Posts Tagged ‘Southern Capitol Ventures’
Tuesday, November 20th, 2012
By Joe Procopio
Two weeks ago, I moderated a panel on Internet Entrepreneurship at Raleigh’s Internet Summit. It was an intimidating experience as, although I’ve been on panels of all kinds, this was my first time moderating.
My panel was comprised of two founders – CEO Andy Beal from Trackur, a social media monitoring solution company in Raleigh, and COO Alexandre Douzet from The Ladders, the well-known online job matching service.
There were also two investors – Co-Founder/General Partner Brian Rich from New York-based Calatyst Investors and Co-Founder/General Partner Jason Caplain from Raleigh’s Southern Capitol Ventures.
Not to say that entrepreneurs and investors disagree all the time, but this panel agreed on quite a lot. Now, if you’ve ever seen a conference panel where all the panelists agree on everything, you know that can be the dead boring. But in this case it was actually helpful, because some really smart advice came out of it.
Regardless, I know what you want. Here’s where they disagreed
VC investment is down. Is this a hiccup or a trend?
The disagreement here was over the underlying causes of the downturn. Rich pointed to the ever-declining return on venture capital. Douzet noted the emergence of super angels, entrepreneurs who successfully exit their startup and use the proceeds to begin investing, have begun to replace early-stage, first-round VC money. Caplain offered that his firm has always made two new investments every year and is still doing that.
“Regardless of the overall trends,” Caplain said, “Great entrepreneurs always get capital.”
Everyone agreed with that. Aggressively.
Bootstrap or raise money?
Mostly there was agreement on why a startup should raise venture investment. Big, game-changing ideas in capital-intensive markets are obviously better candidates for VC money. Also, everyone agreed that an entrepreneur shouldn’t seek outside investment until they’ve determined that it’s absolutely necessary.
Andy Beal, a successful serial entrepreneur.
Andy Beal has built several companies without funding. He’s a big fan of keeping equity and control in his pocket, and noted that without investor backing, he’s been able to take on big ideas, work with new sciences and technologies, and make quicker decisions that he would have been able to otherwise.
Douzet stated that The Ladders raised its only outside money early on, and has been running on revenues for eight years. He didn’t see any negatives to using that initial funding as a launch pad.
Everyone agreed that it all depends on the investor. Choose wisely.
What sectors are hot in entrepreneurship?
Different investors have different theses – methodologies they use to determine which markets and which types of companies to invest in. Overall however, Rich noted that any company that can automate manual processes and compete on price was going to get attention.
Douzet spoke to his interest lying not so much in new sectors, but in applying new technologies to The Ladders, namely by making a big push into mobile.
Caplain and Beal felt that the sector didn’t matter much if the product and the company were solid. Talented entrepreneurs with great ideas who can execute on those ideas were the most important aspects of determining a successful company.
Everyone agreed with that. Including me.
Joe Procopio (@jproco) is a serial entrepreneur who currently heads up product engineering for startup Automated Insights. He also founded and runs startup network ExitEvent. You can read him at http://joeprocopio.com.
Monday, November 14th, 2011
It isn’t the idea that’s paramount when it comes to investing in tech startups, says Jason Caplain, general partner with Southern Capitol Ventures. Management is paramount, he says, adding, “A great team wins.”
Raleigh-based Southern Capitol Ventures has invested in art.com, ChannelAdvisor, Batanga, DoublePositive, Reverb Nation, and eTix. Caplain is among the 120 entrepreneurs, venture capitalists, digital media and marketing thought-leaders who will be presenting at the Internet Summit at the Raleigh Convention Center Tuesday and Wednesday (Nov. 15-16).
The Internet Summit, Caplain says, “Is unique. There really hasn’t been a national conference in our backyard. This is a national level conference you don’t have to fly to New York, Boston or the Valley to attend. It has a jam-packed lineup. People will hear a lot of good take-away tips on building their business. For us, it’s about building relationships and bringing them to our portfolio companies as potential partners or customers.”
Caplain is one of a handful of venture capitalists who will give entrepreneurs at the Internet Summit a chance for a fast five-minute one-on-one pitch.
