Trading emails with a startup CEO building an iPhone app, I asked him why potential customers would buy his product. In response he sent me a competitive analysis. It looked like every competitive analysis I had done for 20 years – ok maybe better.

And it made me sad. Looking at the spreadsheet, I realized that competitive analysis tables are one of the ways professional marketers screw up startups from day one. And I had done my share.

An attorney and a group of early-stage investors published a set of documents last night called the “series seed” documents, a set of contracts for raising a small, seed round of funding.

 Ted Wang of law firm Fenwick & West first called for a streamlined early funding process in 2007, with an editorial for VentureBeat titled, “Reinventing the Series A.” The problem, he said, is that the legal hassles and costs don’t change much between a large, institutional venture round and a much smaller seed investment — but it doesn’t really make sense to spend tens of thousands of dollars on legal fees if you’re only raising $500,000.

“Start-up company lawyers are under an intense pressure to keep our fees low on these deals, and we find ourselves struggling meet our clients’ expectations around pricing,” Wang wrote back in 2007. “The result is that these small Series A deals have become a source of unwanted tension between us and our clients.”

Grouping industry players together in clusters can be an effective way of giving small businesses access to foreign markets, according to the Enterprise Europe Network (EEN), a European Commission service.

Small businesses traditionally struggle to make inroads into foreign markets due to cultural barriers and marketing costs. However, SMEs have a better chance of selling their products and services overseas if they are part of a larger package of regional expertise.

Nicoletta Marchiandi, who will speak about the internationalisation of SMEs at a 9 March meeting of the Enterprise Europe Network's Steering and Advisory Group in the European Parliament, said that relatively few SMEs have any export experience, but markets like China, India and Russia are crucial for dynamic SMEs.

"For SMEs, it's impossible to access big buyers unless they are within a specific cluster. They face the language barrier and often don't know how to get information on foreign markets," she told EurActiv.

The mystery of startup valuations has existed since the day 1st startup was born! This topic is fundamental, emotional, scientific and artistic at the same time. I have been asked this question often, and in different forms like "What is my idea worth?", "How can I get 10 crores funding, but retain control of my company?". The answer depends on the person who answers the question. Entrepreneurs like to increase the number as much as possible while not annoying the investor, and investors like to peg it to as low as possible, while keeping the entrepreneur interested and motivated. I will try to demystify the mystery below.

For starters, valuation is the number which shows how much the company can be sold off completely for. Typically, if 10% of shares are issued for 1 crore, then company valuation is 10 crore – pre-money is 9 crore and post-money is 10 crore. One of the ways to arrive at a valuation number is try 4 – 5 methods and take an average.

It wasn’t at a press conference or inside the Inquirer editorial boardroom. The city’s announcement to join the rush for Google’s ultra-high speed fiber broadband came during a few minutes of a presentation, backed by dense slides at a technology community event inside a rock venue.

“Let’s light this joint up,” city Chief Technology Officer Allan Frank said, throwing his hands in the air and walking off stage at the fifth Ignite Philly, seemingly surprised by the cheers and laughs the slide earned.

The announcement at Johnny Brenda’s last night, a bar filled with mostly 20 and 30-somethings, came 10 months after Frank first unveiled his $100 million city technology investment vision to Refresh Philly, another young, hip, technology community event staple. Technically Philly urged continued involvement by the community and Frank and, in many ways, that’s continued.

The decision marks something of a marriage between likely the city’s two most prominent officials whom have hands in the region’s technology community: the son of a former mayor and, as City Councilman Bill Green put it last night, “the baddest ass CTO of any city, Allan Frank.”

At our new venture fund, we’ve been spending time looking into new ways that will make the lives of entrepreneurs seeking funding easier. To that end, we've linked up with Ted Wang who has been working on an open source legal project called the Series Seed documents. We’re impressed with his work and are going to use these standard funding documents as part of our seed stage investments wherever appropriate.

We have to give a big shout out to Ted: he nailed this. It’s exactly in step with our intention of letting entrepreneurs focus on building businesses in today’s environment, without having to follow old VC rules.

