DIGITAL ENTREPRENEUR HAMBURG

strategic partner Archive

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

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 […]

Mittwoch

17

Oktober 2012

0

COMMENTS

(b) Bankers, accountants, lawyers, consultants, fund raisers – how to deal with eCFO service providers

Written by , Posted in Strategie

Lawyers Depending on your business you should consider building a junior legal presence in your business to avoid having to pay high hourly rates for all legal related questions. This is especially important if you deal with legal questions, contracts etc. on a regular basis. If you do have to hire a lawyer always go for the best and somebody with specialized knowledge. If your counter party has to negotiate with a highly qualified lawyer it will save you more money in the long term compared to paying a slightly lower hourly rate. I would not engage one lawyer for everything but instead get an expert for each topic and use them as needed. That means a lot meetings and time spent on searching for various lawyers but it also means that you will get expert advice for each questions you might have. I would advice against large firms since work will usually be done by junior associates and you will only meet the partner for sales negotiations and billing purposes. Stick with small, specialized firms that know what they are talking about and do not have a deep hierarchy. Also note that lawyers will never tell you yes or […]

Montag

1

Oktober 2012

0

COMMENTS

(a) Bankers, accountants, lawyers, consultants, fund raisers – how to deal with eCFO service providers

Written by , Posted in Strategie

As an eCFO you will have to deal with a range of different service providers. While making good decisions in this area help you to substantially improve your operations and allow you to run the business effectively, making bad decisions can be very costly to you and your new venture. I would recommend that you first understand your business well and then look for advisors. You should strategically pick advisors who understand your business and can help you develop it further. As a start-up you should have a good combination of old, reputable wisdom and young, start-upish advisors who will help you to rapidly grow the business. I have selected a few categories of advisors and provided my personal opinion of each. It would be interesting to get some feedback regarding your experience and “best practice for working with start-up advisers!” eCFO Tips: Always do a beauty contest when it comes to selecting advisors/service providers. No matter how small you are, always have at least 3 potential advisors compete for business. You will learn a lot through these interviews and it will be time well spent. Make sure you also invite people from various background e.g. individuals, small, medium and […]

Freitag

23

März 2012

1

COMMENTS

Financing or getting married?

Written by , Posted in Finanzierung

Setting the tone… Financing is a fundamental decision for each entrepreneur. Unfortunately, there is no perfect financing partner and each financing process should be highly tailored towards an entrepreneur’s individual needs. I often compare financing to marriage – as crazy as it might sound a financing process has many comparable steps. From the initial flirtatious phase where a person goes out and looks for a date to eventually marry–an entrepreneur’s initial hunt for an investor to the final signing of documents in front of a notary has a lot of similarities. Whether you see your perfect partner on a dance floor or see a famous venture capitalist walking around at a networking event – I promise your heart will start to beat faster. Once a relationship becomes serious and an engagement looms on the horizon an entrepreneur will face a lot of due diligence questions – similar to going for your first trip with the future in-laws. Marriage is just the same – some will be great, long-lasting and highly profitable for both sides, while others will end in a quick and maybe even messy divorce where both sides wish they would have paid more attention to the wedding contract. […]