Most entrepreneurs tend to avoid this area of the business, and as a result are badly surprised by cost realities, and investor expectations. They seem to think that financial projections are simply invented numbers for investors, and not useful. In reality, it’s like jumping in your car for a long hard drive with no destination in mind. Chances are, you won’t enjoy success from the trip.

What is a business financial model, really? In most cases, it is merely a Microsoft Excel spread sheet loaded with your cost and revenue projections for your startup, starting now in time and extending at five years into the future. For more value, a few variables can be added, like product volume growth rate, and number of salesmen, for “what if” analyses.

Angel investors and venture capitalists don’t invest in non-profits. The simple reason is that it’s impossible to make money for investors when the goal of the company is to not make money. Yet I still get this question on a regular basis, so I’ll try to outline the considerations in common-sense terms.

A non-profit organization is generally defined as an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. Examples include charitable organizations, trade unions, and public arts organizations. In the US, a non-profit is technically any company who qualifies as tax exempt through IRS Section 501(c).

Last week, for the first time, a jumbo jet used a blend of biofuel and kerosene on a transatlantic flight. Also last week, KLM Royal Dutch Airlines announced a biofuel supply agreement to commence regular flights on a biofuel-petroleum blend on 200 Amsterdam-to-Paris runs starting in September. Lufthansa could beat it by a month under previously announced plans to launch a six-month test on Frankfurt-Hamburg flights.

Such regularly scheduled operations mark a big jump from the one-off biofuels flights that airlines have conducted since 2009. Aviation and biofuels sources say this indicates that biofuel-based jet fuels are ready to be scaled up. Amy Bann, director of environmental policy for Boeing's commercial airplanes division, says the KLM and Lufthansa announcements "signal to governments, fuel processors, and the financial community that the demand and market for these fuels exist."

I spent some time yesterday talking to an entrepreneur about this topic and I thought I'd share what I told him with everyone.

When your company is growing really fast, doubling employees year over year, adding users and customers at a very rapid rate, you don't want to raise too much money. If you raise three or four years of cash, there is a very good chance that by your second year, you will be sitting on cash that you raised when your company was worth considerably less. That's not a good thing. It's too dilutive to you and your co-founders and angels.

SAN FRANCISCO — Front pockets and purses are slowly being emptied of one of civilization’s most basic and enduring tools: the key. It’s being swallowed by the cellphone.   Enlarge This Image

James Best Jr./The New York Times New technology lets smartphones unlock hotel, office and house doors and open garages and even car doors.

It’s a not-too-distant cousin of the technology that allows key fobs to remotely unlock automobiles or key cards to be waved beside electronic pads at office entrances. What’s new is that it is on the device more people are using as the Swiss Army knife of electronics — in equal parts phone, memo pad, stereo, map, GPS unit, camera and game machine.

While we in the West continue to be anxious about the pace of the economic recovery, from China, India and Indonesia all the way to Sub-Saharan Africa, the excitement of a new generation — no longer hamstrung by the economic, technological and personal limitations of their parents’ generation — is palpable.

Masked underneath all the talk about the global financial crisis, an even bigger phenomenon is at play, one that in due course will overpower the memory of the current crisis. That phenomenon is the true unleashing of the global entrepreneurial capabilities of the bottom half — or, rather, two-thirds — of humanity. It is boom time in “Global Entrepreneurland.”

As a result, a great reversal, or rather rebalancing, is underway. While Westerners are in for more uncertainty, people in the developing world who have lived with significant uncertainty for many decades, if not centuries, now find them selves moving in the opposite direction.

Trawling through the Ausindustry website, one will notice that there are only a handful of fully registered early stage venture capital limited partnerships (“ESVCLPs”) with some additional ESVCLPs having been granted conditional registration on the proviso that they do manage to raise the necessary capital. The ESVCLP regime has been introduced four years now, yet the take-up of ESVCLPs has been poor so far in comparison to its predecessor (the Pooled Development Fund regime, now grandfathered, had 126 registered entities at its peak). Is it a matter of bad timing, a lack of funding appetite in an area that is underserviced in the Australian investment landscape or the wrong incentive offerings? Arguably, it is a combination of all the above i.e. the global financial crisis, lack of familiarity by Australian investors with the ESVCLP model, a certain bias towards a unit trust model by the funds management industry and certain regulatory and legal constraints imposed on ESVCLPs.

The ESVCLP regime was introduced by the Australian Government with the aim to attract both domestic and foreign investment flows in risky startups. With a partnership structure, ESVCLPs were seen as the most appropriate vehicle to attract offshore venture capital investors given that the latter would already be familiar with this type of investment structure. However, as alluded above, there has not been a flurry of investors to get the momentum going and increase the level of investment activity in the early stage venture sector.

Before I got into the venture business, it seemed like there were a number of rules that many VCs held as sacred.

I won’t go into all of the “rules” on this post, but the most typical one was the “20% rule.”

The idea was that VCs would tell founders (and their limited partners) that they always own 20% of the startup at the time of their initial investment.

