I’ve personally made around 75 angel investments during two periods of time – 1994 – 1997 and 2006 – 2007.  The first was the period of time after I had sold my first company but before I co-founded what become Mobius Venture Capital.  The second was between the end of the “investment period” (the time when we could make investments in new companies) for the Mobius Venture Capital 2000 fund and when my partners and I raised our first Foundry Group fund in the fall of 2007.  Per my agreements with my limited partners, I can’t make angel investments during the time period that I have an active fund in the market.  So – I’m “out of the angel investment business” (although I can make a follow on investment in any company that I’ve made an investment in.)

I give you this background so that my statement below has some credibility.  I think it is grotesque that an organized angel investor group would charge an entrepreneur to present to their members. This is in response to the article I read over the weekend in the New York Times titled Angel Investors Become Less Available where this practice is described.

While there are some good and useful angel groups, there are plenty of bad ones.  And many of the members of organized angel groups aren’t actually angel investors.  I’d like to suggest that to “qualify” as an angel investor, you have to have made at least one equity investment of at least $25,000 in the past 12 months.  If you haven’t done this, you can’t call yourself an angel investor.

Now, I realize that running an “organized angel investor group” costs something > $0, but the number shouldn’t be very much.  And – the cost of this should be born by the angel investors that are members of the group, not by the entrepreneurs.  Does anyone else out there think having the entrepreneurs underwrite this is absurd?  It’s just completely backwards in my opinion.

I have an incredibly high regard for a number of angel investors that I’ve gotten the chance to work with – both as an entrepreneur, angel investor, and VC.  The great ones know that their purpose is to help entrepreneurs get up and running with a secondary goal of a long term economic return.  But – the economic return can’t possibly be there unless you are an active angel investor (e.g. your chance of having economic success by making one angel investment over your angel investing lifetime is extremely low – more about this in another blog post.)

In the mean time, I’d like to encourage any angel group that charges entrepreneurs to present to them to reconsider their position.

In January, I made a seed investment in a company called Standing Cloud.  My premise was that as “cloud computing” proliferated, it’d be a total mess for the typical application developer and ISV.  Over the past six months a small team of super talented long time software developers and system architects have been exploring a wide variety of cloud services, OS instances, and popular open source software packages to understand where the “extremely broad painful problem that no one is addressing” is going to be.

Dave Jilk, Standing Cloud’s founder, and I are going to hike Mount Bierstadt as part of our annual tradition of climbing a 14er together (this will be #4).  We’ll have each other trapped together for 5+ hours to consolidate our thinking on what we’ve learned so far this year and which particular angle to position Standing Cloud on the launch pad.

In the meantime, one of the other Standing Cloud founders – Joel Wampler – wrote a guest post on ElasticVapor titled Fixing Major Linux Kernel Vulnerabilities in the Cloud.  If you are interested in this type of thing, it’s a good hint about the types of things that Standing Cloud is uncovering every single day.  For example:

“Last week, a Linux kernel vulnerability that allows for local privilege escalation through a NULL pointer dereference was announced. Many of the major Linux distributions are still working to provide updated kernels, and a few already have. Once updated kernels are released, applying the patches should be straightforward. But for systems running in the cloud, additional complexities and delays may arise.

Most providers of on-demand cloud servers require the use of custom kernels, which are tuned for the provider’s specific virtualization implementation. These custom kernels significantly change the upgrade path, and may even affect the short-term workarounds provided by the upstream distribution.

For instance, the Ubuntu bug report for this issue states the following:

Ubuntu 8.04 and later have a default setting of 65536 in /proc/sys/vm/mmap_min_addr. When set, this issue is blocked.

However, if a system is running Ubuntu 8.04 on Amazon EC2, the underlying kernel is likely based on a Fedora Core 8 Xen kernel. This is one of the kernels Amazon provides to those who create boot images for their service, and most such images use this kernel regardless of the distribution running on top of it. Thus the default setting of 65536 cannot be relied upon; and worse, this proc setting does not even exist in the Fedora kernel, so there is no way to repair the image to match this workaround.”

