Archive for the ‘Start ups’ Category

First Tuesday

Wednesday, October 8th, 2008

Back in 1998 I read a lot about First Tuesday, and I finally got there last night 10 years later.

They are still using colour lanyards: Green = entrepreneurs Yellow = Service Providers Red = Investors, however, they were trialing a new web 2.0 mobile networking device provided by The idea sounds like a good one – you can look up who is at an event, connect with them and then arrange to meet them at a meeting point. In reality, the tech was not quite there yet, perhaps more web 3 than web 2.

First Tuesday attracts an interesting mix of people – the original First Tuesday founder Julie Meyer was there as was the founder of Multimap, Sean Phelan. Sean had some great advice on how to build a web business in a downturn, revealing that Multimap focused on its business to business channel in 2001/2002 when web advertising virtually disappeared as a revenue stream. This enabled Multimap to build a client base with little competition from other suppliers and then come out of the downturn in a strong position and build its consumer advertising model.

All in all a great evening and not bad value at £20 with a couple of glasses of wine thrown in.

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Valuing a start up

Friday, September 19th, 2008
Arsenal manager Arsene Wenger and in the backg...

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I just watched Day 4 of Seedcamp on video. You can watch it here: There is a great quote on valuing startups:

“I asked Arsene Wenger the same question the other day. How do you value a player? Why is one player worth £16.5m and another player worth £35m? …..and he basically says “I just know”.”


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How much money to ask for?

Saturday, September 13th, 2008
photo of Paul Graham

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Paul Graham has published a great essay on some of the challenges start ups face when trying to raise money. You can see the whole essay here.

He has an interesting strategy on how much money to ask for. He says:
“We advise startups to tell investors there are several different routes they could take depending on how much they raised. As little as $50k could pay for food and rent for the founders for a year. A couple hundred thousand would let them get office space and hire some smart people they know from school. A couple million would let them really blow this thing out. The message (and not just the message, but the fact) should be: we’re going to succeed no matter what. Raising more money just lets us do it faster.”

The challenge here is having several funding plans up your sleeve that show different growth rates and also stack up together. To be credible, the plans should show that if an investor puts less money in, the business will not grow as fast and will also have a lower chance of success. The key is putting the lower growth scenario together without putting the investor off and at the same time not making the larger investment easy to pass on because the lower growth scenario looks like a good investment. Why put more money in at the highest risk point when the start up can show good progress with a lower investment?

For me, the difficulty here is that I know if we have less money the chances of our success are greatly reduced. The reason for this is you don’t know what you don’t know and more money allows you to find out, flex your plans and find a successful strategy. Credibly telling an investor that if they give you less money, you are still equally confident of success albeit on a smaller scale, is a challenging balancing act. I will let you know how we get on.

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