Been thinking about the advantages of doing deals as LLCs? John Filla runs the Houston Angel Network, the largest angel organization in Texas. They do things differently in Texas, for example they charge entrepreneurs $250 to apply and then half of their deals are set up as LLCs or joint ventures, something unique to Texas. Why do these legal structures matter? They offer "greater leverage later on, for subsequent negotiations".

What to listen for: 2009 predictions, of course, but also how about valuations? John says entrepreneurs approaching for the first time have not factored in the new economic realities, but experienced entrepreneurs who are circling back for additional funds, they are more aware and their deals reflect that.

Is money still available for entrepreneurs? John describes that there could be more than before the meltdown! Exits? I'll let John describe his successes.

Show #207 (48:32)

Trouble in Venture Capital? "Keep the faith!" Clearstone's Jim Armstrong shares some sobering year-end perspectives. "Things get good as fast as they went bad," Jim encourages. Is it the beginning of another great buying opportunity? Or is Jim inclined to be an optimist? And what about exits? "VC returns are nearly 100% correlated to the IPO market; and that's troubling! It's never been harder to create a billion dollar company. Can we take the risks we used to take?"

What a way to ring in the new year! Jim shares some great insights,"you can afford to have a false positive; you can afford to invest in things and fail, but because the big ones are so rare, you cannot afford a false negative. You cannot afford to be looking the wrong way."

Check out Jim's blog. Let's hope he finds more time for his posts in 2009. "Keep the faith!"

Show #206 (43:11)

Listener Bill Baker has been feeding me some great year-end links. Check out Doug Kass' 20 Surprises for 2009. Am I reading these wrong? I found them generally optimistic, except for the cyberterrorism attacks that totally compromise the internet. Thanks, Bill.

The Black Swan is often mentioned by my guests on the podcast. Who is Taleb?

Watch Charlie Rose interview Nassim Nicholas Taleb.

CHARLIE ROSE: Define capitalism II for me.

NASSIM NICHOLAS TALEB: Banks become utility companies. A lot less
debt. Less speculation in asset values, all right? You make fewer -- a
barber, you make your money shaving people and cutting hair and so on, and
talking to them, rather than money in the stock market. Or if you're a
dentist, dentists used to make money in dentistry, and then later on they
started making money in investments. You go back to making money in
dentistry.

So we're seeing people reverting to old habits. And of course that
can be achieved with a decrease of the allocation to assets, unfortunately.

Stocks -- there is no reason for stocks not to be much cheaper than
they are today.

These short days and long nights offer too much time for reflecting on the year winding down. For several days I've consoled myself with heartening economic cheer from the rankings in BusinessWeek's Top 25 Startups. To have one of my portfolio companies named to the list, Trius Therapeutics, has lifted my spirits more than any New Years' champagne likely will; surely it will payoff in my lifetime...

But then this morning, a flurry of listener emails all referring to the state of the art of venture capital investing: Rebecca Buckman pulls no punches in the January 12th issue of Forbes: "Venture Capital's Coming Collapse". If business is bad for venture capitalists, what can angel investors expect?

Does he have the best job in angel investing? That's what John May, Chairman Emeritus of the Angel Capital Association (ACA) claims. This new role offers more international exposure, like speaking at the Arab Business Angel Network (ABAN) conference. Can he even talk about it? Word is that there's a new international angel association, the World Business Angel Association, forming in Arabia. John shares what he can...

What to listen for: It would be great to see the great petroleum wealth of Arabia become available for angel investments, but more money coming into the system doesn't necessarily mean more exits. John asks, "do we have a sustainable angel model here in the US?"

Show #205 (40:02)

He's been starting and growing companies for 30 years. Insights into the markets, advice for entrepreneurs and investors, advice for the incoming President, too, Randy Lunn offers something for everyone. But what's he been doing lately? He says he's focusing on more personal projects, but just what kinds of projects does he mean?

What to listen for: Agonizing over pre-money valuations, but still want your 10X? Do your valuations backwards from where you think your exits will be. Why does he think venture capitalists should be involved in fewer companies? There are so many pearls in Randy's comments, I've listened 3 times.

Show #204 (37:07)

Angel investor and blogger, Permjot Valia would be the lunch time speaker in Halifax and my friends at the National Angel Capital Organization wanted to introduce us. We hit it off right away. Permjot writes the Business Angel Blog out of his office in London.

What to listen for: He's acted independently as an angel investor; does that mean he doesn't favor angel groups? He's created a Distress Fund and says it's scary how similar its application is to angel backed companies. But most of all, Permjot's on the show because of his stories; he shares his lessons learned with that marvelous self-deprecating British humor.

Show #203 (36:51)

My recent podcast with the co-founders of Budding Brilliance generated a comment from down under. Listener Andrew Fern flinched at my comment about serial entrepreneurs and pointed me to Nic Brisbournes's blog The Equity Kicker; read more about how careful scrutiny of statistics topples long held mythology of entrepreneurship. Nic summarizes an article in the Financial Times, "Lessons that are wasted on entrepreneurs" by David Storey.

"In the UK, the evidence is that novices are neither more nor less likely to have a business that either grows or survives than experienced founders." Then Nic ties this into Black Swan author N. Taleb's perspective. Brilliant and controversial, read more.

How are serial entrepreneurs created? Many times by failing first. It's true in my case and for Jennifer Cook and Tina Davis, too. They had a great concept and they pursued their dream for years, but eventually the Budding Brilliance co-founders had to admit defeat. They went back to work, at real jobs, but the experiences they shared as they developed the company were worth telling. So we met, as people with real jobs do, on a Saturday morning, outside a coffee shop to record their story, the happy and the sad.

What to listen for: What mistakes did they make? What would you have done differently? Or, more to the point, how are their challenges similar to yours?

Show #202 (44:51)

Lux Capital's Josh Wolfe offers, "the best way to predict the future is to invent it". So where do they find the best inventors? At the elite research universities across the country, especially in California where Shahin Farshchi is located. "If you can actually de-risk a project early on, you're going to get a huge value inflection. I think of Risk almost like the First Law of Thermodynamics, it's not created or destroyed, it just changes forms; what Risk turns into is Value."

What to listen for: Josh and Shahin talk about the challenges in licensing technology out of research universities. Solar energy, electric cars and nuclear power, Josh shares his sector likes and dislikes.

Show #201 (35:08)

Dave Berkus returns from European travels and brings along Transcepta's Ray Parsons. John Huston and I haven't gone anywhere.

Ray announced a new fundraising initiative right in the teeth of the economic meltdown; we get an update on his progress and how he communicates with his 45 angel investors.

Then we dive into Fool's Gold; Scott Shane was recently on the show and his interview generated lots of listener feedback. Listen to the Chairman of the Angel Capital Association describe his reaction. And what does John mean by Standability?

Show #200 (52:08)