start.up

startupweek2011: the four winners

2011-10-10T09:03:00.000+02:00

the startupweek 2011 - a new startup conference including a startup competition held in vienna - had four winners: the conference hosts, the startup region vienna, mysugr & mysugr. and this is why.

for the first time ever a significant startup-conference was organized this very week (3. - 7. oct. 2011) in vienna. besides the startup competitions at leweb and europas the startupweek left a serious mark in the european internet startup scene.

empowered by the success of their startuplive events, the conference organizer STARTeurope , supported by initial factor, mixed four ingredients for their success. their very own entrepreneurial spirit, the professional network of inital factor with the announcement of their new fund speedinvest & the involvement of techcrunchUK, aka mike butcher (find his coverage here).

being overbooked with max. 1.300 paritcipants allowed, including 100 speakers, 500 startup applications with 50 invited startups from all over europe, STARTeurope delivered a professional managed conference. the cross over of the monarchy style location with the future of european internet startups just added to the success.

while vienna is recognized for the quality of living, it does not have the label as being a startup city - like london, paris or berlin. quite to the contrary, there are some austrian startups which stated in private discussions, that they should have started their business directly in london and not in vienna/austria. one main reason being the lack of venture capital funding.

luckily for the growing vienna startup scene, speedinvest offeres now a initial funding source. one must not overlook though, that follow up investments will still require the startups to look abroad. with only one local private early-stage investor, startups in vienna do face a local monopoly. thanks to the mobility of new startups like egoarchive, which recently moved to copenhagen, this can be only considered as a problem for those not willing to follow the money.

therefore combining quality of living, a growing ecosystems of startups with new funding possibilites, vienna just upgraded itself in the european startup landscape.

and then there is mysugr. their startup idea born out of their own personal experience with diabetes, the founders frank westermann and fredrik debong (also co-founder of STARTeurope) won the hearts and the wits of the jury and the audience.

mysugr makes logging the daily diet easy and provides help for the diabetic on how to manage his daily nutrition with the help of their mobile app. unlike competitors like "on track diabetes" the app and the services around are a "medical device" grade. mysugr is in alpha mode, but take applications here. see also a video where fredrik explains what mysugr does here.

so why is mysugr a two time winner?

not because they won both prices (€30.000, 3 weeks in silicon valley) of the startup competition. not because the rocked the audience to standing ovations including a champaign shower for mike butcher - the outstanding host of the startup competition finale.

but (one) because the showed that it is worth to bring one´s very own startup idea to live and fight it through. and (secondly) for the exposure they generated by inspiring the audience & the jury at the pitching competition. this will turbo-boost them in their next steps towards customers, investors and industry cooperations.

while the future of mysugr looks promising many challenges lay ahead of them. the same holds for the startupweek2012, as the organizers set their own bars high. being a startup by themselves, that will however only encourage them to make it even better in 2012.

how to finance your (startup) dream

2010-11-20T10:00:00.001+01:00

ideas on how to finance your startup dreams, proposed at the barcamp vienna 2010.

how to finance your (startup) dream

View more presentations from hannes.a.schwetz.

"rutschgefahr!" founders terms in german venture capital contracts

2010-08-17T07:00:00.001+02:00

multiple liquidation preferences, full ratchets and founders warranties are on the rise on the german startup market. the positions for founders and new investors in new financing rounds get worse in 2010, as a bearish venture capital (vc) market dictates tougher conditions.

in order to avoid "rutschgefahr", german for slip hazard, when negotiating an investment round, read on to get the facts right.

a recent study of the german "mlawgroup" on "vc deal terms report 2010" (german only) gives quantitative insights into an often less transparent market. take the waring, plenty of numbers coming up - plenty of facts to get the own expectations right.

the study is based on feedback on 30 seed fundings, 36 series a and 16 series b rounds. the german "high tech gründerfonds" was taking the lead with 27 investments of 66 early rounds, thus making it the first address for young german startups.

so what to expect as a founder team, when sitting down with investors?

founder vesting is dominant, in 73% of the seed investments. vesting periods are between two to four years. allowances on the vesting are the minority with just 40% of the deals for only 25% of the founders shares.

good leaver/bad leaver clauses gain 18%, up from 32 to 50% of the investments. most good leavers can expect to gain a fair valuation of their shares (73%, up from 49%) though.
venture capitals seek for preferential rights in 78% of their investments. simple (1x) liquidation preferences are seemingly unavoidable in the seed stage (73%), while multiple preferences (2x) are a minority with only 7%. 20 percent of the feedback forms contained no answer on that question though.

exit preferences are common (53%) with an average of 5% interest p.a. on capital invested (8% last year) , although a maximum of 20% was reported.

while founders warranties remain an imperative (95%), pay to play seems to become a scare species. no seed round saw such rulings, series a rounds just in 23% of the cases.
non compete clauses for founders are enforced in 100% of the seed and in 75% of the a rounds with average durations of 2 years. on average founders get a half year salary in return.

anti dilution provisions are either weighted averages (51%) or full ratchets (35%), with a clear rise in the latter.

mlawgroups commented the tightening of conditions for founders as questionable. they could not understand how the worsening positions of the founders could help to prepare the founders (and existing investors) well for exits. for a law firm, this is a rather strong statement.

so much on the numbers. good thing with the study is, that it provides a useful basis to get one own´s negotiation aims right.

read more on general terms & conditions of vc contracts in "legal gibberish of investors in plain english" and in the series "six steps to venture capital".

