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Olson’s Observations

Technology. Innovation. Science. VC. Media. :: by Eric Olson

Archive for February, 2006

FeedBurner Gets a Facelift

without comments

Well, we’ve hit two years old at FeedBurner so we figured it was time to see Doctor 90210 (i.e. our design team) for a facelift (hey, don’t judge). Seriously though, the stats redesign was released today and I am loving it. The colors and overall design are much more pleasing to the eye and easy to navigate.

New Stats Design

However, we found plastic surgery to be a bit addictive so we didn’t stop with the facelift. We also added some more functionality (get your mind out of the gutter). Most notably we added a figure that show how many people your posts actually reach and we added a list of uncommon uses (as well as download tracking for pod/vidcasters).

Reach is very important because it looks at how many people actually viewed or clicked items. As you can see in my example, 77 people are subscribed to my blog (thank you everyone!) and 16 of you actually viewed or clicked an item in the last 24 hours. The is very helpful for me because it gives me insight into how many people are reading each post and how quickly they get to it after I publish it. I can also infer which posts are most popular allowing me to give you all more of what you want. (Item level detail (views and clicks) is part of our Total Stats Pro package.)

Reach

Uncommon uses allow you to see where your content is being resyndicated or viewed outside of your feed but not in a newsreader. An example from my feed is below. In that example you’ll notice that I have a FeedBurner livefeed reference. This appears because I clicked on something in my feed from within my FeedBurner dashboard. Now, if you were being resyndicated on another site and people were cliking through from that site we would be able to show that here.

Uncommon Uses

I think publishers large and small will enjoy the new look and new numbers we now offer. Now, its off to the recovery room where we’ll be sipping on some frozen drinks with those little umbrellas in them. Actually, we’re already back to work on some new stuff I’m sure you’ll enjoy!

Written by Eric Olson

February 28th, 2006 at 2:28 pm

Posted in FeedBurner

Advisory Capitalists?

with one comment

Stowe Boyd brought up an interesting notion of Advisory Capitalists (or ACs) last week and it had created a lot of stir with people on both sides of the coin chiming in to flush the idea out. One of the more interesting chime-ins was Fraser Kelton’s. Fraser brings up the idea that VCs could add advisory services to their offering as a happy medium to either VCs or ACs. I liked this idea enough to comment on Frraser’s piece. Here are my comments:

Another great piece of writing Fraser. Well done. I had commented on Fred’s [Fred Wilson] article in agreement that money (”skin in the game”) is important to the VC/entrepreneur relationship. However, I should have thought things through a bit more and I would like to think that if I had I would have come up with your argument. VCs could easily add some of these “advisory” services into their current offering mostly untilizing staff they already have. I think as the VC space becomes more competitive for deal flow you will see some of these advisory services enter into funding offerings.

Another intersting thing that advisory services could do is bring a tier 2 VCs to the top tier. There are some good tier 2 VCs that just don’t have the reputation or track record of people like DFJ simply because they are too new. If these firms began to add advisory services to their offering they may be able to break out of the tier 2 level sooner and compete with the big guys for deals potentially shaking up the landscape in a way that not only benefits the tier 2 VCs but also benefits entrepreneurs.

I think there are some very hands on VCs out there now already adding in advisory services without calling them by that name. When I think of these individuals and how they are able to get such great investments things start to make a lot of sense.

There are a lot of great hands on investors out there that are, in a sense, adding a lot of advising time in with their cash investment. I believe that most of the better VCs are doing this and it is why they are in the positions that they are. Entrepreneurs are getting smarter about capital all the time. They know that they need not only the cash but a partner that will stick with them for the long haul through the good times and the bad. As more and more entrepreneurs figure out that VC isn’t all about the money, more VCs with advisory capacity will appear but the guys that have been doing it all along will still have a good stronghold.

On a side note: It was mentioned that ACs alone would not have the capital to put up once an entrepreneur needed it. This is probably the case (depending on the AC of course) considering that they are only individuals while VCs have a lot of money raised from their Limited Partners to put to work. It was also noted that ACs may not want to part with their vaulable advice for such a small portion of the company. This is especially important considering that ACs would not have the cash to continually participate in subsequent funding rounds leaving their positions to get diluted even further.

Let’s also remember that the VCs are not bad guys. A lot of them are great guys who really want to help companies out. Yes, they are worried about losing investments but it should be noted that a lot of times they are managing money for foundations, non-profits, pension funds and college endowments so the more money they can make the more these institutions will be able to help people (and, of course, the more money they make for themselves as well).

Written by Eric Olson

February 27th, 2006 at 2:43 pm

Posted in Fixing the VC Model, VC

Fixing the Venture Capital Model: Fund Term

with 3 comments

On to the next post in my “Fixing the VC Model” series that I had promised a week or so ago. Sorry about the delay in posting. The usual excuses apply… Well, I really wanted to get a discussion going about the term of VC funds and how they affect the start-up business. For those who don’t know I will start with a quick background on VC funds and their usual term length.

So, as can be inferred from above, the VC set up is that of a fund. The money for the fund comes from many different places including institutional investors (college endowments, charitable organizations, etc.), high net worth individuals/families and a little bit even comes from the General Partners of the fund themselves. All of the investors in the fund with the exclusion of the General Partners (who are also the VCs) are called Limited Partners. These Limited Partners, or LPs, do not directly make any investment decisions.

The fact that VCs are set up as a fund make things very interesting. Since the investments VCs make are fairly illiquid a time limit for realizing those investments needs to be put in place. The usual time limit is 10 years. The first 3 - 4 years or so being the “investment” and the last 6 - 7 years being the “management” years. You can see how leaving a fund open-ended with illiquid investment could cause problems as far as returning money to investors goes. Theoretically an investment could never be realized and, even if it was eventually realized, the effective internal rate of return would be so low it wouldn’t even matter.

While the term makes sense if you look at things from the investors point of view it does cause problems for entrepreneurs. The main problem is that some entrepreneurs are rushed to exit. I think this is happening less and less now because entrepreneurs can bootstrap a lot of the way before taking VC money but, in the bubble, a lot of companies were rushed to IPO or sale and now continue to flounder or have closed their doors.

The question is: can the VC fund term be changed in any way that will benefit both the entrepreneurs and the VCs? I don’t know that it can because investors still need a way to predictably reclaim their capital. With that said: maybe it doesn’t need to be changed because people may feel that most entrepreneurs are not rushed to exit. Anyhow, I thought I would open the floor for discussion and see what everyone else has to say. Looking forward to some good comments and posts on this!

Written by Eric Olson

February 12th, 2006 at 5:56 pm

Posted in Fixing the VC Model, VC