This post aims to help startup CEOs optimize their funding strategy by examining how investors value startups, and explaining how to avoid the common cash management pitfalls.

Every smart CEO knows that they need to focus on building a compelling product, hiring a great team, maximizing sales and making their customers happy. For many first time CEOs focusing on these extremely important topics may distract them from another very important task: making sure that the company can continue to raise funding at ever increasing valuations.

In practice this means that the CEO should:

• Make sure that they understand when their cash runs out
• Understand what milestones have to be achieved before then to get a higher valuation
• Create the right plan to achieve those milestones in the right timeframe.

Managing to your cash out date introduces some very strict time deadlines into the equation, and requires you to examine which specific milestones you plan to achieve before that date.

London, UK February 15, 2011 – GPV Investment Limited (“GPV-i”) announces the appointment of Mike Simmons based in New York as President US-Eastern Region & S.America, and also of Flemming Nørklit based in Copenhagen, Denmark as CEO Nordics and Non-Executive Director on the board of GPV-i.

Mike Simmons has over 28 years of general management experience in global industries with senior roles in cable TV, Internet, software, financial services and video conferencing sectors. He has also served as a consultant to multinationals developing market opportunities in Brazil and in Europe. In addition he served as training consultant for a major US multinational in their "Capturing Global Business" program, helping executives develop and operate businesses in markets outside the United States.

Flemming Nørklit has more than 25 years of general management experience with global players in technology and professional services working in Denmark, Germany and the UK and has spent significant time in Asia and the Americas. Flemming has had an outstanding career with Xerox holding various leadership roles in logistics, product management, sales & marketing before becoming MD of the Danish operation. He specialises in strategic market development with channel business and partner programs as well as developing strong value propositions.

Achieving growth in challenging markets is prompting companies to consider new and more costeffective ways of increasing revenue and profits. GPV-i has an innovative approach to market development by providing and managing bespoke virtual teams and advisors to strengthen client in-house teams as and when required, without the risk, cost and management overhead of taking on new employees.

GPV-i’s Market Development service is ideal for any technology business seeking growth, whether early stage or global enterprise. It’s also valuable to Venture Capital or Private Equity investors looking to enhance the performance of their portfolio companies.

A significant increase in enquiries from US and Asian based companies wishing to expand into the UK or the rest of Europe confirms the appeal of this service. Ongoing budget and resource constraints have been holding companies back, so providing a cost effective route to new markets with virtual teams without the need for a long term commitment to permanent staff and infrastructure is generating a great deal of interest.

It’s a smart, low risk, low fixed cost and highly effective means of driving business growth.

David has over 15 years experience in the TMT sector product managing and marketing some of the world’s biggest brands in telecoms and digital media, including Nokia, Activision, Hasbro, Warner Music and EMI.

With global experience throughout the product marketing mix, David drives a holistic approach to the creation and delivery of consumer-focused products and services from strategic planning through to integrated marketing communications and agile product management and implementation.

At Nokia David created and launched the Music Recommenders service with David Bowie and was granted a patent in media recommendation systems. He also managed the integrated service marketing strategy for Ovi and Nseries, and product managed the entertainment experience for Smartphones.

Anastasios is a profit oriented senior international executive with over 25 years experience in the telecommunications and technology industries, demonstrating a track record in building and growing successful businesses in Europe, Australasia and Middle East.

His international expertise includes general management/operations, building from scratch new companies/ businesses and turning -around existing ones, strategic business development and C -level & governmental sales.

Anastasios has over 14 years senior management and board experience for private companies as well as public ones (US, Australia & Europe).

A large share of venture-backed companies expect to hit the funding trail in 2011, but they may find the path treacherous if they’re not operating in a few choice industries.

According to a new survey from the National Venture Capital Association and Dow Jones & Co., 64% of the 182 chief executives polled plan to raise additional funding in the new year. These CEOs, spread fairly evenly over a number of industries, also expect the dollars to flow - 58% project overall venture investments will increase in 2011 while just 14% think they will decrease.

Regarding VCs' own chances for raising capital, they're rather split - 38% expect limited partners to hand over more money, 32% see a decrease and 30% expect the same as 2010. Not surprisingly given the industry's troubles, VCs expect the LPs to hold the cards, with 76% believing fund agreements will favor LPs and just 3% expecting them to favor VCs.

The VCs' cautious tone changes when it comes to certain investment sectors. They overwhelmingly expect dollars to increase for consumer Internet and cloud-computing software companies (82% and 80%, respectively). Those sectors also happen to be the two that VCs labeled as most likely to see investment 'froth,' meaning over-funded.

