I am also sharing a summary of a recent event by TiE Institute - Silicon Valley on the popular topic of start-up valuation. And in today’s article, I discuss my views on the cash plug technique and its potential pitfalls. This is an issue you may want to be aware of if you develop budgets or financial plans, or even if you hire someone to develop them for you.

Finally, on Tuesday November 14th I’m hosting a one day event produced by SDForum. The event will start with my workshop on financial planning for start-ups. It will be followed by a presentation on debt financing alternatives, a workshop on how to deliver the perfect elevator pitch to investors, and a VC panel discussion on successful funding strategies. Further information and registration details are available here (link omitted as date expired). I hope to see you there.

To YOUR Venture’s success,

Anthony: Kelli, how did you get involved with the field of astrology, and what prompted you to turn your passion into a business?

Kelli: Astrology was something I started reading a lot about when I was around eight years old. I always read my daily horoscope in the newspaper so my interest grew from there. I went to the College of Humanistic Astrology in Sydney, Australia (where we are originally from). We moved to the US in 1994 and started Astrology.net in 1995.

Anthony: David, how long after you co-founded Astrology.net with Kelli did you sell it to iVillage, and what factors made its acquisition compelling?

David: We sold to iVillage in February of ‘99, just one month before their very successful IP0. Kelli and I made the initial investment that established the company, and we raised another $250k from five angel investors, but it was clear that wasn’t going to be enough to build a big company. In the late ‘90s the costs for doing business were escalating as venture backed startups were passing money back and forth between each other. We needed to either raise a lot more money (which would have meant giving up substantial equity), or find a buyer. The “bubble” market was another driver – clearly valuations weren’t going to keep on rising forever. Our predominantly female audience was attractive to sites focused on women and we were able to sell at a premium. Maybe we sold six months too early – but that is much better than six months late!!

Anthony: David, both you and Kelli stayed on with iVillage for some time after the acquisition. What were your respective roles and contributions towards growing Astrology.net within the iVillage family?

David: We ran a mostly autonomous division. Advertising sales, accounting and business affairs moved to NY, but content and technology development, commerce system, customer service and distribution stayed with us. We grew the traffic and membership manyfold and in 2001 became the number one site in the “Divination” category. As Publisher, Kelli ran the “front-end” and I ran the “back-end” and business development.

Anthony: Kelli, last year you and David launched ZDK Interactive, Inc., a new astrology-focused online venture. Why not just retire early and enjoy more time with your family?

Kelli: We tried retiring with different experiences. David got very busy with one of the companies we had invested in, then decided to work on the 2004 election with a fellow Internet entrepreneur. He was busier than ever! Whereas I contracted a near fatal illness called Toxic Ephidermal Necrolysis. It happened suddenly and without warning and to this day no one knows what caused it. It was some sort of reaction to a toxin or chemical. Around 70% of my skin just basically burned off. I literally woke up in a hospital, not knowing what had hit me. I had been in a coma for two weeks, on life support and treated in the intensive care burns unit. The corneas of my eyes burnt off. My lips burnt off. My esophagus and lungs have burn scars. I was skin grafted from mid-thigh up my front and back. It’s been over two-and-a-half-years and I’m a normal functioning person although I do have some remaining health issues which I do plan to get through.

As to why we launched a new venture in astrology, I really felt there was still unfinished business in this arena. For astrology to reach its potential, interactive technologies and web services can be used to bring a deep knowledge of this field to a general audience. Now you can synthesize and conveniently bring three bookshelves worth of astrology information to people wherever they are. My feeling is that other astrology sites haven’t evolved much in this direction, which is why we’re undertaking this new project with ZDK Interactive and theastrologer.com.

Anthony: Kelli, please describe your product offering and what makes it unique?

Kelli: We offer unique content and features through web services. We provide this information on multiple platforms including the Internet and mobile. We are displaying the information through bar graphs and meters as well as through short and long content. We are taking astrology to where people are to use in their everyday lives, and that doesn’t necessarily mean sitting in front of a computer.

TheAstrologer Mobile is a great way to take the most popular astrology content with you, wherever you go. It’s available from Sprint and Cingular, with more to follow. Our web site also offers a range of astrology "reports" or "assessments.” These are interpretations of the astrological influences present in your life.

Anthony: David, to what extent is ZDK a web 2.0 company and what future plans do you have to continue moving it in this direction?

Many people decry the term Web 2.0. (There is a great article by Tim O’Reilly titled “What is web 2.0” which is worth reading). But I think it helps distinguish a second generation of services that put the user (or client, in the case of B2B providers) in control rather than a traditional broadcast publishing model. The first thing we did was to focus on services rather than creating just another destination. Our microcontent management system allows us to manage content in a highly granular manner to meet the needs of a diverse range of clients. Moving beyond the browser on a PC has also been a goal, and in February we launched our first mobile app on Sprint and Cingular. As a virtual company with no central office, we’re definitely web 2.0 consumers making great use of technology such as the JotSpot Wiki.

