The May Report: 11/11/2011: Once in a century!: The eleventh minute of the eleventh hour of the eleventh day of the eleventh month of the eleventh year — we won’t see it again until 11/11/2111 — so the rush job and three more reports to come today

Editor and publisher: Ron May, ron@themayreport.com, ronaldmay@aol.com, www.themayreport.com , 773-525-3944.

If you missed an article, go here: www.tmronline.com/A55951/tmrarticles.nsf/vwFullNewsletter

Louis Brandeis: “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants.”
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TEDx welcomes ideas worth spreading to Naperville on 11.11.11

TEDxNaperville is launching its second conference on 11.11.11. The event will be held at the Grounds for Hope Café, Lisle Illinois on November 11, from 1PM to 6PM. Cost of this event is only $50 and is payable online at tedxnaperville111111.eventbrite.com
About TEDx
In the spirit of “ideas worth spreading,” TED has created TEDx, where x = independently organized. TEDx is a program of local, self-organized events that bring people together to share a TED-like experience. At TEDxNaperville, TEDTalks video and live speakers will combine to spark deep discussion and connection in a small group. The TED Conference provides general guidance for the TEDx program, but individual TEDx events, including ours, are self-organized.
TEDxNaperville is a local, self-organized event modeled in the spirit of TED.
“Through TEDx, the TED organization has created a viral movement that allows great ideas to be spread – starting at a local level,” said Arthur Zards, founder and curator of TEDxNaperville, “It allows business leaders, visionaries , community leaders, and readers of this fabulous May Report a chance to listen to area leaders share thought provoking ideas, and have an opportunity to partake in engaging discussions afterwards”.
Speakers Include:
The Founder of the Red Bull Air force, Othar Lawrence, NBC5 blogger and entrepreneur Jill Salzman, and whom Shaquille O’Neal dubbed,” his head coach for happiness” , Dr. Elizabeth Lombardo PhD. Learn about more speakers at www.tedxnaperville.com.

Tickets are $50 and are available at tedxnaperville111111.eventbrite.com . Seating is extremely limited. Interested parties can also visit www.tedxnaperville.com for complete speaker bios and up-to-date event and ticket information.
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Briefly noted, by Ron May

