Nov. 4 (Bloomberg) — at a Northwestern University footballgame in October 2005, venture capitalist Peter Barris watchedhis alma mater suffer a 33-17 defeat to Michigan. The blow wassoftened by getting the best investment tip of his career.

A friend at the game told him about an entrepreneur namedEric Lefkofsky, and the two soon hit it off. Barris’s firm, NewEnterprise Associates, began investing in Lefkofsky’s endeavors,including a $4.8 million bet on a startup called The Point.

that company, started in 2007 with a vague idea about“group action” and no prospects of making money, morphed intoChicago-based Groupon inc. less than four years later, NEA’sstake has now increased more than 150-fold to $2.28 billion,thanks to Groupon’s initial public offering this week.

“We were fascinated by the concepts, but there reallywasn’t a way to monetize it,” Barris, 59, said in an interviewearlier this year — before Groupon entered its pre-IPO quietperiod. “We bet on the belief that the team could mine thepromising aspects of the model, and they did.”

NEA, one of the nation’s biggest venture-capital firms, canuse the returns. while it had a successful IPO this year withthe flash-memory startup Fusion-io inc., NEA missed out on manyof the top social-media companies, including Facebook inc.,LinkedIn Corp. and Zynga inc. Investments in that market havebolstered the portfolios of venture firms such as AccelPartners, Greylock Partners and Union Square Ventures.

Kate Barrett, a spokeswoman for NEA in Chevy Chase,Maryland, declined to comment for this story because of quiet-period restrictions.

while social networking has been a bright spot, mostventure firms have struggled to make money over the past decade.A drought of IPOs has made it harder to earn a payback oninvestments, and funds aren’t attracting as much money. U.S.venture fundraising fell to the lowest level in eight years inthe third quarter, when companies canceled $8.9 billion in IPOs,according to the National Venture Capital Association.

Groupon jumped $6.11, or 31 percent, to $26.11 in its firstday of trading. that gives the company a $16.7 billion marketcap and values NEA’s stake at $2.28 billion.

Groupon may help the IPO market regain some momentum, saidDixon Doll, co-founder of investing firm DCM and a 35-yeartechnology-industry veteran. that bodes well for other companiesregistered to go public.

“When the industry shuts down, it takes a strong companyto blaze the way forward and pry the door open again,” saidDoll, who has co-invested with Barris in the past. “We haveother good companies that are in registration that would like totake advantage of a reopening window.”

still, Groupon’s journey to an IPO hasn’t been smooth.Since filing to go public in June, the company has come underfire for its aggressive accounting, executive departures andcomments that company officers made about financial prospects.

Barris, who joined NEA in 1992 after a career intechnology, has worked with challenging startups before. He’s onthe board of Web-phone service provider Vonage Holdings Corp.,which had a disastrous IPO in 2006 because of competition frombigger competitors and a patent-infringement suit.

Vonage’s shares plunged in the weeks following their debut.after warning that bankruptcy was a possibility in 2008, Vonageis now profitable and the stock has regained some of its value.

Barris isn’t afraid to play a hands-on role at portfoliocompanies. in 2009, he had to make a critical decision atemployment site Jobfox inc., where he was an investor anddirector. The chief executive officer, Rob McGovern, was in acar accident that left him in a coma for two weeks.

Barris had backed McGovern at his previous company,CareerBuilder inc., and was committed to helping him while hewas hospitalized. Barris asked a fellow director to take the CEOrole on an interim basis, and McGovern fully recovered andreturned to the company about nine months later.

“Peter wanted to make sure the board wasn’t going to berash,” McGovern, 50, said in an interview. “He had the chanceto say, ‘Let’s go hire another CEO,’ and he didn’t do that. Hereally stayed with me.”

Barris has similar responsibilities at Groupon. As chairmanof the compensation committee, he’s charged with reviewingsuccession planning for management, as well as approvingexecutive compensation and change-of-control arrangements.

NEA is counting on him to protect its 13.7 percent stake inthe company. The firm invested a total of about $10 million inGroupon from 2008 to 2009. Groupon sold 35 million shares at $20a piece yesterday. that values the company at $12.7 billion.

Assuming the stock holds its value for six months, a periodduring which insiders can’t sell, it would make Groupon NEA’ssecond-biggest gain in the firm’s 35-year history. The largestwas computer-equipment maker Juniper Networks inc., which wentpublic in 1999. NEA made more than 500 times its money on thatdeal.

Prior to Groupon, NEA had invested in three other Lefkofskycompanies. they have so far produced less dramatic gains.

in 2001, Lefkofsky founded InnerWorkings inc., a providerof software to printing companies. NEA paid $40 million for 19percent of the company in January 2006, seven months before itwent public. The firm now owns a 15 percent stake valued at$66.4 million.

that year, Barris led NEA’s $13.1 million investment inEcho Global Logistics inc., a company started by Lefkofsky andhis friend from law school, Brad Keywell. Echo Global, whichprovides technology for the transportation industry, went publicin 2009, and NEA now owns an 11 percent stake worth $38.8million.

The third investment came in 2007, when NEA bought a stakein MediaBank LLC, a developer of advertising software that inSeptember announced plans to merge with another company to formMediaOcean.

in building Groupon, Lefkofsky and Keywell were joined byAndrew Mason, who had worked at InnerWorkings. they started ThePoint in 2007 to “solve collective action problems,” accordingto Lefkofsky’s website. NEA’s $4.8 million investment, thefollowing year, valued The Point at about $30 million. by 2010,as Groupon, the company generated more than $300 million inannual revenue and rebuffed a $6 billion takeover offer fromGoogle inc. Mason serves as Groupon’s CEO.