"get a free portrait!" & more practical guerilla marketing examples

2010-06-21T09:51:00.025+02:00

marketing budgets are a scare resource for every startup. finding innovative ways to reach more customers with less money therefore is key. "guerilla marketing", a concept introduced by conrad levinson in 1985 can be one answer.

wikipedia describles guerilla marketing as "...an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget." so much about the theory, but how to put that in practice? let´s have a look at three recent examples.

the first one is from the last barcamp vienna 2010 (thanks to the organizers rolf & max and the sponsors by the way!). when everyone was invited to post their proposed sessions, young photographer christian lendl put up the following "portrait photo for a link for a link" to his homepage.

by spending one hour of his time, he reached around 60 barcampers, almost a third of the attendants. now for marketers, that is a extremely good conversion rate! 60 people remember his name and will put links on their blogs, so his own website will rise in the search rankings, without one euro spend on adwords.

what about riding on the hype wave of someone else, to gain customer attention?
in this case it was the company ifixyouri using the apple ipone 4 hype to demonstrate their dedication towards their business: repairing iphones. the upcoming ihpone is supposed to use a 30 times more flexible front cover then used in the iphone 3gs and should therefore be less prone to breaking. at their company blog they published a post "iphone 4 glass - will it break?" to check that out. so they took a new iphone 4 an threw it on the floor. the glass broke at the third try.
disproving the impression the one could get from apple´s presentation, that the new glass would be much more durable, brought them plenty of attention. cost? approximately 30-40 us$ (they sell the iphoen 4 glass repair for 69 us$, so their actual costs will be much lower).

considering the ranking on techmeme and the respective discussion following, that was much more attention time then they would get for 40 us$ worth of printing standard marketing folders. p.s. that they maybe got inspired by "will it blend" does not make this guerilla marketing any less effective.

let´s move on to a third example, graffiti style guerilla marketing. regardless if one considers graffiti as art or daub, they are everywhere and the are a provocative in every way. using graffiti in the public space form marketing purposes remains illegal though(at least here in austria).
although sometimes graffiti are used without raising too much attention of the city authorities, this example of using graffiti style advertisement of telering, a local austrian mobile phone network operator, did not go unnoticed.
as telering was not allowed to spray the advertising message all over vienna the just thought different. why spraying colour on those walls which is forbidden when you can clean the walls - which is perfectly legal? so they did some selective cleaning, whileprotecting a dirty brick wall by a stencil. and that was the result:

again, the cost of the idea and "cleaning" their message on the walls showed true guerilla spirit and was in perfect relation to the attention gained.
that were three examples of great creative approaches to marketing. so what´s the guerilla marketing campaign for your start.up?
p.s. if the guerilla style sounds interesting, why not checking out another idea of conrad levinson´s book "guerilla marketing": "5 words to describe your business".

interview with thomas r. koll about his photostre.am project

2010-06-07T07:00:00.002+02:00

photostre.am is a portfolio service for photographers using flickr. recently i had the opportunity to interview the creator of photostre.am, thomas r. koll.

every photographer wanting to present her photo work without using technical skills while remaining on flickr at the same time is in the target audience. no double uploading necessary.

photostre.am is jumping right into a crowded market. competing with hosting one´s own website, using widely available templates, specialised services for photographers or with services form fluidr, viewbook, pullfolio, deviantart or alternative approaches like flickroom, using adobe air.

at the barcamp 2010 in vienna, i had the opportunity to sit together with thomas for a founders interview about his motivations behind the project. (photo by thomas r. koll, view his photostre.am here)

start.up: thomas, what´s motivating you to work on photostre.am?
thomas: to learn, that´s my top motivation. and the pleasure to interact with users of photostre.am.

start.up: what are the most difficult things working on photostre.am?
thomas: photostre.am is taking a lot of time and therefore competing with the "bread" jobs i have to do in order to make a living. being a one-man show, it is furthermore tricky to cover areas like interface design, which is an art by itself. finally to prioritize features is always a challenge.

start.up: how will you make money with your service?
thomas: through pro accounts and a white label b2b service. pro accounts will cost between 10 to 300 euros, depending on the features. compared with creating one´s own portfolio websites, that is rather valuable.

start.up: what would you recommend new startups, considering that you are already work on this project for around one and a half year?
thomas: first, make your to-do lists and prioritize in order to focus. secondly, choose your "bread" jobs - which finance your startup project - based on how much money you can earn on them.

start.up: finally, what´s the technical background, behind photostre.am?
thomas: i am using rails3, mongo db - which has nice horizontal scaling, two virtual servers - one for the app, one for the database and rackspace cloud.

start.up: thomas, thank you for the interview.

