Grow VC Manifesto:
everyone funding startups
A warm welcome to the network society
Jan van Dijk1 described the network soc...
More equal opportunities
It is because of these very reasons that Grow Venture Community was inevitable.
In fact when we d...
We asked how do we make funding for innovation and entrepreneurship, and
indeed finance more general, more equitable and m...
So what’s our manifesto, what gets us out of bed in the morning, making the
coffee, singing in the shower and just feeling...
Sharing is good
In complete contrast to the idea that industrial age thinking is grit in the mill and
all that, we know an...
The learning organisation
Lastly, learning is something we all at GrowVC passionately sign up to. We think
that learning i...
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Grow VC Manifesto

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It is because of these very reasons that Grow Venture Community was inevitable. In fact when we don’t like how something works then amazing things can happen, especially when we have the tools to enforce that change. “Ordinary people can be instruments of the sublime,” wrote the author and playwright, Alan Bennett. What we don’t like is how many of us live, how we work, trade, are governed and how we learn. So, we are in the midst of renegotiating those relationships. Don’t be fooled that these 2.0 communication tools and legal frameworks that amplify the unique human talents for cooperation, are accidental. We have become the instruments of the sublime, midwives in helping to bring into a world a society that is not locked down by the hierarchical structures of the past, and of course financial markets play a key role, there are simply no exceptions.

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  • In my so far fruitless campaign to obtain investor funding for my pet project, Better Than New Auto Centre LLC, I have found a curious bias by investors in favor of 'high tech' investments over anything else. It seems investors are all looking for the next Apple or some similar adventure, willing to risk millions on any high tech startup, most of which turn out to just be a money pit, rather than achieve a

    really great return from a well thought out, well managed, good old 'meat and potatoes' venture with a new, exciting twist. If this trend continues, I fear for the hopes and dreams of myriads of new entrepreneurs who have great vision but lack the funds to put their vision into action. Personally, my project offers investors a 3 year

    return of approximately 560% on an investment 92% secured by hard collateral IN A PROVEN HIGH DEMAND BUSINESS, yet I haven't found a legitimate investor even remotely interested in even talking. Something is seriously wrong with that kind of thinking
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  • As a lifelong student of psychology (law enforcement and educationally) GrowVC is right on target. In describing the financial meltdown of markets and infact the lesser number of VC funders, it has become critical for small start ups to find capital elsewhere. The only way to do so is through networking. Unfortunately, VC'ers tend to look for only low or no risk ventures due to the economy worldwide.

    What we need as small businesses and start ups is the mentality of the industrial age investors that had the courage and patience, the moxie, if you will, to stand up and revitalize the economy instead of hedge and protect. The Bonsai tree grows in any way you want. You have to trim, shape and grow it into the large trees which take 30 years to reach maturity. If you do nothing, the tree dies.

    The same can be said for a start up or small business. GrowVC is a good, and smart place to start. We need more capital flowing in the veins of the system to go with the networking. Then we all prosper. Investors draw more investors like moths to a flame but the flame has to be lit. It takes fearless risk and some faith. That's what makes investing exciting.
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Grow VC Manifesto