In a nutshell, entrepreneurs and the businesses they are starting have evolved. Start ups today don’t need to build a manufacturing plant (as DEC, the very first high-tech VC investment, did in 1957) to start a business. They need less money to build a product and prove that it works before scaling the business. Yet, the paperwork involved in funding entrepreneurs hasn’t changed to meet these needs. Series Seed is the first to establish this new way of supporting funding suited for today’s entrepreneurs – and we’re big fans.

Inspiration often precedes innovation, a topic I love. This is my third installment on the subject.  The first is titled, “2010: The Year of Spontaneous Innovation” and the second is, “The Art of Bold Innovation.”  Innovation is such a personal, creative endeavor, but the influence of others plays a big role in helping us succeed.  Here I'll share insights from some of those who've inspired me when it comes to developing innovative practices in my business. Perhaps they will have the same effect on you.  

At the end of each passage, there’s a lesson learned along with a big question to get a conversation going. 

Walt Disney

“My father was not a complicated man.” ~ Diane Disney Miller (daughter of Walt Disney)

If there is one way to foster innovation in your business, it is to be innovative yourself and to be straightforward. In “

Walt Disney: An American Original” by Bob Thomas, Diane Disney Miller says this about her dad:  “I think Dad was an easy read.  He didn’t want to be complicated.  He was always straightforward, never devious.  Not unless he could be devious in a constructive way.”  Diane continues,“We always ate dinner late, because Dad worked late at the studio.  He would tell about what he was doing, but he also wanted to know about our lives, too.  And he would listen.”

Texas Venture Labs at The University of Texas at Austin (Texas Venture Labs) is a university-wide initiative to support technology commercialization, entrepreneurship and innovation, while providing a unique and directly applicable educational experience for participating students. Our purpose is to provide the intellectual horsepower to promote new venture creation at UT Austin, through education and mentoring; market and business plan validation; team-building and networking; and providing direct links to resources and funding.

Located in the AT&T Executive Education and Conference Center, Venture Labs Texas builds on the entrepreneurial skunkworks that has long thrived at The University of Texas at Austin, adding resources, new ways for student entrepreneurs to engage, and increased channels for successful funding of new ventures.

Ron Conway, the angel investor known as the “Godfather of Silicon Valley” due to his prolific backing of web startups, is raising a new $10 million fund. This is the first outside capital Conway has brought into his SV Angel fund.

The news was first reported in TechCrunch, and Conway confirmed the story in an email.

Last year, Conway split off the SV Angel fund from his existing investment vehicle, Baseline Ventures. At the time, he told us SV Angel would focus on real-time startups, a market he predicted would reach at least $1 billion in three years. Conway was an early backer of Google, and his real-time investments include Twitter, bit.ly, CoTweet, TwitVid, Kyte.tv, Factery, and many others.

Government cuts to science funding would damage UK competitiveness by stifling innovation, university bodies have warned.

The broadside, from Universities UK and the Russell Group of research-led universities, sets the scene for a post-election battle over funding the research that business relies on for lucrative new technologies.

Wendy Piatt, director general of the Russell Group, said: "Cuts and uncertainty in research funding risk disrupting the intellectual ecosystem and harming the prospects for spin-out companies and other commercial exploitation." According to a recent survey, companies spun out from the 20 Russell Group universities generate yearly turnover of more than £700m.

Universities UK said senior academics were worried that the UK's £3.1bn government-funded science research budget would be hit as an incoming government struggled to contain the £178bn deficit. "We are gravely concerned about the prospect of substantial cuts," said the body, which represents all UK universities. "If we want to keep our seat at the table of the top economies, we need to have better ideas than other countries."

I was going to save this post for a while but the “Patzer Problem” meme has forced my hand.  I, for one, am with Rob Hayes of First Round Capital on this one.

“If we are doing things right and our company founders are successful, then over the long run we should be successful. If we get to the point where our founders are successful but we can’t be, we should be rethinking our business.”

I have a philosophy. A thesis. An entrepreneur thesis. I’m not talk about the age old debate amongst investors whether you back entrepreneurs, markets or products (or as many people like to hedge – product / market fit). I’m unequivocal on that topic. It’s entrepreneurs I back. I’m on the record as saying I’m 70% management, 30% market. We’ll have that debate another day, I promise.

