Tag Archives for Business plan

Booming or Busting?

A view of downtown San Jose, the self-proclaim...Image via Wikipedia

Very strange reading the papers in the UK and hearing news from the USA about budget cuts and contrasting it with the talk by Paul Graham at the Y Combinator Startup School 2010.

Graham’s talk is all about lots of clever money seeing the quick returns on startups in Silicon Valley and wanting some of the action.  The angels are forming Super Angel groups and the VCs are prepared to invest smaller amounts for first rounds of £300k.  The valuations are going up and up so it is a good time to raise funds providing, as always, you make great progress and can justify a higher valuation at the next round.  Lack of progress can lead to a lower valuation and a dreaded downround or no round.

Ignore the gloom about budgets and get out and start a great company.  But whatever funds you are offered, use a great business plan resource and keep exceeding the targets.  Graham pointed out the recent effect of small startups funded by angels being bought up early giving returns of 10x to angels in one year.  As returns have to be related to time, these 10x returns in one year are way ahead of the returns angels received in even Google where they had to wait five years.

Are you Booming or Busting?

But take great care as ever!

PS Do listen to Ron Conway et al talking at Startup School.

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Teams from the start

Watching Ron Conway, top Silicon Valley angel and super-angel, on my iPhone speaking at a Y Combinator event for start-ups was amazing.  Could not have done it a couple of years ago.  Sadly the streaming rate to the iPhone means that the picture and voice is not perfect but am sure it will be next year.

Of the part I was able to watch, Conway was saying that he sold his last start-up of which he was CEO in the mid nineties and made the decision to invest in Silicon Valley companies starting up in the Internet space.  He invested in Google, need more be said and has recently started investing in New York.  In answer to a question about sole entrepreneurs, he said that great companies are built by great teams so you might as well have a team at the start or at least the nucleus of a team.  Then you can use a business plan resource to work out the value the team has to create to make it worthwhile for a team.

You can still do it the Imsense way with a very small team but a number of investors, angels and VCs, but perhaps it will be harder to create real value.  Not sure that Ron Conway would be satisfied with 2x return.

So teams it is from the start!

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The Way to Win!

I found this on the web about the short history of VCCP, an advertising company:

“Chime announced yesterday that it was paying £14.5m in cash and shares for VCCP, the group behind the successful marketing strategy for the O2 mobile phone brand as well as campaigns for Coca-Cola, the financial services group ING Direct and Dyson vacuum cleaners. A further £15.5m will be paid to VCCP depending on future performance. The company’s founding partners – Charles Vallance, Rooney Carruthers, Adrian Coleman and Ian Priest – each own 20 per cent of VCCP, with the remaining fifth held by 19 senior managers.”

So started in 2002 and sold in 2005.  Interesting two of the founders of VCCP had been through the loop before: “VCCP was founded in 2002 by the four partners, who previously worked for other London ad agencies. Chime also owns 51 per cent of the ad agency HHCL, where Mr Coleman and Mr Priest used to work.”

It just goes to show the strength of the advertising cluster in London.  Perhaps the Cambridge Cluster could learn from it.  I wonder what business plan resource the London advertising enterpreneurs use?  They seem to be single round financing deals but with the founders realising the importance of including as many as possible in the equity.

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Plastic Logic joins LBO at CES

The BBC’s Rory Cellan-Jones reports from the Las Vegas Consumers Electronics Show on this year’s best new gadgets and includes two Cambridge companies, LBO and Plastic Logic.

Plastic Logic says that the wraps are still on their product but their site but Que has already been announced.  Now the site has been updated with lots of information on the QUE. Lots more on the website QUE.  But who would want to order one until Steve Jobs reveals the iSlate?

I wonder what business plan resource the academic founders of Plastic Logic used as so much money has been raised to launch the product?  I thought that they would be selling the screens to the likes of HP,Sony and Samsung.  A very different business model from CSR and other Cambridge Cluster companies which receive royalties for intellectual property.

Let us hope that there is a special Cambridge Cluster version at a good discount for us locals.

