Bras Meet Software at Babson

Great story on two Babson MBA’s and their search for the perfect fitting bra. Xconomy’s Erin Kurtz highlights Derek Ohly’s experiences from MBA student to holder of a “Phd in Bras” (his words).

“Bra guy” is a relatively new gig for Ohly, dating back to about 2004, when his MBA classmate and now Zyrra co-founder Christi Andersen mentioned that there was a pervasive problem with bra fit. So Ohly, who says he was overwhelmed by the number of women sharing Andersen’s gripes, set out in the bra business. He started by taking a sewing class at the Cambridge Center for Adult Education.

“I said, ‘I’m here to learn how to make bras.’ It was a good moment,” he says, noting that he was the only guy in the class. The group of women responded, “Sign me up,” when he explained his aim to make better-fitting bras—early market validation for the company’s product, he says.

Zyrra incorporated in late 2004 and spent a few years designing, prototyping, and building the bra models and the sizing system to plug into the CAD platform in order to design them in a more individualized way, and came out with its first bra model around 2007. The startup worked out of office space in Boston’s Chinatown neighborhood before moving to MassChallenge for the accelerator and business plan competition phase this summer.

The company is about to close a $500,000 – $700,000 round of angel financing.  Zyrra has been fortunate to make use of the campus — including interactions with diverse students, use of a venture accelerator, and participation on business plan contests (MassChallenge).

Zyrra has an interesting business model – using computer design and also custom fitting parties (like Tupperware).  Notice how long the company has been around. Persistence is a requirement in entrepreneurship.

Its amazing how much entrepreneurial action is taking place on campus these days. From biotech and software startups to performance t-shirt and great fitting lingerie, the Campus Frontier is open to all willing to take the challenge.

via Where Bras Meet Software: Zyrra Raises Money From Jess McLear, Jean Hammond, & Local Angels For Its Bra Industry “Revolution” | Xconomy.

Will Dodd’s new bill destroy Angel Investing? | VentureBeat

For those who don’t know, and apparently Senator Dodd has no idea, angel investors play a crucial role in the high-impact start-up ec0-system in the US (and thus play a crucial role in job creation).

Angel investors provide financing at the levels (usually $500,000 to $3,00o,000) that are not feasible for other financiers (from banks & friends and families to VC and corporate venture firms.)

Well, it appears that buried inside Dodd’s 1300 page financial regulation reform bill is language that will limit the size of the angel investing world and will add more complexity to the completion of angel deals. Sounds great huh? Make it harder for small firms to grow!

Found out about this from John Mauldin. Here is a good piece from Venture Beat. Here is a snippet:

Under Dodd’s bill, the definition of “accredited investor” would be revised to require individuals to have a net worth of at least $2.3 million or annual income of $449,000 (or $674,000 of joint income with his/her spouse).  According to Business Week, this revision would lower the number of individual accredited investors by 77 percent.

It gets worse. Even if all the investors are “accredited investors” under the new definition and the startup is thus relying on Rule 506, a filing (presumably a Form D) must be made with the SEC, and the SEC will have 120 days to review it.

That’s right – 120 days.  And if the SEC does not review the filing within such 120-day period, then the applicable States securities commission(s) would have the right to review the merits of the financing.

So, not only will the new rules limit who can invest in promising new ventures, but will also let the SEC and/or state regulators decide if the agreement between private investors and entrepreneurs is okay?

How this will prevent another crash based on mortgages and massive debt is beyond me, though I do know how it will prevent a recovery based on entrepreneurship and investment.

Ask the attorney: Will Senator Dodd’s new bill destroy angel investing? | VentureBeat.

WSJ Sees Struggles in 2010 for Entrepreneurs

Collen Debaise of the WSJ wrote a piece predicting tough times in 2010 for entrepreneurs.  Traditional sources of funding (personal savings, friends, stock & real estate assets) have all been hit during the recent downturn.

There is some good data in the story, though I think it a bit odd that they chose to highlight a chef/restaurateur in LA as representative (though he is an immigrant). From the article:

Funding from angel investors, or high-net-worth individuals who provide capital to young companies, fell 30% to $9.1 billion in the first half of 2009 compared with the same period a year earlier. That figure is expected to remain flat for 2010, according to Jeffrey Sohl, director of University of New Hampshire’s Center for Venture Research, which tracks the data.

What is encouraging, Mr. Sohl says, is the number of deals has ticked up slightly. While angels are investing less—$370,000 per deal in 2009, versus $530,000 in 2008—about 24,500 ventures received funding during the first half of 2009, compared with 23,100 the year earlier.

The article is worth reading, but after a decade in high-growth startups and industries, I think there are more struggle years for successful entrepreneurs than there are easy/flush years. 2009 was difficult and 2010 will also be a challenge, but for entrepreneurs, being short of resources and struggling is always part of the deal.

Angels Flee Tech Startups?

Just catching up on some posts over at Up and Running by Tim Berry and came across this headline: Angels Flee Tech Start-Ups. The post referred to a NY Times article. The bad news is obvious: less angel funding.

The good news is that the more a startup can do before eventually finding money, the less the founders will have to give away. Founders will have to be super creative in order to get through this period, but that leads to a second dose of good news: those who make it through will have real strength from their experiences.

One potential solution is to go back to school and use the resources and time universities afford in order to launch your firm. 3% money in ‘student’ loans from the Fed? Any takers?

My startup, Family Fantasy Sports, which has just achieved some crucial milestones, has briefly spoken with some ‘angels’ and many are super cautious, though some of the older, wealthier ones are pretty even keeled. We are trying to hold off going there.

Angel Investments Down

“Angel group investments in North America have decreased at least 10% over 2007 levels, according to a new survey by the Angel Capital Association (ACA). The organization found that the average size of group investment this year was about $281,000, up 6%, though the average number of investments per group fell 16%.” The news release.

More on the Myths of Angel Investing

We recently highlighted Scott Shane’s new paper on Angel Investing, this morning the WSJ featured part of their discussion on the topic in the paper under “Best of Independent Street.” The article online by Kelly Spors is tight and there are some insightful comments from their readers, plus a big, obvious piece of ‘British spam’ (see picture).

The main critique is likely around the term Angel Investor and what that means to the academic — Shane — versus the practitioner — the entrepreneur.

How do you use/define the term Angel Investor? And do you think one’s conception of the term varies by location (as a commenter on the WSJ site points out); people in and around Silicon Valley, DC, Boston, etc. have different expectations of an Angel versus someone in Omaha, Saint Petersburg, or Midland, TX?

Tivo Alert — Elevator Pitch on Donny Deutsch

Just noticed that the Big Idea with Donny Deutsch is having an elevator pitch show tonite (28 Feb). No doubt it will play again multiple times (probably over the weekend). Here is the elevator pitch section of the show’s site.

Calling all entrepreneurs! If you’re looking for an angel investor, our new segment “Elevator Pitch” could give you the chance of a lifetime! We’re talking about REAL DEALS for REAL MONEY. We’ve connected budding entrepreneurs with willing investors to see if their Big Ideas have what it takes to make it to the next level.