Caplain offers the following tips for entrepreneurs making a fast pitch:
Explain what you do clearly and simply.
Talk about your background. Why of all the things you could be doing is this important?
Remember that the team is often more important than the idea.
He notes that the idea is to get the investor interested enough so that he says, “I want set up another time to meet with them.”
Caplain has heard fast-pitches before, if not ones limited to five minutes. He has participated in a number of “Calling All Entrepreneurs” events in which people get a fairly brief chunk of time to run ideas past real VCs looking for investment opportunities in the right companies.
In those, he says, “The ones who caught our attention talked about what prospects have said, or about customer feedback.”
Thursday, May 26th, 2011
DULLES, VA – Four and a half million domain names were added to the Internet in the first three months of 2011, according to the latest Domain Name Industry Brief published by VeriSign, Inc. (NASDAQ: VRSN), the trusted provider of Internet infrastructure services for the networked world.
The first quarter of 2011 closed with a base of more than 209.8 million domain name registrations across all Top Level Domains (TLDs), or a 2.2 percent increase over the fourth quarter of 2010. Registrations grew by 15.3 million, or 7.9 percent year over year.
Verisign’s combined base of .com and .net domain names experienced aggregate growth in the first quarter of 2011, surpassing a total of 108 million names. New .com and .net registrations totaled 8.3 million during the first quarter. The total represents a 9.2 percent increase year over year in new registrations, and a 2.7 percent increase from the fourth quarter. The .com/.net renewal rate for the first quarter was 73.8 percent, up from 72.7 percent from the fourth quarter.
Tablet PC Market to Reach 100 Million Units by 2015
ROCKVILLE, MD – Worldwide Tablet PC market size in 2010 was nearly US$ 9 Billion and it is anticipated that Tablet PC unit sales will cross 100 Million Units by 2015. In 2010, US and Western Europe together holds 75% of Tablet PC unit sales share but they are gradually losing their share to China and Korea, according to Renub Research in a new report, “Worldwide Tablet PC Present and Future Market Scope (2010 – 2015) and its Impact on Various Sectors.”
Latin America Tablet PC unit sales and market size will keep on growing year on year but due to aggressive growth by China, its market share worldwide will decline year on year. India, Australia, Central and Eastern Europe, Africa and Middle East Tablet PC unit sales and market sizes will keep on increasing year on year (2010 to 2015).
The Tablet PC is expected to drive massive demand for digital content and services. Telecom service provider is likely to benefit most from it in the same way as they gained from smartphone boom. This is demonstrated by the fact that sales of the 3G iPad make up as much as 40% of total iPad sales. Internet traffic and location based services will increase tremendously thus creating a market for Internet service provider. This will further create a market for online paid content industry.
We’re still waiting for the tablet that will replace our netbook. Both the Xoom and the iPad weigh about 1.6 lb., almost exactly the same as the Acer netbook we’re using. The netbook does show signs of being under-powered (with only 1GB of RAM and running XP) and the Xoom we tested was certainly faster. We still prefer a regular (non-virtual) keyboard.
Kabam loads up with $85M for Facebook games
If we needed any more convincing that valuations and funding rounds in the California digital ecosystem are climbing into the stratosphere, here’s another:
Kabam, which offers games that appeal to the more serious electronic game fans on Facebook, has raised $85 million from investors including Google Ventures, Pinnacle Ventures. Performance Equity, SK Telecom Ventures, Canaan Partners, Redpoint Ventures and Intel Capital. This follows the firm’s $30 million raise a few months ago.
The company’s games include Glory of Rome, Dragons of Atlantis and Kingdoms of Camelot.
Dragons of Atlantis, which has about 4 million monthly active users, is its most popular.
We expect to see even more large rounds for West Coast digital media, gaming, and social media firms, but Southern Capitol Ventures David Jones warned at TechMedia’s recent Digital Summit in Atlanta that valuations on the East Coast – particularly in the Southeast – are not anywhere near what they are now on the West Coast.
Thursday, March 24th, 2011
MORRISVILLE, NC – Massachusetts-based health and safety-focused PerkinElmer (NYSE:PKI) has acquired Morrisville-based Artus Labs, which sells Web 2.0 enabled software to the phamraceutical and related industries.