The reality is that since we started Spark in 2005, we haven’t embraced that rule. (We try not to have too many rules actually).  Sometimes we own 20%, sometimes we own more and sometimes we own less. It depends on lots of things.

And this approach has served us well. Many of our best investments have come from startups where we ended up owning less that 20% initially but either a) the startup radically increased it’s value over time and our position became worth tens or hundreds of millions or b) we were able to respectfully increase our ownership over time thru one or more inside rounds that were good for the company and good for us.

Canada is a country that loves to study things. Commissions, task forces, inquests and panels are a national obsession.

Look at innovation. Last week, the federally appointed Science Technology and Innovation Council issued its second major report, Imagination to Innovation: State of the Nation 2010.

If innovation was measured in the output of reports about innovation, Canada would be a world leader.

We’re not. We are a laggard. The report tracked Canada’s progress over the past two years based on 24 different indicators, such as the percentage of GDP spent on research and development, R&D spending by businesses, investment in machinery and equipment, PhDs and high school test scores. Since the council’s initial report in 2008, Canada’s performance is down in 15 categories, stagnant in three and improved in just six.

Venture capitalists in the United States are pitching ideas to entrepreneurs on behalf of time-poor investors, with local funds backing the idea to take off in Australia.

An article in The New York Observer claims American VCs are attempting to lure entrepreneurs with promising start-up ideas, crediting start-up incubator Y Combinator as the catalyst for the trend.

“Most tech VCs would say they swear by [American angel investor] Ron Conway’s adage, ‘We invest in the entrepreneur first, not the idea’, but … VCs seem increasingly comfortable placing a custom order,” the article states.

“The practice was sanctioned in 2008 when… Y Combinator published its start-up wish list.”   The article goes on to say that since then, the concept has taken off in the US, with VC firms becoming increasingly comfortable to pitch their ideas to start-ups.

For the past few months, I’ve been exploring some of the more confusing terminology in VC term sheets.  In my last post, I discussed conversion provisions, which address the right (or obligation) of the investors to convert their shares of preferred stock into shares of common stock.  Today, I examine redemption rights of the investors.

What are redemption rights?  A redemption right is another feature of preferred stock. It lets investors require the company to repurchase their shares after a specified period of time. In essence, it’s a “put” right – that is, the investors may elect to put their shares back to the company.  As a practical matter, however, redemption rights are rarely exercised and, according to Fenwick & West’s recent VC survey, only 20 percent of the Bay area deals during the first quarter of included such rights.

BANGKOK — The sister of exiled former Prime Minister Thaksin Shinawatra led Thailand's main opposition party to a landslide victory in elections Sunday, heralding an extraordinary political turnaround five tumultuous years after her fugitive billionaire brother was toppled in an army coup.

The vote paves the way for 44-year-old Yingluck Shinawatra, who has never held office, to become this Southeast Asian kingdom's first female prime minister.

A large mandate to govern could help the new government navigate a way out of out of the crisis that has plagued Thailand since Thaksin's 2006 overthrow. But the question remains whether the nation's elite power brokers, including the monarchy and the army, would accept the result.

We are the connected generation. Thanks to our ever-present mobile devices we are always ‘on’ and connected. This allows us to capture a record of all the great things we do, and share our experiences, our recommendations and our memorable moments with friends, colleagues and the world at large, through the medium of popular social networks like Facebook, Twitter, and Yelp. We broadcast these moments out to the rest of the world. We let others share in our passions and see the details of our daily lives. We have become the lifeblood of information for our friends and followers, and they have taken on the role of gatekeepers as we filter and pump information from network to network.

As the opportunities to share information have become more ubiquitous, there has been an increasingly hyped-up debate and concern around the topic of privacy. But is privacy really the issue? As Jeff Jarvis rightly points out, the reason for using social services is for sharing, not hiding. Twitter and Instagram are prime examples of this, where the user is forced to choose between sharing everything or limiting their sharing to a personally selected group who apply for the privilege. Nonetheless, the fact is that although many of us want to share, we want to be able to fine-tune our audience. This challenges services like Facebook where you determine sharing settings in advance of your broadcast.

It’s the Fourth of July here in the U.S., and small business owners around the world are celebrating their independence with increased activity in the online space. Working online allows small businesses access to new global markets, opportunities for new low cost marketing options and an incredible new array of networking and other tools. Here’s our roundup of tips for the online entrepreneur. Have something you think we’ve missed? Share it in the comment section below:

Blogging

Does your business have a blog? Lots of businesses do and are finding the benefits offered by business blogging. Giving your small business an enhanced online presence could include experimenting with the many advanced features a blog offers. A simple Website may not cut it these days. What do you want to achieve with your business communications? A blog may help. Small Business Shift

Monetization basics. Yes, businesses can make money online and, yes, your blog could become more than simply a Website marketing another business. It could be your business. But before you get too excited or listen to a lot of get rich quick gurus, please understand. This is a lot of hard work. The Work At Home Woman

Whether embarking on a new concept or re-evaluating an existing business, entrepreneurs have to constantly revisit who they are and where they are headed. We need to continually feed that hungry spirit that got us here in the first place and always lead the initiative to keep our work creative, flexible, and innovative. So what does it take to keep that initial energy alive? Like in a good marriage, I doubt there’s any one magic answer, but here are some tips I’ve seen work for myself and for many of my entrepreneurial friends.