  1. 1. Grow VC Manifesto: everyone funding startups A warm welcome to the network society Jan van Dijk1 described the network society thus, “networks cause a comprehensive restructuring of society at large – they are breaking old models of organisation. In a network society, the network becomes a basic unit of organization at all levels, in a mass media society, the basic units are the large collective ‘masses’. A network society is based on individuals who form voluntary connections with other individuals regardless of location. Online social networks, media networks and technology networks act as the catalysts for a networked society.” Compare that to the heavy, unwieldy industrial age – industrial thinking, says John Thackara2, is “grit in the mill of the network society”. The industry that is described as venture capitalism designed initially to spur on innovation and entrepreneurship is of course part of that industrial era – and it is our view that it too, is grit in the mill. System breakdown We are in at the final stages of the industrial revolution, and are witnesses to events that at times that appear almost Biblical. The recent unprecedented meltdown of financial markets, point to a real design problem, in the same way that legal frameworks, that were once meant to support and encourage innovation and creativity are being used to, as James Boyle and Lawrence Lessig describe it, as enclosing the commons of the mind and locking down our culture for the benefit of a few. Regulation has become so tight it is no longer regulating but choking new growth to death. From a VC perspective The Go4Venture monthly report in March 20103 stated that “professional venture capital funds have become less relevant to the financing of innovation for the time being”, that “the market is wondering whether professional VC managers add sufficient value” and “by driving new investors into the venture capital market, such shifts may prove beneficiary to the eco-system as a whole in the end”. You might say that the contrary to the opportunities offered up by the networked world that many at a grassroots level have grasped, the existing VC world seems parallel parked in an alternate universe. 1 Jan van Dijk, The Network Society. Sage – (second edition) 2006 2 John Thackara, In the Bubble: Designing in a Complex World. MIT Press – 2006 3 http://www.go4venture.com/
  2. 2. More equal opportunities It is because of these very reasons that Grow Venture Community was inevitable. In fact when we don’t like how something works then amazing things can happen, especially when we have the tools to enforce that change. “Ordinary people can be instruments of the sublime,” wrote the author and playwright, Alan Bennett. What we don’t like is how many of us live, how we work, trade, are governed and how we learn. So, we are in the midst of renegotiating those relationships. Don’t be fooled that these 2.0 communication tools and legal frameworks that amplify the unique human talents for cooperation, are accidental. We have become the instruments of the sublime, midwives in helping to bring into a world a society that is not locked down by the hierarchical structures of the past, and of course financial markets play a key role, there are simply no exceptions. So it’s not surprising that Business Angels and friends & family collectively represent more investment money than VC’s. Annual angel investments stand at $20-50 billion in the US alone. YouTube exploded, as Henry Jenkins4 explains because we as a society were ready to return to our participatory ways5, and so the next Silicon Valley does not have to be place, it can exist as part of this networked society, which is a different eco-system. Indeed GrowVC decided it would provide a platform, service tool kit and partner network for the virtual Silicon Valley. GrowVC’s view is you can build with money, or like the Dutch Polder model, you can build with people. In a world where people are connected up to, and, across each other, it seems to make a great deal of sense. That said, sometimes common sense is not always that common, which is why the Venture Capitalists struggle to see alternative views. GrowVC had a dream, and that dream was more equal opportunities, where entrepreneurs and private investors unite to accelerate innovation, in an environment that was, global, transparent, open collaborative, and effective. And where value was created for all; entrepreneurs, investors, and experts in their particular fields. Investors need great ideas, and great ideas offered up by entrepreneurs need investors, it’s just that in the networked world we can re-imagine what that looks like. We thought the answer was staring us in the face, it wasn’t more venture capitalists, with the emphasis on capitalism, but a global entrepreneurial community brought together by their passion for new and exciting visions of the world. 4 Henry Jenkins is an America media scholar and currently a Provost Professor of communication, Journalism and Professor of Cinematic Arts, a joint professorship at the USC Anneberg School of Communication and the USC School of Cinematic Arts. Previously he was the Peter de Florez Professor of Humaniries and Co-Director of the MIT Comparative Media Studies Program with Willaim Uricchio. He is also author of Convergence Culture: Where Old and New Media Collide and TextualPoachers: Television Fans and Participatory Culture. 5 Jean Burgess & Joshua Green YouTube Polity – 2009
  3. 3. We asked how do we make funding for innovation and entrepreneurship, and indeed finance more general, more equitable and more effective? We recognised it was a design problem that required greater transparency, no middle-men, better availability of information, more cost-effective tools combined with open source and legal frameworks to manage transactions. And companies and organisations such as Kiva.org6 Local Motors7, Lego8, NASA9, Linux10, txteagle11, and Zopa.com12, all in there own trailblazing ways taught us, and inspired us how we might go about designing GrowVC 6 Transactions well over $100 Million in 4 years 7 Local Motors, designs cars via a global community, uses open source and creative commons legal frameworks, and builds them in micro factories. Local Motors can design and build cars 5X faster with 100X less the capital costs 8 LEGO transformed its business by using co-creation as a principalmechanism to develop better products 9 NASA has used distributed communities to harness collective intelligence on specific projects accelerating the time in which those projects were completed 10 LINUX pioneering the open source movement and demonstrating sharing can stimulate innovation and commerce 11 txteagle connects corporate clients to the world’s largest knowledge labour market: the 2+ billion literate mobile phone users distributed throughout the developing world. txteagle enables mobile phone subscribers around the world to earn small amounts of money or airtime in exchange for work. Pioneering work in connecting previously disconnected economies together 12 Zopa chnages the ways we thinkabout lending and finance
