Who Will Fund Local Web 2.0 Aussie Businesses ?
If you're an (Australian) (locally focused) (Web 2.0) (consumer + enterprise) (Entrepreneur) you wouldn't waste your time with VC's. They want big billion dollar global Delaware incorporated Valley relocated hire a good lawyer son, we need to patent that technology, we want to own this space, and get a quick, Jim Clark-esque billion dollar home run. Yeah baby a billion.
If you're an (Australian) (locally focused) (Web 2.0) (consumer + enterprise) (Entrepreneur) you wouldn't waste your time with angels. Dumb money. Non industry expertise. Lots of mother-baby here comes the plane food education sessions.
What you want is the size of the angel investment with the expertise of the VC, and forgeth delaware. The closest approximate of this is the successful Serial Internet Entrepreneur, who made good on their 1.0 venture. But they're really busy too : Either working in private equity, doing an earnout with the company that acquired their business, or happy to focus on extensions to the family home in Mosman.
So it's good to hear that Charles River in the US anyway, with their QuickStart program, are proving that institutional angel funding, similar in a micro sense (fund 6x more companies with 1/6th less money to the Union Square Ventures philosophy) can work.
TechCrunch : "CRV said they’d make 25-50 investments through Quick Start in the first two years. After six months, they are on track to do about 40 investments. Nine have been completed so far..Three of these have completed a subsequent Series A round - Mobeus, Aveksa and Samplify.. The average investment size was $250,000. It’s still too early to tell if these investments will pay off, but CRV is doing very well overall. They say their 2000 fund will return 2-3x to limited partners, an excellent return by any measure, particularly given the 4 year nuclear investment winter from 2000-2004."
Hopefully this may stimulate in Australia, and other non-US countries (there was some y-combinator like player in Europe recently announced yeh ? Y-Something ? eg Y-Europe!) a similar type of investor group. The sweetspot is probably slightly later stage than Charles River : So similar to Union Square, the company has launched a website, is a leader and has traction in an emerging "local" sector. The investment would be bigger than the Y-Com and CharlesR avg amounts (and dont forget TechStars in Colorado), but slightly smaller than Union Square total amount invested. (who do larger amounts in later Series/Stages)
The formula would look like :
- $10m-$20m fund per region. As small as $3.5m for Series A round for first 5 investments.
- Invest in 5-10 leading companies in designated 2.0 "local spaces" in each non-US geographic segment
- Invest on a milestone by milestone basis : "Be first investor" / Pre-VC etc
- First round 25% investment : Average amount invested $500K (up to $1m)
- Allow founders/debt/angel funders of business to get small amount of money out in stage 1 (up to $100K) to keep their mortgage, wife, family happy.
- Provide Blue Chip who get it Advisory Services in accounting and legal with designated partners and associates to be allocated one company which they "own" and work on high equity/low cash incented basis. (these costs kill a business early on, but ignoring them kills a business even quicker)
- Strategic equity partnerships important (help where angels cant) esp on the distribution side (ie media co's provide guaranteed distribution to millions of users in return for minority equity %'s in co's or parentco) This is critical in taking a successful prototype eg 50k monthly users to the 500k-1m users level.
Locally this is where the gap is : For those that dont do the US visa thang (as b5, omni, tnglr) that go/get VC, there are a range of locally operating companies that are self funded, that need expansion funds having proven their initial model. I wonder who will step up... (people keep telling me it is size that matters, and it easier to raise more than less. So rather than have 5 entrepreneurs run around asking for $500K : you could have 1 round for $2.5m.. nb i know its more complicated than that but it could be more efficient)
Who Will Fund Local Web 2.0 Aussie Businesses ? Seriously, I'd love to hear examples (emails and/or comments) of those looking at the above in Australia but also parallel markets like the UK (even Germany, India, too with similar problems), whether they be corporate departments of media/telco/tech companies, VC's, or angels/internet entrepreneurs... redbarren at gmail dot com.
(Update : meanwhile the real angels and vc's are pumping $45M into Tesla the green friendly great looking and performing sports car!!! forget the prius. also u just have to see the agenda that marrignton + jcalacanis are pulling together for techcrunch20 conference - which would also be a great incubator - and see where australia is lacking in terms of setting up the right environment to educate and promote tomorrow's successful business... i mean shite they've got MC Hammer "u cant touch this" who u know has fo real been blogging longer than most in Australia myself included, and has had business interests in the space for years...see in the US u can invent a dance move, have a #1 single, then go web2.0 !!! ok i'll shutup now..)