1. Stick to your ethics. No matter how much you may need revenue, clients, or recognition, if you compromise what you believe in to get there, you’ll never be truly successful. I’ve fired high-paying but abusive clients, fired friends who just didn’t belong in the job, and hired family members even when people thought I was crazy—all because I stuck to my core beliefs.

Colorado has what it takes to be the most innovative economy in the country. But this won't happen by accident. Our ability to get from here to there depends on whether we are willing to work together — across industries, expertise and political parties — to create an environment where Colorado's inventors, entrepreneurs and job creators can thrive.

Several months ago, U.S. Sen. Michael Bennet asked us to undertake an effort aimed at making Colorado an epicenter for economic innovation. The process began without any preconceived notions of what policy solutions our efforts would yield. We convened a non-partisan group of leaders from business, industry and academia, all of whom recognized that Colorado can't stay competitive unless we work together to create the best possible environment for innovation, and hence job creation.

Some people want you to think that Canada's hightech star, the company that invented the BlackBerry, is in deep trouble. The big bad bears on Wall Street smell blood, and they are clawing at Research In Motion, driving down the share price with bad news, so they can buy at the bottom of the market. Then there are the takeover artists, who argue RIM is doomed. Why prolong the pain, they say? Why not find a brighter future safe in the arms of IBM or Microsoft? Their goal is to buy at the bottom and drive up RIM's share price so they can profit from a takeover bid.

For the past three months, we have witnessed some major attacks on Research In Motion. Are they justified? Well, no and yes.

Let's get the "no" out of the way first. There's still a lot of life left in RIM and its flagship Black-Berry product. Most people know RIM for its smartphones, sold by providers around the world. But the company's real cash cow is its BlackBerry Enterpriser server. Businesses and organizations lease these boxes to give them complete control over corporate messaging services, with security second to none. RIM's biggest client, the U.S. government, manages more than 600,000 Black-Berrys, and RIM revenue has passed the $20-billion mark.

With the final flight of the stalwart space shuttle Atlantis just a few days away, America is beginning an exciting new chapter in human space exploration. This chapter centers on full utilization of the International Space Station, development of multiple, made-in-America capabilities for astronauts and cargo to reach low-Earth orbit, and pursuit of two critical building blocks for our nation's exploration future: a deep space crew vehicle and an evolvable, heavy-lift rocket. Today, we embark on a new knowledge and innovation-driven approach to space science and exploration that will lead us into the new frontiers of deep space. Critical to this new chapter in human space exploration are continued investments in science and technology that will ensure our nation's prosperity in the 21st century.

The technology used to develop the space shuttle, which first flew more than three decades ago, was the most advanced and cutting-edge in the world at the time. This remarkable vehicle has provided a means for extraordinary accomplishments and discoveries for 30 years. The Baltimore-operated Hubble Space Telescope, which has transformed our understanding of the universe, was deployed by the shuttle and serviced four times by shuttle-ferried astronauts. A one-of-a-kind, three-dimensional map of 90 percent of the Earth's surface was made using a spaceborne pair of radars mounted on a 198-foot boom extending from the shuttle's cargo bay. Most notably, America and its international partners have constructed the most sophisticated scientific laboratory ever — a football-field-sized research facility in space — using the space shuttle as our construction workhorse. Because of our nation's up-front investments in science and technology, the shuttle's legacy will continue with the remarkable research that is yet to come from the International Space Station.

As a child, upon meeting a friend of my parents, I would immediately ask what grade they were in. My dad explained that after your last year of high school, you stopped counting that way. People kept learning stuff, but they didn't say they were in 17th grade, or 30th grade. After a certain point, the set of knowledge is not well-ordered. MBAs are not 19th graders, or 21st graders - they're just, well, MBAs.

This is the message that the folks over at INSEAD who compiled the Global Innovation Index have yet to learn. The recently released index purports to rank 125 "countries/economies".  The "countries/economies" are ranked in "terms of their innovation capabilities and results."

Can U.S. research universities learn from IBM’s intellectual property (IP) licensing strategies?  I don’t mean that universities should behave like a for-profit corporation and attempt to wring revenue out of the plethora of intellectual activity that takes place on campus.  This wouldn’t work for several reasons.  I mean that some elements of IBM’s IP licensing strategy might improve the way U.S. research universities manage the patents that result from publicly funded on-campus research projects.

Here are some elements of IBM’s IP licensing strategy that are revelent to university patent portfolios, although not necessarily in the way you would expect:

• IBM IP-related revenue includes payments from licensing know-how, consulting fees and other intangibles, not just patents
• Patenting decisions at IBM are de-centralized and inventors given bonuses
• Selected IBM patents are cross-licensed to other companies
• Potentially patentable IBM technologies are sometimes placed into the public domain
• Selected IBM patents are donated to open source projects
• IBM engineers search for potential patent infringements