Makes it complex - by investing are you investing in any returns for that round, or for the lifetime of the programme? J
On Fri, Feb 6, 2009 at 1:38 PM, Geoff McQueen - Hiive Systems < geoff.mcqu...@hiivesystems.com> wrote: > > Phil, > > Quick question: since the idea is to have "rounds", would it really be a > commitment to contribute $500 per half year for each of the 500 investors? > > If so, the share values themselves could probably be traded - if the group > has a couple of decent exits to proper angel or series A or - God forbid - > the businesses generate dividends without needing to have a specific > liquidity event - which would result in the value of the shares going up. > > The trustholders/shareholders agreement or articles of association would > require a capital raising every 6 months, which I don't see as an issue: > however, if we don't have a liquid market to set the price for shares (which > we shouldn't be aiming for: the idea of the network/connections/support > stuff is that the investors would probably be pretty engaged and stable), > when someone chooses to dip out or not pay up, how would you "buy out" their > share? Surely it wouldn't be a sum of contributions, else people could vote > with their feet if times were tough and realise a valuation greater than > "book value"... > > These problems have solutions, and I've got a few ideas, but I was > wondering if you had some comments to make about how this sort of thing > would go over time since you've certainly already put a lot of thought into > it... > > Geoff > > -----Original Message----- > From: silicon-beach-australia@googlegroups.com [mailto: > silicon-beach-austra...@googlegroups.com] On Behalf Of Phil Sim > Sent: Friday, 6 February 2009 3:21 PM > To: silicon-beach-australia@googlegroups.com > Subject: [SiliconBeach] Re: question about startup funding in Australia > > > I think anyone would agree that the benefit of being a part of a > scheme like this, would be the advice and mentoring you would get from > some of the 500 'shareholders'' who all have an interest in helping > you to succeed. Suddenly, you've got a crowd of people who you can go > for advice, guidance, etc. A swathe of people who have been following > you from word go who might then want to invest more as angels and a > genuine path up to larger funding. Read the Y-combinator material and > they go to great pains to say most of their companies dont need the > money but they're doing it for the access to networks and guidance. > > After all, nobody REALLY needs money in Australia to do a start-up > because you can go on the dole and just code until you've got > something to show for it, but its taking that next step to > commercialise, market it, make those important first hires that people > need help with. > > This is how I would see it working: > 500 shares at $500 each gives an annual fund of $25k. Aim to fund 20 > startups in two batches six months apart. (2 x 10) Funding would be > similiar to y-combinator model of $5k per founder. The event I > previously proposed could be used in doing some of the selection > process. The organisation would also try and get sponsorship > agreements for free hosting, etc. further reduce costs. Again keeping > to the Y-combinator model that would get the group up to 10 per cent. > > An email list like this would be used to keep the group up to date and > for the startups to talk about their progress and ask for > help/feedback. Nice and low maintenance. Virtual networking for the > investors as well as the startups. > > The quality of the investors is important. I'd suggest an application > process and that at least 100 powerful investors who are invited to > join so as link the group to VC organisations, angel groups, political > circles, and generally wealthy networks. > > After the first six months is up, startups that have done well could > apply to receive one of the next batches as well. > > This is a concept I've been keen to get involved with for a long time. > I even registered a domain virtualkapital.com a few years ago when I > last got excited by the idea. Would be happy to donate that to the > cause if people liked it. > > What this needs now is for some people to actually step forward and do > something about it. If there is anyone that could do the > legal/financial legwork to get up a structure that would work then I > would be happy to use our upcoming media conference (feb 22 to 24) to > launch this idea and get the publicity rolling and then to basically > take the lead in marketing the organisation. Someone who would put > some time into project managing it, would be useful as well... > > I sincerely think this would make a massive difference to our startup > environment and provide a true path from seed through to VC funding. > > Phil Sim > Chief Executive Officer, > MediaConnect Australia Pty Ltd > www.mediaconnect.com.au > phi...@mediaconnect.com.au > Ph: +61 2 9894 6277 > Fax: +61 2 8246 6383Mobile: 0413889940 > > > > On Fri, Feb 6, 2009 at 10:30 AM, silky <michaelsli...@gmail.com> wrote: > > > > On Fri, Feb 6, 2009 at 10:23 AM, Bart Jellema <bart.jell...@tjoos.com> > wrote: > >> > >> Have been following this thread for a while. Mick and David, some > >> excellent input! Having been around the community for a while now I > >> keep hearing this argument over an over that what Australia need is > >> more access to funding. This is bugging me for a few reasons: > >> > >> - I feel that many use this as an excuse to justify their failure or > >> much worse: Their failure to even try. > >> - I get the feeling that some think "getting funding" = success, > >> instead of the "creating a great product that solves someones issue" = > >> success. > >> - Sometimes I think people feel a sense of entitlement. > >> - Many seem to me to have a skewed view of how hard/easy it is to get > >> funding in the valley. (One of our friends in the valley spent > >> countless coffees trying to get funding. After months they finally > >> just bootstrapped it and sold to Salesforce after about 1.5 years.) > >> > >> Sure, some startups can only happen with funding, but in this day and > >> age I don't quite understand why you would lose your focus and waste > >> time on trying to get funding for a web startup if you can simply > >> bootstrap it. Sure it takes sacrifice (Kim and I lived in my parents > >> attic for 3 months to get tjoos off the ground) and it's a huge risk > >> because in all likelihood you will fail. But how can you expect others > >> to take that risk off you if you're not willing to take that risk > >> yourself first? Once you get your venture off the ground and start to > >> get some good traction you will find that there is plenty of money > >> available in Australia to help you grow. > >> > >> Right now I meet many wantrepreneurs, hear about many great ideas, but > >> see too little people cutting code and putting it on the road. I think > >> it's true that one of Australia's problems is aversion to risk, but > >> this doesn't only apply to the investment side. So I'd say: Take some > >> risk, believe in what you do and just build it. If you're growing like > >> crazy but can't grow as fast as you'd like because nobody wants to > >> invest, then come bitching about it. > > > > Legitimate advice but nothing to do with the topic at hand - creating > > a group to help fund people that *do* deserve it. Nobody wants to fund > > people that don't. > > > > -- > > noon silky > > http://www.boxofgoodfeelings.com/ > > > > > > > > > > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Silicon Beach Australia mailing list. No lurkers! 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