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Venture capital

  • Down and out in Silicon Valley: The dark side of easy VC access

    The Valley is the tech centre of the Universe and you're unlucky if you're not based there. That's what popular culture will have you believe. The image of Mark Zuckerberg waltzing into Case Equity in his night gown and slippers and telling Mitchell Manningham that Sean Parker says F You is what pop culture will have you believe a tech founder on his way to business success must look like. There are many businesses like oil drilling and bio-tech that need a large initial investment or they simply aren't feasible. Software businesses are not one of them. A small group...

  • Funding your business: 8 ways to win over VCs

    In the world of venture capital (VC), ideas are plentiful but fundable businesses are hard to find. Despite the perception, VCs do not fund ideas alone, no matter how solid passionate entrepreneurs believe they are. To negate risk, VCs evaluate proposals based on several characteristics, often in-line with their specific funding mandate, to bridge the huge divide between a cool idea and a fundable business. Differentiated VC funds are inundated with requests for capital to get start-up businesses to the next critical level but very few offer significantly differentiated product or service in the eyes of their target market. The tech...

  • Why emerging markets need startup accelerators to produce gold

    While I was living in Silicon Valley for a couple of months earlier this year, I had the opportunity to see how a number of the startup accelerators over there function, and also to speak to a number of tech entrepreneurs that passed through their programmes. The formal definition of an accelerator is a "programme designed to assist startup businesses with financial and/or operational resources that will increase their chance of growth and success". After seeing them for myself, my definition is slightly different. I would suggest that: "Accelerators are schools for entrepreneurs, primarily tech entrepreneurs, where you can do your...

  • Gone in 30 seconds: How Venture Capitalists screen your business plan

    "The average time that a Venture Capitalist spends analysing a business plan is 22 seconds" – Speaker at the 26th Venture Capital Institute, Atlanta, 2000. Since this realisation more than 10 years ago I've often wondered whether it was entirely fair towards entrepreneurs who spend significant time and resources to develop a comprehensive business plan. But top tier venture capitalists (VC's) deal with hundreds of business plans a year, and a decision on whether to take the proposal to the next level or to reject it is often made in less than 30 seconds. This is how: Consider the 'Flight-Path' of...

  • Here comes the flood: VC firms funding corporate media push into social media

    Somewhat lost in the news because of Google's acquisition of Motorola, Buddy Media, a New York startup raised US$54-million at a US$500-million valuation. Buddy Media helps corporations set up and run their presence on a wide range of social networks. From Buddy Media: We are in the midst of a massive shift online from a search and intent-based world to a social, people-based world. The last three years were about the consumer side of social platforms, as we watched Facebook, Zynga and Twitter grow exponentially. The next three years will be all about the enterprise side of social, and how companies engage and...

  • 5 Common mistakes startups make when applying for funding

    There is a perception among entrepreneurs that a revolutionary idea is enough to secure the venture capital needed to kick-start their businesses. This is simply not true. Here are five of the most common mistakes made by entrepreneurs when applying for VC funding. 1. No WOW! Factor The first rule in the VC game is that your business proposition must have an exceptional differentiating factor. You need to know what your sustainable...

  • Markets fall: What will happen to Silicon Valley recovery?

    Turmoil in global financial markets and economies is never good for Silicon Valley despite the fact that the regional economy has its own boom and bust cycles that operate on a different timetable. Currently, Silicon Valley has been booming, recapturing the trend that was in place in the second half of 2008, before the financial meltdown, of growing VC investments and jobs. It has to be asked though, whether like that recovery in 2008 which ran smack into an economic crisis, this recovery will again be nipped in the bud. Maybe. Profits at the large Silicon Valley companies such as Google...

  • Forget the bubble, the rise in VC investment is unsustainable

    The latest MoneyTree Report from PricewaterhouseCoopers LLP (PwC) and the US-based National Venture Capital Association (NVCA), based on data provided by Thomson Reuters: Q2 2011 VC investments jump 19% to $7.5 billion in 966 deals. Year ago: $6.3 billion in 814 deals Latest quarter is highest total since Q2 2008. These high levels are not sustainable says Mark Heesen, president of the NVCA: "For the past three years, the venture capital industry has been...

  • Six questions that rejected Venture Capital seekers could not answer

    Raising funding for an early-stage venture is always difficult. There is no bottled recipe for success, but even if you have a great concept that is scalable combined with a passionate team that can execute the growth strategy, you still need to communicate this in a multifaceted investor’s pitch. Most entrepreneurs can give a fair account of the top line business strategic growth path, dive into the complexities of the product or service offering, put together a good industry analysis, name a handful of possible clients and present enticing year three to five financial projections, but this will not necessarily...

  • How to do market and competitor research that wins investment

    Regardless of whether it’s an angel investor or venture capitalist you are approaching, every funder will narrow things down to one major question: “Who is your target market and who are you competing against?” This is the warning of Alex Fraser, who drives home the fact that preparing a market and competitor analysis is a vital part of any business plan or pitch deck. Fraser is based at at InvenFin, an early stage capital company. She says she often receives business plans with no competitor analysis, leading her to request one from entrepreneurs with the need for more information. It’s...