private vs. comany live and more, interview with flimmit, part 2

2010-05-13T12:00:00.002+02:00

this is part 2 of the interview with the austrian film search and download portal flimmit. if you missed part 1, it´s worth checking out. read on how setting up a company affects the private life of founders and what the flimmit founders karin, walter and ulrich would recommend to founders of new startups.

how to handle private life vs. work?  
work is private life and private life is work for a start. there is no real private life when realising your dream. the business is with you at all times, after the office, in the evening, at night, during sport, when seeing the family – always. our secret is not to see it as a burden but as a thing one loves to do.

see an animation from the beginning of flimmit:

what does pitching mean for your company? 
pitching is a chance to move on. it is the thing to get the message across. karin haager: “i hated it in the beginning, but i really love doing it now. it demands constant practice, practice, practice - the more the better. the most difficult for me was to do a pitch for training reasons in front of my own company colleagues, but it’s one of the best ways to get settled for the real thing.”

you have already left some tracks in your personal careers, e.g. karin and ulrich, you have been film producers for six years, working on 20 projects. walter is a helicopter pilot. now you are start.up founders. what`s next?
  we have a bucket list of things we still want to realise in our lives. however, now it’s all about movies! and we are aiming to keep it that way for a while.

how do you handle working with those „big“ film industry guys which try to stay in business by suing their customers?  
no fear from the “big guys”. if you got something good, take a chance. and flimmit’s offer is a good alternative and a chance even for the “big guys”. plus we don’t criminalise our customers.

  what are the three most important things to gain visitors on your site? 
billy wilder once said: “a good movie needs three things: a good book, a good book and a good book.” the thing flimmit needs is permanent seo, seo and seo (editors note: search engine optimization). on top of that strategic cooperations with websites and word of mouth and our site gets rolling.

  anything else you would like to talk recommend new start.ups for the beginning? 
gang on in there and believe in your dreams. find good friends that you can work with. and always keep your eyes and ears open and take other people’s advice. finally react quickly (editors note to market and costomer feedback) and just do it!  

interview with flimmit - the austrian film search and download startup

2010-05-02T12:25:00.003+02:00

legal film downloads in europe are a mess. therefore film search is broken too. the austrian startup flimmit is out to fix that. not having one legal framework like in the u.s., the european "rights" marked for film is hyperfragmented. first steps for a common legal framework are only in their beginnings. therefore just to google a film one wants to watch is nearly pointless. because finding the film of choice on a u.k. video download portal will lead to nowhere, as they will not have the distribution rights for austria.

find another search example in the demo video from flimmit:

flimmit searches and finds, lets mention "legal" again, content. so does it work? searching for "lord of the rings" there is a full-size feedback. download and buying possibilities, best prices, reviews, trailers and more. same goes for more recent productions, like avatar. just the recommendations leave room for improvement.

what drives the three founders of flimmit, karin haager (cfo), walter huber (cto) and ulrich müller-uri (ceo) to fix the broken film search and download business? (founders photos © flimmit 2009, photographs by lisi navajas)

i tried to find that out in a recent interview with them. as with the interviews with andraz tori from zemanta or christoper clay from soup, it is split up in two parts. read on the find out more on the startup in this part 1, on how to gain traffic and more in the upcoming part 2. so lets jump right into the interview:

tell me about the (three) most exiting things about starting up your company? 
starting a new business is all about making your own ideas come to life. an innovation that first pops up in your head and then materialises into ones own company is a great for oneself and the self esteem. to inspire people with your idea and see the results when finally the thing gets going is important as well.    

what about the (three) most unfortunate things about starting up?   
constant worries about financing and a possible lack of money are tough on the way to success. that leads to sleepless nights. what really got us up in sheer shock was the up and then arising fear that the innovation we have brought to the market is not unique anymore – that someone else has just done the same thing.
 
what are your lessons learned until now about tech/people/market/sales (choose what you prefer)?  
people: it takes ages to find the right people to work with and it is a tough task to have them stay with you, above all due to lack of funds in the start up phase.
market: we have learned that customers / users never do anything because of good will. they want a benefit when using your product or service.
sales: the most important lesson learned for us: never trust sales forecasts!
 
when you hear the words "exit" and "shut down", what comes to your mind?  
the term “exit” mostly appears in a conversation with possible financers. we do not yet think about an “exit” so far but we can talk about that in a few years time.
shut down means disaster, a sheer horror scenario. on the other hand when founding your own business you always have to calculate with a possible shut down. but isn’t that the essence of a start up: to always have the motivation to go that one step further?

to find out how the founders handle private vs. company life and more, read on in the upcoming part 2 of the interview.

inside tupalo, a photographic snapshot

2010-02-25T20:01:00.010+01:00

all one regularly "sees" of a web start.up is , well, their web site. recently i got the opportunity to find out how it actually looks behind the scenes at the vienna based austrian-american startup tupalo, a social yellow pages community.

working together with the tupalo -team for an afternoon, we produced a photo line up for "deutsche-startups.de". to read more, head over to the tupalo blog.

tupalo won a first round investment from the austrian incubator i5invest. they subsequently reached an investment and a strategic partnership from herold business data.

estc2009 & leweb: do startup competitions bring visibility?