Lots more coming soon – get ready for it.  In the mean time, I hope there are no clouds on my hike tomorrow.

I regularly get asked some variant of “what books would you recommend to an entrepreneur.”  I typically send a quick email answer along with a link to the list of all the books I’ve read in the past few years.

Earlier this week, Fred Wilson forwarded me and Jerry Colonna (his old partner at Flatiron Partners) an email exchange he had with an entrepreneur.  The question in the email was:

“i’m looking for some book recommendation that have made an impact in your life, or books that you would recommend that would benefit me in a beginners life of entrepreneurship.”

Fred’s answer included two of my top three books for entrepreneurs.  My top three, along with a brief reason, follow:

Atlas Shrugged : While I’m not an Ayn Rand fanatic, every entrepreneur (or aspiring entrepreneur) must read this book to better understand the morality of self-interest (which is at the root of Rand’s Objectivism philosophy).  I find the contrast (and conflict) between “producers” / “founders” and “looters” / “moochers” to be a powerful characterization that will meaningfully impact any young entrepreneur.  This is a very long book that should be read slowly and carefully, especially John Galt’s speech near the end.

Zen and the Art of Motorcycle Maintenance: An Inquiry into Values : Robert Pirsig’s first book is a brilliant essay on quality.  I’ve never been particularly good at reading classical philosophy – Zen and the Art was one of the first philosophy books that I actually felt like I grokked (assuming you don’t include Stranger in a Strange Land in the philosophy genre.)  While Zen and the Art isn’t as long as Atlas Shrugged, it should also be read slowly and savored.

The Amazing Adventures of Kavalier & Clay: I didn’t read this until a few years ago and it was the second Michael Chabon book that I read (after The Yiddish Policemen’s Union – also a fantastic book.)  While this book is a fictionalized account of the creation of the comic book industry it really is a treatise to entrepreneur as superhero.  Chabon is an incredible storyteller and he takes the philosophy-fiction genre to a new level.

All three of these books are on my “must read” list for entrepreneurs of any age.  As the dog days of summer wind down, pick one and go for it.  I just inspired myself to go reread all three (five!) of them.

Or were you recently fired or laid off?  Or are you an analyst (especially someone in the typical two year pre-business school programs) at a consulting firm that hates your job?  One of my investments – Zynga – is hiring like crazy and wants to talk to you – we’ve hired a few folks like you and they’ve worked out great.  The job spec follows – if you are interested email your resume to jobs@zynga.com.

Zynga’s Product Manager will be responsible for creating a list of features to one of our hit games! This person will have to work independently to provide a detailed roadmap on the implementation process. The implementation process should include designing, executing, and optimizing the feature(s).They’ll own the outcome of these new features by working with our talented team of engineers to get the features implemented.

Required Skills:

• We are looking for an enthusiastic, performance-driven self-starter and team player
• Demonstrated capacity for developing and understanding strategy
• Strong aptitude for determining the optimal way to position products in the market
• Strong passion for games
• Strong organizational and analytical skills & attention to detail
• BA/BS degree – CS/EE/Engineering degree preferred
• 2-5 years of experience in product management in consumer web or game development OR another extremely analytical workplace!
• Passion for creating fun, compelling and addictive user experiences
• Passion for writing product specifications, white papers
• Outstanding written and oral communication skills
• Previous start-up experience is a strong plus, especially in social networking

And – if you need someone high level in your mafia, I’m now level 163 – just friend me on Facebook with “mafia wars” in the subject.

I don’t know who’s managing the District 9 twitter marketing campaign, but their abuse of twitter (via their creation of Twam – “twitter spam”) just caused me to decide not to go see the movie tonight.  Here’s the history of the experience.

On August 15th, I tweeted “has anyone seen District 9?  Worth it?”  I got a handful of generally positive responses including one that said "@bfeld district 9 was very good.  stylistically a bit reminiscent of 28 Days Later.  well done  and entertaining.  also, go see hurt locker.”  I didn’t recognize the handle of the person that tweeted it to me but I noticed it since it was more descriptive than others.

Over the past three days I’ve now gotten over 20 tweets from people I don’t recognize that say exactly the same thing.  For example, I just got one from Joanne ODonnell (apedvatu).  I don’t know Joanne (if she even exists) and her twitter account is garbage. 

Or how about the tweet from Dominique Arnold.  Exactly the same text.  Same drill – no clue who Dominique is and her tweets are a bunch of district 9 crap.

This is classic marketing spam.  No different than all the email garbage we get every day (that a whole industry has been created to deal with).  To date, Twitter has done a great job of dealing with twam but it’ll logically get worse, especially now that all you need to be a “social media consultant” is a twitter account. 

As I was writing this, I saw a tweet pop up on a TechCrunch article titled “You’re Doing It Wrong Part 348: Complete And Utter PR FAIL”  I think the dynamics around social media marketing are now going to get a lot worse now before it settles down.

Guess I’m going to see Julie & Julia tonight instead of District 9.  Amy told me that District 9 looks too scary for me anyway.

One of my favorite lines from TechStars is that “investor day is just the beginning”.  In this great wrap up of the TechStars 2009 video series, David Cohen says it around 6:30.

The Founders | TechStars Boulder | Episode 12 | The Beginning from Andrew on Vimeo.

All twelve episodes are up on the TechStars website.  I think Megan Leigh Sweeney of Alpine Light Pictures just did an amazing job with this project. 

There was an enormous amount of blog traffic about the TechStars Boulder 2009 class.  Following is some some of it (the blog posts from the teams are particularly awesome and really capture what they got out of the program.)

Mentors / Investors: Fred Wilson, Todd Vernon, Matt Blumberg, Jeffrey Kalmikoff, Don Dodge, Chris DeVore, Mark Solon, Andrew Hyde, Brad Feld

Teams: Vanilla, Next Big Sound, Everlater, Mailana, Spry, Retel

General: TechCrunch, Rocky Radar, The Deal,  Chad James, Rob La Gesse

I’m sure there are others – if I missed you just post the URL in the comments.  Thanks tons to everyone that has been involved in TechStars over the past three years!

I’m really looking forward to the TechStars Boston 2009 Investor Day on September 10th.  Even though it falls right in the middle of my Q3 off-the-grid vacation, I’ve gotten special dispensation from Amy to attend.

The DailyBurn Fitness Challenge started today.  For those of you that don’t know DailyBurn, it’s one of the TechStars Boulder 2008 companies (it used to be called Gyminee).  More on the fitness challenge from Andy Smith, the CEO.

This morning I weighed in at an uncomfortably high weight (fuck, fuck, fuck) – not quite as high as my jihad inspiring weight – but uncomfortable.  I refuse to be over 200 pounds on the anniversary of my jihad on my weight (10/27).  So, I’m going to get religious about using DailyBurn.

Fortunately for me, the DailyBurn iPhone app was released today.  This was one of the things holding up my extreme discipline to using DailyBurn and used to provide me with another excuse not to log my food (as in, “well, there’s no DailyBurn iPhone app so I forgot to log my food.)  Busted.

Come join the DailyBurn Fitness Challenge and encourage me.  I’m bfeld.  Begone weight, begone!

Fred Wilson has a nice post up titled The Ideal First Round Term Sheet.  In it he describes the process of closing a financing using a standard set of Series A terms from Gunderson that he agreed to as part of the term sheet.  In this case, the VC (Fred’s firm – Union Square Ventures) isn’t using a law firm.  Fred states:

“I’d like to see this practice become standard in our industry. We need to lower the time and cost of raising capital. We need to eliminate a lot of bad terms that have caused a lot of harm (tranched investments, mutiple liquidation preferences, super pro-ratas, etc, etc). We need to converge on a set of standard Series A terms that everyone uses.”

I couldn’t agree more.  Chris Dixon wrote a post titled Ideal First Round Funding Terms that Fred points to.  I agree with almost everything Chris says, and especially agree with his assertion that you should “only negotiate over 2 things – valuation and amount raised.”

When my partner Jason Mendelson and I wrote our Term Sheet series in 2005, we had a lot of people thank us for demystifying the term sheet.  Some time last year, both TechStars and Y Combinator open sourced their financing documents – TechStars were done in conjunction with Cooley Godward and Y Combinator’s were done in conjunction with Wilson Sonsini.  On top of all of this, the NVCA (National Venture Capital Association) has had a set of model legal documents up on the web for a while (Jason was on the team that put these together).

So – there’s now no shortage of term sheet data (and forms) available.  Now the trick is to get everyone to start using the same stuff.  It seems like first round deals is a great place to start.

Ironically, if you read through all the various sets of documents with a fine tooth comb, you’ll find an interesting phenomenon – they are all slightly different.  So – a next step is to get Gunderson, Cooley, and WSGR to standardize on one set.  If there was truly a set of “first round docs” (for angel rounds, seed rounds, and venture capital rounds – whatever you want to call them) – life would be a lot better for entrepreneurs, VCs, and probably even the law firms since most first round deals are money losers for them even though they generally cost way too much.

We’ve funded a company called Brightleaf that plans to help with the document production part of this problem.  But we also need leadership from VCs and law firms to realize that there really should only be two terms being negotiated in most first round financings – valuation and the amount raised.

Tired of the health care debate?  There’s a ton of other great stuff out there today.  Here’s some of the things I came across on my Sunday morning pre-run scan of all things web.

A Laser Strike at the Galactic Center: I like to learn at least one new thing every day.  The Astronomy Picture of the Day site insures this happens.  Today I learned about our Galactic Center and very powerful lasers that create artificial stars.  This is something for my Boulder Hack friends to aspire to.

Financial Times Feels Vindicated by Web Strategy: Does anyone actually believe any of this?  Does anyone find it ironic that this article is in the New York Times.  I wonder when a black hole is going to emerge and swallow the newspaper industry because of all its self-referential articles.

Scanning Headlines: Now this is more like it.  Maybe the Financial Times will learn something from Fred Wilson.  Oh – and when I page around on the Financial Times site, they appear to give me access to everything (I’m 20 clicks in and still haven’t been asked to sign up to pay.)

Editorial: X Could Learn a Lot from Vista, Windows 7:  Articles like this entertain me.  Every time I’ve ended up using a computer that runs Gnome on top of Ubuntu, I think of things like this.  Well – not really.

How To Fly Without ID: Awesome description of the real truth behind “has your bag been unattended; have you accepted gifts from a stranger; can I see your identification please?”  I’m not flying on an airplane again until September, but I’m definitely going to try some of this when I do and see if I can increase the level of harassment I receive from the airlines.

Caution: Disruption Happening: Very smart post by Micah Baldwin about disruption, some of the TechStars Boulder 2009 companies, and comic books.

The Flawed Terms in VC Deals: Suddenly VC terms seem to be an issue again.  I haven’t ever been able to figure out what drives the cycle of interest / non-interest here, but when I ran across the article Ensure VCs don’t drag you out of your venture immediately after I knew there was at least a trend.

Weinsteins Struggle to Regain Their Touch: If you are a Tarantino fan and are excited about Inglorious Basterds, read this article to find out why this is such an important movie for the Weinsteins’ empire.

I’ve always wanted to use the word hodgepodge in a title of a blog post.  I wonder if I’ll make the first page on Google – there’s not much competition other than some definitions and a few stores.