I'm with the comments on bootstrapping - I've bootstrapped two
companies, and sold the last one to Novell in 1999 - imagine an exit
when you get >80% (once you give employees and board members their
cut).
All that being said, I am angel funding my latest, mainly because
there is a huge amount of angel money here in the bay area, but I
intend to use this money to get to profitability and another quick
exit within 2-3 years. This business model suits the Angels extremely
well, plus it forces me to be more disciplined by having investors.
Phil Montgomery
www.majura.com
www.philmontgomery.com
On Sep 24, 12:32 am, Mathew French <mathew.fre...@subscribe-hr.com.au>
wrote:
> Can I say that the best way to find Angel $ is through contacts. 2-3
> Degrees. We raised about 500K late last year through a contact who is an
> accountant. You need to find these types of people who look after high net
> worth indivuals and these investments. There are loads of them out there,
> just have to mix in the right circles. If you need any help, let me know.
> You have to have your stuff in order. Business Plan. Projections. B.E.
> Marketing Strategy. A product that is nearly done. We spent about 2 years
> building our product and it was about 90% complete before we were successful
> in raising capital.
>
> I was quite fortunate to have a damn outstanding developer whom I formed a
> partnership with in the early days. What he did with our platform really
> wowed the Angels.
>
> I might also ad, detailed market IP/Knowledge is also critial. Without this
> you will not be able to tell a story that is complelling.
>
> As I said, am here to help.
>
> Cheers,
>
> Mathew
>
>
>
> On Wed, Sep 15, 2010 at 11:59 AM, David Jones <david.jo...@gmail.com> wrote:
> > Its all been said but few points....
>
> > 1. Marko hits it on the head - OZ startups are are historically
> > lean/emaciated - As Matt says web businesses at least can . Hats off if you
> > have the business model sorted and funding is supporting scale. (assuming
> > your business is a web business)
>
> > 2. The good news is there is an angel bubble - I don't know how long it
> > will last or whether the tide has risen much in OZ as opposed to US. Sure
> > its smaller...that leads to point #2. Point is, now if probably a good time.
>
> > 3. its a numbers game, regardless of angels or VCs there are many non-you
> > reasons why they say "no"*:
>
> > - wrong market segment
> > - wrong stage of company
> > - processing another deal
> > - wrong stage of fund
> > - or a myriad other reasons. (The "you" reasons: team, market size,
> > competition, bad idea, personal hygiene etc)
>
> > So assume your odds (as Mark said 1-10%). Thats not cause for whinging - it
> > just means you see a lot of cafes. It hubris to think meeting 3 folk will
> > close a deal - it happens but rarely. Yes, its true there are few early
> > stage VCs - hence the recommendations for angel.
>
> > (*or often the response is "really intriguing - perhaps when you are a
> > little further along - keep us updated". There is a few reasons for this.)
>
> > 4. Most importantly, if you are raising, then make sure you continue to
> > execute on the business - so-called "traction". When you go back for 2nd,
> > 3rd meeting, then update them on differential progress since last time on
> > metrics that matter (registrations, uniques, transactions, revenue etc)
>
> > cheers
> > d.
>
> > On Tue, Sep 14, 2010 at 12:37 PM, Marko <marma...@gmail.com> wrote:
>
> >> Hi guys,
>
> >> great discussion!
>
> >> As an entrepreneur who's about to start looking for angel money, all I
> >> can say is, less crying and more doing.
>
> >> We are in a privileged position here where we HAVE to focus on revenue
> >> early in the game and create business models that actually work.
> >> Talking to my peers in the US I get a feeling that since there is a
> >> lot more money over there, they are a bit more chilled out about
> >> creating viable business models that have a realistic revenue stream.
> >> It's true that for the Twitters of this world this is the right
> >> approach, but I believe that most businesses can generate revenue
> >> before they create a massive user base.
>
> >> Bootstrapping and squeezing out the most out of very limited resources
> >> can be very tough, but this helps build a culture of efficiency and
> >> sound business practices. It also brings people together and creates a
> >> stronger sense of camaraderie. We are all in it together fighting for
> >> the same goal and we have to trust and depend on each other as that's
> >> all we have. If a team can survive under these Spartan conditions and
> >> learn how to get the most out of what's available, then money will
> >> turn it into a formidable force.
>
> >> One sure way to kill a startup is having founders leave the company.
> >> If you were an investor, wouldn't you want to know that the team you
> >> are investing in can survive under tough conditions before you pour
> >> your hard earned money into it?
>
> >> We have to use the conditions around us to our benefit and if that
> >> means having to jump higher and dive deeper than everyone else, than
> >> be it. Investors will come along for a ride once they are convinced
> >> that you can create value. More early stage investment is becoming
> >> available and by boosting the image of Australian startups as
> >> resilient and robust operations, we'll for sure attract more money.
>
> >> Onwards and upwards I say.
>
> >> Cheers,
> >> Marko
>
> >> On Sep 14, 10:41 am, "Mick Liubinskas (Pollenizer)"
> >> <bigm...@gmail.com> wrote:
> >> > Thanks for the post Renai. It's a good question and there are some
> >> > great answers here.