Chris has over 25 years’ experience in the telecommunications, logistics and technology industries. He is a highly experienced marketing professional specialising in the rapid implementation of strategic marketing initiatives that deliver significant shareholder value.

Chris has spent the past four years as the Marketing Director for mid stage private equity backed companies in the Candover and Alchemy investment portfolios. Prior to this he held senior sales and marketing roles in BT Group and Concert Communications.

A new business growth specialist, he specialises in developing and implementing sales and marketing initiatives that deliver rapid results.

Flemming has more than 25 years of General Management experience with global players in technology and professional services. He has worked and lived in Denmark, Germany and the UK and spend significant time in key parts of Asia as well as the Americas. His roles have included MD/CEO of BSI Management Systems, London, Xerox Germany and Xerox Northern Europe.

As a native Dane Flemming studied electrical engineering and organizational behaviour in Copenhagen, has an SEP diploma from GBS-Stanford University and resides in Copenhagen, Denmark.

Venture capitalists put €843 million to work in 230 deals for European companies in the fourth quarter of 2010, according to Dow Jones VentureSource. This represents the lowest quarterly investment figure for Europe in 2010. Compared to the fourth quarter in 2009, deal flow dropped 31% from 333 deals and investment declined 16% from €1 billion invested in the fourth quarter of 2009.

Throughout 2010, 1,039 venture deals raised €3.9 billion, a slight increase in investment from the record low in 2009 when €3.6 billion was collected for 1,118 deals.

A different picture emerges when looking at the annual figures, however. Compared to the lows of 2009, all of the major industries recorded increased investment in 2010 -- Business and Financial Services rose 22%, Information Technology (IT) rose 20%, Healthcare rose 14%.

Venture capitalists invested the most money last year since 2007, pumping $21.8 billion into 3,277 deals in 2010, according to a MoneyTree Report released today by PricewaterhouseCoopers and the National Venture Capital Association.

The software industry roared back to reclaim its status as the single largest investment sector for the year, rising 20 percent over 2009 to $4 billion in 2010, which was poured into 835 deals.

The investment was a 21 percent rise over the prior year and helped make software the number one sector for both dollars invested and total number of deals in the fourth quarter. Investment dollars also increased across every stage of development, except seed-stage investing, which fell 2 percent. However, first-time financings rose in 2010 compared to the prior year, despite a fourth quarter drop in both first-time dollars and deals when compared year-over-year.

From 1986 to 1994, annual investor commitments to venture capital funds calculated as a percentage of GDP were under 0.1%. The result was a positive investment climate when venture funds delivered significant returns to investors. The average return of the top 25% of funds, (i.e. the return of the best funds) was 5.3x in that period. Call this the Golden Years of venture capital. In 1995, the rules changed with the Netscape IPO, and the result was the Gold Rush period. Even though the capital invested doubled, the hugely strong IPO market meant that returns soared to 9.3x invested capital, an almost unheard of rate of return for any asset class. Capital poured in until inevitably, the rush of hot money killed the business off. In 2000, capital invested was 1% of GDP (or 10 times the rate it had been only a few years earlier) so once IPOs stopped, returns plummeted. Most of these funds have not yet returned the capital invested in them, and our estimate here of a 1.7x for the top quartile of venture funds strikes most LPs we talk to as optimistic.

Across the whole venture industry including clean tech, life science and information technology, there are markets that are cold where prices are plummeting, parts that are lukewarm, and parts that are super hot. Price is doing what price is meant to do within the industry, sending a signal to invest less in solar panels and more in social networks (the market does not make value judgments). At the same time, price has done what it is meant to do for the venture industry as a whole, it has sent a signal to investors to withdraw capital - they have done so - and the result will slowly but inexorably be better returns for the industry as a whole.

U.S. private equity fund-raising declined even further from the low levels of 2009 as both buyout and venture funds took their hits. Now all eyes are on 2011 as the next marketing cycle kicks into high gear. "Going into 2010, we originally thought it would be a busy year because a lot of firms had put off fund-raising in 2009," said Steven Standbridge, a partner of placement agent Capstone Partners. "The reality is that many firms continued to put off fund-raising in 2010 and worked to put their portfolios in shape. So the market wasn't overly crowded."