* Before I get into specifics about the FFF, let me say a few general things.
There were far fewer people last week than there were on May 4th.They did have more difficulty getting firms to present, or so I heard. And I did hear some scuttlebutt that the price being charged by FFF was too high for some firms.
Even if we buy that people circulated in and out throughout the day as they clearly did, the attendance never got anywhere near 200 which they probably had in May.
I would be quite surprised if the attendance, all in, went over 150.
Consider this logic. There were 15 more presenting firms on May 4th than on November 2nd.
Figure at least two people per presenting firm along with associated consultants and advisors. That is by my estimation at least 30 and most likely 40 to 50 people.
Some of the sponsors for the December and May events have apparently dropped out. One appears to be Marengo Hampshire, marengohampshire.com/. I called and left a message to find out why they dropped out but have not heard back yet. Well, I did hear back Tuesday morning and Alexandra Zaporozec, Managing Director told me they did have a person there, but she and Andrea Moran who is in Bali on vacation were not able to make it.
Evan Herman is gone from Hampshire Marengo as of Labor Day. He was hired to do biz dev, but my information is that he was not a good fit for them. Evan is now working full-time for www.coverago.com and on a part-time basis he works with an online capital matching site called www.caplinked.com which Evan says is in the news lately.
Alexandra stressed that she is a big believer in what David Culver is doing, that she was there at the start and will continue to stick with FFF as a sponsor.
A few comments about logistics and organization. The biggest problem they have hands down is time management. A secondary lesser problem is background noise. They got a late start because the presenting firms did not show up on time, as Andy Nadler explained to me. The reason we were even having that conversation to begin with is that when the final three or four presenters were speaking, the food caterers started putting out the dinner food and a huge line of people started swarming around the food, leaving far fewer folks in the seats to watch the presentations. I immediately commented that this was not cool and that the organizers had screwed up. Nadler basically agreed.
The other side of the argument is that it’s hard to coordinate these things with precision timing. The food was good and came from The Upper Deck at Sully’s located nearby at 1501 N. Dayton, 773-244-1234.
The other on-going logistical problem was that during the presentations throughout the whole day, a lot of people were standing behind the main stage presentation area chatting. Bob Bock did go around trying to hush people. I was sitting in the back of the main stage presentation area and I did have a hard time hearing one presenter and I told Culver who was chatting behind me to tell people to shut up so we could hear.
Part of the problem is background noise from people talking while presenters are talking, part of the problem is the microphones the speakers are using, and since this was Grossinger’s, part of the problem is that the floors are not carpeted. It is an auto dealership, albeit a classy one, after all.
The second stage for presenters, which was used to accommodate only four of the sixteen presenters, was a more enclosed area and when I went over there, I could see that the second stage suffered from none of the problems of the first, more open stage. There were no people milling around chatting in the back. Those who wanted to talk near the second stage were far enough removed that the noise they created did not interfere at all with the presenters.
Back in May with 31 presenters, there were three stages and cross talk from stages two and three. This time, no stage three to conflict with stage two, so no problem.
There were actually four firms that won awards. When the judges came back from what I gather was a lively debate to announce the winners, David Culver quipped that the judges had had a “bloody fight” especially, I sensed, over the Piranha Pond. The judges resolved that argument by giving an honorable mention to Wish by Wuauu, Inc., www.wishvendors.com , which allows shoppers to “haggle” with vendors with their mobile phones on select items right at the point of sale. The retailers can then accept, reject, or counter-offer, manually or automatically, through pre-set business rules.
The firm that won in that category was Pazari, LLC. In many ways, Pazari and Wish by Wuauu, Inc. are in similar businesses in the sense that they both seek to empower the customer in purchasing, one at the point of purchase and the other using an auction system in which businesses set a secret reserve price for their item.
Pazari can be used for a variety of products and one of their foci is ticket sales. Everyone seems to be in that biz already, but Pazari wants to be a niche player on the high end for tickets. As Casey Christensen told me, 40% of tickets for events, be they sports or concerts, go unsold.
Pazari goes under the name PegWise as well. You can see how it works: www.pegwise.com/how-it-works/
or www.pazarillc.com
* At about 8:15pm, Bill Anthony helped get me outside and over to North Avenue where I got a cab to Bloomingdales, but as I arrived people were leaving. I found out about the after party being held at Underground in the basement.
I went over there with a guy named Rishi who is a Microsoft partner (Microsoft was the main sponsor) — and I believe he used to run a dot com called electionmall.com.
Microsoft was sponsoring the event along with Bloomingdale’s and I saw Adam Hecktman.
There were about sixty people at the after party.
This clip showing a number of the male fashion mavens strutting their stuff in front of a large group of adoring women really shows their inner selves. A number of the guys strolled down the aisle in a serious way, as a model would, and then you have the show-offs, guys like Willinger who took his jacket off and did a little dance, Phil Tadros who was dragging some kind of toy duck? behind him, and Ed Glassnman from Tribeca Flashpoint.
Here are the guys who walked down the runway. Each guy represented a different designer and the clothes did look very nice.
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Adam Hecktman, Microsoft *
Andy Crestodina, Orbit Media *
Chris Foreman, AvePoint
Chris Hill, PerkSpot
Edward Domain, Tech.Li *
Edward Glassman, Tribeca Flashpoint Academy
Eric Lunt, BrightTag
Jack Philbin, Vibes *
Jeff Ringgenberg, Evolyte
Jeff Willinger, RightPoint Consulting*
Joey Schoblaska, Groupon
Johnnie Lovett, Fresh Connection Brand (NFTE graduate)
Joshua Hernandez, Tap.Me
Mark Lawrence, SpotHero *
Matt Hancock, Chicago Tech Academy
Peter Cherukuri, Aol-Huffington Post Media Group
Philip Tadros, Doejo *
Reid Lappin, VOKAL Interactive
Robert Blackwell, KillerSpin *
Rudy Pamintuan, Sherman Worldwide
Seth Kravitz, Technori
Shawn Gaines, kCura
Tim Toomey, Rockit Ranch Productions
Zak Boca, SingleHop
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The asterisk indicates that I know this guy was at the after party.

