Allan Isfan is a co-founder of FaveQuest, a young start-up. This blog covers start-up topics.

Thursday, March 22, 2007

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Asbestos Underwear and the VC Ring of Fire

Going into the VC ring of fire. Read this blog with the Johnny Cash Song "Ring of Fire" playing in your head and imagine the object of the love is a start up.

Ring Of Fire Lyrics

Love is a burning thing
and it makes a firery ring
bound by wild desire
I fell in to a ring of fire...

I fell in to a burning ring of fire
I went down,down,down
and the flames went higher.
And it burns,burns,burns
the ring of fire
the ring of fire.

The taste of love is sweet
when hearts like our's meet
I fell for you like a child
oh, but the fire went wild..

I fell in to a burning ring of fire.....[etc]


Well .... that time is now. Dates are being nailed down for a VC roadshow. I expect to have at least 3 or 4 major pitches between now and the end of April. That's nothing as far VC road trips go but it is still scary since this is the first time. No more kid gloves ... I'm expecting to come out somewhat burnt but hopefully not too bitter and ultimately successful.

There is so much to think about ... burn rate, advertising vs subscription, founders, founders, founders, advisers, patents, validation, a detailed spreadsheet that tracks everything including coffee stir sticks and toilet paper, tax credits, what makes you truly different and can you defend that, patents, partners, go to market strategy, value chain, marketing plan, sales plan, development costs and on and on and on. Add some of the consulting work to all that and the relaxation we had in Disney last week seems like months ago.

When I started this, I knew it would get crazy and have some ups and downs. I can't say that it has been easier or harder than expected though I'm entering the hardest phase imminently. We are actually aiming for a seed investment under $1M which should theoretically be easier to achieve since there is less risk. However, I falsely believed that the expectations would be lower. My expectation was that I would have to pull together a great team around a good concept and growing market. A detailed description of the concept coupled with some validation in the form of "sounds very interesting ... it could be something we would deploy because of reason X, Y and Z" from some key industry people and we're off to the races. Silly and naive. The way I perceive it, you have to plan on being just as prepared as you would for a $5M A round. The only difference is that the VC is not taking as much of a chance ... you are lowering their risk. I'm probably exaggerating a bit but not much ... but I'm not taking any chances.

It is enough to drive you to drink. The 2 AM trips to the hot tub with a glass of Drambuie are becoming a nearly daily event to clear the head and it actually works quite well ... I should be able to claim it as a tax deduction. To add to the joy, a very recent change in the founding team has led to some pieces of the puzzle falling back in my lap to scramble. Fortunately I was able to pull some favors and draft some excellent help but I hit a real low for about a day this week. This was followed by clinching some fantastic partners I've been hoping to get to sign on to the advisory board and another major exec that could really help fill out the team ... a fantastic guy ... back up to a high. Basically this week has been a roller coaster.

I was the QB of the football team in High School and I must admit I wasn't a fantastic one though I did have some great moments. If my center, good ol Fraser, got stomped on, I would ultimately feel much pain, especially on a very wet late October with mud in nearly every orifice. Things seem to hurt a lot more when you are cold and wet for some reason. I don't like pain and fortunately Fraser covered me most of the time, a big boy who ended up in RCMP I think. You have to be able to count on your team and I'm working very hard to ensure I have very good pigs and not chickens. Sometimes one is disguised as the other ... why did that pig just lay an egg??? hmmm ....

Having said all that, even though I'm exhausted and whipped, I'm more pumped than ever. I have managed to polarize some people who don't think what I'm doing will work or that people won't sign on in the quantities required. Of course, I have many on the positive side but the negatives is what I need right now to polish things. I have asked a number of knowledgeable people to sit through my pitch over the next couple of weeks and hammer me as hard as they can. Be difficult, a devil's advocate, ask nasty questions ... whatever ... tell me I'm crazy and dreaming. I best get some calluses before go time on April 10th. This is one of the reasons I have invited many of you to a big bash (other than an excuse to party with lots of fun people) on April 14th. I really need the input of the general consumers, and especially women who don't get easily swayed by cool wiz bang stuff. Plus its a good excuse to party ... not that I need one mind you but this way at least it is a tax deduction.

Well ... heading to bed before tomorrow for once ... must find my asbestos underwear.

Cheers,

Allan Isfan
CEO, MYDYO (as in My Radio + My Video = MYDYO in case you are wondering)

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