>
> >> > I'll summarise my point by saying yes and no.
>
> >> > Yes, there is a VC funding here in Australia.
>
> >> > No, it's not particularly relevant for early stage web businesses,
> >> > which a lot of Silicon Beach is about - or is that just me?
>
> >> > Matt's post is good as it shows where you need to be to be to get VC
> >> > funding.
>
> >> > So the whinging is whinging to some degree, as people read Techcrunch
> >> > and think that VC money is how you do things. It may appear that way
> >> > but in reality there is a a lot more companies in the valley that
> >> > don't get VC funding than do. They are bombarded each year by
> >> > thousands of companies from around the world and each VC may fund 3-5
> >> > each each year.
>
> >> > What we need to be looking at is more seed and angel funding. This is
> >> > partly why Pollenizer is structured the way we are. We can expect big
> >> > cash without a working business, so we find a little bit of cash, stay
> >> > lean and get to validation.
>
> >> > I've got no doubt the VC's in Australia will fund you - IF - you fit
> >> > their requirements and IF you want to take the money.
>
> >> > For some quick stats,
> >> > * Of the more than 100 business that Pollenizer has worked with and
> >> > more than 500 that we have spoken to, only 2 have been VC funded.
> >> > Xumii (mid-sized project) and Mig33 (tiny project).
> >> > * Of the $5m we have raised for our portfolio companies, none of it
> >> > has come from VC's. Yes, it's a young portfolio and I expect some in
> >> > the next few years will look to VC's for expansion capital, but many
> >> > won't need it.
>
> >> > The big part I agree with is the stop whinging and just do it. Ian
> >> > Cummings is a good example. He finds a way. It's hard, and requires
> >> > persistence - welcome to the job!
>
> >> > Mick
>
> >> > On Sep 14, 10:11 am, timparsons <tmpr...@gmail.com> wrote:
>
> >> > > Nice post Matt - and thank heavens for Silicon Beach too I say :-)
>
> >> > > On Sep 13, 8:26 pm, Matt <matt...@yuuwa.com.au> wrote:
>
> >> > > > Hi Renai
>
> >> > > > Thanks for the write up :)
>
> >> > > > I was trying to find another early stage VC-fund investment in IT in
> >> > > > the past 6 months and found it very difficult.
>
> >> > > > VC funding is not particularly sought after by typical web-based
> >> start-
> >> > > > ups these days for two key reasons:
>
> >> > > > 1. I look to invest $1.0 - 3.0m in a Series A round, most start-ups
> >> > > > these days can get to cashflow positive on a lot less and that's
> >> where
> >> > > > the average entrepreneur is happy to either stop thinking about
> >> extra
> >> > > > capital ("I am cashflow positive already") or start believing in
> >> > > > valuations that would mean my $1-3m would not give me any
> >> substantial
> >> > > > stake in the business.
>
> >> > > > 2. Our terms are very very tough compared to family and friends or
> >> > > > private equity or just about any other form of investment money. We
> >> > > > ensure very strong downside protection, which frankly is very off-
> >> > > > putting for many entrepreneurs
>
> >> > > > Read VentureHacks to get an idea where VC sits in the cycle, you can
> >> > > > get a lot from Angels if you can find them, but a VC is mean to help
> >> > > > propel a business to the next level and should bring a lot more than
> >> > > > cash. I have sat on both sides of the table, I don;t pretend for an
> >> > > > instant that I can bring the networks or skills of the average
> >> Silicon
> >> > > > Valley VC but from little ol' Perth I can certainly help a business
> >> go
> >> > > > international for the first time.
>
> >> > > > Agworld was an exception opportunity for us, great management, an
> >> > > > understanding of the value of VC and some great early traction with
> >> > > > customers built on the back of some serious sweat and real cash from
> >> > > > the founders. Hats off to them for seeing where Yuuwa could fit in
> >> > > > and giving us a chance
>
> >> > > > Matt
> >> > > > Co-founder
> >> > > > Yuuwa Capital LP
>
> >> > > > On Sep 13, 8:42 am, Renai LeMay <rle...@gmail.com> wrote:
>
> >> > > > > Innovation Bay is constantly calling for people to come and pitch
> >> to
> >> > > > > them, and now this drops out of the 'sky' -- or should that be the
> >> > > > > 'Yuuwa'? ;)
>
> >> > > > > Perth VC pumps $1.5m into agriculture IT startuphttp://
> >> delimiter.com.au/2010/09/13/perth-vc-pumps-1-5m-into-agricultu...
>
> >> > > > > I am beginning to suspect that the whinging about a lack of VC
> >> capital
> >> > > > > in Australia is just that ... whinging.
>
> >> > > > > Thoughts?
>
> >> > > > > Renai
> >> > > > > Publisher, Delimiter
>
> >> > > > > PS I am heading to the next Innovation Bay dinner -- will be
> >> > > > > interesting to see what the sentiment is on the issue there.
>
> >> --
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