2010-01-24T14:10:00.002+01:00

what do have collibra, flimmit & gnowsis and stribe, tigerlily & cloudsplit have in common? they are all young startups. they all hard won prices at two recent international startups competitions. and they need to be seen by potential customers & investors.

startups face many challenges, one of them is visibility. a way to address challenge, is to compete at startup competitions, like at estc and le web.

the third european semantic technology conference (estc) startup competition had 16 invited startups from 12 countries competing. at seven minutes per pitch only the well prepared teams

could bring their message across. many forgot to talks about how to make money though - or did at least not have the courage to present a „freemium“ model. see here for the video coverage.

at le web, being more internet-minded, the 16 startups as a majority looked to earn money with premium services, based on users gained by free basic services.

as business angels and venture capital money is currently scare in europe and probaply will be for 2010, sticking out of the crowd and gaining attention is a key. so how did the winners perform?

stribe already competed before. making it into the techcrunch50 in 2009 was the first attempt. leweb was the next, this time finishing in 1st place.

but does it really bring attention? does winning competitions bring the wanted visibility? gaeol delalleu, cto of stribes, thinks so. at leweb, he was approached by five venture capitalists.

looking at a streamgraph of the corresponding twitter activity, visibility seemed to get a strong push around leweb as well.

the profile of stribes is in the twitterworld strongly associated related with leweb is obviously strongly correlated with the startup competition.

illustrations thanks to http://www.neoformix.com.

collibra took a different approach to get visible on the fist hand. they made it into a price waterhouse coopers report and won the scientipole initiative award before gaining the first place at estc. if they got approached by vc is not know until they will start to leverage the prize when they start pitching for money in the next year. to know more on collibra listen to this interview.

based on the shere size differential (1:10) between estc and leweb as well as the fact that the semantic world is just about (!) to discover the use of tools like twitter, the results are less meaningful and the streamgraph did not reveal the option to change the timeframe according to the event.

a smaller, more focused event like the estc can significantly boost visibility, as investors attending the estc are already focused on semantic technologies.

what both, stribe and collbra, have in common is, that they have no immediate need for investment. however both are powering up for next rounds in 2010. the visibility is already gained.

five things for startups to expect from mentors & the other way round

2009-11-16T14:20:00.001+01:00

the estc2009 innovation seed camp will introduce mentoring sessions for the pitching startups. the diverse spectrum of mentors present at estc covers founders, investors & the industry - laying the ground for interesting feedback sessions. so what can startups expect from those mentors? and the other way round, what do the mentors expect from startups?

let´s break it down into two sets of five :

5 things startups can expect from mentors
1) critical questions - no answers, no solutions.
2) instant feedback on how each and every startup gets its story across. if the pitch is bad, it will be made obvious instantly. that´s a good thing.
3) the impression a startup has on a mentor will be based 95% on pitch, 5% on executive summary et. al.
4) mentors have contacts (businesses, investors, lawyers,...) and some will help you with them - if they value the startup. if not, not more then polite friendliness can be expected.
5) not every mentor will be interesting for every project (and the other way round). that´s ok.

and now, let´s flip sides:

5 things mentors expect form startups
1) passionate, enthusiastic open entrepreneurs are welcome. self centered show-offs looking for adulation will not feel served well.
2) feedback can be direct & rather blunt - better from mentors then your customers, investors or potential employees. so startups must not be offended but take the feedback as is its & do with it what they think is best for them.
3) mentors will want to get ideas on what´s happening in the markets. some will search for investment.
4) mentors invest their energy for prepared teams. startups using the "next best" slide set available, preferring the check their tweets et al. rather then to get the most out of the sessions will receive what they seed.
5) and finally, mentors look forward to critical, even controversial discussions not yea-sayers. so let´s give them a good time!

for more on mentors see also the intersting interview of dave mcclure by mike butcher of techcrunch europe. for an overview of pitching opportunities head over to the finance mindmap. finally, to refresh the memories, find enclosed the start.upICT blog intro on start.up competitions.

startup competitions

View more documents from hannes.a.schwetz.

good relations, twitter & co. dexa 2/2

2009-09-30T07:00:00.000+02:00

good relations, a semantic e-commerce ontology was another highlight of dexa. for part one of the coverage, see here. martin hepp, bundeswehr university germany pinpointed to the lack of semantic description of products offered online. this makes search, not only in the long tail, inefficient for sellers and buyers. with good relations he offers a open source basis to tackle this. best.buy and yahoo already use good relations to make their product easier to find. enthusiastically martin hepp was evangelizing for good relations.

Product Variety, Consumer Preferences, and Web Technology: Can the Web of Data Reduce Price Competition and Increase Customer Satisfaction?