PerkinElmer also purchased CambridgeSoft and says the cash purchase price for both companies was about $220 million.
Venture-backed ArtusLabs offers the Ensemble scientific knowledge platform, to accelerate research and development in the pharmaceutical, chemical, petrochemical and related industries. Its flagship product,
“Ensemble, blends social networking, collaboration, and refined scientific data mining to drive the research process, leading to faster time to market,” said David Jones, a partner with Southern Capitol Ventures.
Investors in Artus, include Southern Capitol Ventures and Hatteras Venture Partners.
Artus CEO Robin Smith will stay with PerkinElmer and keep an office in Morrisville.
SCV invested in Smith’s first company, Synthematix which sold in 2005 and then SCV and Hatteras Venture Partners seeded ArtusLabs in August 2007.
Wednesday, January 19th, 2011
By Joe Procopio
I’m an entrepreneur and I also consult to entrepreneurs. This kind of consulting is so much fun that I can’t even put it into words. It’s inspiramindblowingtastic. And although the questions I purport to answer are mostly along the lines of “how do I build this?”, I also get a lot of “how do I fund this?”
I like those questions, but the answer I give usually isn’t the smile-producing kind. This is because the answer isn’t what people want to hear. What people want to hear is: “Call this guy. Give him the secret handshake. Sign the term sheet.”
How to Get Rich in Two Easy Steps
What I usually tell them is: “Build something everybody has to have then prove to everyone you know who has money how they can invest that money in your thing and make a substantial return on their money.”
“Also hard work.”
Rich Uncle Moneybags
Most entrepreneurs are ready for hard work, and the ones that aren’t usually abandon the fancy business cards and the WordPress site and return to the cubicle from whence they came. The problem is that most entrepreneurs don’t know a whole lot of people with a whole lot of money.
If you are indeed that fortunate breed of entrepreneur, then Godspeed – go build that airline to the moon.
As for the rest of you, you’re going to have to hustle.
In working with what is now dozens of startups, I’ve attempted to beat down so many doors that I’m like a thief on a safe with a stethoscope and those cool fingerless gloves.
“Oh, what’s that? A Protex-A-Lot 5000? Give me 30 seconds.”
People like me are described as, for lack of a more professional label, hustlers. Keep in mind though, this is not the kind of hustler like the kids talk about today with their Iced-T and their OGs. I’m talking more along the lines of, say, Pete “Charlie Hustle” Rose.
Oddly enough, I too like to bet on sports.
My Lock of the Week
Jason Caplain doesn’t hesitate to talk to those who hustle. He’s a General Partner with Southern Capitol Ventures, a just-turned-ten-years-old VC firm behind companies like Motricity, ChannelAdvisor, ReverbNation, eTix, Zift Solutions, Artus Labs, and so on and so on.
Jason talks to me not because of my awesome haircut or penchant to buy the first round, it’s because he’ll talk to anyone who will bust down any door in order to get to someone who will listen or help or point them in the right direction.
However, a lot of entrepreneurs aren’t the door-busting type. They’re the brilliant artist geniuses who are too busy coding and working to get their story out.
Calling All Entrepreneurs
So it became good business for Jason to reach out to them. Southern Capitol started doing this years ago with Calling All Entrepreneurs, an open-to-all, one-on-one ten-minute quick pitch and Q&A that they held in Raleigh as well as in Charlotte, Greensboro, Atlanta, Northern VA, and Baltimore.
They’d hear up to 30 companies in a single day and more than once held sessions until midnight in a hotel lobby.
It was tough for the entrepreneur to get their idea compacted into those 10 minutes, so they added coffee and expanded the blocks to 30 minutes. But they soon discovered that, beyond the initial relationship with the entrepreneur, the overall effectiveness of the sessions began to wane after a while.
So why not have an entire meal, skip the pitch, and turn it into a group discussion?
This became the Entrepreneur’s Breakfast which Southern Capitol has now held in all of their target markets. The structured pitch is gone, replaced by a group discussion of whatever the entrepreneurs are interested in. It’s not always about the money – there’s prospects, customers, product, other employees, other relationships that need to be built.