Give me a song, or rhythm
Makin em sweat
Thats what Im giving em
Now they know
U talk about the Hammer
Youre talking
A show thats hyped
And tight singers
And sweating
So pass them a wipe
Or a tape to learn
What it is going to take
In the 90s
To burn the charts
Legit
Either work hard
Or U might as well quit
U cant touch this
I told U home boy
U cant touch this
Yeah, thats how were livin and U know
U cant touch this
Look in my eyes, man
U cant touch this
Here, let me bust the funky lyrics
U cant touch this
If you're an (Australian) (locally focused) (Web 2.0) (consumer + enterprise) (Entrepreneur) you wouldn't waste your time with angels. Dumb money. Non industry expertise. Lots of mother-baby here comes the plane food education sessions.
What you want is the size of the angel investment with the expertise of the VC, and forgeth delaware. The closest approximate of this is the successful Serial Internet Entrepreneur, who made good on their 1.0 venture. But they're really busy too : Either working in private equity, doing an earnout with the company that acquired their business, or happy to focus on extensions to the family home in Mosman.
So it's good to hear that Charles River in the US anyway, with their QuickStart program, are proving that institutional angel funding, similar in a micro sense (fund 6x more companies with 1/6th less money to the Union Square Ventures philosophy) can work.
TechCrunch : "CRV said they’d make 25-50 investments through Quick Start in the first two years. After six months, they are on track to do about 40 investments. Nine have been completed so far..Three of these have completed a subsequent Series A round - Mobeus, Aveksa and Samplify.. The average investment size was $250,000. It’s still too early to tell if these investments will pay off, but CRV is doing very well overall. They say their 2000 fund will return 2-3x to limited partners, an excellent return by any measure, particularly given the 4 year nuclear investment winter from 2000-2004."
Hopefully this may stimulate in Australia, and other non-US countries (there was some y-combinator like player in Europe recently announced yeh ? Y-Something ? eg Y-Europe!) a similar type of investor group. The sweetspot is probably slightly later stage than Charles River : So similar to Union Square, the company has launched a website, is a leader and has traction in an emerging "local" sector. The investment would be bigger than the Y-Com and CharlesR avg amounts (and dont forget TechStars in Colorado), but slightly smaller than Union Square total amount invested. (who do larger amounts in later Series/Stages)
The formula would look like :
- $10m-$20m fund per region. As small as $3.5m for Series A round for first 5 investments.
- Invest in 5-10 leading companies in designated 2.0 "local spaces" in each non-US geographic segment
- Invest on a milestone by milestone basis : "Be first investor" / Pre-VC etc
- First round 25% investment : Average amount invested $500K (up to $1m)
- Allow founders/debt/angel funders of business to get small amount of money out in stage 1 (up to $100K) to keep their mortgage, wife, family happy.
- Provide Blue Chip who get it Advisory Services in accounting and legal with designated partners and associates to be allocated one company which they "own" and work on high equity/low cash incented basis. (these costs kill a business early on, but ignoring them kills a business even quicker)
- Strategic equity partnerships important (help where angels cant) esp on the distribution side (ie media co's provide guaranteed distribution to millions of users in return for minority equity %'s in co's or parentco) This is critical in taking a successful prototype eg 50k monthly users to the 500k-1m users level.
Locally this is where the gap is : For those that dont do the US visa thang (as b5, omni, tnglr) that go/get VC, there are a range of locally operating companies that are self funded, that need expansion funds having proven their initial model. I wonder who will step up... (people keep telling me it is size that matters, and it easier to raise more than less. So rather than have 5 entrepreneurs run around asking for $500K : you could have 1 round for $2.5m.. nb i know its more complicated than that but it could be more efficient)
Who Will Fund Local Web 2.0 Aussie Businesses ? Seriously, I'd love to hear examples (emails and/or comments) of those looking at the above in Australia but also parallel markets like the UK (even Germany, India, too with similar problems), whether they be corporate departments of media/telco/tech companies, VC's, or angels/internet entrepreneurs... redbarren at gmail dot com.
(Update : meanwhile the real angels and vc's are pumping $45M into Tesla the green friendly great looking and performing sports car!!! forget the prius. also u just have to see the agenda that marrignton + jcalacanis are pulling together for techcrunch20 conference - which would also be a great incubator - and see where australia is lacking in terms of setting up the right environment to educate and promote tomorrow's successful business... i mean shite they've got MC Hammer "u cant touch this" who u know has fo real been blogging longer than most in Australia myself included, and has had business interests in the space for years...see in the US u can invent a dance move, have a #1 single, then go web2.0 !!! ok i'll shutup now..)
Give me a song, or rhythm
Makin em sweat
Thats what Im giving em
Now they know
U talk about the Hammer
Youre talking
A show thats hyped
And tight singers
And sweating
So pass them a wipe
Or a tape to learn
What it is going to take
In the 90s
To burn the charts
Legit
Either work hard
Or U might as well quit
U cant touch this
I told U home boy
U cant touch this
Yeah, thats how were livin and U know
U cant touch this
Look in my eyes, man
U cant touch this
Here, let me bust the funky lyrics
U cant touch this
posted by redbarren at 1:16 PM
<< Home