It's late, so 3 quick comments: 1. Elias, appreciate your anecdote for focusing attention on importance of the person. Just wanted to mention in case anyone missed it though that the financial side of your venture was about customers and their money. Customers rightly expect a result from their spend, but as much as us sales types want to call it an investment, it is really a spend/cost. Anyone wanting $ from a customer had better deliver. What Richard & Chris are talking about is investment, where someone takes a stake and aims for a return on investment, eventually through profits. There's also a third important source of funds - debt - where a bank/capital provider takes security, not a stake. But it ain't that sexy right now.
2. Chris, the existence of mature Secondary markets (the Series A to an angel round) as well as a global perspective, which breeds scale and potentially better profits, is what makes the Valley easier for Angels to take bigger bets in. Conway is master at investing as an Angel and then almost guaranteeing competition @ Series A because he's Ron 'rock-star-angel' Conway. I feel the lower volume of VC's in AU makes this style of 'betting' harder to make a return on, so lower bets. Smaller markets don't help. But I'm with Elias on tech entrepreneurs not doing stuff 'cause they can' and expecting funding without a clue about value, even if they're not sure about monetising it yet. Google's propostion to web searchers had demonstratable value from Day 1. 3. Richard, good to be putting the word out there, but I can't help but think these Angel associates are setting the bar too high. Revenue & Profit for a 100K angel round? They'll want to be expecting a rounding error of common stock for that, but your other idea of the sailing say ties in all thre threads - people believe in and invest in people, the valley is all about people meeting people a LOT, and if you can bring together people who are in the scene and mutually beneficial, you'll probably get a great result where entrepreneurs and investors can help decide what levels of type & investment & support work best for both parties. Longer response than planned! Night everyone. I've got to be on a train to syd in a couple of hours. I'll probably need a beer tomorrow arvo if anyone's keen... Geoff ________________________________ From: Chris Saad <[EMAIL PROTECTED]> Sent: Thursday, 2 October 2008 1:39 AM To: [email protected] <[email protected]> Subject: [SiliconBeach] Re: New funding available Sorry mate you're wrong ;) It can't be explained if you have not lived in the real valley - but googe had no revenue when they too their 100k If au wants to get somewhere it needs to make more bets earlier. Chris Saad Please excuse brevity and typos - Sent from my iPhone On 01/10/2008, at 8:00 AM, "Elias Bizannes" <[EMAIL PROTECTED]<mailto:[EMAIL PROTECTED]>> wrote: "before they have revenue or even a proven path to revenue." Don't mean to bash you Chris, but I really hate that - it's the whine of the industry and it won't go away The problem with the web is you get starry eyed developers building technology that doesn't have a market willing to fund it. Investors of any kind aren't stupid and it's not a charity. At university, I created a publishing house (and which is why I got into the internet, but that's another story). One of our first projects, was a magazine, in which I went door knocking to local businesses, whereby we raised advertising of a few thousand dollars with nothing but a rate card and me talking with passion. That first edition, we raised enough to print 4,000 editions in glorious colour. Success perhaps? Not quite - we had a shocking distribution strategy, and I could not bear to face returning to those advertisers asking for more because I knew fair well their investment was a flop. But at least I gave them *hope* of making a return: I had an identified market (students) matched with their need (exposure to that market). All I need to do was prove I could do it - that's the right way. However asking to "trust me, there is no market yet but we'll find one" is just wrong. There is no way in hell they would give us money, and of the 95% of businesses that turned us down, most of them did so because they didn't appreciate the market. But at least we could identify that market for them to make that decision. Asking investors to take in more risk is not appropriate. They know full well how much risk they can take. Entrepreneurs just need to recognise they have an obligation to make a return and you need objective evidence to prove you can. If I was to invest my cash into a business, I will look at signs that I can recoup and build my investment either through knowing the person well enough that I have faith in them or evidence that there is a return to be made within a period (like revenue). So in the absense of proof you will make a return, I think the only justifiable reason why a investor should invest in you is because s/he actually knows you as a person and can make a judgement on your ability; not blind faith. On Wed, Oct 1, 2008 at 7:16 PM, Chris Saad <<mailto:[EMAIL PROTECTED]>[EMAIL PROTECTED]<mailto:[EMAIL PROTECTED]>> wrote: Richard I would imagine that a typical web startup these days would take $100-250K at a seed round, before they have revenue or even a proven path to revenue. In some cases that amount may even be enough to work out if it's going to succeed or fail. At that level (and in Australia generally) investors are going to have to take on more risk if they want to make real bets on the web. Chris Saad Cell: 646 797 2890 Twitter: @chrissaad FaradayMedia.com . Media 2.0 Workgroup . APML.org . DataPortability.org On Wed, Oct 1, 2008 at 12:16 AM, Richard Hayes <<mailto:[EMAIL PROTECTED]>[EMAIL PROTECTED]<mailto:[EMAIL PROTECTED]>> wrote: Dear group, There is a new funding opportunity based in Sydney. There is a new group who are currently actively looking for new investments. A formal 'beauty parade' aka pitch will happen mid-November but I can not tell you 'officially' who they are. The group has about some serious private money and any investment will be in the $100-250K range. Anyone who thinks they have an 'investor ready' project should contact me off-line. But as we all know that there is a huge difference asking for money and receiving funding. 1. You must have a business plan. 2. IP helps 3. Revenue and hopefully even profits (or at least a reasonable path to profitability) 4. A decent board and management (or at least advisors) 5. Exit strategy within 3-5 yrs (saying Google will buy us does not count!!) If anyone wants to talk I will be at Opencoffee tomorrow or just call me over the next week. BTW, I will be hosting a Opencoffee / Silicon Beach Sailing day next weekend. Sailing, Sea Food and Beer. Possibly not in that order. Richard 0414 618 425 -- Elias Bizannes <http://liako.biz>http://liako.biz --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