  4. 4. So what’s our manifesto, what gets us out of bed in the morning, making the coffee, singing in the shower and just feeling so damned in love with the world? What do we passionately believe in? Well in this networked world – the world of no straight lines there are some dots that we need to join up and explain what those dots mean. Conversation (s) (al) First up the millennial insight that true markets are equitable, conversational, where we are all traders of knowledge and information, which translates into commerce, or entertainment or friendship or all three. It’s pointless trying to separate these. Embedded Socia (bility) Of course, conversations are well, social. Therefore it’s not social media that excites us, it’s embedded sociability. Our platform, our business, is entirely predicated on the notion of sociability. Participat (ory) (ion) + Co-creation + Collective Joy If we explore the idea of sociability we find ourselves musing on [1] participation, [2] collective joy and [3] co-creation, what some describe as the holy trinity of the three-legged stool. Why do we think they are inseparable? Because, you cannot participate without co-creating, experience, knowledge, value, innovation, memories and if we do that it always makes us feel really good. What you might describe as, the intensity of engagement. Passion Got an itch you really need to scratch? Innovation is about passion, entrepreneurship is about passion, and you cannot participate, co-create, and feel good when you reach your goal without being passionate. Simply, you can’t change the world looking at your socks, and feeling glum. So if you have a touch of the grumpy Mondays, or if you feel there is nothing you can change – we reckon stop reading here. Different roles As we join up the dots, we can say that people do not have to be defined by one simple job, what you are is more interesting that what you do. People have different skill sets and can apply them in different ways – that’s why at GrowVC, you can be an entrepreneur, and investor and advisor all at the same time. We think diversity works – well that’s what Mother Nature thinks anyway, and since there are no straight lines in nature and since we live in a networked society – our instinct is that’s got to be a good thing! In many startups the roles of being an investor, customer, and employee can be mixed. So if we imagine a business that is irrelevant for 99% of people, but for 1% it is a life long passion, those people can invest in it, they can work to implement it, and they are the customers.
  5. 5. Sharing is good In complete contrast to the idea that industrial age thinking is grit in the mill and all that, we know and believe that sharing is a good thing. In fact lots of evidence shows that an open approach to stimulating innovation is the mitochondria of growth. It’s why we have built our business on open source technology, and we have created an open API architecture to allow others to help everyone grow. We make the observation that we cannot know everything, as we like to say, nobody is as clever as everybody. Our ‘Start Up Commons’ is based upon this insight. And more than that a cooperative model of ownership can be a good thing. What does that mean? Well because we are premised upon a community-funding model – co-ownership is a default setting. Trust Trust is crucial for a sustainable business, because it is the bet we all take on the future actions of others. We need trust for better and long lasting relationships, and we think this breaks down into some key areas, [1] legal frameworks (e.g. licenses) [2] personal – the connections we make [3] networks, so do my friends or business partners trust in something or someone? GrowVC believe there are many ways to build trust in networking services, your track record, your social network, ratings, or trusted partners. So we have to build trust as a value into the business. Reputation is one of the key assets in the networked society – we say, you should build it, not destroy it. Trust in the networked society = $$$ Technologies of cooperation Howard Rheingold was the visionary that described all that shapes the phenomena of 2.0 as ‘technologies of cooperation’ that as he says, ‘amplifies the human ability to collaborate’. To share, co-create, participate, and co-innovate we must have technologies that enable us to that. So we enable, crowd-funding via community investments, for example. Velocity Over a cup of coffee the other day, Valto one of our founders, reminded us of Hitachi who once famously said that, ‘speed is God and time is the Devil’. Innovation needs speed, to accelerate; creativity, deeper insight and execution. Therefore GrowVC is all about velocity, speed to market can sometimes make the difference between success and not quite getting there before ‘closing time’, and of course connecting entrepreneurs up to investors and breaking down the norms of how investments are normally done, we know that we can accelerate, funding so you can get on with the business of scratching that itch and realising the dream. It means you, as entrepreneurs are not hog-tied by VC’s where you live that have no knowledge or expertise in what you want to do. In the old world it was called ‘poor deal flow’. We prefer the raging torrent of deal flow, we think it makes a more pleasant sound.
  6. 6. The learning organisation Lastly, learning is something we all at GrowVC passionately sign up to. We think that learning is not something you do twice a year on an away day, but something that should be part of our every day life – in the ebb and flow of conversation we share what we know, incrementally we all collectively learn, what some might call the harnessing of collective intelligence, as we are all actively engaged in conversation – it is through this rapid information exchange on a daily basis that we become a better business, and therefore can put into practice what we know. As you can too. In a way, we see ourselves therefore more like a village than a corporation with, as Charles Handy13 would say, villages are small and personal, and their inhabitants have names, characters, and personalities. What more appropriate concept on which to base our institutions of the future than the ancient organic social unit whose flexibility and strength sustained human society through millennia? And who could argue with that? Written by Alan Moore, Head of Vision at Grow VC (www.growvc.com) and author of the forthcoming book: No Straight Lines: how we will live, trade, govern and learn in the networked society. 13 Charles Handy – Management professor and author.The Hungry Spirit Arrow – 1997

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