Really an investor is buying to this round, plus any existing assets. Valuing these would be hard. Valuing them at their initial investment value wouldn't be proper. I would imagine it would fall afoul of a few ASIC rules.
Even if it's somehow workable, then you're taking away a big risk element - I can invest at round 3 and reap the rewards of the previous rounds at no cost. Perhaps it can work, but I think that will be an issue. J On Fri, Feb 6, 2009 at 2:21 PM, Geoff McQueen - Hiive Systems < geoff.mcqu...@hiivesystems.com> wrote: > > Phil, > > Sounds reasonable; in my limited experience, I think this is called a > recapitalisation. > > My only comment: make the price to play higher. Making it something closer > to $2k means people will care more about their investment; $500 for the > angel types (and possibly also $2K, or even $20K) is more like a donation. > > 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 4:19 PM > To: silicon-beach-australia@googlegroups.com > Subject: [SiliconBeach] Re: question about startup funding in Australia > > > I think its key to keep it as simple as possible. This isn't my area > of expertise, but I imagine that each year all investors would be > given the opportunity to invest again and you just essentially add > that number of shares each year. So when you start you start with the > .2 per cent and you can maintain that holding by investing each year, > if you don't your shares just get diluted. To be active, however, with > the event/email list you need to have invested in the current round. > > I don't know about anyone else, but $500 a year to be involved in > something like this would just be a no-brainer. > > 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 6383 > Mobile: 0413889940 > > > > On Fri, Feb 6, 2009 at 3:42 PM, Jonathan Williams <william...@gmail.com> > wrote: > > 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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