Plus, now the entrepreneurs build relationships not just with Southern Capitol, but also with the other entrepreneurs in the room, who sometimes have best advice. There have even been a couple of occasions where people have met at the breakfast and gone on to found new companies together.
The breakfasts serve to make Southern Capitol more accessible, and also help to clear up a lot of the myths and misunderstandings about VCs. They don’t all wear top hats and monocles, for instance. This in turn sends a lot of entrepreneurs into second gear.
See, once you know the water isn’t full of sharks, it’s a hell of a lot easier to jump in.
So why is this creation of doorbusters a necessary thing? Because the VCs aren’t exactly flocking to the RTP in search of the next Twitter. Yet. Jason says that he and his partner David Jones have never been to a board meeting where they haven’t booked additional meetings with entrepreneurs in the same location. That isn’t being reciprocated here.
Coffee is for Closers
That’s because the investors are customers, and they don’t know what kind of product is here. And that’s because the salespeople here aren’t out there selling – building and managing those key relationships.
Look. I’m not a salesguy, but I know when I need to be. The same is true for any startup. You’re not only selling a product, but if you’re raising money, you’re selling equity in the company. This isn’t even a metaphor, so I won’t extend it.
Except to say that smart entrepreneurs know that they’re selling $5 bills for a dollar.
VC Secrets Revealed
So why would Jason want this out there for his VC kindred to replicate, and potentially steal all those golden opportunities out from under him?
It doesn’t work like that.
Again, it’s about relationships. The more successful investors and therefore the more successful startups that are coming here, or better yet, located here, the higher the exponential on the overall return. Novak Biddle, Valhalla, Noro-Moseley and others are stopping by regularly for board meetings.
They should be on your list of VCs.
Bust a Door
Jason suggests the Price Waterhouse-Coopers Money Tree report as a starting point. Build a list of VCs whose criteria matches your startup (this is crucial, don’t get a reputation for wasting people’s time).
But don’t be afraid to check in with the ones that come here for board meetings, let them know who you are and what your company does, and offer to maybe meet them at the airport. The VCs aren’t flocking, but they are actively looking, a lot of entrepreneurs don’t understand the difference.
The difference is you’ve got to be visible.
Coffee, Bagel, Million-Dollar Advice
And that starts with building your network. Upcoming Entrepreneur’s Breakfasts will be held in Raleigh on January 31st and February 28th. Remember, they’re strictly for entrepreneurs (no service providers), but are indeed open to everyone.
Make sure you give Jason the secret handshake when you get there.
Jason and Southern Capitol will also be hosting the Venture Outlook 2011 with panelists Tom McMurray, formerly of Sequoia (current angel), Hooks Johnston from Valhalla, John Burke from True Ventures, and Matthew Witheiler from Flybridge on February 9th.
Joe Procopio heads up product engineering for sports media startup StatSheet (statsheet.com). He also retains ownership in consulting firm Intrepid Company (intrepidcompany.com) and creative network Intrepid Media (intrepidmedia.com). He can be reached via twitter @jproco.
Thursday, December 23rd, 2010
By Jason Caplain, General Partner, Southern Capitol Ventures
A couple of months ago, I spoke with Kevin O’Connor, co-founder and former CEO of DoubleClick. Kevin is also the co-founder and current CEO at FindTheBest. He has a lot of really good entrepreneurial stories and advice to share so I thought it would be good to do a quick Q&A with him as a post. And he agreed. Kevin has some ties to the Southeast since he was the initial investor in Atlanta-based ISS, which went public and eventually sold to IBM for $1.4 billion. Of course, his success with DoubleClick is a widely known story exiting to Google for $3.1 billion in 2007.
Most recently, it was announced that FindTheBest was one of the first recipients of investment from Kleiner Perkins’ new sFund. So here is the Q&A. I hope this helps. Thanks again to Kevin for spending the time.
Q: With the businesses you have started in your career, how did you generate the ideas behind them? A: We always start with brainstorming big problems facing a market. Then, we brainstorm major technology trends. We narrow the problems and tech trends to the top few. We then brainstorm again by applying a top tech trend to solving a big problem and out pops a bunch of product or company ideas. The feeling is disjoints happen with new tech trends and is the best opportunity to launch a new company.