Today’s post is about my investment thesis.  It’s what I call the “entrepreneur thesis.”  My investment philosophy is to back the best possible entrepreneurs I can and to stick by them through the growth (or sale) of the company.  I’ve outlined already what I believe makes a great entrepreneur and I’ve stated unequivocally that this is a subjective view of what it takes.  But when I’m looking to invest the dollars that my Limited Partners have entrusted my firm with I’m going with my view.

Cities should become living innovation labs, says Saul Kaplan. Only then will we come up with bold system changes that work

I have been asked by Living Cities, a philanthropic collaborative of foundations and financial institutions, to participate in an upcoming economic development roundtable, Changing the Trajectory of an Urban Economy, taking place in Detroit on Mar. 5. Organizers asked each of the participants, public and private-sector leaders from across the country, to provide an answer to the following question:

Given your experience, what are the most "game-changing" ways to use $100 million-plus to change the trajectory of an urban economy?

In other words, if I were given a free hand to use $100 million-plus of grants, what would I do? Here is my answer. I suggest that we turn cities into innovation hot spots.

We are playing defense based on old industrial economy rules and systems. We must play offense to create a 21st century innovation economy in which all citizens can fully participate. A new national economic development conversation should bubble up from cities.

Irish companies raised €288m in 2009, up 18.6% on the previous year according to the Irish Venture Capital Association (IVCA) Venture Pulse Survey.

The VenturePulse survey measures money raised from domestic and international venture capital funds, from the AIB and Bank of Ireland seed capital funds; as well as from Enterprise Ireland and from private angel investors.

But Irelands venture capitalists are concerned that Future Early Stage Funding through bodies like Enterprise Ireland could suffer in government cutbacks, as a result of last year's strong figures for tech funding holding up so well during a tough recession.

Compared to prior recessions, something is definitely different this time. If you've lost your job, it is harder than ever to replace it. The New York Times reports that 6.3 million Americans have been unemployed for six months or longer, more than double the next-worst period, in the early 1980s.

Tighter credit, outsourcing, globalization, and productivity-enhancing technologies have played a role-and each is here to stay. As a result, many older employees are delaying retirement, making it increasingly difficult for recent graduates to enter the workforce.

Voices across the political spectrum agree that America desperately needs private sector job growth, and many are calling for change. In a recent USA Today editorial, Robert Kiyosaki, the best-selling author of Rich Dad Poor Dad, calls for two different public-school programs: one for employees and one for entrepreneurs.

Mr. Kiyosaki writes, "If I were running America's school system, I would create the U.S. Business Academy for Entrepreneurs, modeled after our federal military academies. Admissions would be via congressional appointment along with nominations from community business leaders."

EIGHTEEN months ago, Li & Fung, a firm that manages supply chains for retailers, saw 100 gigabytes of information flow through its network each day. Now the amount has increased tenfold. During 2009, American drone aircraft flying over Iraq and Afghanistan sent back around 24 years’ worth of video footage. New models being deployed this year will produce ten times as many data streams as their predecessors, and those in 2011 will produce 30 times as many.

Everywhere you look, the quantity of information in the world is soaring. According to one estimate, mankind created 150 exabytes (billion gigabytes) of data in 2005. This year, it will create 1,200 exabytes. Merely keeping up with this flood, and storing the bits that might be useful, is difficult enough. Analysing it, to spot patterns and extract useful information, is harder still. Even so, the data deluge is already starting to transform business, government, science and everyday life (see our special report in this issue). It has great potential for good—as long as consumers, companies and governments make the right choices about when to restrict the flow of data, and when to encourage it.

The search giant's former employees are seeding tech startups—and shaping another wave of innovation

During the holidays last year, Aydin Senkut and Elad Gil gathered 50 of their friends at a health-food restaurant in Palo Alto. Over turkey burgers and tofu wraps, they talked about tech trends and how to get rich. Or, more precisely, how to get richer.