lightspandigital.com/blog/chicago-entrepreneurs-rock-bloomingdales-at-geek-2-chic-fashion-show/

* Let me continue with my list of things I learned at FFF. I left off at item #5.
6. John F. Thompson, angel investor and friend of Andy Nadler. John is an advisor for wealthy people who has done well. He invested in a firm that is going public, AXGN. john.thompsom@wfaadvisors.com,
904-393-4654.
7. John Jonelis wants to pick a fight with me, for the purpose of generating attention and controversy. Someone has tried that idea before — Andy Sernovitz. He was holding an event years ago, I think this was 2004, and he first invited me very publicly, but then when Gary Slack and a few others kvetched, he uninvited me. The email he sent was nuts. It started with my un-invite and then launched into a diatribe about why people should com to the event. And then he called me, suggesting that WE could boost HIS event’s attendance by fighting like cats and dogs by day — as he told me that’s the way they do it in Washington, D.C. — and having beers together after work.
That’s when marketing “genius” Steve Lundin came up with the idea of the Secrets of The May Report event which we did hold, and not only did we hold it, we had the event at Costa’s in Greektown, just a few feet away from Andy’s event which was taking place at the same time, same place! Lundin tells me that he writing a book now on marketing horror stories and he thinks this book will actually be finished — maybe even before my book or Jeff Willinger’s.
Man, it was great. I love stuff like that, just as I get thrilled when I send a bulletin about Terry Howerton just when the ITA is about to hold its City LIGHTS event.
Anyway, John Jonelis is trying to now be the Greek Avery Cohen — you are Greek, aren’t you John?
He wants to write up events and did a good job on the September MIT-EF meeting. I dug it up and ran it, as I will run whatever events he covers.
John, no need to stir up fake conflict. We have enough real conflict at TMR already. But John’s efforts to cover event should be applauded and encouraged.
I have one or two caveats. John, as a newcomer to covering the tech scene, is susceptible to being played by his sources and the people he writes about.
People will talk to him readily because they are not afraid they’ll be challenged.
Here is one article that I will have some comments abouit, along with more information.
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coreinsightstory.com/author/johnjonelis/

A Contrarian VC Model

28Sep

Midwest Renaissance Fund Launches in Chicago

As told to me by Loop Lonagan -

“Hey, I’m a Futures trader but that ain’t workin’ these days. I seen these computers swallow up 75% of the market. Used to be 7,500 floor traders here in Chicago. Now I count just a few. Most of those oh-so-carefully-tested trading strategies don’t work no more and the old rules get broken all the time. Bonds don’t look so good either. Our own government got downgraded for heaven’s sake. Real estate is in the tank and still sinking. Even gold took a plunge this month. Maybe 20% of the country is out of a job. Nobody hiring. Nobody lending. I think the VCs are asleep in bed. Cash just sits. Lots of it. This economy is all clogged-up and nothing moves-it just shakes real hard. The bank pays exactly the same interest as my Serta Perfect Sleeper and inflation looms. So tell me some good news. Where do I put my money? I wonder. Is this that rare time in an investor’s life when the smart money-the real smart money sees blood on the streets and buys for the long run? Warren Buffett seems to think so. Gotta go with Warren.

“So the food is great. I like the people. I sit in this plush chair in a room of 60 others. Not the retail crowd. These are the pioneers of today. Yeah, lots of ‘em got MBAs from Kellogg and Booth and I know some guys here got their Ph.D. I also know some of those grew up on the tough streets and fought their way to the top. Now they’re all movers in the financial world. Any one of ‘em can plunk down a quarter mil without even mentioning it to the wife. Like tipping a waiter. I stick to coffee and listen real close while most of my friends hit the hard stuff. The room gets hot and I take off my Hart Shaffner and Marx suit jacket and loosen my hundred-dollar tie. This is what I hear:

“Len Bland, Ray Markman and a real big team of experts are ready to launch the Midwest Renaissance Fund. Len built this organization brick by brick. I watched him do it. That gives me confidence. Now he’s ready to pounce. Does he smell blood on the streets like Buffett does?