The past year also saw the rise of a class of investors dubbed "super angels." Although many are true angel investors - wealthy individuals with industry connections - some have raised funds from other angels and, in a few cases, institutions. The best-known of these is the team of technology entrepreneurs Marc Andreessen and Ben Horowitz, who as Andreessen Horowitz have morphed into a venture firm, raising a $650 million fund, its second fund in two years. Another is former Google executive Aydin Senkut, whose Felicis Ventures raised a $40 million fund.

Simon has over 20 years experience in the technology and telecommunications industries. He has a superb track record in building and operating businesses in Europe, Asia, the Middle East and Africa most recently as CEO Telstra International, MD AT&T Global Accounts and MD Colt Telecommunications.

He has been a board director of a number of companies in the UK, Germany, France, the Benelux, South Africa and the U.A.E and he is a non executive director of 3seven9 Agency Ltd., a UK digital marketing, e-commerce enabler and web agency.

Simon's international expertise includes strategic planning, execution of investments / divestments, team leadership, proposition development, market analysis, enterprise solution selling, customer loyalty, and revenue / profit assurance.

As we wrap up 2010, things might seem bleak. The common wisdom says that the chickens have all come home to roost from a disastrous series of economic decisions ... and this next decade will see the further decline and fall of the West and in particular of the United States.

Personally, I think there's a chance that the common wisdom is very, very wrong - and that the second decade of the 21st century may turn out to be the West's - and in particular the United States' finest hour.

I believe that we will look back at this decade as the beginning of an economic revolution as important as the scientific revolution in the 16th century and the industrial revolution in the 18th century. We're standing at the beginning of the entrepreneurial revolution. What’s happening is that all the things that have been limits to startups and innovation are being removed.

Social media has become increasingly important to businesses small and large over the past couple of years. It is, however, a field that changes almost constantly. And few companies seem to realize that social media goes far beyond sites like Facebook, Twitter and LinkedIn.

In spite of concerns over security, response time and performance, enterprises have continued their steady move to the world of cloud computing and SAAS, according to new numbers from Gartner.

Gartner defines SaaS as "software that is owned, delivered and managed remotely by one or more providers. The provider delivers an application based on a single set of common code and data definitions, which is consumed in a one-to-many model by all contracted customers anytime on a pay-for-use basis, or as a subscription based on use metrics." Call it on-demand, the cloud, or SaaS, but the most surprising thing may be that enterprises have overcome their concerns which were a major inhibitor to enterprise adoption.

Prabhat brings over 25 years of global senior management and consulting experience in the US, Europe, Asia-Pacific and Latin America with Telecom and Cable service providers and data/voice networking vendors.

He started his telecom career at AT&T Bell Labs and moved quickly to leadership roles to build joint-ventures and IP voice and data networking businesses for AT&T, Lucent Technologies, and Liberty Global.

Nikos joined Google in 2007. At present he is responsible for the technical side (pre and post sales engineering) of direct Google partnerships for Content and Commerce. In this role Nikos is responsible for North America, EMEA and Asia Pacific.

eTask.it is a Professional Services Automation company for which GPV Investment secured $1.8m of Angel funding.

'eTask.it' is a SaaS platform designed to optimise the delivery of Professional Services through a framework that allows the definition, delivery, governance and improvement of services around 3 key areas: People, Processes and Partnerships; achieving repeatable high quality services at a lower cost.

eTask.it announces:

• significant VC investment to fund US growth
• short listing for prestigious awards in Latin America
• successful debut at London show

eTask.it, an innovative SaaS company will receive at least US$1.8 million in angel funding. The investment will enable acceleration of the eTask-it platform development and expand sales and marketing efforts.

"The US$1.8m funding completes our first round funding requirement, creating the platform for eTask to complete the milestones needed to achieve a fully funded plan (Q3 09) and move towards global scalability" said Shakeel Ahmed, Chairman of eTask-it.

As a serial entrepreneur, I learned a lot of lessons from things that didn’t work.So in no particular order, here is a list of six questions that I learned to ask to validate my own startup ideas, that now shape what I look for in an investment. I hope this list will help you validate your idea :

The simple answer is that 6-9 months is a prudent amount of time to allow for raising money, although there is significant variation between companies (and over time). My advice would be to allow more time than you think you need and to be honest with yourself about the extent to which you can hope to be faster than average.

The deal process has two parts, pre-termsheet and post-termsheet. The post termsheet part should largely be for legals and confirmatory due diligence which shouldn’t take more than 1-2 months. The process of getting to termsheet can be much longer, as it involves writing an investor presentation, contacting VCs, getting them interested in a meeting, scheduling the meeting, and then scheduling follow ups, and building excitement and momentum within the VC fund. Each of these stages can take weeks.

