Real Economic Stimulus
Mark Cuban - owner of the Dallas Mavericks, venture capitalist, serial entrepreneur and now angel investor has gone out on a limb and introduced a concept he calls “open source funding”. I REALLY love the idea. He wants to see all pitches that meet 13 basic criteria that he has drafted under one condition: you have to publicly post your business plan on his blog or put it up on slideshare or Google docs and link to it from a comment on his blog. Either way, Mark wants the “world” to see peoples business plans and he clearly points out that if HE isn’t interested in it, someone else who is reading might be.
When I first saw Mark’s post a few days ago there were already over 600 comments. Today the comments have climbed to over 1200. If you skim the comments; all are not pitches, some are critisims of Mark for 1) not being interested in seeing deals where revenue is from ads and 2) asking people to post business plans or ideas publicly instead of sending them in email.
I respect Mark for sticking to these two criteria because I agree that revenue from ads is a very tough business to actually make work without extremely viral, original and frequent content. Secondly, you can tell that Mark thinks ideas are free without execution; a point I’ve written about a few times and totally agree with. Most people worry about somebody stealing their idea, but I say who cares, it doesn’t matter. If you really are passionate about something then you need to execute on the idea instead of telling Mark Cuban that “I’ve been thinking about doing X for a couple of years”. I can tell you this…the probability of Mark Cuban or any other angel guy trading you cash for equity on a deal that you have been executing is much greater than them giving you cash for equity on “an idea”.
- Entrepreneur Rant - Wannabe entrepreneurs (WEs); please understand that you have no skin in the game until you actually do something…execute on your idea, and then you can get someones attention if you need help. Without any execution WEs have 0 leverage with angels, VCs, Mark Cuban, your rich uncle or whoever is assuming all of the risk in your deal. No one owes you anything. By executing on your idea you will start to learn so much about what is right and wrong with your idea. You will get valuable feedback from your users/customers. If you still need cash to grow, take your questions and challenges to an angel guy then and watch their interests perk. That’s almost guarunteed to get you a meeting (at least an email) as long as your deal is in their sweet spot. I realize angels and VCs go in on deals that are at the paper and spreadsheets phase, but my rant is to help entrepreneurs increase their chances of closing a round by bringing angels and VCs real problems instead of theory and ideas. You gain leverage (value) as an entrepreneur by trying to prove your business idea, not by wishing someone with cash would take a chance on you. - End Entrepreneur Rant-
I’ve said this all before, and got off topic in the rant, but my point is that we absolutely need more Mark Cubans during this economic shit storm. Two posts that you should go read right now along the same topic are Fred Wilson’s post on When Greed is Good and Howard Lindzon’s rumor post on Twitter filing for an IPO. Both are solid reads beyond these two posts. Fred and Howard know what they are talking about and have the portfolios to prove it. It’s nice to have guys like them be so transparent with their business; it helps me in running mine, and I’m sure others feel the same way.
February14