Q: What are the top three elements that you’ve had in your businesses that have helped your companies be successful? A: There are really only 3 things in business: big market, best product and smart/competitive people.
Q: Talent is obviously very important to you when you build your companies. What are the best methods you have used to attract the very best people to your companies? A: I’m upfront with them and say if they are smart, passionate and hard working they will have the best time of their life. If they are not, then this job will suck and they won’t last long. Great talent loves to hear that – they want to compete with the best.
Q: What are some lessons learned in your career that other entrepreneurs should pay attention to? A: Ideas are cheap so come up with a lot of them, innovate constantly and focus all your efforts executing your strategy.
Q: What are the areas that are most ripe for innovation for 2011 and beyond? A: TVIP, cloud, vertical search and social.
Q: What are some of the biggest mistakes you made? How did you correct the situation? A: I repress all bad memories like a good entrepreneur. My biggest mistakes probably center around hiring the wrong person or coming out with a product too early and not sticking it out.
Q: When is the best time to take VC funding? What alternatives should an entrepreneur be thinking about? A: The best time to take funding is when you don’t need it. Ideally, you’ll have a product and customers which validate your market before you approach a VC. Most startups still begin with $25k so build a prototype and test it on the cheap.
Q: Talk about FindTheBest. Why did you start it? What are your goals with it over the next 3 to 5 years? A: A couple of years ago, I kept running into the same problem where I needed to make a big decision – school choice for the kids, web hosting for business, ski resort for vacation, but either couldn’t find great comparison data or couldn’t get past all the “affiliate shill”/scam sites purporting to tell me what was “best.” It took me a while before it occured to me these seemingly disparate problems were actually the same – the ability to filter and compare products and services with objective data.
What Kayak.com does for travel, we want to do for the other 1,000 important decisions you need to make in life. This is a massive market with no viable solution. We created a “comparison engine CMS” that allows us to rapidly create and develop comparison Apps for hundreds of product categories from best cities, fast food nutrition, smartphones and tablet computers. We create the foundation for these comparison Apps and populate the initial dataset but our goal is to have businesses and experts continue to build the data over time. This is happening.
We think FindTheBest is a big idea addressing a great number of large niches. However, as we learn more about “socially curated data” we believe we’re on the cusp of something gigantic. The web is this massive labyrinth of mostly unstructured data. Shouldn’t “like” things be organized in a way that is most useful to users? Stay tuned…
Reprinted with permission from Jason Caplain’s blog: www.southeastvc.com
Friday, September 24th, 2010
MORRISVILLE, NC – ArtusLabs Inc., a company deploying Web 2.0 platforms to help groups of scientists manage IP, collaboration, and analysis, has raised $790,000 in debt on top of a $3.68 million equity raise last month, according to regulatory filings.
The company raised a raised a $2.6 million A round in 2008 from Hatteras Venture Partners and Southern Capitol Ventures, both also seed investors in the firm.
The company disclosed the current funding in a filing with the US Securities and Exchange Commission.
ArtusLabs’ software helps life science companies cut research and development costs.
When the company raised its A round, David Jones, a principal at Southern Capitol Ventures, told us, “They have a couple of big Beta partners using it. It’s basically a software tool for decision managment. The idea is to create efficiencies in every process these biotech and pharma companies use to get drugs to market.”
The life science industry spends nearly $900 million a year on data management solutions and another $300 million on internal programs.
Thursday, June 3rd, 2010
RALEIGH, NC - Zift Solutions, a SaaS company that increases channel sales by enabling channel partners to create and execute measurably better marketing campaigns, has secured a $500,000 investment from Southern Capitol Ventures (SCV).
The funding will enable Zift to significantly expand its development and sales efforts. As part of the investment, Jason Caplain, general partner at SCV joins the Zift Solutions board.
The company had eight employees last week, ten this week and has four open positions. It is looking for people in sales and developers.
Founded in 2006, Zift provides a SaaS solution that allows clients to cost effectively deliver branded multi-channel marketing that includes online advertising, content syndication, SEO optimization, event management and e-mail marketing to channel partners.
