Ever wonder what happens to the VC deals that don't work out?  Here's one venture capitalist's take on what happens to the companies they fund that don't "make it."

The first online VC just got approval from the SEC - FundersClub.  Sounds like they have some investing to do....

Via VentureBeat, we came across an amusing (and good) top 10 list of things to not say to a VC while pitching. 

“My product is naturally viral”: Every entrepreneur claims to have a “naturally viral” product. It’s like everyone believing they are an above-average driver. The fact remains that average CTR on Facebook news feed links are around 0.2 percent, which are about the same as banner ads, and certainly no one has ever claimed that banner ads are viral. Until a product has gone viral, it’s not viral."

Start-up investing is reaching new heights - Hedge Funds.  They are not the only ones getting into the game. Also lining up are private equity firms.  Hey, the more the merrier, but one things for sure, it's still a gamble based on historical returns.  We'll see how well they do at picking winners compared to their VC brethren. 

Unless you've been living under a log, you probably heard about the firing of Andrew Mason, CEO of Groupon.  Funnily enough, the company's stock went up after the announcement.  Probably a short term tick up. 

Unless Groupon can revamp it's current business model or do some acquisitions to change its direction, we just don't see how it survives in the long term.

The recent launch of the new Yahoo! homepage makes me wonder if she is trying to transform Yahoo! into Google before our very eyes.

we have a feeling that she is getting Yahoo! ready for sale.  Gee, we wonder who the buyer would be......

Despite word on the street (or valley) claiming that many VC firms are dead in the water when it comes to fundraising, certain firms like Battery Ventures are defying the trend.  They just raised $900 million, split between two funds.  It appears that they are gearing up to invest in later stage technology deals, which often require deep pockets.  We're looking forward to see the kinds of growth capital deals they end up investing in. 

As they look for deal flow, they should check out The Deal League. 

Being part of an "angel investing group" can be a double-edged sword.  But, being an investor looking for money, angel groups can be a life-line for your business.  How can you use them to your advantage?  TechVibes has provided insight into the Good, The Bad and Ugly of angel investor groups.

The CIA, NSA and FBI aren't the only ones with competitive inteligence units.  Many large corporations throughout the world have internal intelligence divisions to secure more detailed information about their customers and competitors as well as to secure their own intelligence.  You might be surprised at how easy it is to find information. 

A start-up or growing company should also be focused on competitive intelligence in their business.  Try using the following technology driven competitive intelligence tools:

Company Website - This one's easy.

Social Media - LinkedIn, Facebook, Twitter -  mounds of information waiting to be discovered!

Search Engines - Think Google, Yahoo, or Bing!

News - Set up a Google News Alert or search for news articles.

CRM - Your contact management system for your sales team can contact key data on your customers and potential customers.

Applicant Tracking System - Potential new hires and new hires can contain key data on customers or competitorsLae

Lawsuits, liens and judgments - Check out the federal pacer.gov database as well as local county courts for primary research. 

Bloggers - These can be industry experts that have a huge network which funnels them information to write about

Market intelligence is key to any business.  What is going on with your competitors, customers, and industry can help a business navigate the rough terrain involved in their business strategy.  Who can provide this key intelligence?

Industry experts - Befriend folks in your industry.  Ask them lots of questions.  Take good mental notes.  Figure out how to use that data to run your business.

Customers - Your customers can provide insights into your business.  What are their needs?  How can you help solve a business problem?  If you can make their lives easier with your product or service, customers will keep you around.

Potential Hires - During the hiring process, you can learn quite a bit about competitors, customers, and general industry trends.  Folks looking for new jobs are often more than willing to "spill the beans." 

What happens when your are plugging along on your computer and BAM! the hard drive goes down?  It's usually nothing to freak out about when you use it for personal stuff, but when it's for your business - you have a major FREAK OUT on your hands.  Here are some lessons learned from a start-up entrepreneur in Chicago:

1) BACK UP EVERYTHING!  Have a back up system in place.  Whether it's on an external hard drive or up in the cloud.

2) Comb through your emails.  If you sent something via email, it will be stored on that system whether its gmail, yahoomail, or microsoft email.  You can retrieve it.

3) Drafts.  Some documents may be lost forever, especially the one you were in the middle of when everything crashed.  Take a deep breath and start over.

4) Restore.  Call up your Go-To technology guy and let him/her know the situation.  Start the recovery process ASAP.

5) Learn from your mistakes. Next time, have a plan in place.  And remember, nobody died, it's just a computer.

When starting up a new business, there are many costs you have to pay before you ever start charging customers for your product or services.

Corporate Filings.  You will need to file corporation papers  Inc., LLC or Partnership with your secretary of state where you are doing business.  If you file them by yourself, it might set you back $500-$600 if you use an attorney, double it.

Legal Costs.  In addition to incorporating a business, founders/partners should establish a shareholders' agreement.  This will put the business issues out front before problems occur.  Depending on how complex your business is, this can set you back a few thousand dollars.  Expect to pay it.

