50 angels in a room

I am sitting in a room listening to high powered startups present to a room full of angel Investors. Standing room only. This is the second time this week when I’ve witnessed positive energy in the early stage market. I don’t have data on how people are investin capital. Maybe all 5 companies will strike out. But are 50 money guys here on a wed. Night in order to do nothing?

Better Place Yes. Detroit No.

I still loathe the BIG 3 Auto CEOs today. I know that’s strong, but these guys are the Larry, Moe, and Curly of the Fortune 500.

Meanwhile John Markoff at the NYT reports that Better Place is moving into Hawaii with another sweet deal in the worst financial climate in two generations.  Because Electric cars make sense.  Renewable Energy makes sense.  Why would I believe that Detroit will crank out more fuel efficient cars with their $40bn bailout?  How do we know they wont’ be back in 6 months asking for more?  Is a Hybrid Navigator or Hummer our future?

Better Place is one part of the future.   Detroit is the entire past.  Israel, Denmark, San Francisco, Australia, and Hawaii have seen that future.  Detroit will drill for oil on 8 Mile Road, before they let electric cars into town.

Coolest Company in the World

This week, Better Place cut a $1bn dollar deal to bring electric car charging stations to the San Francisco area.  Better Place is without question, the most ambitious startup to ever come out of Israel and perhaps the company that has the best chance of restructuring the automobile industry in the next 5 years.

The Better Place Station

Better Place will replace fossil fuel burning cars with electricity consuming cars using a series of battery swapping stations around a given metropolitan area.  Nissan is the first company to build the cars.  Israel became the first country to commit to building the infrastructure and now Denmark and San Francisco are joining them.

Remember when everybody (Jobs/Bezos etc) hyped the Segue has an urban lifestyle changing device?   Well I’m hyping Better Place. To be sure, creating electricity can create CO2 emissions when we use coal, but there are many sustainable and renewable ways to create electricity. Denmark, for example, gets 20% of their electricity from wind.

There will be much more to say about Better Place going forward.  I am following the company closely.  But I wanted to introduce you for two reasons:

First, the wheels are really coming off the economy.  Everybody is terrified.  Shai Agassi gave us hope this week  announcing  that he will raise $1bn (in equity!) to change the Bay Area and help us out of global energy and environmental crises.  Second, to me Better Place symbolizes the rise of Israel as a first world economic power.  I don’t care how small the population is.  I don’t care about the geographic location.  The cooperation between universities, the military and the government coupled with a relentless entrepreneurial spirit among Israelis makes it the most undervalued population in the world.

Better Place is headquartered in Silicon Valley, but make no mistake, it’s an Israeli multinational company.

Why Boxee was Funded

In Japanese, one of my favorite words is gaman.  Translated it is a combination of “patience and persistence” and to be a good entrepreneur you must have the gaman gene.

Boxee, a company that brings the Internet media experience to your living room, announced a round of financing today from two quality firms here in New York — Spark and Union Square Ventures.  It’s a testament to what they have achieved so far.  Fred Wilson and Bijan Samet get plenty of opportunities so it’s worth thinking about why Boxee was able to secure financing at a valuation that made sense for the team.

Of course, I’m interested in thinking about how this particular Israeli company secured financing.  If I’m not mistaken I think it’s the first Israeli owned  company in either firm’s portfolio but I can’t say that with certainty.  Fred’s post lays out his investment thesis. As usual, his voice is distinctive, differentiated and thoughtful.  Read it to hear to understand why Boxee is special.

Here are my thoughts on how Boxee got this chance to build a big company and did so at a time when many investors are pulling back on new investments.

1. Boxee has been over a year in the making.  This is a year where a small team worked tirelessly for very little money or no salary (in fact I think founders contributed some of the capital and tons of it in sweat equity) to get the company to a point where it would be eligible for financing.

2.  This team completed a product with a closed alpha relatively swiftly because they were very clear about what they wanted to do from the beginning.  Their  mission is to unite web media consumption with the home theater.  They stayed relentlessly focused on that.  I’m sure there were many times during the year where investors questioned their strategy and product roadmap etc.  Fred admits he declined twice before saying yes.  However,  they did not waver and kept building a product that we all need.  Having a vision and sticking to it is much easier said than done.

3.  They met the big market challenge.  Everybody loves TV, everybody has broadband, and plenty of people have a big plasma screen ).   So getting the on-demand web experience to the Plasma screen in the living room is vitally important for audiences to grow online and convert from watching NBC to watching Hulu.  This is a company that could have 100mm users or more.  That’s rare.

4.  Boxee kept their alpha invitation-only and created a culture of listening to user feedback to simplify the product.  Now, they will continue to look for ways to make Boxee easier because they know that’s the critical element in order to spur growth and cross the chasm to mainstream adoption.  Avner wants a 1mm users by the end of 2009, but he knows value is created with 10mm and Boxee is the platform with 100mm.  Listening to users will be how boxee gets there.

Most importantly, Avner, Gidon and their team recognize they must understand the culture of the people that Boxee wants to serve. From the beginning he was focused on the 300 million American television watchers.  So Boxee has an office in New York with the CEO here and the development takes place in Israel.  This means many trips back and forth between Tel Aviv and New York. It’s tiring and difficult.  But this is how Boxee has world class development talent and product leadership based in a huge market like the United States.

Boxee is symbolic of  Israel’s future –  a global company that serves consumers around the world and creates job in Israel and abroad.  It’s a company founded and owned by Israelis that live around the world.  This is great for Israel and even better for the people who are served by these extraordinary innovations.