View more documents from mhepp.

in contrast to most of the presenting scientists he focuses on an industry ready product approach. uptake of usage will be interesting to follow.

there have been many other interesting talks, like perspectives of web services intermediaries of urlich scholten et. al or fraud detection by human agents of daniel schwabe.

surprising was the lack of twitter and slideshare. only two other twitterers seemed to be posting. only one presentation can be found online. there is still a way to catch up with non-academic life by those which explore the future.

frogs, elections and e-commerce recommender systems. dexa part 1/2

2009-09-21T07:00:00.001+02:00

the 10th edition of the international conference on database expert systems & applications, DEXA 2009, brought four packed days with scientific tracks. though seemingly a tough topic to handle, not everyone can jump on the bandwagon of hardcore tech tracks like „evolution of query optimizations methods...“ for data grid systems of abdelkader hameurlain and the like. so let´s focus more on generic topics and start with the „frogs“.

if one would put a frog in hot water, he´d probably try to jump out. if put in a pot of cold water heated steadily he wouldn´t. although not advised to try that, alessandro acquisti from carnegie mellon university (usa) used this baseline to show recent research on privacy behaviour in the internet.
working in the field of behavioural economics, he tried to find out how the arrangement of questions in surveys would influence the willingness of participants to reveal quite private information. like if people did betray an insurance or tax authorities. following the frog analogy (and thus one common design principle of survey design) people should be more willing to reveal sensitive information about themselves if the questions would steadily get more „private“. acquisti rejected this idea. so here we go, if you want sensitive information from your customers, get to the core right from the beginning.

e-commerce recommender systems have also been proven to be a hugely popular research topic. edith elking from the nanyang technology university in singapore brought up a worthy connection between elections and recommendation system.
recommendation systems have the aim to provide (internet) users with proposals, best fitting to their individual preferences. by an „magic“ accumulation of crowd, social, personal,... data every user should be served with her personal best recommendation. this is a difficult task on many dimensions, like context interpretation or manipulation hardness.

for the latter, most technical scientists try to invent new „bulletproof“ recommendation systems from the scratch. on the other hand have scientists since the french revolution thought about voting systems which should find the best candidate for millions of voters, making manipulations hard, easy to use and to compute.
as arrow´s theorem though states, there is no perfect voting system. based on this aspect of the talk the hypothesis can be stated, that the same will hold for recommendation systems.
it seem´s though that in recommendations systems the technology seems to struggle already with simple majority voting systems.

read more on "good relations", twitter & co in the second part of the dexa coverage.

legal gibberish of investors in plain language

2009-08-06T07:00:00.004+02:00

investors inject money in start.ups and they want it back. x-times in the best case, although most of the time the just loose it. so in those selected cases where a start.up works out well ,they make sure to get their money out. how they want their investment back is nailed down in the legal contracts which come along the money. every start.up should know this terms ahead of an investment. why? because otherwise they are in a game in which they do not know the rules. and that makes succeeding impossible.

this is no legal advice - as that´s the job of attorneys. rather putting legal gibberish in plain language. links are there to offer alternative explanations and resources. this post goes in line with the series "six steps to venture capital" , in particular part 5 on negotiating: in order to negotiate well, one has to know the typical terms in vc contracts. so here we go:

tag along rights/co sale rights
protection for minority shareholders. in case the majority shareholder sells his shares, the minority share holder can demand his shares to be sold on the same terms to the buyer.
this avoids that e.g. a big stake of the company get´s sold off to a strategic buyer making the remaining shares de facto un-sellable=worthless.
link investopedia

drag along rights
protection for majority shareholder. obliges the minority shareholder to sell his shares to a buyer on the same terms as the majority shareholder.
the idea is, that e.g. a one percent shareholder must not be able to block sale respectively the exit of an investor.
links: investopedia, slashstar

pre- post money valuation
definitions of company value. if a company is worth one million before an investment, this is the pre money value (before vc money gets invested).
after a two million investment, the value increases to three millions (one million company value plus two million cash), called post money value.
link investopedia, socaltech

anti dilution provision/clause
protection for investor. forces the transfer of shares from the initial shareholder to the investor in case the value of a firm decreases in the period after the investment.
if an investor a puts 1 million in a company which was worth 10 millions (before his investment = pre money) he will get 10% of the shares and the company value increases to 11 millions (post money). now assume there is another investment round with investor b only willing to invest 1 million at a company valuation of 6 million. this will trigger the anti dilution clause, as the company value decreased from 11 million to 6 (=down round). in this case investor a will demand shares form the initial shareholder in order to be compensated for the devaluation. e.g. increase his shareholding such that (after the investment of investor b) he will finally hold 15,71% of the shares (0,1571*7=1,1).
links vcexperts, investopedia

