“More bad news for actively managed mutual funds: A ’survivor bias’ in the Morningstar mutual fund data relied upon by most individual investors and financial advisors has the effect of ’systematically and significantly’ overstating the performance of actively managed mutual funds relative to their related indexes for the 10-year period from 1995-2004, according to a major new study to be released today by Savant Capital Management Inc., of Rockford, IL., and the Zero Alpha Group (ZAG).” (Thanks kottke.org!)

“It takes money to make money. Use these heavenly hints to attract the early-stage funding you need to get your new business off the ground.”

“Let’s kick off 2006 with an issue about which I get a lot of questions (and which StatCounter reports is one of the highest-ranking Google search terms that lead people to this blog). That issue is equity splits within the founding team.”

“When Peter Kight, a former college decathlete, began managing health clubs in Texas in the late 1970s, he was re-pulsed by the high-pressure sales tactics gyms used to keep revenues flowing. Realizing that many new members drop out after a few months, clubs leaned on recruits to pay a full year’s fees up front. Why, asked Kight, couldn’t they arrange to have monthly dues deducted from members’ checking accounts? Kight quickly began negotiating with local banks to do just that — forever changing how millions of Americans pay bills.”

“I had a meeting last week where an entrepreneur insisted on showing me a demo first. He was scrambling around asking for wireless keys and looking for ethernet jacks, while I sat there and tried to engage him in conversation. He lost my interest right then and there. As I started to think more about it, I thought it would be helpful to share some of my thoughts on how to make the first VC pitch a better experience for all participants.”

“Venture capitalists are simple people: we’ve either decided to invest, and we are convincing ourselves that our gut is right (aka, ‘due diligence’) or there’s not a chance in hell. While we may be simple, we’re not necessarily forthcoming, so if you think it’s hard to get a ‘yes’ out of venture capitalist, you should try to get a conclusive ‘no.’”

“…a recent issue of BusinessWeek magazine … devoted many pages to listing the corporations and individuals who have been the most generous… To make the list, I would have had to give or pledge more than $120 million from 2001 to 2005 — that’s the amount pledged or given by No. 50 on the list, Analogic founder Bernard Gordon. More impressive, his net worth is estimated at $125 million and it’s believed he has given some $125 million in his lifetime. That’s pretty great!”

“The worst mistake we made at Moreover was to raise too much money. The Bay Area prides itself on the sophistication of its investment structure, but most of the successful Web 2.0 ‘exits’, from a founder perspective, have been non-Bay Area companies or ones that didn’t raise too much cash.”

“I had the following conversation recently. Entrepreneur: ‘Brad, I just got an offer for my company for $15 million from Company X.’ Brad: ‘Awesome. Who’s Company X, I’ve never heard of them.’ Entrepreneur: ‘It’s a private company funded by Venture Firm Y.’ Brad: ‘Cool, $15 million — is it a cash deal?’ Entrepreneur: ‘No, it’s all stock…’”

“While everyone from Warren Buffett to Arthur Levitt says that it’s important for individual investors to read the footnotes in annual and quarterly reports, nobody has ever written a book that spells out exactly what investors need to look for.” And there’s a web site too.

“…51 are now corporations and 49 are countries.”

“It takes all kinds to make the world go round, and it takes all kinds to make Forbes’ list of America’s 400 richest people. The billionaires on our list have a variety of strange and expensive hobbies–including funding longevity research, flying military aircraft and searching for extraterrestrial life. We looked at five classic billionaire personality types: the Geek, the Limousine Liberal, the Thrill Seeker, the Hedonist and the Narcissist, and came up with some fanciful ways that they might squander their fortunes.”

“In a VC meeting, first thing to remember: Your goal is to get the next meeting (See: Commandment #3). Second thing to remember: That’s not your audience’s goal. The goal of the audience is to decide whether it’s ‘worth it’ (see below) to schedule a second meeting (their opportunity cost, and, to a limited degree, yours). For this, they will inevitably ask a bunch of questions (see Commandment #8: Know what you don’t know, and admit it). Questions can be good, bad or distracting (a form of ‘bad’). The wrong approach to answering questions can be fatal to the second meeting. This Commandment offers advice on ways to handle this situation.”

“Say hello to Blinksale, the killer new web application from Firewheel Design. Blinksale makes it a breeze to create, manage, and send CSS-formatted invoices to your customers and clients.”

“Last week I was invited to speak to a group of 200 students at Duke University. The organizers gave me pretty much free rein in picking my topic, so I decided to talk about this: How to Make a Million Dollars. How to make a million dollars is: a) something students are interested in, and b) something I am qualified to talk about. And the talk went really well. So well, in fact, that I have received requests for copies of the presentation.”