate their service by attributing a score to each vehicle, although the services are basically one in the same.

“Many used car buyers quickly dismiss the thought of buying a CARFAX report because of the money, but let’s get real, the $25 spent on a quality vehicle history report is the best investment you will ever make. There are thousands, no probably millions, of drivers who wished they had spent the measly $25 to look into a car’s history instead of spending thousands of dollars on a car that has a damaged history, salvaged title, or is even a lemon!” – Jake Newberry, automotive industry insider.

So we’ve looked at three separate industries where big-ticket buying behaviors have driven the creation of tools and techniques that enable both sides of the equation to benefit. Athletes know what criteria they will be measured on and can train accordingly. Real estate agents know the impact a third party inspection will have on the transaction so the can gauge whether or not they want to provide it, or push it onto the uninformed buyer. And CARFAX has created a way for buyers to pull an honest background check in an industry where the deceptive salesman is legendary.

In each of these our last three blog posts, we see lessons from worlds of Real Estate, Professional Sports, and the Automotive Industry that need to be applied to early stage investing. These systems, tools, and processes ALL serve to accelerate trust and enable transactions. Entrepreneurs and investors, we hope you all took good notes.

If you’re interested in learning more about how a Venture 360 due diligence engagement can make you a more effective and efficient investor or entrepreneur, please contact us by sending a short email introduction to northventure360@dontgosouth.com and we’ll set up some time to talk shop.

Side Note; I also happen to know someone that is looking to purchase a used 2008 or 2009 Prius Package #5 in dark grey or silver. They’ll pay cash. And yes, they’ll require a VIN# as they’ll be conducting there own due diligence on the vehicle before they invest:).

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homeinspectionreportNow ask yourself, would you buy a new home on a gut feeling or simply because the guy selling it says it’s a great deal? Probably not. A sensible real estate investor would probably evaluate every aspect of the property; from the foundation to the roof, the plumbing, the electrical, the lot size, the appliances, the paint, and of course the neighborhood. Even more likely, you’d probably pay for a professional home inspector (who sees thousands of homes every year) to come over, take a look, and give you a written report before you would sign the deed.

“A home inspection is perhaps the most important chapter in the home-buying process and can benefit both the buyer in understanding the condition of the house and the seller who wants to provide accurate disclosure information.” – Lynette Wyrick, PC from RE/MAX Equity Group.

Because buying a new home is most likely the single largest investment an individual will make in his or her life, it is difficult to remain completely objective and unemotional about a home that is seemingly perfect. Flaws get overlooked as judgment is affected.
hanselandgretel“Think you’ve found the home of your dreams? So did Hansel and Gretel. The fact is, every property has its dirty little secrets that only the owner knows about. In a perfect world, owners would come clean about the quirks and glitches in the old homestead when they fill out the property condition disclosure form that many states require. But as Hansel and Gretel found out, real estate is fraught with subterfuge.” – Jay MacDonald, Bankrate.com.

For accurate information, it is best to obtain an impartial, third party opinion by a professional in the field of home inspection. From a seller’s perspective, an objective inspection will provide valuable information and the opportunity to make repairs that will make the house more attractive to prospective buyers. A third-party objective inspection is therefore beneficial to both parties.

What’s interesting is that in some markets it’s standard for the seller to provide a detailed third party inspection to prospective buyers, while in other markets the buyer is the one who needs to invest in the inspection if they want to remove contingencies in their offer letter. The responsibility of who pays for the inspection tends to shift to the side of the market that has the upper hand at that particular moment. In the recent housing boom it was the sellers who got to push buyers with a “take it or leave it” attitude, today sellers are doing everything they can to make their property more attractive and they are now shouldering all sorts of costs, effort, and concessions that weren’t even on the table two years ago. What does that mean for raising investment capital? In today’s investing market the available capital is constricting while at the same time the pool of available deals is expanding. Will this shift some pressure (and costs) onto the sell side of the venture market like it has in the real estate market?

Note; one other insight that can be pulled from the real estate market is the standardization of deal documents and terms. The liquidity of real estate hinges upon the simplicity of the standardized paperwork. Just imagine the efficiencies that could be gained from standardized deal terms in early stage venture investing…

Key takeaway; neither entrepreneur nor investor are well-served by spending time and money focused on a new venture (or new home) that has bad DNA.