The content can be created once and used by all channel partners on demand. The channel partners are provided easy access to the marketing programs, which are customized to reflect their unique branding. All partners can view their dashboard which measures each marketing campaign’s effectiveness and provide other key metrics.
“Companies like Red Hat use them to allow their partners to log in and customize Red Hat content, add their own contact information and logo and send it out,” explains Caplain.
“We look forward to working with the seasoned management team at Zift Solutions,” said Caplain. “As a repeat team, their technology and operational expertise has helped them scale the company quickly and surge ahead of their competitors.”
The Zift team has experience in delivering web-based enterprise marketing solutions to American Express, Target, National Geographic, AOL, Novartis, and to top agencies like Leo Burnett and Carmichael Lynch.
“We think it’s one of the best management teams in the Triangle,” says Caplain. “They’ve built some of the leading software marketing companies previously.”
They include President and CEO Ken Romley, who was previously president of SmartPath Inc., and joined Doubleclick when it acquired SmartPath. COO Bryan Ferren was formerly VP of Corporate Accounts at Aprimo.
Caplain tells us that the company’s clients include those with hubs, such as HP and Red Hat, hundreds of resellers.
This is Southern Capitol Ventures’ sixth SaaS investment.
Wednesday, April 28th, 2010
By Allan Maurer
ATLANTA & RESEARCH TRIANGLE – The economic recovery is not jobless in venture-backed startups. Southern Capitol Ventures’ Jason Caplain tells us, “100 percent of our portfolio companies are hiring.”
In Atlanta, Noro-Moseley Partners portfolio companies list about 150 openings on its site.
Intersouth Partners, based in Durham, NC, says that 14 of 16 of its portfolio companies it surveyed are “hiring across the board.”
Caplain says many of Southern Capitol’s portfolio firms are staffing up in sales and marketing. Southern Capitol’s 11 portfolio companies include firms in Miami, RTP, Baltimore, Morrisville, Raleigh and Durham.
Noro-Moseley’s portfolio firms list jobs for network and systems engineers, security specialists, software engineers, a director of channel sales, a PR associate, and a project manager, among many others.
Intersouth tells us 14 of its companies plan to hire an average of 18 employees each this year with jobs open in both its tech and biotech companies.
Jobs across the board
Jobs are across the board – in sales, development, engineering, clinical, operations, marketing, says Intersouth spokesperson Suzanne Cantando.
We think a broader survey of the Southeast and in fact the nation would reveal that venture-backed startups and those bootstrapped, as well, are the real engine of job creation, not all these huge companies the government keeps pumping money into.
Intersouth Partners Dennis Dougherty
Intersouth’s Dennis Dougherty points out that ““High-growth startups aren’t using the money they’ve raised to acquire real estate or build new buildings – they’re using it to hire people. If you take the amount of venture capital raised each quarter and multiply it by 80 percent, that’s probably about the amount of money that will be going to paying for jobs.”
Noro-Moseley’s Mike Elliott says all of its portfolio companies have positions open. “If we were an investor during the downturn, they were stripped to minimal staffs,” he says, “So now they’re beginning to put people in both C level and middle management positions.”
Eliot says that while he feels “We’re definitely coming out of the recession, I don’t think we’re going to come roaring out. We have to remain cautious.”
He adds, however, “That we would like to show the folks in DC that it’s the young companies that really create the fuel for growth.”
Thursday, February 25th, 2010
ATLANTA & RALEIGH — If you are a technology entrepreneur looking for funding, you can pitch two venture capitalists from Southern Capitol Ventures over breakfast in Atlanta March 4 or in Raleigh March 1 and 15.
Southern Capitol’s Jason Caplain and David Jones invite entrepreneurs who want to start a tech company or already have to join them for bagels, coffee.
They have already held informal sessions for entrepreneurs in Reston, VA and Baltimore.
Caplain says these differ from the firm’s “Calling All Entrepreneur” events in that they are less formal and give entrepreneurs not only a chance to ask their VC-related questions, but also to meet other entrepreneurs.
Space is limited and an RSVP is required. The events are limited to tech entrepreneurs.
For more information, see Southern Capitol’s Web site: www.southcap.com