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Mid Sussex Auctions – good for clothes but competition for laptops

A long day at the South of England Showground attending the monthly general auction run by Mid Sussex Auctions.  With over 1,500 lots it looked like being a very long day with a late finish but fortunately the auctioneer knocks the lots through with little patter – you either buy or miss out – and alos offers buyers the option to buy similar following lots.  Suddenly you have jumped fifty lots so you need to stay awake to catch your number.

This general auction offers a broad range of items mainly from distressed sales and lost property.  Clothes and bedding comes in big bundles but computers and mobile phones are sold individually.  Amazingly there was little interest in SLR cameras but bidding for the Mac Book was fierce.  Someone bought it untested and with no extras such as power supply for over £250.

I had hoped for a bargain with a “lost” laptop but the CEO of Dragoon Solutions chased us all away.  He told me afterwards that they buy all laptops at auction on the south coast.  So better to go direct to Dragoon Solutions and see if they have what you want and they may even offer a guaratee.

One other key point – bring your own chair.  The sofas and chairs can be removed as soon as sold so some unfortunate bidders had to stand for a long time.  Lots of gold and watches for sale but one dealer just took them all.

Another great day watching entrepreneurs at work and wondering what sort of business plan and business plan resource they all used.  Our Dragoon man must have found it worth spending his time bidding rather than enjoying the seaside!

By the way, bring a large van to take all your lots away!

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Red Gate Software and Springboard v Brent Hoberman and PROFounders v CfEL v Government Venture Fund

Brent HobermanImage via Wikipedia

Red Gate Software is one of the rising stars of the Cambridge Cluster and now they are helping the next wave.  Entrepreneurs are provided with a desk, Internet and the biggest draw of all, FREE DELUXE FOOD.  We all know that an army marches on it’s stomach but geeks build great businesses powered by sensible nibbles.  If you are working 100 hundred hour weeks you need a sensible diet, some exercise and deep sleep.

In Neil Davidson’s blog post The Accidental Incubator there are more details.  It fits in well with his recent takeover of the Cambridge Network and contrasts with the way CfEL has moved their Summer School into a general management programme called Ignite which no longer concentrates on entrepreneurs but “corporate innovators” prepared to pay the hefty fee.

Both make mention of the importance of a business plan but little mention is made of a business plan resource.  If you do not take your equity seriously then stick to the corporate world.

Or you can try Brent Hoberman’s PROFounders Fund which has culled a list of 500 applicants to 5, I think.  The first investment is in TweetDeck with less than 10% share.  Later investments should be more ambitious and the stake higher.  Great set of entrepreneurs including the impressive Michael Birch of Bebo fame.

But perhaps avoid the Capital for Enterprise Fund backed by the Government and “administered” by the likes of fund managers Octopus Capital.

If the Government wants to encourage investment in small companies, do it via the EIS scheme with entrepreneurs been given higher and higher tax breaks to put in their cash and time.  It is a fact of the Venture Capital world that only the top tier firms spot the winners so fund managers will never make it work; well, hardly ever as the old song goes!

Hope one day to be invited to discuss Equity Fingerprint with the Red Gate Software Springboard aspiring entrepreneurs and take a bite of deluxe food.  Or perhaps Hoberman will serve a tasty dish to tempt me.

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Surprising news from Lakeland

Harry Wallop features Lakeland in an article in the Daily Telegraph titled “Shopping Mecca fro Middle Britain”.  The surprise is the news that that Father Rayner, the founder, ran off with the company secretary and the three brothers took over and built the business.  The other surprise that the Lakeland’s HQ at Windermere station is the second most popular tourist attraction after Windermere Lake cruises with more than one million visitors.  I guess that they were ahead of the Apple shops with the emphasis on customer fun rather than pressured sales.

One of my first jobs was counting plastic bags at what was then Lakeland Plastic.  My late Sister was so much faster that I had to count another product and staple them together.  I remember surprising Mr Rayner by saying I knew how many I had stapled by counting the number of staples in each set of staples which I inserted into the machine.  When I wrote to the Rayner brothers to remind them of the fact that I had been a neighbour and early employee I received an impersonal reply.  Maybe they did not wish to be reminded of the early days with their Father.