I was asked by somebody recently in a private message on Quora about whether the individual should leave his comfortable job to become an entrepreneur. You would think the obvious thing I would tell somebody is, “yes, of course it’s a great idea.” You’d be surprised. I often advise against it. I really have to know somebody’s personal story and circumstances to know whether it is suitable for that person.

I’m sure everybody has their own definition of the attributes of an entrepreneur. Some of the ones I would identify are:

Technology startups often get an angel's attention; especially if the idea is new and exciting with great team and market potential. Where entrepreneurs sometimes get in trouble, however, is when they promise so much more in revenue than their idea can realistically deliver.

In its 10th year of operation, Oracle Corp. finally reached US$50 million in revenue. It took software giant Microsoft 8 years to accomplish the same goal. Surprisingly, many startups are projected to reach this lofty level within the first 5 years.

If you want a very quick primer on all the stuff nobody ever tells you about raising venture capital check out this article.

If you're an entrepreneur, you're probably going to screw up at some point. That's ok. Entrepreneurship is a constant process of quickly testing hypotheses, failing, refining and testing again. If you're not failing, you're not learning, right? Well, not all fails are created equal. Some are wholly unnecessary, and I'd like to list my top 15 here. Note that Many of these are based on advice from actual entrepreneurs who would rather you learn from their mistakes than repeat them. So, without further ado, here are 15 mistakes you don't have to make as a young, first-time entrepreneur. Enjoy!

Although the economic downturn was historic, we were surprised to see how many savvy investors and startups simply shut down during this time period. While conserving cash was critical to survival for a lot of companies, whenever possible, that should have been done within the framework of doing more with less, rather than simply doing little or nothing at all..

Great insight and a reality check for any current or would-be entrepreneur.

Critical Factors for Obtaining Venture Funding

Sometimes there is nothing more powerful than the passion and vision of an entrepreneur. But sometimes passion and vision are just not enough. It helps to understand the criteria that venture capital firms such as Garage Technology Ventures use to decide which companies to fund.

The job of the executive summary is to sell, not to teach.
The executive summary is often your initial face to a potential investor, so it is critically important that you create the right first impression. You need to convey the essence of your business plan, and its energy. You have about 30 seconds to grab an investor's interest. Be clear and compelling.

What about valuation? How do you go about preparing for the process when raising the next round for startups?
We break the valuation process into two steps: 1) The Basics and 2) The Presentation.
Remember a company is only worth what an investor is willing to pay

Being 'right' means focusing on what you think is important, essentially ignoring the market and hoping everyone else comes along for the ride - not a high-return strategy. Being 'relevant' means continuously meeting needs - of customers, employees, suppliers, and all the other people important to your business - such that you become indispensable to them. When you're indispensable, a strong platform will be formed to help you build your business.

Perfecting Your Pitch

The purpose of your pitch is to sell, not to teach. Your job is to excite, not to educate.
To win over the hearts and minds of investors, Garage Technology Ventures suggest your pitch has to accomplish three things:

Investing in SaaS Ventures (Part 1): The Basics

What Is SaaS ?

SaaS (Software as a Service) is a software delivery/distribution model. The software is hosted on a remote server and delivered as a service. Users can access the software anytime, anywhere via a web browser. They don't have to install anything on their computer or worry about upgrades and maintenance. Everything is handled by the vendor. Hence, SaaS is also known as Software on Demand or Hosted Solutions.

Many use the terms "SaaS"; and "cloud computing" interchangeably. But they aren't the same. Precisely speaking, cloud computing is made up of 3 segments:
1. Software as a Service (SaaS)
2. Platform as a Service (PaaS), and
3. Infrastructure as a Service (IaaS).
So, SaaS is the application segment of cloud computing.

SaaS monetization can be put into 4 main categories :

The university's final percentage ownership may increase or decrease, depending on

1. the company's financial realities
2. commercialization efforts
3. technology development progress
4. the technology's attribution to the company's success and ability to raise risk capital.

"The technology is never worth more than 10% of the equity of the venture. The key to success is always the management team, not the technology. It's all about the team's ability to execute.

"A single patent or a single technology is not going to be adequate to build a successful company."VCs and angels invest in people rather than technology; even promising technologies will be abandoned if the company and management team aren't already in place. Investors fund growth and customer acquisition, not product development"