Mission: Austinpreneur on assignment in Puerto Rico

    

Earlier this month I was fortunate and flattered to be invited to keynote the Puerto Rico Venture Forum in San Juan, Puerto Rico. This was my first trip to Puerto Rico but it definitely won't be my last. My wife Amy came along for the trip and we got to spend a day exploring through the forts of Old San Juan. It was such an easy trip - no passport, everyone speaks English, and they use dollars for money. Gowalla was already there too - most of the places I visited were already listed and one of the old forts even has a custom stamp! On our next trip we want to explore the bio-illuminescent algae, caves, mountains, beaches.

 

I want to thank Grupo Guayacan and all of the great people we met - everyone was so welcoming! Special thanks to Francisco, Bob, Eva, Joanna, Paul many others. And of course thank you to Manuel Rosso for introducing me!

The Puerto Rico Venture Forum is the culmination of the EnterPRize competition - a business plan competition that on its face looks very similar to Capital Factory. They have a longer process that starts with a business plan competition and extends over the course of a year or more. There are five finalists each year and the top 3 receive $25k, $15k, and $10k in addition to other free services and mentorship.

I was very impressed with the Puerto Rico startup scene. The community is highly educated, with expertise in biotech, aerospace, manufacturing, and more. I met a dozen young entrepreneurs and many of the elders of the community as well. The energy and enthusiasm was infectious!

The five finalists that presented were:

• Adiestrate.com - Online Learning Classes
• Edunarium - Online Learning Store
• EMM - Simulations for Unmanned Aerial Vehicles
• NanoEssentials - Nanoparticle production
• Sonar Sending Technologies - Medical device for improving catheters

Unfortunately, none of the five really got my juices flowing. All of them had interesting ideas and viable businesses, they just weren't in my areas of expertise or interest. I wish there had been an email marketing company! Still i was impressed by what I saw and wish all of the companies the best in their entrepreneurial journey.

 

 

Angel Investor Panel moderated by Frank Peters

Frank Peters of the Tech Coast Angels led a fun and informative panel of angel investors with Mic Williams of the Boston Harbor Angels and Christian Meade from a Mexican angel investor group. Here are some of the best quotes from Twitter: 

"Don't tell me what the rate of return will be, tell me who your potential acquirers are" - Frank Peters

"Investors want NO risk, high return" - Mic Williams

"Investors want to give you money once you don't need the investment anymore." - Frank Peters

"New angel investors should 'just watch' for 6 months before investing. At the start, every deal looks good!" - Frank Peters

I definitely plan on checking out the Frank Peters Show podcast about startups and angel investing.

Corporate Venture Capital with Blake Modersitski

Next we heard Blake Modersitski speak about corporate venture capital. For a while he ran the venture capital group at Novell (reporting to Eric Schmidt, who is now CEO of Google) and now he's with UV Partners. 

Blake warned to "be careful about taking a high valuation early on [from a strategic investor who might be less valuation focused], it can make it harder to raise more money later." 

He also cautioned that "if you're taking venture capital from a company, cut your business deal first because it can be harder to do it after." 

 

From Bootstrapping to Venture Capital with Brian Halligan

My favorite talk of the day was probably Brian Halligan from Hubspot. He had great content but also a fun and engaging delivery. Many of his points resonated well with the Startup Lessons portion of my keynote that followed. 

Brian presented an interesting equation to illustrate just how hard it is to get funded by a VC. Most VC's require up to 8 meetings to a termsheet, and at each step of the way it just takes one "No" to eject you out of the process. He gave most people a 50/50 shot at each step, which leads to the following formula:

    F(VC) = 1/2 x 1/2 x 1/2 x 1/2 x 1/2 x 1/2 x 1/2 x 1/2 
    F(VC) = about 1 in 200 = 1/2 of one percent

I don't think he was trying to be exact, but more just to show how the process works and how easy it is to get a "No" somewhere along the way.

Some of my favorite quotes from Brian's talk:

• "Syndication is bad for founders - it's better to make the VC's compete"
• "Build it or sell it: you only need 2 founders for your startup"
• "Series A is about founders, Series B is about market, Series C is about business model"
• "don't bootstrap by just writing checks from your bank account, instead you should invest with a convertible note" 

Keynote - Mission: Austinpreneur by Joshua Baer

My keynote was the conclusion of the event and I presented over lunch in a beautiful room overlooking the sea. I talked about my passion for entrepreneurship and the companies that I've started, described Capital Factory 2009, and shared some Startup Lessons I've learned along the way. I wasn't able to record the whole thing but I have 20 minutes that tell my story from my first dorm-room dotcom in 1999 to the founding of Capital Factory.

I'm hoping to be invited back next year. I would love to come early and help the companies to prepare their pitches.

Keep your eye on Puerto Rico

Some of the entrepreurs that I talked to said that they often are discouraged from pursuing entrepreneurship - they are told that it would be better to get a safe government job. I think they just need some success stories to point at. And with them, more successful entrepreneurs as mentors. Fortunately there seems to be a strong sense of loyalty to the homeland - many of the people I met were born in Puerto Rico, went to school or a job in the US, and then came back to Puerto Rico. And I could see that they are bringing back more and more of the entrepreneurial spirit.

Overall I was very impressed with the entrepreneurial community in Puerto Rico. It's small but passionate. It's just going to get easier and easier for startups in Puerto Rico. The same forces that made "$500,000 the new $5,000,000" will soon make $5,000 the new $500,000. As the cost of starting new companies drops capital will no longer be a limiting factor.

Here are the complete slides from my keynote:

Comments

[moncler down]

It's funny how we adopt words and adapt our lexicon to the times.

[Israel Melendez, Jr.]

Joshua, it a pleasure to meet you here in Puerto Rico. Our team really enjoyed your presentation. Excellent summary of the event! We'll pass it on. As one of the presenting teams, we wish we can meet again and share the experiences of our startup enterprise. We'll keep you posted @Edunarium.