Angel Investing, Entrepreneurship & Learning

One of the most important topics of being an entrepreneur and having a family is health insurance.  Let’s just say that there are no “shortcuts” or great health insurance discounts for entrepreneurs — I remember Paul Allen writing about this same topic 2 years ago saying that the lack of health insurance was one of the biggest “damper’s” on entrepreneurship.  The cost of health care is continually increasing, which makes it more and more difficult for entrepreneurs.

During the beginning stages of FundingUniverse, we all just had personal and/or student health insurance (some of us were still taking night classes in the beginning)… so it wasn’t that big of an issue.  When we raised our first round,  we decided to test the waters to have company health insurance benefits.  Getting health insurance for a small company is about the same as getting health insurance for a family — they look at each team member to determine your initial rates.  We ended having a few “pre-existing” conditions that raised the prices of our company health insurance dramatically — so we passed.

Since then, we’ve looked into getting company health insurance a few times…and we just keep passing.  We have found that getting individual health insurance is more cost effective for everyone — and we offer other perks & benefits to make up for it.

If you are looking for health insurance, I recommend eHealthInsurance.com.  My wife and I have gone through the process a couple of times (testing insurance brokers and online tools), and we have found that eHealthInsurance has been the most productive.

I’m glad to see that Governor Huntsman is starting to make an effort to help with small business health care.  For those of us with families, it is a huge issue to taking the step into the life of entrepreneurship. (I’m especially thankful after my boy had to go to the emergency room on Thanksgiving after he hit his head on the head board while jumping on the bed with his cousins!  Probably won’t be the last time that he gets stitches.)

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First off, I’ve been fairly impressed with Google lately.  While most of the world (including me until recently) doesn’t ever interface with any human at Google (which is why they have such a great business model), FundingUniverse has shown up on Google’s “radar screen” in the last few months because we have such a large adwords strategy.

I guess that if your monthly adwords account grows to a certain level, they assign an account manager/team to your account to help you optimize and grow your adwords strategy.  They also provide a Google Line of Credit so that you can change the billing from your credit card to a monthly invoice.

Anyway… that’s a whole other story.  Back to Christmas…

Recently, we received a gift in the mail from Google (something else that must happen once you reach a certain level of adwords).  Besides a very cool 2 GB USB storage device (that is the size of a credit card), they also included a $100 “gift certificate” to the website DonorsChoose.org.  I hadn’t heard of DonorsChoose before, but it is a pretty cool website that allows you to donate to a school/service project of your choice.

So instead of Google just making huge donations to a small handful of charities, they give us the freedom to choose a project by giving us a $100 DonorsChoose gift card.

Google:  I like it.

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In keeping up with my latest tradition, I’d like to share a few companies that I have met with (through my role at FundingUniverse obviously) recently that, to me, are the latest and greatest Utah up-and-coming companies. In no particular order, we have:

1. Global Tech: GT was the highest rated pitch at our last SpeedPitching event and was immediately asked to present at a couple of Utah’s angel group meetings. It may be a little difficult to explain Global Tech, but I’ll do my best. The technology that they have developed can measure (very, very accurately) the volume of liquid in any container at any time. For example… right now, if you’d like to measure the volume of gas in those huge tanks, someone has to travel to the tank, climb on top of the tank, measure the level of gas, (etc. etc. etc. — you get the idea — it’s a pain in the butt). GT’s technology can measure the change in volume (by the mL) by simply dropping their technology into the tank and monitoring it from the computer on the desk. The founders of GT have been working out of their garage (for the past 3 years) doing their best to build their prototype — and it appears that the R&D is complete and ready to go to market. GT is in a good situation bc gas & oil companies from across the US have been knocking on their door trying to get the product.
2. Jive Communications: Jive is an up-and-coming full-service VoiP provider for businesses here in Utah. It was started by a fellow Junto partner and they have been steadily growing over the past 1.5 years. We have used their service at FundingUniverse and have been very happy from the beginning. The VoiP market is so fragmented that there will certainly be some consolidation/roll-up a few years down the road — and I’d bet that Jive will be an attractive target. If you are looking for a great phone service for an affordable price — you’ll want to check out Jive.
3. ISYS Technologies: This company is the brain child of a brilliant techy named Jason Sullivan. 7 years and 3 patents later, Jason has made a significant advancement with the modern computer. Instead of trying to explain, I’ll recommend watching this video/demo.

A few others that I like too:  Mountain West Energy, Green List, and Innovative Showing Solutions.

Keep your eye out for great things by these companies. If there are any others that we should know about, let me know.

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H3 Tec, a company here in Utah, recently purchased a full-page ad in the USA Today to attract the attention of Ed Zander, Chairman & CEO of Motorola. Apparently, the founder of H3 Tec, Charles Christensen, has invented a technology that can detect any element or compound from up to 2 miles away.

For example:

• If you are walking out in the desert, the technology could detect oil within 2 miles
• If you are at the airport, the technology could detect any hazardous element or compound on the plane
• If you are up in the mtns., the technology could detect gold

Starting to get the idea? If not, here is a more extensive demo.

Anyway… back to the full page ad. Talk about a gutsy marketing strategy! If you haven’t clicked on the link above (the full-page ad), you need to. Charles left his personal email and cell phone on the ad and went all out to attract the attention of Motorola’s CEO.

Some people that have talked to Charles said that a lot more people than Ed ended up calling his cell phone; Eric Schmidt (CEO of Google), Steve Jobs (Apple), and others also called him expressing interest.

To me, this is all pretty far-fetched. Sounds like a story out of the tabloids… but I’m very anxious to find out. Has anyone else heard anything about this story?

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Josh Steimle wrote an interesting blog entry last week about his personal debate on getting loans or bootstrapping his company. This is a very difficult decision for most entrepreneurs because a lot of people believe that more money is the solution to everything. It’s an interesting topic for me to write about since I am in the business of helping entrepreneurs raise money for their company — so you would think that I am 100% for fundraising — but that’s not the case.

We see a lot of deals every week — and thousands every month. If I were to guess, I would say that only 5-10% of the companies that sign up to FundingUniverse are great candidates to acquire capital. The rest of the companies may need capital down the road, but it probably isn’t the underlying issue to success right now. (By the way… I put myself into this same boat most of the time — I often think that we need to get more money to solve a particular problem, when there are other solutions that would be more beneficial to our company.)

Let’s just say this — the worst time to raise money is when you need it. If you and your company is in a difficult cash situation, there is probably another solution (bootstrapping) that can help reduce the stress. Those actions might require you to downsize on employees, work from home, reduce high expenses, and/or work harder to drive sales.

Yesterday, we (FundingUniverse) just released a new product that I call the Entrepreneur’s Roadmap. The Roadmap is a 13 lesson course on every aspect of raising capital — including bootstrapping — because we believe that every entrepreneur should first focus on bootstrapping your company before trying to raise capital.

The more and more I think about fundraising, I am starting to formulate the opinion that entrepreneurs should first focus (on a small scale) on how to build a profitable business model. If you can bootstrap your company to prove your business model, then fundraising will be much easier.

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