Hosting Ohours Sessions

This past weekend I had the opportunity to host my first Ohours session (http://ohours.org/). In my Ohours profile, I mention that I'm willing to talk about a range of topics, which include: startups, finance, private equity, venture capital, investing, tech trends, non-profits and healthcare. Anyone can log onto the site and sign up to meet and chat about any topic, which provides a great way to meet new people who share the same interests.

This week I had the founder of an online fantasy sports league website sign up to go through his business plan as he is getting ready to pitch to angel investors. I was impressed with his story and how he got started and came up with the idea for his startup. As a corporate lawyer, he had followed and read about the new online gambling regulations that started to come out in 2006 and he noticed that one of the loop-holes in the law was related to Fantasy Sports leagues online. He waited a few years to see if the government would come in and add any new regulations after a few of the initial sites started to pop up. Today there are about a dozen websites that let you bet on fantast sports, but he has come out with a platform to extend fantasy sports leagues online to just about every type of sport including tennis and golf as well as college sports. The most interesting part of the platform will be its ability to extend betting between people outside of sports to reality television as well. This way people can also start to bet on events such as who will make it to the next round of American Idol or Dancing with the Stars and they will also be able to capture a target audience outside of just the adult male population.  The one thing to look out for will be the potential for the government to see how profitable these companies will become and then they may start to tax the revenue these companies are making, since right now there is really nothing in place for this industry. The other potential concern I would have as an investor would be the acquisition cost for each customer. Since there are several competitor sites, these companies may have to spend more and more on advertising online in order to capture additional active members. It's also still unclear how long active members remain members of these sites since the oldest site is still only two years old. Overall, it still seems to be a pretty convincing business model with a very scalable platform and low operating costs, so hopefully his idea will get some traction with the Chicago angel investors in the coming weeks.

My First Ohours Session

I signed up on the ohours.org site to chat with a managing director at the Chicagoland Entrepreneurial Center (CEC).  I originally signed up to chat with the MD to learn about her background, how she came into the role and what the CEC does. I came to realize that the CEC is a phenomenal resource for the startup community here in Chicago and their goal is actually very similar to mine when it comes to advising startups. The CEC is a non-profit organization that has been around for about 10 years, providing resources and connections to local tech startups in the area. They have five criteria for the startups they work with:

1. Tech industry focused
2. Unique and compelling value proposition in the company’s specific landscape and industry
3. Growth potential – they like to see reasonable projections of $10m in revenue by years 3-5 in order to help the startups get ready for funding
4. Market validation – i.e. customers
5. Strong management team

They also want to understand what the startup needs help with and see if it fits with the resources they have available. They typically have 30 startups that they talk to on a regular basis and develop an informal curriculum to bring in experts on valuation and how to build marketing strategies, etc. The sessions are typically twice a month and not publicized, since they are exclusively for the startups they work with and often 10-15 startup teams will attend each session on a first-come, first-serve basis. After an initial phone call, they like to meet in person with the startup team to do a deeper dive into the business and see where their network may overlap with the company’s own contacts. After our initial phone call, I introduced the startup I am working with to the CEC and we will be sending our teaser/executive summary prior to our in-person session. After the holidays, I’m looking forward to hopefully getting a chance to start attending these bi-weekly informal classes offered by the CEC.