(full) ratchet
protection of investors. typically a performance depended anti dilution provision which (completely) compensates an investor for the devaluation of his shares (see above) as agreed goals are not met.
e.g. an investor injects money in company according to milestones, like sales revenues. if milestones are not met – thus leading to a lower company valuation - the initial shareholders loose shares to the investors.
link vcexperts

earnout
protects buyers, brings upside for sellers. the final price of a company depends on the performance within a time period after the transaction.
buyers of a company pay a base price for the takeover of a company. if e.g. in a period of one year after the buying the company outperforms its profits, the sellers gain a premium.
link investopedia

exit preference / participating preferred stock
protects investor. in case of a company sale, money gets first distributed to the investor and the remains to the initial shareholder. the method of distribution can vary widely.
one way would be as follows. A company gets sold 5 years after the investment of 1 million for 50% of the shares. of the exit proceeds of 5 millions the investor gets the initially invested 1 million. then he takes the interest rate of 15% per year for his invested money (around 1 million), leaving 3 millions. having 50% of the shares he takes another 1,5 millions, leading to a total of 3,5 million (3,5x or 28% per year). the remaining 1,5 millions go to the initial shareholder.
link wikipedia

pay to play
protects new investors. In case of a new investment round, the former investors/shareholders only keep special rights, if they participate in the financing.
special rights can be e.g. nomination rights for the advisory boards, anti dilution protections, or exit preferences. this clause intends to motivate old investors to support the company if further financing is required. also the governance is simplified, as old special rights get successively removed in new financings round.
links altassets, wikipedia

so much about legal stuff. no reason to let it come in-between the core business and the product. just one thing to look after and to get done right.

barcamp blinks

2009-06-20T10:29:00.013+02:00

a great location, a huge crowd of around 150 and a multitude of sessions made the barcamp vienna 2009 a thriving event. so lets have some blog-blinks on the event.

organized tightly from beginning to end, leaving out the intro round of the participants as well as not discussing the sessions took out part of the barcamp essence. the same goes for the general call to blog about it. let´s have that next time. participating day one of barcamp, those were the highlights:

freewave presented their wlan concept. the session was on the line between marketing pitch and sharing their motivations and experiences. their engagement to protect users against the ever growing data collection lust of public authorities impressed. that smart phones already account for 40% of traffic on their hotspots and they expect 50% throughout the year as well.

the cloud made it possible for dctp.tv to bring 21 years of tv shows online. at 10% of the costs of a conventional (=buy hardware) solution. fabian topfstedt held a interesting session on this project.

Cloud Computing and WebTV (English)

View more PDF documents from topfstedt.

the media watch on climate change project of module university, the thank worthy host of the barcamp, show the next step of data monitoring and analysis. the origins of academic research are still dominant. see also the idiom project. there is also their start.up "weblyzard" to monetize their work, which is in strong need of a internet strategy makeover though.

the jolicloud session of alexander kirk showed a visionary approach on netbook os. jolicloud= nebook oriented os=classic os+socially enriched. e.g. one sees which apps one´s netbook peers installed and proposes to do the same. looks promising.

more pictures of the barcamp can be found at the start.upICT flickr stream. finally the top quotes of the barcamp:
"....die usa ist ein problem..."/ „..the u.s. are a problem...“. totally taken out of context. and finally "mein rechner hat keine windows taste!" / „my computer does not have a windows key!“. cu at the next barcamp!

how to win seedcamp & other pitches

2009-05-20T10:35:00.011+02:00

start.ups compete all the time. for customers, money, press attention, employees. how to win such competitions was in the spotlight at the opening event of the mini seedcamp laibach.

the most minimalistic approach for a successful pitch is to a) show your product, then b) show your google analytics metrics and finish by c) shutting up. then wait for questions from the audience. to be clear, this also means d) not to talk about technology and e) all the rest.

this is the essence of the introductory talk of dragos ilinca from ubervu, 2008 winner of seedcamp on “how to win seedcamp” and other pitches.

a crowd of 50 people was gathering together for the pre-opening of the laibach mini seedcamp 2008 at kiberpipa. spreading out all over Europe, this was the 6^th out of 7 mini-seedcamps taking place all over Europe, from paris to ljubljana.

having lost count of all the pitches held around the world, be it 20 or 50, dragos was blunt in what to expect from venture capital. “90 percent of the start.ups fail, most do not fit into the venture capital criteria."..."start.ups not solving a critical problem will get no funding!"

How To Win Seedcamp

View more OpenOffice presentations from Seedcamp .

the same holds for those which don not know why customers will spend money for their products or do not have an excellent team. those things sound common. still, most start.ups do not practice it in real life.

thanks to the folks from kiberpipa , there is a complete video coverage of the opening event:

How to win Seedcamp? from Kiberpipa on Vimeo.

read on about seedcamp laibach in the upcoming post “venture capital is not fast food”.

let the pictures talk: mini seedcamp laibach 09

2009-05-16T14:48:00.003+02:00

ahead of the upcoming in depth coverage of the mini seedcamp laibach, let the pictures talk. feel free to use the pictures, all under creative commons attribution-sharealike.

interview with christoper clay of soup.io, part 2

2009-05-05T07:45:00.001+02:00

Image via CrunchBase

this the 2nd part of the interview with christopher clay.f ounder of soup.io. where christopher sees the need for new start.ups and if austria is a good location to start are in the center of part 2. if you missed the 1st part of the interview, look here.

christopher, which areas do you find most in need for new start.ups?
translations services are in need. translation is annoying us right now, the work flow of translating takes a lot of time. that´s a problem of all european [internet] start.ups. it is an opportunity for a start.up if you can double your market with being available on more markets, it is worth money for them. however, i do not want to say too much right now on that.
actually good opportunities are found by doing your first start.up. you itch on a certain problem, you feel the pain and then you can go after it.