“It was the combination of the business savvy of Eric andBrad with the creative genius of Andrew Mason,” Barris said.

Barris keeps backing Lefkofsky and Keywell, looking formore Groupon-like returns. NEA is an investor in their seed-stage venture firm, Lightbank, which they started last year.Lightbank has invested in about 20 startups, including SproutSocial inc., which helps businesses bolster their presence onsocial networks.

Barris and his partner at NEA, Harry Weller, met the Sproutfounders on a trip to Chicago in 2010. The startup had received$1 million from Lightbank and wasn’t yet ready to raise anotherround. their meeting with the NEA partners went so well thatwhen it was time to bring in more capital, it was a quickdecision. NEA invested $10 million in February, and Barrisjoined the board.

“We had already talked about our business and brainstormedwith them,” said Justyn Howard, the 32-year-old CEO of Sprout.“they were excited and willing to help, so it made it reallyeasy to make the jump and actually do business with them.”

to contact the editor responsible for this story:Tom Giles at tgiles5@bloomberg.net

NEA’s Barris Turns Football Loss Into Gain From Groupon IPO

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The iChair team, based out of Dallas, Texas, brings a feel-good story to the table. Believe it or not, the folks behind this accessory quit their jobs last year, including their steady paychecks, to pursue research and development towards making the perfect stand for iPad. their motivation behind this idea was the bulkiness or unpractical nature of all other iPad stands that they had came across. As any entrepreneur will tell you, this involved risking nearly everything.

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Overall Score:

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Review & Giveaway: iChair

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It has been a challenging time for American and global economies. We have pushed and pulled ourselves in every direction looking for change and the promise of a new tomorrow. Many of us have taken to the solo route, using our skills and abilities to push forward during these turbulent times.

What can you do to stay afloat in today’s kill or be killed atmosphere? We read a ton about people popping up with home business, get rich quick schemes, infomercials, “as seen on TV” ads, etc. How do we decipher what really works and what is just another scam hitting the ever growing e-shelf of business.

Here are a few steps to protect you against the arsenal of rip-offs, internet scams, and get rich quick methods.

1. Use your head – Nothing beats common sense. If it feels too good to be true it probably is. I was watching an infomercial on Internet Millions the other day and I said there has to be a catch here. First off, if these guys are making so much why are they selling their secrets, even more so, why are they selling them for $30 on TV? Most of these skits are selling a product that is making these people the millions they are talking about!

2. Hard Work – The sound of making millions at the press of a button is quite alluring. I press plenty of buttons every day and I can attest that there is no easy way to get rich. All the people I know that are well off or have above average incomes worked damn hard to get there. Nothing beats hard work and persistence. Find something you love and stick with it! Many people turn their dreams into reality.

3. Research – Watch out for people asking you for your hard earned money whether it is a small or large investment. Most reputable business ideas have proven business practices that got them there in the first place. Think twice when these websites and salesman are doing just that selling you! Is it hard to believe that you can buy your financial freedom for a small purchase of an e-book? Sounds too good to be true… usually it is. Do your research and if you are genuinely interested in a new business take the time to dig deep and find the right methods that have worked for other people.

You may have notices that this post doesn’t tell you what to do but rather how to approach a new business. Having the right mindset in your next venture might just save you a long drawn out headache in the end. As with any business using common sense, hard work, and doing your research can indeed yield you better results than jumping off the bridge into a new project you know nothing about until you make an investment.

The great thing about a Guerilla Marketing Plan is that it shouldn’t take you more than 10 minutes to create. If you go beyond this then well you are probably including too much too early. You can accomplish most of your plan in one sentence and I will show you how.

GMP’s are creative, high-level, targeted, marketing outputs that drive results for your business.

Creating A Guerilla Marketing Plan

Each piece of your plan should be accomplished in one sentence. This keeps your plan concise, clear, and obtainable when it comes time to put it into action.

1. What is the purpose of your marketing strategy?

This is the action that you wish your customer’s to take. Statements like; click on your website, call a number, go to your store location.

2. What is your competitive advantage?

This is the why. Why will your customer’s take the action you described above? Explain your advantages here. What do you offer that your competition doesn’t?

3. Who is your Target Audience?

What customer’s are you trying to reach? This is focus, specific, and as narrow as possible.

4. What will you use to accomplish the above?

What mediums will you be using to market to your target audience that drives them to complete the overall purpose of your marketing plan? Keep this within reach as budget, time, and effort are all apart of the equation.

5. What is your differentiator or positioning?

Do you offer the best pricing, best service, best user experience, etc?

6. Who are you?

This is the part where you tell them about YOU. Your identity is one of the most important pieces as it creates buy-in with your customer. We are an honest reliable electronics retailer with over 1000 satisfied repeat customers.

7. What’s your budget?

Let’s all be realistic, if we had the money to market in all the best spots we would be doing it. Setting a budget keeps things real and gives you clarity to what you can reach as far as your goals.

In about 7 sentences you should have your marketing plan ready to go. I read this strategy in Entrepreneur magazine and have applied it to another business I am working on. It has really put things in perspective and helps to keep your vision inline with what your capabilities are. Jay and Jeannie Levinson are the writer’s of Startup Guide to Guerrilla Marketing and I believe most of this originates from their book, I suggest you check it out.