“I like to see discipline in a fund. I also like a strategy told in a few words. In my experience, the best ideas are clear and simple. Here’s their plan: Invest in and mentor early stage Midwest companies at a discount in under-invested sectors. Hey, that sounds pretty good. What do they look for in a company? A good product. Good management. Okay, that makes sense. What makes a good team? Education. Straight thinking. A track record of success. Those are good old-fashioned business values. I can relate to that big-time.

“I ask a few questions and like the answers. This bunch has their own skin in the game-even more, they committed their own sweat. If a company in their portfolio needs a manager, one of the founders of the fund does the job or sees his stake get knocked down. They even help manage some of these companies before they put in any money. They plan to monitor progress day-by-day. How’s that for oversight? This is way beyond the usual seat at the board or quarterly checkup. So I sit straight, grab my gold Cross pen and scribble notes all over their full-color brochure.

“What do they invest in? Mobile apps? Biotech? Silicon Valley? Nope. They’re into consumer packaged goods, software, financials, healthcare, clean tech-wherever their team can make a difference. All under-invested sectors. That means Midwest businesses. The Big Ten states. The breadbasket of the world where you almost never see a VC. And their target is a sweet spot called “The Valley of Death.” Don’t let that throw you. It’s is a stage in a company’s life when they’re too big for Angels and too small for VCs so they can’t get funded no matter how good they are. And what kinda return do they expect? They’re talking 25-35% IRR. That’s huge. I scooch up straighter in my chair but I notice that the numbers don’t faze anybody in the room. That’s normal stuff in the VC world.

“What’s safe these days? Sounds like venture capital might be. Strange world, isn’t it? Renaissance is gonna stay small and nimble and they’re already 85% of the way to their funding target. That means I gotta get my research done and make up my mind. Am I in or out?”

That’s what I heard. What did you hear? Comments welcome. View the Midwest Renaissance Fund website at www.midwestrenaissance.com

Commenting and re-posting is highly encouraged. I cannot guarantee accuracy but I give you my best. This is not investment advice – please perform your own due diligence. © 2011 John Jonelis – All Rights Reserved. coreinsightstory.com/blog/

6 Comments
Posted by John Jonelis on September 28, 2011 in BNC Venture Capital, Chicago Ventures, Events, Midwest Renaissance Fund
Tags: Angel Capital, Big Money, early stage, Fund, Insider, Smart Money, Startup, VC, Venture Capital
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May again. John and TMR readers, what I found out is that Len held a meeting for prospective investors at the Hyatt that drew about 70 people, mostly from outside the Chicago area which I reported. Has an actual check been written yet?
My information on that is unclear. One major investor has committed to a significant investment in the fund IF various conditions are met, the main one being that a certain amount of money be raised from other investors. Now I have known this for a long time, actually, for the better part of a year. When they got that investor to commit on a contingent basis, Len went crazy and started talking publicly as though they already had a fund, and that when I called him out on it. Truth in advertising was one big issue I had with Len. He told Howard Brown who presented on May 4th that his firm would not be funded by the Midwest Renaissance Fund because they don’t do mobile and they don’t do social media. The clear implication of that statement was that they have a fund and that they are investing.
Aside from truth in advertising, my other big issue with Len Bland is just that he is not qualified to run a VC fund. How much time do we have? He does not do due diligence on the presenters at BNC VC Group. He does not even ask those presenters for their financials. He has not successfully raised fund for more than one or two firms that have presented. I sense that he has never taken a firm public.
Bottom line. In the investment world, Len would be considered a neophyte, and he has amateur standing at best. It is hard for even the pros to raise a fund. Ask Matt McCall, Tom Churchwell and Ellen Carnahan.
There are far better people than Len Bland to actually run a fund, if it does ever get raised. I am still skeptical about whether the fund will become reality since when the investors do their due diligence on Len and the others running it, Len and company come up short.
One person who was at the FFF event who might make a good fund manager is David Bird. Bird has actually done real deals and has taken firms public.
My information is that discussions are actively going on to make that happen. But remember that both David Carman and Len Bland told me that the entrepreneur involved with OpGen (if I have that right) is a megalomaniac and that he would not take their advice. Well, Len has the same problem. He may not seem that way at first blush, but as you get to know him, that oversized ego comes out.
I have never heard Len admit to any weakness, never heard him be candid about his strengths and weaknesses or the excesses of his statements, both public and private. In fact, while his style is low key, he’s really quite arrogant.
David Carman knows his own limitations. You’ve got to know what you don’t know, and Carman, unlike Len, pretty much does.
Maybe Len should ask David Carman for lessons on humility.
I happened to be there when Len gave his spiel as a sponsor at FFF. He was low key, and did not mention the fund, only his coaching services and the BNC VC Group as a presentation organization, not as a deal broker organization.
When I say Len is arrogant, he is also very manipulative. I won’t name names, but he has balled out people who know me for failing to keep me on a short leash.
Bottom line. The focus of the proposed fund sounds good to me. It just needs professional management and that is not the Len and Ray show.
Here are some other articles written by Jonelis about the firms that presented at the FFF Presentation Elevation in September. Some of those firms also presented again on November 2nd.

