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Message from discussion The business reality in the cloud emergent year of 2009
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Miha Ahronovitz  
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 More options Sep 27, 7:06 pm
From: Miha Ahronovitz <mij...@sbcglobal.net>
Date: Sun, 27 Sep 2009 16:06:15 -0700 (PDT)
Local: Sun, Sep 27 2009 7:06 pm
Subject: Re: [ Cloud Computing ] Re: The business reality in the cloud emergent year of 2009

The $250K is place holder. The angels administrating the fund may decide anywhere from 50K to 500K for  a specific high risk funding. which pre-VC funding

It is relatively easy to have VC appointment. They may invite over 1,000 candidates to present in a year. From those maybe 2 or 5 get funded. They get the anwer YES. This means 3M to 5M  or more in VC funding.

Probably  895 candidates hear NO.

The rest of 100 are advised to do more more work and come back later. It it this group of 100 businesses that need more 3 month or 6 months or 12 months of work to get the chance in front of the VC. These 100 ideas have a good potential, but their entrepreneurs do not have the money to invest 50K, never mind 500K

If these 250K (50k to 500K)  were the total VC investment, Jim is right, this is not sufficient. What I call a VC fund  should be better called a an 'Angel fund" that removes the risk at the pre-VC investment stage.

Miha

________________________________
From: Ray DePena <ray.dep...@gmail.com>
To: cloud-computing@googlegroups.com
Sent: Sunday, September 27, 2009 3:00:51 PM
Subject: [ Cloud Computing ] Re: The business reality in the cloud  emergent year of 2009

@Jim, @Gabriel,

It is not uncommon practice by the VC community to expect startup founders to take very low / small or no salaries as they get the startups off the ground.

$250K doesn't cover two corporate Fortune 500 type headcount.  I suspect that for a startup, that level of 1st round investment represents a high valuation from the perspective of the VC community.  

-Ray

On Sun, Sep 27, 2009 at 10:33 AM, Jim Starkey <jstar...@nimbusdb.com> wrote:
>>Ray DePena wrote:
>>> Hi Miha,

>>> Conceptually, I agree.

>>> The numbers, well, I'll leave that to others more expert in these
>>> matters, though suffice it to say that $250k for a startup investment
>>> seems a bit high to me particularly nowadays with tools such as cloud
>>> computing and the wide availability of virtual resources.
>It isn't remotely realistic.  Computing resources are not a significant
>>expense for startups.  Salaries and health care costs are.  $250K
>>doesn't cover two loaded individuals even at subsistence salaries.  It
>>probably covers one real salary and change.

>>> I could be wrong, but I doubt anyone is rejoicing in your failure.

>>> You point out something interesting.  Each merger and acquisition (and
>>> cloud computing) is followed by layoffs and cuts.
>Cloud computing has an insignificant effect on head count.  The systems
>>need just as much administration in the cloud as they would on physical
>>servers.  Buying out software is a different matter, but that's not a
>>new issue.

>>> Since replacement work for that talent base is currently low.  Do you
>>> think innovation and new startups will be the result? (Even without
>>> the $250k investment)

>>> -Ray

>>> P.S. Didn't realize you were in Rocklin, CA (I'm in Folsom)

>>> On Sat, Sep 26, 2009 at 6:15 PM, Miha Ahronovitz

>> <myinnervo...@gmail.com <mailto:myinnervo...@gmail.com>> wrote:

>>>     The conversation is about who bought whom. VMware bought SpringSource
>>>     and CloudFoundry. Dell bought Perrot Systems. We talk why and how they
>>>     complement. Then we speculate about who might buy whom. EDS might buy
>>>     CSC. Or maybe IBM buys Amazon. Or maybe Microsoft merges with Amazon,
>>>     not Yahoo!

>>>     We go over an over on how the new enlarges older companies will
>>>     deliver a better services to the customers. On how they will become
>>>     dominant and will survive.
>>>     The net results is this: every merger is followed by layoffs and cuts
>>>     in product lines. We ask questions, in the name of progressive
>>>     evolution, of what we shall cut next .
>>>     This reminds me a joke. In 2050 the news headlines are : "First
>>>     settlement on planet Mars established !"   and  "Texas executed today
>>>     its last citizen"

>>>     There is no company creation. All the masses of technical experts are
>>>     back to school or drifting. The word "single consultant" is a
>>>     glorified synonym for "unemployed"

>>>     Something is not working in America.

>>>     New ideas will come alive with new companies creation. We don't have
>>>     wait for the behemoth like Microsoft to IBM and HP and even Dell to
>>>     revolutionize the cloud landscape and lay off even more people in the
>>>     name of good. Why would Microsoft start something so risky, when
>>>     simply releasing Windows 7 will bring them all the billions in world?
>>>     Why HP must buy IBM or vice versa, however improbable this be, to
>>>     watch new development?

>>>     We concentrate the power in fewer hands and watch impotently .We have
>>>     no more room to show our ideas work will triumph

>>>     My intent to do something by starting a petition at
>>>     http://www.change.org/actions/view/revive_the_high-tech_start_up_on_s...

>>     , has the staggering number of 43 signatures. I am grateful to each
>>>     and everyone of them. For the skeptics on this group, probably they
>>>     rejoice in my failure so far. They have common sense and are educated
>>>     people. But education insists in accurate detail and detached
>>>     "objectivity", which serve only to paralyze  the individual's project
>>>     of self-realization and action in the world

>>>     I don't have common sense and I will continue to believe that times
>>>     for IPO and new start up explosion  will come back

>>>     Miha

>>> --

>> Ray DePeņa
>>> Director, Stealth Startups
>>> Strategic Business Advisor

>>> http://www.linkedin.com/in/raydepena
>>> Sacramento, CA 95630
>>> (916) 941-5558

>--
>>Jim Starkey
>>Founder, NimbusDB, Inc.
>>978 526-1376

--
Ray DePeņa
Director, Stealth Startups
Strategic Business Advisor

http://www.linkedin.com/in/raydepena
Sacramento, CA 95630
(916) 941-5558


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