A few weeks ago, I was talking with Dr. Greg Jones about the stateof venture capital in Utah (particularly seed and early stage).  Greg'scomment was that Utah needs more "rock star entrepreneurs" who aresuccessful, and then who can both fund and mentor the nextgeneration of companies.  We just don't have enough angels who canbring this "rock star success" model to their investments (for the number of entrepreneurs with promising opportunities that we have).  I wasgetting ready for vacation and happened upon a book entitled "Once You're Lucky, Twice You're Good, The Rebirth of Silicon Valley and the Rise of Web 2.0 " by Sarah Lacy.

 

I thought that sounded like interesting beach reading, so Igrabbed it.  Most of the research/interviewing was done in 2006 and 07,and the book was published in 2008 - and it includes the early storiesof companies like Facebook, Twitter, Six Apart, Digg, Ning,Revision3, deli.cio.us, LinkedIn etc.   As such, it was a lot of fun -especially since, when she wrote it, many of the stories were stillunfolding, so it's great to know the endings! 

What is important for Utah is that the author really captured the rise of a new type of Angel inSilicon Valley - those who had made money in Web 1.0 and who became"Friend-Tors" to this next gen of entrepreneurs.  Voila, Greg Jones'Rock Star Entrepreneurial model in action, and quite a lot of detailabout how it worked, how these guys "squared off" in many ways againstventure capital etc (perhaps contributing to the current crisis inVenture Capital).   A lot of personal stories add depth to the capitalpicture. 

 

This, in addition to some ongoing soul searching, have led me towonder if I've been working on the wrong agenda for the past 8 years -that of increasing the availability of capital "in Utah".  Perhaps themore important thing is to increase the sophistication of ourentrepreneurs - to help them become so savvy, so knowledgeable, soconnected that they can raise money anywhere in the world - and thenturn around and "Friend-tor" the next gen of Utah entrepreneurs.  It isstill an emerging idea, but I think it has merit  and welcome any thoughts on this.

 

It brings to mind a conversation I had with a local active angel investor (part of one of the active angel groups)  He said that they were just "notseeing" entrepreneurs with "fire in the belly" - and I said, almostwithout thinking,  "That's because the best entrepreneurs aren'traising money from you, they're going out of state."   This was atleast a year ago, but that off-the-cuff remark has stayed with me.  AsI look at those entrepreneurs we have who have had "decent tosubstantial" wins here in Utah, many of them (although certainly notall) have raised all or most of their money out of state.

I think our Angel community now is many many times stronger than it has ever been, and I give a ton of credit to a few key people who have worked hard behind the scenes to improve the process and sophistication of our angel groups - but Sarah Lacy's book is definitely worth a read to see the Friend-Tor dynamic at work.