DIGITAL ENTREPRENEUR HAMBURG

sources of capital Archive

Dienstag

1

Oktober 2013

0

COMMENTS

VC industry changing due to new platform – death or life?

Written by , Posted in Finanzierung

Recently, I have read a very interesting article that continuous my argument that aside from many sectors the financial sector is also changing rapidly due to digitalization. The author states that: “In my life, I have been very fortunate to chronicle the emergence of the commercial internet (as we know it) from its early days. Over next decade or so, I came to realize the amazing deflationary powers of the internet. It was — and still is — a great deflator, squeezing out middle men, friction and of course, profits.”  The author argues that the next wave of change will affect the way businesses raise venture capital. Intransparencies will be broken open by Angel List and other fundraising platforms that force a secretive VC industry to differentiate their offerings beyond the initial cash injection. While I agree with the broad thesis of the argument I would highlight two aspects that seem to be overlooked frequently. As previously reported the VC industry as a whole does not generate positive returns. It is an assets class where only very few firms make money. These firms generally are not “smarter” than others but have a strong PR function and therefore get more deal […]

Donnerstag

1

August 2013

0

COMMENTS

VCs vs. Angel

Written by , Posted in Finanzierung

Recently, there have been two interesting blog posts that once again highlight the ambivalence between choosing either a VC or private/business angel investor. One very entertaining rant(!) from Paul Jozefak (Liquid Labs) that focuses on the „more than money“ promise each VC makes. He has a very clear opinion what VCs really provide and how their „advertising talk“ should be evaluated by future entrepreneurs. (LINK) „Enough with the Kool-Aid though….without your money most entrepreneurs wouldn’t really care much about you. It’s OK, you still have your triathlon, cycling or foodie friends.“! Protonet on the other hand has chosen to ignore higher valuations and instead go with angel investors. More about their rational here: (LINK). Interestingly enough they left money on the table in order to go with business angels among other reasons due to the easier negotiations and less tight up management time. This is often an overlooked point – VCs are experts when it comes to negotiating deals (given that aside from trying to get a proprietary deal flow that is their only other expertise ;)). If you negotiate with experts you have to take into account that these negotiations will be very drawn out. Your starting point will most […]

Montag

22

Juli 2013

0

COMMENTS

Healthcare and digital innovation?

Written by , Posted in Strategie

During my work with eTribes we have completed several projects for merchants, producers and publishing houses. All these industries have already been heavily impacted by digital innovation and new, web based technologies. Many of the established players in these industries have not quickly enough „braced for impact“ and will eventually disappear since their business models have become obsolet in the digitalized economy. Recently, the healthcare sector has picked up on the ever fastening process of digitalization. Funding is moving to all time highs and even crowd funding is picking up on the trend. Rock Health recently published an interesting analysis of where funding is allocated in the United States. „With half of 2013 behind us, we’re able to uncover some interesting insights and trends in funding in digital health.  We saw continued growth with $849M invested in 90 different companies.  This is 12% more money and 25% more deal volume than this time last year.“ So there is money, other industries as examples and a definite need in the healthcare industry to innovate. Therefore, we have now combined the traditional „start-up weekend“ methodology with the healthcare industry and created the „Healthcare Innovation Weekend 2013“ in Hamburg. We hope to encourage […]

Montag

15

April 2013

3

COMMENTS

What to do with all this liquidity…?

Written by , Posted in Strategie

Encouraged by Alexander Graf and his critical analysis of the current digital environment I asked myself why so many irrational business seem to get an almost unlimited amount of funding. In Germany there is always Zalando as a great example of this trend. The business is so far not profitable and investments that by now are topping over a billion Euros will never be recovered but international money is being thrown at Rocket Internet with an ever increasing speed. Its business model is not closely examined and investors push new capital into the firm without even asking some of the most basic due diligence questions. Is it really a plan to buy up the fashion market and pray that your proprietary brands and size will eventually lead you to break even? How are logistics organized behind the shiny technology and TV commercials?  Why is there such an irrational rush to throw more money at these kind of businesses? Since we are now starting to talk about investments going into the billions I am going to take a macro economic perspective to create a possible explanation. Due to the current monetary crisis money has been pumped into our economic environment – […]

Donnerstag

7

März 2013

0

COMMENTS

Conclusion: Venture Capital – does it still work?

Written by , Posted in Finanzierung

…finishing of my post series in regards to VC industry changes … Will prices for start-ups significantly change? In my opinion most start-ups will continue to raise the necessary funds in Germany. Firstly, venture capital never played a significant role here and secondly a large range of new capital sources have been developed over the last years. Corporate investors have become much more active and crowd funding offers a new way to raise initial proof of concept financing. Universities and government agencies have also been offering additional financing sources. So I believe that in terms of start-up financing there will not be a significant impact from the declining venture capital funding. Internationally, this will probably be a different story. But what does it mean for valuations? Again I believe that most German start-ups would not have been sold/continued financing rounds to/with VC funds in any case. Trade exits are the normal route to go for start-ups here and most corporates are not only willing to invest in start-ups but have been allocating significant amounts of capital. In terms of pricing I also believe that Germany is looking at incredibly low valuations anyhow and that equity markets are not an exit […]

Mittwoch

20

Februar 2013

0

COMMENTS

eTribes Business: StartUp-Roundtable am 19. März 2013 – come see Alex in action!

