Sometimes it take 10 years to build a successful company.

Kyma Technologies markets semiconductor products related to gallium nitride (GaN), aluminum nitride (AlN), and other group III-nitride based alloys, so says their website, but there's more to the story...

"There's nothing like being profitable," brags Keith Evans, President. But it hasn't always been so, the company started out with a $2.6M Series A in 2001 followed in 2003 by a $4M B-round, and lastly, at the end of 2004, a C-round of $1.5M. Why so small? Keith has brought the company to cash flow break even, right at a good time to do so.

Who are their customers? Keith suggests it might be easier to say who isn't. Keith shares a few pearls of wisdom when we get into "lessons learned".

Kyma Tech, it's time for some good economic news!

Show #194 (26:14)

It's a great time to start a company and to invest in early stage tech companies. "Huh?!" you say, "Have you been stranded on a deserted island for the past month?! Just look at the markets, layoffs, and economic outlook!" Yep, I've got a ticker on my computer screen, and we've been having long discussions at CommonAngels. The question isn't whether to build companies but how.

It is a bad time if you depend on advertising revenue. It also is a bad time is you need to build a huge company to achieve your goals. It also is a bad time if you need a gazillion dollars to get there, especially across many rounds of funding.

It is a great time if your revenue is counter-cyclical to start and you can grow your business even more when the economy recovers. It is a great time because competitive risk is now way down--you aren't going to get a bunch of incumbent corporations entering your market nor will you get a bunch of well-funded startups on your heels.

It is a great time to have loyal, hard working employees. They aren't going to jump ship for a sweeter deal down the street. It is a great time to build a product methodically, with customer input and assistance. It is a particularly great time if you can build a company lean and mean with a modest amount of capital up front and make a good return for everyone on an average exit.

At CommonAngels, we are running at full speed. We have had a lot of discussion in the group, and yes, we get heartburn about the economy, financial risk and market risk. But, we are enthusiastic about the high-quality, dedicated teams we're meeting. We are bullish about the lower competitive risks and are working even harder with companies to have tight financial plans that can survive in the coming months and years.

We are financially cautious and entreprenurially optimistic. We hope you are as well.

--James Geshwiler

How many months-to-fumes does your startup have? That's the metric John Huston, Chairman, Angel Capital Association, suggests we use to recalibrate our portfolio companies' runways. On the call with me is Tech Coast Angel Dave Berkus; he sits on 10 for-profit, 4 non-profit boards and is chairman of 6, including the myShape board and brings CEO Louise Wannier along to discuss what steps she's taking after her C-round financing by Lehman Brothers to deal with the new economic realities.

Show #192 (36:15)

"Calculate your own runway," that's some of John Huston's advice to entrepreneurs. How is the economic meltdown affecting angel investors? John offers his perspectives and he should know; he's Chairman of the Angel Capital Association and founder of the Ohio TechAngels.

I catch John between sessions at the National Angel Annual Summit in Halifax; it was a timely event, bringing angel investors together from across Canada and the US. What's on everyone's mind? How will the down trend affect their member angel groups? How much will investing be curtailed in the short term? And what should a leader offer as advice to his members and the entrepreneurs already in the funding cycle?

John describes his system for determining his portfolio companies need for cash and likelihood of survivability; you'll hear him describe the categories he's fit these companies into.

Where did his motivations come from to start the TechAngels? He's a deal junky who flunked early retirement.
His fellow Ohio angels? "Our members are much more concerned about making more of a difference, than just more dollars."

Don't miss this: John offers some gems on how he builds trust with the entrepreneur then negotiates the all-important pre-money valuations. You'll want to borrow his technique!

Save the date: the ACA's Annual Summit is next April 15-17, 2009 in Atlanta

Show #191 (35:37)

Al Gore had to start somewhere... I started at Pepperdine University last night, in John Buckingham's Marketing class.

Are they smiling only because I stopped speaking? No, it's a new presentation, my first since reading Garr Reynolds' PresentationZen, and it went over well. I may never receive the Nobel, but I'm convinced of the merits of Reynolds' PowerPoint guidelines. Last night's presentation has NO BULLETS, but it does have lots of quirky photos with captions that support my narrative. The title? SPECTACULAR DISASTERS and other INVESTMENTS I've made. Wanna see the original?

"Young technology companies across Southern California and Silicon Valley are scaling back growth plans or laying off employees to brace for a potential drought of venture capital funding as the global economic crisis spreads."
So writes Alana Semuels for the Los Angeles Times this past Saturday.

"While two months ago you could write a plan and raise a million bucks, everyone is holding back," said Steve Mock.

Tech Coast Angels past-Chairman John Morris, OptionEase founder Kim Kovacs, Giftventure's Steve Mock and I source the material for the article, full story.

A double header: two contestants in two different competitions in southern California. One contestant from a non-profit company, a social enterprise, the other a brand new startup competing in an open mic bake-off.

How do non-profits compete for capital? Would a fast pitch help? Or are too many local investors reeling from the declines in the stock market? Melanie Stephens runs the non-profit Centro Latino for Literacy where they use the web to teach literacy. She's in a fast pitch competition hosted by the LA Social Venture Partners and USC's Stevens Institute. The non-profits will be judged on:

1) Social Impact
2) Innovative Approach
3) the Pitch (presentation style, etc.)

Come to the Social Innovation Fast Pitch at 4pm Oct 29th, 2008.

Rania Nasis is the second contestant; she won first place in Survivor 4, an open mic competition hosted by TCVN. She's just getting started with her startup.

Show #188 (42:27)

What does the market meltdown mean for angel investors? Will they keep writing checks or sit on their wallets? And how will they protect their recently funded portfolio companies now that the world economy has changed?

These are the issues angels and entrepreneurs want to hear about. Has the pendulum swung too far? Have angel investors been so heavily impacted that the terms for entrepreneurs who do get funded will become too onerous?

After a week like last week, many angels will be recalibrating their risk tolerance. Certainly valuations will drop, but what other impacts will affect angel groups?

Today, a special episode of the show that draws in Dave Berkus and Dan Caulfield of the Tech Coast Angels, Bill Payne of the Vegas Valley Angels and the Frontier Angel Fund in Whitefish, Montana, and Steve Mock, founder of Giftventure, as the token entrepreneur.

Show #187 (51:22)

Today I held another all-day video pitch shoot at Stradling Yocca's offices in Newport Beach. Tech Coast Angel Dan Caulfield felt these video pitches are worthwhile; he brought another entrepreneur up from San Diego to take advantage of the session. San Diego came in 2nd place when it came to distance traveled to the session; Rick Gibson, Octopi chair, flew in from Tucson.

Remember? Where are all these video pitches going? OPENdeals on Angesoft.

Watch for yourself: Octopi, Workforces+, Recyclers Network.

I can never be a Life Science Angel! Even though I now know the President and co-founder, Greg Scott. That's because each of their 120 members must have life science credentials; I don't. Too bad, because the almost 4-year old group has had some nice exits and is poised for several more.

And what about their side fund? It really isn't a side fund, but it acts like one and it's simpler to operate; Greg explains.

Greg's run several startups and now he's started ChinaBio to promote angel deals in China biotech. He's doing so much, you'll wonder where he gets the time...

Show #185 (36:34)

Tags: Allylix, Coda Genomics