"I've decided to write a book," I told my wife over a year ago.

She gave me that what-the-bleep-are-you-talking-about look. You may be familiar with your spouse.

"You've what?"

"I've decided to write a book," I repeated, slightly less confidently.

"On what?"

"Venture capital and entreneurship."

"Why?"

"Well, when I was an entrepreneur, I couldn't find any good books on how this mysterious capital-raising process worked and how to harness the resources and knowledge of the VC industry to help build my start-up. Now that I've seen it from the other side, I want to explain to entrepreneurs how it all works to help them be successful. There are good blogs out there, but no good books that pull it all together."

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Recently an entrepreneur extraordinaire I admire by the name of Chris Dixon touched on the two general paradigms people/institutions can adopt towards one another when conducting business. He first referenced the transactional/legalistic approach wherein labor is exchanged for money in the form of a contract that is enforced by organizations, (especially the legal system). The other approach is one based on trust, verbal agreements, reputation and is "enforced" (so to speak) by the community. As Dixon points out, the world of startups is overwhelmingly governed by the trust/reputation/community approach.

Let's just juxtapose these very different paradigms against the backdrop of the modern American university. As we've established in earlier posts in this series, it has now become fashionable and accepted for universities and their tech transfer offices to engage in the practice of spinning-off companies based on their intellectual property and know-how. In fact, according to AUTM statistics, over 600 university startups are created every year based on federally funded R&D.

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All eyes are on Toyota’s recall of 8.5 million vehicles due to faulty gas pedals and brakes. The recall has sparked congressional hearings, a probe by the U.S. Department of Transportation, possible criminal charges stemming from a federal grand jury investigation and numerous civil lawsuits, all in the name of driver safety.

This aggressive response to Toyota’s mistakes is appropriate, even though the human toll from its miscues has been, thankfully, relatively modest – 34 alleged deaths and a few hundred injuries. Not to downplay this misery, but in stunning contrast, consider this: More than 100,000 Americans die annually in U.S. hospitals because of avoidable medical errors, according to the Institute of Medicine (IOM), which also says that medical errors rank as America’s eighth leading cause of death. This is higher than auto accidents (about 45,000) and breast cancer (about 43,000). And the problems don’t end here. Studies show that approximately 19% of medications administered in hospitals are done so in error, injuring about 1.3 million each year, according to the FDA.

Something must be done to address this woeful situation. In addition to avoidable death and injury, it is costing the economy $60 billion a year. If recouped, those dollars could fund health insurance for a large number of those currently uninsured.

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I'll never forget my first marketing class at business school. Our professor peered at us with an intense glare as he pushed back on our standard, "chip shot" comments. At one point he asked the guy next to me to opine on the case we were discussing, which involved launching a new consumer product. "Well," my neighbor answered confidently, "I think it will be a hit because I can see my mother-in-law buying it."

"I see," replied my professor dryly and then turned to the class with a withering look on his face, "Steve appears to have fallen into that fatal trap of 'Mother In Law Market Research' - believing this new product will be a hit just because his mother-in-law likes it. Instead, let's look at the data, shall we?"

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Apparently, our work to weed out unscrupulous venture events is not done. Today, I learned that Boston entrepreneurs will be fleeced in order to have the opportunity to pitch to VCs. 

To quote my partner Seth:

“THERE IS NO CIRCUMSTANCE IN WHICH ENTREPRENEURS SHOULD PAY TO PITCH THEIR BUSINESS TO PROSPECTIVE INVESTORS. PERIOD. END OF STORY.”

It’s not just Seth. Much of the credit goes to Jason Calacanis for leading the charge against such practices.  But while Jason was instrumental in dissolving a few pay-for-pitch groups, it seems like this one has managed to survive. (Hopefully not for long).

Name:  Young Startup Ventures Date and Location: April 21st, at the Microsoft New England Research & Develop...

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