Written by , Posted in Allgemein

Liebe Mitglieder und Freunde von Hamburg@work, Woche für Woche sprießen neue StartUps wie Pilze aus dem Boden. Es lockt der Traum der Selbstständigkeit mit der zündenden Idee. Doch nicht jedes StartUp kann zum Knaller werden. „Rising Star oder Flop! Ist Erfolg eines StartUps planbar?“ heißt das Thema unseres nächsten StartUp-Roundtables am 19. März 2013: Wie bewerte ich, ob mein Geschäftsmodell erfolgreich sein kann? Der ‚Proof of Concept‘ ist erbracht; aber wie bringe ich meine Idee zum wahren Erfolg? Auf welche Faktoren kommt es dabei wirklich an? Auf diese und viele weitere Fragen zur erfolgreichen Umsetzung einer Geschäftsidee, werden Ihnen unsere 4 erfahrenen Podiumsteilnehmer in der moderierten Diskussion Antworten geben. Freuen Sie sich mit uns auf: Jörg Binnenbrücker; Geschäftsführer von DuMont Venture, Beteiligungs-Unternehmen für digitale Medien & IT sowie Capnamic Ventures, dem neusten Multi-Corporate Fonds. Alexander Graf; Gründer und Geschäftsführer der eTribes Framework GmbH sowie Herausgeber von kassenzone.de. Katharina Wolff; Bürgerschaftsabgeordnete der CDU und erfolgreiche Gründerin der Personalberatung „Premium-Consultants„. Christian Richter; bekannt als Serial Entrepreneur, gehörte z.B. zu den Initiatoren von radio.de; heute Geschäftsführer der internationalen Digitalagentur Spoiled Milk. Weitere Informationen zu den Podiumsteilnehmern finden Sie hier. Ablauf: Einlass: 18:00 Uhr Beginn: 18:30 Uhr Networking: ca. 20.30 Uhr Im Anschluss an […]

Montag

18

Februar 2013

0

COMMENTS

What are the implications for start-ups?

Written by , Posted in Finanzierung

cont’d from last post VC funding… Does it matter whether venture capital is a failed asset class or not? Yes, some capital restrictions will apply but I would argue that there are sufficient alternative sources of capital to not significantly restrict new venture creation. Smart entrepreneurs can bootstrap, rely on angle networks or newly emerging crowd funding platforms in order to bring a venture through the proof of concept phase. Additional follow-up capital rounds can then be financed through trade investors who are currently committing significant amounts of capital. There is a significant interest from trade, publishing and pharma companies to invest in digital start-ups. These companies have hundredth of millions available for new venture creation or “corporate innovation” outsourcing. Almost daily new funds, initiatives or deals are announced by corporates who are looking to mitigate the impact of digitalization on their core investment business. These sources of funds should be able to replace venture funding (at least in Europe). In addition, German/European entrepreneurs are also cashing out and are ready to invest in new ventures. In Hamburg there is a wide range of angle / VC money available from successful industries partners e.g. HackFwd – Lars Hinrichs.  Therefore, I […]

Samstag

26

Januar 2013

1

COMMENTS

What consequences does this bring for VC funds, which have fully invested their current capital?

Written by , Posted in Finanzierung

As discussed in the previous post – times are tough for VC funds – but what implications does that bring? Funds need to start lasting value creation to attract new capital! As a first step I think that VCs need to reevaluate how they select investments. So far the industry has a way too high failure quote – I even think that VCs with their general herd behavior often miss interesting opportunities. Secondly, they need to increase their target range. There are lots of successful start-ups outside of the Silicon Valley and SV like hubs that would present interesting funding targets. Thirdly, they really need to develop beyond pure capital providers. Almost all of them will tell you that they are really value add above and beyond capital – that is generally just a statement but far from reality. Increasing number of start-up accelerator programs indicates that pure venture capital financing is not successful. More skills, support and knowledge are necessary. Investing in a VC environment is incredibly hard and finding the right investment criteria and sticking with them is quite a challenge. This is nicely described in Paul Graham’s “Black Swan Farming” article. Source: http://paulgraham.com/swan.html Small is beautiful VC firms […]

Dienstag

15

Januar 2013

1

COMMENTS

Venture Capital – does it still work?

Written by , Posted in Finanzierung

Previously, venture capital as an asset class has been critically discussed by Jochen and Alex in their respective blogs excitingcommerce.de and kassenzone.de. Source: http://www.excitingcommerce.de/2012/09/vcs-und-die-hohe-wahrscheinlichkeit-des-unwahrscheinlichen.html and http://www.kassenzone.de/2012/09/12/venture-capital-funktioniert-nicht/ In his last blog Alex already hinted that I am working on a more detailed analysis of the subject. Why do I find this interesting? Well, after having worked in the PE and VC industry I always wondered how it would feel to change sides – become an entrepreneur and learn the nuts and bolts of daily operational challenges. It has been very interesting and I am tempted to claim that “professional” VCs who have been in banking or consulting all their lives and therefore represent the favorite MBA trained elite that joins VC/PE firms on a junior level – know next to nothing except how to draw pretty slides, talk in “investor” slang at fancy conferences and run after hypes like a crazy bunch of headless chickens. This is clearly an exaggerated view but overall the question remains if  venture capital is an asset class with a future. The question is, if the more experienced senior staff has the ability to find deals and make investments that are profitable. In addition, I am wondering […]

Dienstag

4

Dezember 2012

0

COMMENTS

Web Future Awards in Hamburg!

Written by , Posted in Finanzierung

Web Future Award is now open for applications. Any new start-up in Hamburg should not miss this great PR opportunity BUT be warned… though judges, including our own TAREK MÜLLER, will evaluate your ideas: http://www.hamburg-media.net/awards-webfuture-jury/ Applications: http://www.hamburg-media.net/awards-webfuture-bewerbung/