Senkut, Gil, and their dining circle are alumni of Google (GOOG), one of the greatest engines of wealth creation the U.S. has ever known. Since going public six years ago, Google has generated more than $170 billion for its employees and investors. Many of the millionaires the company has produced are young, wired into the latest developments in tech, and at ease with risk. Which explains why so many Google alums—including many of those at Senkut and Gil's gatherings—are active angel investors, attempting to add another zero to their bank accounts and another innovative company to their list of accomplishments. "I feel like we have such a strong network, it's almost like we've recreated Google outside of the Google walls," says Andrea Zurek, a 39-year-old backer of 26 startups.

More than 40 ex-Googlers have invested in about 200 fledgling companies since 2005, according to the research firm YouNoodle and reporting by Bloomberg BusinessWeek. At least a half dozen current Google executives, including CEO Eric Schmidt and co-founders Larry Page and Sergey Brin, are also financing young companies. Numerous angel-watchers say the Google group has more in common than just pedigree. Unlike many venture capitalists, the Googlers like to swap investment ideas and back startups together. They're also willing to take big chances. "[They're getting into] very risky deals that can be extremely rewarding," says Jeff Clavier, a veteran venture capitalist who founded Palo Alto-based SoftTech VC in 2004. "They have been very active as a group over the past two to three years."

Wanted: more "local" problem-solving pitches from social enterprises, social innovators and nonprofit activists to help Americans in need, says Sonal Shah, the chief of President Obama's new $50 million Social Innovation Fund.

Speaking yesterday at Harvard's Social Enterprise Conference, Shah told attendees in a keynote address that the Fund has been getting many pitches recently, but mostly for problem-solving initiatives geared to the developing world. Meanwhile, there haven't been many pitches about solving problems in America, she said, and her team wants to see more ideas that can be replicated across the United States. Social entrepreneurs looking at (and working in) the developing world "need also to apply their ideas to the poor in America," she said.

The remarks were welcomed by many attendees. One, New Orleans-based blogger Nathan Rothstein, wrote today in True/Slant that ever since Hurricane Katrina exposed extreme poverty in the United States, cause activists, social innovators and policymakers in America have been forced to confront tough questions, including: "What does it say about us as Americans if we let fellow citizens suffer like this?" and "Do we have the right to tell other countries how to solve their poverty problem when we have not figure it our for ourselves?" Those questions remain, Rothstein says, but many social problem-solvers have "moved on."

Said Shah:"We can't forget that the United States is a market for solutions."

In other highlights of Shah's talk:

A rising class of professional “angel” investors–who typically put sums of less than $1 million to work in a start-up company–is changing the venture-capital landscape. Now these angels and their smaller investments, dubbed “seed” stage investments, have their own set of legal documents to go with them.

Ted Wang, an attorney at Silicon Valley law firm Fenwick & West, is on Monday launching a set of seed-stage documents–dubbed Series Seed docs–that he says will cut down the time and cost of making such investments. The problem: Legal documents associated with investing in a start-up–whether an investor is pumping in less than $1 million or more than $10 million–remains unchanged from years ago. A typical set of such documents usually weighs in at more than 100 pages, says Mr. Wang, which considerably drags out the length of time and cost in completing one of these investments.

Ben Horrowitz of new Valley based fund Andreessen-Horowitz has a good post up today promoting an open source legal project for seed stage investments.

His discussion of how the requirements of companies have changed over the last ten years is spot on and very illustrative for the debate about the evolution of venture capital:

It turns out that building a company has changed quite a bit since the early days of venture-backed technology companies. Building a company like Twitter or Facebook is quite different from building Tandem. Specifically, the risk and cost of building the initial product is dramatically lower. I emphasize product to distinguish it from building the company. Building modern companies is not low risk or low cost: Facebook, for example, faced plenty of competitive and market risks and has raised hundreds of millions of dollars to build their business. But building the initial Facebook product cost well under $1M and did not entail hiring a head of manufacturing or building a factory.

As Flowing Data points out, this video by JESS3 is less of an infographic, and more of an avalanche of animated statistics. (A la this video or this videoo.)

But it includes some pretty astounding numbers--For example, there are about 740 million Internet users in Asia alone; Facebook serves 6 million pageviews per minute, requiring 30,000 servers; and there are 148,000 new zombie computers created each day by hackers using botnets: