Fred Wilson wrote a useful post on valuation today. It reminded me of a document I had Dave Jilk write when he was doing some work for me. I decided to write this “bladon” (Blog Add-on) post – inspired by Fred. Please read Fred’s post first – it lays the groundwork for why VCs do things this way. I’ve found that even sophisticated entrepreneurs didn’t necessary grasp how valuation math (or “deal algebra”) worked. VCs talk about pre-money, post-money, and share price as though these were universally defined terms that the average American voter would understand. To insure everyone is talking about the same thing, I started passing out this document. Recognize that this is about the math behind the calculations, not the philosophy of valuation (which Fred’s blog addresses).

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About a year ago, Greg Prow (one of my partners) introduced me to a guy named Ben Casnocha. He said something to the effect of “Hey Brad – next time you are in California – you’ve got to meet this kid – he makes me think of what you must have been like in high school.” A few weeks later I hooked up with Ben late on a Monday. I was pretty fried from our normal partner meeting, but immediately engaged when we sat down in a conference room and started talking. I thought I was meeting Ben but his dad and the president of his company – Comcate – were there. Fortunately, the conversation focused on Ben and what he was up to so we spent a good hour getting to know each other.

Seth Godin is magnificent and his new book – Free Prize Inside: The Next Big Marketing Idea – is a winner. This book takes you on a romp through the way to help you understand how to make your product or service remarkable. I’ve often been (mis)quoted saying things like “marketing is useless” when in fact what I mean is “the way most people do marketing is useless and a waste of money.” Seth has always approached marketing in a revolutionary way under his thesis that everything we do is part of marketing. If you aren’t a Seth Godin fan, try his blog and his books.

In my attempt to read all of Stephen Frey’s books in record time and subsequently rate an entry in Guiness Book of World Records, I read The Inner Sanctum today. Not so good. Don’t bother. Enough said.

There has been some buzz over the last two weeks about VC investments in RSS-related companies including our recent investment in NewsGator. One company that was overlooked is MessageCast.. MessageCast was founded in late 2001 by Royal Farros, David Hodson, and Mike Rubin. My partner – Heidi Roizen – provided the seed investment (Heidi and Royal had previously worked together for a long time at T/Maker – the company that brought us the wonderful invention of “clickart”.

The Republican Noise Machine : Right Wing Media and How it Corrupts Democracy was a depressing book. I first noticed it from a post by Jerry Colonna. I had it shipped up to my house in Alaska where I settled in for a long read yesterday after my run. In some ways, it seemed appropriate to read this over the fourth of July weekend. I read a bunch of mental floss on Friday and decided I needed to chew on something serious. I’m back to mental floss…

The fourth of July weekend seems like a good time to clean out the brain with some fun summer reading. I recently read my first Stephen Frey book (Shadow Account) and enjoyed it enough to pick up the rest of his books. I just finished two of them – The Vulture Fund and The Takeover. Very satisfying. If you like Ludlum / Grisham style books with a finance / Wall Street backdrop, check ’em out. They’re good mental floss for a lazy summer afternoon.

A true story. From the flyleaf, “In early 2000, the bottom dropped out of the life of New Yorker writer David Denby when his wife announced she was leaving him. To make matters worse, it looked as if he might lose the beloved New York apartment they shared with their children. Determined to hold on to his home and seized by the “irrational exuberance” of the stock market, then approaching its peak, Denby joined the investment frenzy with a particular goal: to make one million dollars so he could buy out his wife’s share of their place.”