coreinsightstory.com/author/johnjonelis/

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FFF Presentation Elevation

19Sep

John Jonelis

Tonight I’ll see something that could change the world

We’re meeting at Tower Club in the Civic Opera building. The raised-panel walls surround me with the ambience of wealth and the seats are packed with it. I take in the great view above the Chicago River while enjoying the dinner spread.

David Culver, CEO of Extraordinary Success hosts this event to put entrepreneurs in front of investors. Each company gets 10 minutes to present before comments by a panel staffed by Carl Moose of Property Calc Analytics, David Beaseley of Synergy Financial Partners and Ron Kirschner of Hartland Angels. Tonight is the prelude to the big Funding Feeding Frenzy in November. Here’s the story as I see it:

As I heard it –
Dr. Harvey Charles-Kaplan

DoctorInvent@gmail.com 773-484-7731

The most memorable presenter in my recollection wears a rumpled suit and gives his entire talk barefoot. I recall stories of Einstein teaching class in a bathrobe and carpet slippers. No spit and polish-This is an inventor presenting new science-not yet a full-fledged company. As I watch, Dr. Kaplan proceeds to read complex patent verbiage off the screen until somebody with a dose of compassion calls out, “Show the pictures.” Kaplan kindly complies and goes on to explain everything in his own words. Things get hugely interesting. If what he has is real, we are seeing something that will change the world.

A few eyes have already glazed over, but along with many others, I am enthralled as he moves on to show us his mass of overlapping technology. His Kaplan Fibonacci is an entirely new method of generating electric power. It’s passive, requiring no fuel. It creates no pollution. Instead, it cleans the environment. Here’s how it works: Water falls through a spiral, using gravity for energy, creating a vortex under pressures upwards of 1000 psi. That swirling water passes through a magnetic field, eliminating the need for an expensive turbine.

It could double the capacity of hydroelectric plant. In Lake Michigan, it could pump water to the top of the Sears Tower while breaking down toxins in the water and cleaning the lake. At such high speeds and pressures it breaks apart water molecules and as a side efffect, produces hydrogen for automobile fuel cells, or in a water treatment plant, produces marketable methane gas.

With the BP disaster still making an impact, the technology cleans oil spills, transforming the molecules into nutrients that could boost the fish population. It is intended to convert nitrogen from the air into liquid nitrogen. That freezes an oil leak, stopping its flow.

Dr. Kaplan is pursuing 243 patents pending. His personal credentials don’t fail to impress, with a Harvard degree, medical experience at Mayo, and a career in nuclear. Can this be the real thing? What do you think?

Nerve Access, Inc. – Dr. Yaser Maksoud, M.D. University of Illinois

ymaksoud@nerveaccess.com 312-731-4949

NA-135 is the first cure for Alzheimer’s disease. How many new offerings get more important than that? Insulin is a proven cure for the disease but the problem is delivery. Dr. Maksoud uses a novel nasal spray that is absorbed by the brain in 15 minutes without going through the blood stream. This is not a temporary fix or treatment of the symptoms like existing drugs. This is the first cure. In vitro studies show that brain cells regenerate using this treatment. Academic studies project a 67% increase in cognition.