you have successfully won yeurope and seedcamp and those investors are now holding 43.3% of the company. what can start.ups expect from such incubators, what not?
their main idea is that they give you just enough money to work on your product for three month without having to worry about living expenses. it makes a difference if can do a project in your spare time or just focus on it.
with seedcamp it was more about introductions. at seedcamp week we got to talk so many people. industry icons like the founders of bebo, photolog, last.fm, mysql and skype. venture capitalists like holtzbrinck or accel ventures of which you normally you would not even get a meeting with. seedcamp was putting you in front of all this people with initial credibility. seedcamp funds project further along then yeurope. it is like a compressed version of silicon valley in one week.

also there is the network of relations you build up. although you meet 100 people in one week and you can not remember all of them, you clearly can get in touch with them afterwards. if i would have a new idea, i could call to get some feedback.

what you do not get is solutions and answers. you get contacts, inspiration, what worked for others and feedback. but nobody will tell you what will work for you, no one will tell you how to get rich. it does not work like this. no one knows your product like you do.

soup.io is working in a crowded space. which three things did you do, to position yourself to become a seedcamp finalist?
at soup we want to give average people their space online. other then sites likes friendfeed, it is the user which is in front, not friendfeed. it is the one place you can put on your business card.

you spend a lot of time in uk and u.s./bay area. what´s your thoughts on start.ups in austria vs. europe vs. us?
austrians mainly did not understand what we did, which is probably why we did not find investment here. london was much more open to new ideas, and not just wanting to copy what was successful elsewhere [like germany].

in the u.s. it is just a hugely different scale. in silicon valley there are events where hundreds of people working on start.ups meet every day. so while the spirit is similar to london, the scale is still a difference.
people in the u.s. did not stop to believe in start.ups while in europe it got even worse. in the u.s. they see the cheap valuations of start.ups as opportunity.

what are your 3 recommendations for new upcoming founders?
first thing is to select your idea to found a start.up on a clear understanding on how to earn money. secondly apply to start.up competitions like seedcamp if you are in europe.
and finally, like already mentioned choose your location wisely.

stay tuned for more interviews with innovative start.ups, right here, on the start.upICT blog.

inside barcamp innsbruck 09, part 2/2

2009-04-29T18:14:00.015+02:00

in part 2 of "inside barcamp innsbruck 09" let´s have a look at usability, twitterish and more coverage on the barcamp. if you missed part 1, look here for different ways of barcamp sessions, iphone development or mobeedo.

usability
olivia haider, aka "olidax" delivered practical hands on examples about website user interface design - gone wrong ones and how to make them better. just to look at user interface design differently, look also at the evolution of websites, eg. tiscover way back in 1999 vs. 2009. or at the self declared design masters of apple here.

if ready to tackle a huge but well worthy slide set (87!), lisa reichelt also held a full house session at web2.0expo berlin 08 about improving website usability, titled "what users really want", but first have a look at olivia´s slides:

Usability Grundlagen

View more presentations from olidax.

twitterish
finally, unavoidably and highly appreciated, the latest and greatest in the twittersphere by luca hammer.
with all the services around twitter, one might already forget the original twitter. and yes, there were non-twitterer (two!) around at the barcamp, which for obvious reason are not to be named here. ;-)

there were two core aspect to the tiwtterworld in luca´s session:
one, to use twitter as "the" social filter to read and find interesting things on the net. gone are the days where newsgroups, email, bookmarks, feedreaders an the like where sufficient to manage the web-info-stream.

secondly, there are plenty of tools out there, which make this possible. although twitter might almost feel like a horse carrying a pyramid around - with all the services which "ride" on the back of twitter. be it twist to discover trends, monitter to monitor the twitteruniverse, tweetree a nice visualization or tiwtturly, which tracks and ranks the urls of fellow twitter"ers".
there were many more services and tools so luca promised to make a session/blogpost about it.

more on barcamp innsbruck
for photo coverage head over to here or here. thanks to takarina there is audio coverage, to be found at the bottom of the barcamp site. by the way, congratulations to takarina for her "tirolercast", best nationa l podcast winner 09!
only for the barcamp hardcore lovers, there is the the twitter stream of the innsbruck camp to get the realtime gossip, right here.

so much from the barcamp innsbruck. there are plenty of more barcamps coming up, so participate and blog about them.

inside barcamp innsbruck 09, part 1/2

2009-04-28T09:46:00.018+02:00

on the way back from innsbruck to vienna, the lazy train speed lets the thoughts about the april 09 edition of the barcamp innsbruck april 09 float freely. let´s have a look on the surroundings of the barcamp and then into selected sessions.

thanks to the organizing forces behind the 2nd edition of the barcamp in tyrol, christop dolar & astrid millebner. they organized a great location at the „zukunftszentrum“/ future-center right in the center of innsbruck. thanks!

a big open space, with room to hang out along the windows and the presentation area right at the heart provided the open atmosphere one would like to see for every barcamp.
there was plenty of good coffee and the omnipresent twittering and taking pictures with and of each other. and well, quite some good sessions. while the not-so-standard-conference format may seem anarchistic to outsiders, the sessions itself appear almost like magic in an ever aging surprisingly disciplinary style. barcampers hang out serious style. let´s look at some.

