Tag Archives for United States

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.

Enhanced by Zemanta

Cobra Beer loses £13.1m whilst angels wait

The Palace of Westminster at night seen from the south bank of the River Thames. Victoria Tower and the House of Lords is on the left. The Clock Tower of Big Ben and the House of Commons is on the right. The spire left of centre is the 300ft ventilation chimney above the central lobby. The twin towers with flagless pole just visible in the background is Westminster Abbey. A 2 x 6 segment panoramic image taken by myself with a Canon 5D and 85mm f/1.8 lens.Image via WikipediaA previous post commented on the long wait for the angels in Cobra Beer and the employees who were told that if the company was sold there might not be a job for them – not bad for the person who gives great motivational talks. I am left to wonder why people who have raised funds from others to invest in their business have time to join the House of Lords, go on trade missions, appear on TV shows whilst back at the ranch, losses have been made for a second year running. This time up from £4.4million to £13.1million on sales of just £43.2million.

How do you lose £13.1million on sales of £43.2million – I guess by taking your eye off the ball and enjoying trips and jollies although I am sure that supping with the mighty will bring in sales next year.  Heard that before?  Expansion to the USA has been aborted and a cautious note for the future is sounded: “The group sells a premium product at a premium prices and its business is therefore especially liable to be affected” in an economic downturn.

As an angel I have suffered losses whilst founders massage their egos on the global stage. It is better to back a dull founder who has a simple mission to increase the value of the business for the founders, investors and employees. When that has been achieved, then the global stage is deserved.  But dull founders make poor speakers but they are so powerful in small groups.  I have always been puzzled how people have the nerve to talk about their success when up to the knees in other people’s money.

Reblog this post [with Zemanta]

Travis moves to Microsoft

MicrosoftImage via WikipediaIt is amazing how people like Adrian Travis (45) keep working away at their ideas and in the end come up trumps. It must be five years ago that I went to the Cambridge University Engineering Department to meet Travis who has a company called CamFDP. He was building large screens by projecting images into a thin glass wedge from the bottom. The wedge worked as a light guide and bounced up the light inside the wedge and you could see an image. It was very early days and now there are other ways of producing large screens. It was very difficult to build large glass wedges to the very exacting specifications to let the light out in the right places.

However the wedge allows you to see the image and also look straight through the glass or rather a camera on the other side sees you and reacts to you pointing on the glass wedge. The invention has been snapped up by Microsoft and Travis is spending a year working in the USA. Another lesson in why you never say no to an inventor or founder as his or her time may come. Well done to Travis and good luck with your business plan.

Reblog this post [with Zemanta]

Who looks after angels?

Wang Yangming (1472 1529), considered the most influential Confucian thinker since Zhu Xi.Image via WikipediaBill Mann writing in The Motley Fool says that China is the greatest opportunity of our lifetime if you missed the boom in the USA from 1980. He is pushing China after the recent 50% drop in the Shanghai stock market. This is because of the tremendous rate of growth and the free enterprise economy.

However he cautions that China “has an unbelievable entrepreneurial culture, but does not yet have a fully formed culture of protecting minority shareholders.” And we do? Having been trodden into the ground by some founders, options intended for new staff “stolen” by founders and offered a cap of 4x by other founders, I am not sure that the Chinese have much to learn from the unpleasant antics of founders in the USA and UK. I am forgetting the dishonest and those who pay themselves top money whilst driving the business into the ground. It is why experienced angels work in packs, get the legal people on side and then go for a strong board appointment with veto clauses. Sad but true. It is all part of the Equity Fingerprint, the business plan resource, fun ride. But then who wants to stay away from clusters and go on holidays?

Zemanta Pixie