Excerpt taken from Breaking Through The Broken: The Transparent Guide To Overcoming The Inefficiencies In Early Stage Venture Capital.

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Smart, wealthy, and very successful men and women lose billions of dollars every year investing in new ventures. Why? Recent research shows investors are often investing without first conducting their own thorough due diligence. Just how powerful is the connection between due diligence and investor returns? A recent three-year study of 539 Angel led investments conducted by the Angel Capital Education Foundation and the Kauffman Foundation, found an extraordinary correlation between due diligence and significantly greater returns.
beanstalk

“Spending time on due diligence is significantly related to better outcomes…investors who spent less than the median 20 hours of due diligence and investors who spent more, shows an overall multiple difference of 5.9X for those with high due diligence compared to only 1.1X for those with low due diligence.”Returns to Angel Investors in Groups, a comprehensive study of 539 Angel led investments. Robert Wiltbank, Ph.D. and Warren Boeker, Ph.D.,11/2007


Those numbers are staggering, not only in terms of the difference thorough due diligence makes, but the fact that the median of the study was only 20 hours, and that people are actually spending less time on due diligence than that! While this seems to support both the “follow the roar” and the “trusted referral” methods for selecting investments, this amount of due diligence is far less than most people would spend researching a major purchase. If you take a step back and think about situations in which an individual is preparing to spend a significant amount of money you see in each situation a unique standardized form of due diligence, and that spending a good deal of time on them is the norm. The goal of these efforts is to reveal any potentially damaging information regarding the item to be purchased as soon as possible. Or as Richard Drake of business law firm Womble Carlyle Sandridge & Rice explains, “a thorough review of what you are buying before it’s yours is the best insurance against any unwanted surprises down the road.” sharksighted


It’s time the early-stage private equity industry takes some notes and follows the models of other industries in which thorough due diligence is the norm (real estate, automotive, and professional sports). In the next few days, we’ll be walking you through each of these industries and illustrate how conducting the proper due diligence leads to increased returns. Each example boils down to the basic, easy to remember motto: cover your ass before you spend your hard-earned cash.


Excerpt taken from Breaking Through The Broken: The Transparent Guide To Overcoming The Inefficiencies In Early Stage Venture Capital.

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oscars

It’s already late Friday. And many of you are feeling woefully unprepared. Why? You’re going to have to fill out a ballot for an Oscar pool in less than 48 hours and you haven’t seen 75% of the nominated films.

Have no fear, North is here. While we excel in providing early stage venture analysis, occasionally we enjoy conducting due diligence on other innovative & ambitious undertakings.

In case you’re wondering, I HAVE seen all but two of the nominated films from the major categories (a perk of having friends and family in the “the biz.”). I’m also co-defending champion of a very prestigious Oscar Party Pool in Echo Park. Okay, now I’m just setting myself up for a bashing on Monday.

So without further ado, here are my picks for the 81st Academy Awards.

Disclaimer: Film enthusiasts should always conduct their own research and due diligence and obtain professional advice prior to making any Oscar ballot decisions. North and its management or associates will not be liable for any loss or damages caused by a reader’s reliance on information obtained in this blog posting…

Best picture: Slumdog Millionaire – seems to have all the momentum right now

Best director: Danny Boyle – Slumdog Millionaire – deserving

Best actor: Mickey Rourke – The Wrestler – he was damn good (Penn a close second)

Best actress: Anne Hathaway – Rachel Getting Married – upset special over Winslet

Best supporting actress: Penelope Cruz – Vicky Cristina Barcelona – upset special over Taraji Henson

Best supporting actor – Heath Ledger – The Dark Knight – sentimental pick, but he was good

Best foreign language film – Waltz With Bashir * – Israel – going to see tonight

Best animated feature film – Wall-E

Best adapted screenplay – Slumdog Millionaire

Best original screenplay – Milk

Best original score – Slumdog Millionaire

Best original song – Down To Earth – Wall-E

Art direction – The Curious Case of Benjamin Button – i fell asleep in this too…boring

Cinematography – Slumdog Millionaire

Costume design – The Duchess

Best documentary feature – Man on Wire – my best film of the year

Film editing – The Dark Knight

Make-up – The Curious Case of Benjamin Button

Sound editing – Iron Man

Sound mixing – The Dark Knight

Visual effects – The Dark Knight

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