Technology Costs. Unless you are a techie and know how to write code, if you have a business with a technology need, you will have to hire a custom development IT firm to build your business.  Budget for 25% more than what you expect to pay. This is not cheap.

Rent. There is a reason why Steve Jobs and Bill Gates built businesses in their parents' garages - rent isn't cheap, but when it's your parents' house, usually its free.  Keep costs low by holding out for free rent as long as possible.

IP/Patents/Trademarks. Even if you are the techie writing code for your business, if you want to preserve the IP, it will be imperative to start the patent process.  This can be a costly, long process.  Put aside $15,000 just to start the process with an IP attorney.  Trademarks are less expensive, but will still cost you.

Technology needs.  Who will host your website? Who will maintain it?  What about email?  Decide a service provider upfront that will suit the needs of your growing business.

If you are looking to raise capital for your start-up, remember to post the opportunity for FREE on The Deal League to gain access to angel investors, venture capitalists and family offices.

In many ways success comes down to attitude.  If you think positively, put your efforts in the right people and surround yourself with others in the same frame of mind, many times you will find things will fall into place.  This is especially true when starting-up a new business idea. 

However, birds of a feather flock together and if you are keeping company with nay-sayers or folks who don't want to help take your dream to the next level, failure can be imminent. 

 VCs were busy last year. 

Over $28.3B was invested in 3,267 deals.  But the real shocker was the growth in seed funding, hitting record highs.  Of note is that despite such large dollars being invested for 2012, it still missed the mark compared to 2011 where over $30B was invested.

Although the recently passed JOBS Act in 2012 is anticipated to change the landscape for investing (i.e., less stringent hurdles to meet a qualified investor), it appears that crowdfunding is still in its slow going stages.  

Bill Bricker at IBM,thinks that crowdfunding can become a HUGE business opportunity - to the tune of trillions of dollars.   This remains to be seen, but early stage companies having greater access to capital that isn't controlled by institutions and high net worth individuals will change the capital raising game as well as their chances for success.  At The Deal League, we are interested to see where this one goes...

VCs were handing out loads of cash in 2012 - to the tune of $20.6B.  This was up 10% from the previous year.  Let's see if the money keeps on rolling in for 2013....

According to a recent Wall Street Journal article, VCs apparently have extremely withdrawals if they aren't constantly connected to a mobile device.  Maybe if they took a different view and enjoyed the simple things in life, finding the next "big idea" might be easier.  Remember, less distraction = greater creativity. 

Even the largest PE funds like Apax Partners have some "explaining to do" while fundraising.  Apax Partners may not hit its multi-billion dollar fundraising target; but what's more interesting is the push back they are getting from potential investors in their newest fund about staff turnover and poor returns.  We expect this to continue across the board in PE firms trying to fundraise over the next several years. 

Hold on for Mr. Toad's wild ride.....

It appears that many startups will be left stranded unable to raise a round of Series A funding. Some companies just aren't meant to be funded, others just need to make sure they are getting in front of the "right investors."  To make this happen, they should submit their opportunities on The Deal League.

Yet another company featured on The Deal League receives funding - SpotHero, which helps reserve parking spots in Chicago.  Battery Ventures led a $2.5MM round of financing, rounded out by Lightbank, New World, among others. 

It looks like the funding market for start-ups continues to be hot in Chicago. 

LPs in the investor world are moving their weight around on fees.  Perhaps the May 2012 Kauffman VC report opened a few eyes.  It appears that LP that have deep pockets are using it as leverage.  The good old "2 and 20" model days are numbered. 

Read out how Hamilton Lane, an advisor with $24 billion to deploy, was able to negotiate these fees down (yes this is NOT a typo).  Twenty-five basis points may not seem like a lot, but it does make a difference over time and it's changing the way GPs are going to have to negotiate in the future.

Not all entrepreneurial pursuits require VC funding.  But it is rare when an early stage venture has to try hard to keep VCs at bay. 

Maybe more startups will think differently about taking VC money.  Or if they do take VC money, they might negotiate more control considering the strings that come attached.

New York got in line early for the post-Thanksgiving rush and secured $40MM+ in federal funding to support innovation, job growth, and entrepreneurship. 

Now that NY has distributed the funds to a few key investor groups, they should check out The Deal League for early stage deal flow www.thedealleague.com 

Another deal that we highlighted at The Deal League recently received funding.

Chicago-based, Retrofit, which plays in the healthcare-weight loss space, recently announced that it raised another round of capital - $8MM more.  Now having its total raise over $10MM. 

The company, which is based in Skokie but moving to Chicago early next year, crafts 12-month weight loss programs for customers, particularly busy professionals, based on data collected via wireless tracking devices such as a scale and pedometer.

To find other types of deals that The Deal League has highlighted join www.thedealleague.com  

It's the classic David vs. Goliath.  Facebook's privacy issues are boiling over the top.  This was all started by an unknown student who was working on a class project in Europe.  It may just transform how Facebook operates and collects data on its 1 billion + users.  We can't wait to see how this one flushes out.