Now the three brothers are coming to the end of their working time, I wonder what business plan resource they are using to make sure the equity stays in the family.  The HQ is a brilliant – wish a picture appeared in Zemanta – and I am sure they will have a business plan as clever as their wonderful products.  By the way, Wendy Miranda is the customer ambassador and ultimately in charge of what the retailer sells – clever lady.

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Tr.im goes dark without angels

This was written before Tr.im reversed the decision and decided to keep open.  However the issues discusses are still valid – no money, no business.

Tr.im announces that it is ceasing the service of trimming the size of a URL.  The blog post says that they have not been able to find a way of making money out of tr.im (I do not like the word monetise) and they are being hit by the cost of running and developing the system.  They have lost out in the race to provide the service to Twitter.

Duncan Bannatyne of Dragons’ Den fame says that the he has lost count of the times he has said “It’s not a business, so I’m out”.  He means that “any budding entrepreneur must have a robust business plan and clear profit-making projections for their enterprise to stand a chance of success”.

The Dragons only pick the easy companies in which to invest; ones with sales and profits.  The flaw normally being that the entrepreneur does not have what it takes to turn the initial success into a large company.  This gives the Dragons easy pickings after the really hard yards have been won.

It will be sometime, if ever, before the Dragons have the nerve to join the angels in Cambridge – you do not have to be a member of the Cambridge Angels – backing ideas a long way from the market and the with sketchy business plans.  It is a very high risk world investing in people and technologies ahead of the game.  It would be fun to present a Google, Flickr or Twitter type deal to the Dragons let alone ARM, CSR and ARTVPS.

But where we can agree with Bannatyne is his condemnation of smoking.  Seen as fun when I was young, the consequences are well known nowadays.  Bannatyne quotes figures of 20% of the population (presumably the UK and not his beloved Scotland) smoking with many more affected by passive smoking.

In the geek world in Cambridge, smoking is almost taboo so perhaps we do have something in common with those fearsome dragons after all even if we may have to tr.im their egos!

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Will football save the bankers?

Arsenal crestImage via Wikipedia

Bankers have not been having a good time recently and those earning more than £150k are going to be hit by higher taxes soon.  Commentators are worried that talent will move out of the UK.  It is all a little removed from the worries of the man in the street and there are few votes for caring about bankers.

However the world of football brings the problems of high earners into everyones homes as it is in the news all the time.  Henry Winter writes in a column titled “English clubs losing out to Spain’s tax system” (DT 13 June) that the income tax rate in Spain is 27% (plus a local tax) compared to the soon to be 50% tax rate in the UK.

Andrei Ashavin of Arsenal warns players coming to the UK to also remember the unexpectedly high National Insurance.  So with the relative weakness of the pound against the Euro making it more expensive for the English clubs to buy from overseas, everyone is going to need a good business plan to attract the best talent.

Perhaps football will achieve what the bankers have not been able to achieve, remind politicians that vey good people are scarce and mobile and go to the highest bidder.  A choice not open to MPs, well, not normally!

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The new Count Palentine of golf

A golf ball directly before the holeImage via Wikipedia

In an article on Ross Marshall, 27, c0-founder and CEO of yourgolftravel.com, there is no mention of the holding company, Palatinate Leisure Group Limited formed in 2007.

Ross met Andrew Harding at Durham University and after trying other careers decided to follow their passion for golf and set up yourgolftravel.com in 2005.  Turnover reached £8m in 2008 and is expected to double this year – no recession in the golfing world!  They now have over 50 staff, nearly 90,000 clients and represent 1,200 golf courses in 26 countries.

In the article, Diary of a Golf Venture, mention is made of £250,000 loan taken in January 2006 for expansion.  Is the loan convertible and what kind of business plan resource have they used? Did they uses their background in banking and the profession to go for an Active Equity Company?

Buried in the website is a little bit of knowledge(!) about the origins of the word Palatinate.  I wonder if they make their customers members of the Order of Palatinates?

Another great case study

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