Alzheimer’s is a huge market and big pharma is spending big money to address it. 36MM patients exist worldwide. This is a 7BB market growing to 70BB by 2040. The competition has no effective treatment-all are symptomatic, yet the top competitor brings in 3BB without curing the disease. Dr Maksoud estimates that NA-135 will be worth 500BB once it gets through phase II clinical trials.

I see a lot of testimonials from impressive sources. The project has already received 1.5 MM in Federal grants and Dr. Maksoud has his own skin in the game. Continuing research shows the same treatment addresses Parkinson’s disease and Diabetes. These are huge markets. Dr. Maksoud has several other products in pipeline. His team is made up of an impressive blend of PhDs with business and legal experts. The delivery method is patent pending for formulation and use.

ExpoInterface – Nick Henning and Mark Marineck

nickh@expointerface.com 312-208-0930

At 31,000 trade shows each year, people throw away brochures and business cards without reading them. Badges, books, brochures, and maps are costly. Registration lines are long and slow.

ExpoInterface creates a paperless trade show. All information is shared from a centralized cloud repository to mobile devices controlled by the trade show. And everybody gets a mobile device-attendees that don’t own smart phones can rent. The cost to the show is negligible and the system adds revenue.

This is a multi-billion dollar market with five competitors. ExpoInterface management has 30 years’ experience in trade shows and sees future opportunities at sporting events, amusement parks, or anywhere there’s a registration line and a payment transaction. Barrier to entry isn’t huge, making this is a time-to-market play.

Silvrspoon – Eugene Revzin

erevzin@silvrcorp.com 847-877-1128

People wait too long at restaurants and bars for their service and bill. A huge gap exists between restaurant and consumer interaction. Silvrspoon plans to become the point-of-sale of the future.

Using a smartphone app, they create convenience to the customers by on-demand ordering at each table. The result? People order more. Service is quicker. Loyalties are built. Rewards programs become interesting. Customers use social media as part of the experience. Waitresses don’t work as hard. Restaurants gain more revenue, see customer feedback and get access to data including inventory, ordering preferences, and facial recognition. When a customer returns, the restaurant has a record of who it is and what was ordered before. Silvrspoon is already live at four locations, has gained international press, and is featured as one of Chicago’s most interesting startups. One member of the audience volunteered a testimonial of a terrific experience.

This is a subscription-based business model. To drive quick adoption, prices are low to restaurants and free to consumers. The database becomes an asset of the company. The management team is young and diverse.

SweetPerk Inc. – Kalan Kircher

kalan@sweetperk.com 614-634-2099

Amazon price checker scans a bar code and gives competitive prices while Google and Amazon provide local data. How does a store remain competitive under that kind of pressure? SweetPerk proposes the LiveLocal.com loyalty programs with a unique identity for each neighborhood. Merchants create a perk that goes live immediately. Customers see it immediately on their iPhone or Android and redeem it. They can “favorite” a merchant and link to Faceboook. Eighty three merchants are already on board.

The system creates multiple revenue streams. A chamber of commerce, merchant association, or city manager can see the dollars spent in a community.

What’s Next for FFF?

The upcoming Funding Feeding Frenzy runs for 12 hours starting at 8:30 am 11/2/11. For details, see FundingFeedingFrenzy.com

To experience what it’s like to present, check out coreinsightstory.com/my-kraken-encounter on this site.

That’s what I heard. What did you hear? Your comments are welcome.

Commenting and re-posting is highly encouraged. I cannot guarantee accuracy but I give you my best. This is not investment advice – please perform your own due diligence. © 2011 John Jonelis – All Rights Reserved. coreinsightstory.com/blog/
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8. Eyal Amir and FasPark, www.faspark.com
9. Kathryn Born and www.tincmag.com
10. Jules Esh
11. Stephen Cook, the flying car guy, www.labicheaerospace.com
12. Tim Knecht and William Metropulos and www.mysmartbar.com which won in the Kraken Cave category.
13. Sweet Perk was the winner in the Guppy Bowl, www.sweetperk.com.
14. Pazari LLC, www.pazarillc.com
won in the Piranha Pond and
15. Wish by Wuauu, www.wishvendors.com, got honorable mention in the Piranha Pond.
16. Technori’s monthly tech pitch events
17. The rise of the LC3 form of corporate organization.
18. Too much to list now.
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