ReadWriteWeb

Now and then a polarizing topic will make its way through the venture capital industry and several prominent investor/bloggers will chime in with their collective opinions in quick succession. Tuesday night TechCrunch's Michael Arrington dropped a bomb on the industry, accusing Silicon Valley's top angel investors of a collusion and price-fixing conspiracy. It goes without saying that while some intentionally chose to avoid the issue, many important VC industry voices have made their opinions heard on the topic this morning.

In the latest example of VC chatter - wherein multiple venture capitalists simultaneously blog about a hot issue - the topic du jour is the debate between convertible debt and equity rounds. The spark came from a Friday night tweet by Y Combinator founder Paul Graham (yes, he finally joined Twitter) that declared convertible notes victorious since each of this summer's YC class opted for them. This morning, several VCs have weighed in on the issue, so here's what entrepreneurs and early-stage startups need to know about the debate.

I've learned a lot about startup culture since I started writing about it at the beginning of January, and there is a trend that I have noticed that is different from the stereotypical outsider's point-of-view - one that I had not too long ago. There seems to be a growing number of companies that are holding off from either being bought out or going public because they are more vested in the interests of their company or their idea than they are about having a big payday.

In the wake of the financial meltdown, a new set of financial regulations proposed by Senator Christopher Dodd aimed at plugging the "too big to fail" loopholes could have some negative side effects for the angel investment community. According to a report from the Seattle-based site TechFlash, Dodd's bill would require that angel investments be approved by the SEC, a process that could take as many as 120 days to complete.

It's Monday and that means that the Interactive portion of SXSW is drawing closer and closer to its close tomorrow after a weekend of great talks, panels, parties and overall hoopla. While some of the most fun parts of SXSW may be behind us, there are still a lot of great things to go see in Austin, especially for those in the startup and entrepreneurship communities. So if you're looking for some interesting panels to attend before you catch your flight home later this week, here's a run down of some of the remaining startup-related talks and events.

The following is one in a series of guest posts by venture capitalists that we're running on ReadWriteStart. This one is by Paul Jozefak, a VC based in Hamburg, Germany, who used to run SAP AG's European venture activities and is now a managing partner at Neuhaus Partners. The original post can be found on his blog.

One way or another, I've addressed the question of "Where is the Silicon Valley of Europe" a hundred times, be it in interviews, in blog posts, on Twitter, or on panels. Ultimately, there isn't really a "Valley" in Europe, only some places kind of like it. If you want my ideas on that, I have other posts on the topic.

The following is one in a series of guest posts by venture capitalists that we're running here on ReadWriteWeb. This one is by Paul Jozefak, a VC based in Hamburg, Germany, who used to run SAP AG's European venture activities and is now a managing partner at Neuhaus Partners. The original post can be found on his blog.

I was thinking about what questions I would ask if I were raising venture capital. Funny thing is that I often think about what to ask entrepreneurs when deciding whether to invest in them. I've told entrepreneurs often enough that they should ask their VCs just as many questions. I have never really clarified, though, what they should ask. My bad. So, to be fair, here is what I would ask a VC if I was interviewing one for the highly coveted opportunity to invest in my business (note the satire).

A startup in the finance vertical aims to democratize investment by providing a more usable interface for financial tools and perhaps even ward off future financial calamity by decentralizing control of financial markets.

Current tools, such as Yahoo! Finance, are considered intimidating, complex, and overwhelmingly boring at a time when understanding of and interest in investment are more critical than ever to global economic revitalization. Kapitall gives investment a new face, one that will be familiar to Gen X and Y users, most of whom are novices to finance but experts in social applications and online or console gaming.

This is how it's supposed to work. A team of super-smart engineers/entrepreneurs comes up with a radical plan to disrupt a huge industry. It builds its technology, gets traction, and, in a few years, sells the venture for over a billion dollars. What do these super-smart engineers do with their new-found wealth? They create a VC fund to invest in early-stage deals with which other entrepreneurs/engineers can disrupt very large industries. Their fund has been investing since 2003 and has a portfolio of around 30 companies.

Meet Ambient Sound Investments (ASI).

We recently spoke with Jean-Francois "Jeff" Clavier, founder and managing partner of SoftTech VC, one of the most active seed-stage investors in Web 2.0 startups. He invests from a $15 million fund, investing from $100K to $500K in companies, generally alongside other funds or angels, making up a total of $750K to $1.5M per venture. He invests in consumer Internet companies working in areas such as social media, communities, search, gaming, and consumer infrastructure, almost exclusively in Silicon Valley.