Anthony: David, how are ZDK’s operations financed?

David: We had quite a few ideas for a new venture and talked over various ideas with a number of long-time friends and business colleagues. Two things kept coming up: first, they wanted to invest in whatever we were doing next, and second, they thought we should get back into the astrology business. While we could fund the business ourselves, outside capital encourages us to grow it faster and the connections that come through our terrific group of investors and advisors are invaluable, especially since we have a global outlook for the business. We have investors in Australia, UK, Switzerland and the US.

Anthony: David, what is your experience with offshoring?

David: When it works, it’s great! For instance, sending a request out at the end of day west coast time, and waking up the next morning to finished code. But it’s equally a let-down to wake up and find they needed some advice or a connection to a US-based vendor. It takes close management, picking the right jobs, and of course the right offshore partner.

Anthony: Kelli, do you offer one-on-one consultations?

Kelli: I don’t actively seek out consultations as I’m so busy working on the business, but if someone is referred to me I will give a chart reading. This is what I call my “fun.”

Anthony: David, do you get involved with philanthropic activities?

David: I’ve had quite a bit of “non-profit” experience funding yet-to-be-successful startups!  Seriously though, I provided the initial funding to establish The Biomimicry Institute , which is furthering the work of Janine Benius, and Musica Omnia, a classical music label organized as a 501c3.

Anthony: David, do you have any words of advice for your fellow entrepreneurs?

David: Be persistent, because every day presents new challenges and there will be many times you’ll say to yourself, “What the heck am I doing this for?!!” And be focused, because it’s much easier to think up 10 great ideas than it is to get any one of them done.

Bio

 

Kelli Fox

KT is the astrologer formerly known as Kelli Fox*. Her astrological accreditations include: CA NCGR IV, PMAFA, ISAR C.A.P., FAA. This means she has studied a lot of astrology for many years which indicates there’s more to it than just sun signs and daily horoscopes.

KT has been fascinated with astrology since she was a child in Sydney, Australia. As an eight year old she carried around a little blue book and recorded the sun sign of everyone who was willing enough to tell. Linda Goodman was an early favorite, but as a grown up KT respects modern day astrologers such as Steve Forrest, Robert Blaschke, Rob Hand, Bruce Schofield and Dana Gerhardt to name just a handful. The ancient astrologers she admires are Johannes Kepler, Evangeline Adams, Carl Jung, and John Dee to also name just a few.

KT’s first teacher was Alia Ryder at The College of Humanistic Astrology in Sydney. He was a memorable teacher and mentor. One of KT’s all time favorite astrology books is The Compendium of Astrology by Rose Lineman and Jan Popelka**. She uses Solar Fire*** to run astrology charts and loves the animate chart wheel feature for Electional astrology. This means picking the best days and times for events, although she tries not to let it rule her life.

KT is proud to be the first member of the Founders’ Circle of Kepler College. She is also an Emeritus Member of the Board of Trustees. Kepler College**** is the only college in the western hemisphere authorized to issue BA, AA and MA degrees in Astrological Studies.

In 1995, KT, along with her husband David, created the world’s leading astrology web site – astrology.com. They continued to work there until 2003 when they left to spend more time with friends and family. After a 2+ year break and a near death experience KT was ready to bring astrology to the world again through never seen before astrological products and services. She feels that with her recent karmic experience comes newly found insight and wisdom that she’'s channeling into her life’s work of continuing to bring astrology to a global audience for use in everyday life.

* KT, Kelli Fox by name, provides astrology services exclusively through TheAstrologer.com and licensees of ZDK Interactive, Inc. She is no longer working for astrology.com or NBCU/iVillage.

David Fox

In October '05, David provided the initial financial support to found The Biomimicry Institute. Earlier in the year his wife and business partner Kelli convinced him to join her in starting a new online venture. They named it ZDK Interactive after the two of them and their daughter, Zoe.

Several years later, selling this startup enabled him to make a number of early stage investments. His interests include cleantech and the juncture of Internet content/commerce/community.

David moved to San Francisco in '94 to start another Internet company that ended up following his wife's interest in astrology. This venture, Astrology.com, was sold to iVillage in '99. He continued working for iVillage until Feb '03.

In '85 he co-founded software/hardware distributor InfoMagic Australia, which  represented Aldus, Adobe, Radius, Supermac and others in the emerging fields of desktop publishing and multimedia. He sold out to partner in ‘92. Prior to that he worked in his family's retail business.