pichting bad and well done
weisswo, a local map based start.up held a "sales" presentation. obviously the did not think about the audience ahead. that never works. not at all.

mobeedo was also pitching their product, but what a difference. [update] richard spindler was proudly presenting their product, delivering a „wow“ effect and looking for feedback made the crowd come in front to see what they can do on the g1 android phone with mobeedo.

their video is worth watching.

what else? what about: iphone app development
well, well, an interesting practial and down to earth slot about iphone app development by thomas katzelberger. albeit the 1 billion downloads money printing machine for apple, anyone wanting to provide an application at the apple itunes store?1.800€! that´s how much it costs the tempted developer.

99€ per year for the right to put the app on the store. around 700€ for an iphone to test apps that use gps and the motion sensor. and well, best thing last, to run the free sdk, a hefty 1.000€ for an apple macbook. that´s because the sdk only runs on apple machines. 1.800€, well that is serious stuff.

after that said and ignoring the ever appearing stories about instant american millionaire richness of some developers, there is one magic thing to remember: top 100.

if your app is not in there, there is no attention. no attention, now money. wanting to make money via apps means using the short time frame which every new app get´s on the store. after that, a hefty release/update schedule can help to stay on the front page and so make the uphill battle into the top 100.

and no, do not even try to spend advertising for your iphone apps, that is just a waste, according to thomas katzelberger , who also says „do not expect anything, do invest only the minimum“.

thanks also to the live streaming efforts of luca via mogulus, quite some sessions (depending on the mood of luca´s wintel machine) were streamed out to the interested barcamp follower.

so much for the first part. more on this years barcamp innsbruck coming up soon.

all about "start.up competitions", fresh from barcamp innsbruck 09

2009-04-27T10:42:00.007+02:00

ahead of the upcoming in depth look at the barcamp innsbruck 09, which took place last weekend on the 25-26th april, the slides of the session "start.up competitions" are already online.

startup competitions

View more presentations from hannes.a.schwetz.

ready to compete? seedcamp laibach application deadline 27th of april

2009-04-21T13:38:00.003+02:00

there is a mini seedcamp coming up in laibach(slovinea). while the actual competition takes place on thursday the 14th of may 09, the application deadline is approaching fast: midnight on the 27th of april. apply right here.

although there is an expressed regional focus on southern europe, this is a rather nearby place for austrian start.ups to compete and certainly an opportunity not to be missed.

barcamp innsbruck 2009 & 25 start.up competitions now on the start.upICT finance mindmap

2009-04-21T11:39:00.001+02:00

barcamp innsbruck april 2009 is happening this weekend (25.-26. April 2009 ) in tyrol (AT) and i am glad to join. i propose to discuss the topic of start.up competitions. any inputs are welcome.

in preparation of the upcoming barcamp , the start.up finance mindmap has gained plenty of updates on the area of start.up competitions: there are 25 now on display.

furthermore the interviews with andraz tori and christoper clay as well as the series "six steps to venture capital" can now also be found in the ever growing topic map of the start.upICT blog.

the popular finance mindmap as well as the topic map can now be accessed directly through the top links on the right of the blog in the "START.UP FINDER" section.

interview with christopher clay, founder of "soup"

2009-04-20T07:00:00.001+02:00

Image via CrunchBase

time was running fast, when talking with christoper clay of "soup". soup is a "tumblelog, a super-easy blog that can do more than just text: post links, quotes, videos, audio, files, reviews and events.". try it out here or just have a look what is going on at soup. winning seedcamp in 2008, working in vienna, london and san francisco, there was a lot to talk about the daily life of the young austrian start.up

this is the second interview in a series with creative new start.ups, after an interesting discussion with andraz tori, founder and cto of zemanta.

christoper, tell me about the (three) most exciting things about start.ing up your company?
first it is all about the places we have been. from berlin to cologne, living for three months in london and just coming back from working for three weeks in san francisco. talking to people, pitching to them all around the world, that‘s been great.

second exiting thing is all the feedback we got. we have 20.000 active users now from all over the world. just scrolling through our feedback tumbelog is simply amazing.

third exciting thing is being your own boss. that is hard. the most important decision is to focus on what to do next. it is fun to learn from your mistakes - and we learned a lot over the last year.

what about the (three) most unfortunate things about start.ing up?
first hard thing is personal. i started the company with two co-founders - none of them is working any more with me. i would not start a start.up again, without having worked intensively with potential co-founders before. so that was very stressful to go through. however, we are three in the team again.

second is the roller-coaster live. there are really bad phases. one day everything works right and you are convinced that soon you are going really big. the next day you are depressed and think that is never going to work and facebook is going to kill us. it is stressful but exciting. therefore you need a good team which motivates each other. i would not be able to do this alone.

starting up in vienna in the hindsight is the third unfortunate thing. the decision to start here was right at the time. but the chances to get investments in the united states would be much higher. unfortunately it is hard to move to the u.s. . for example getting working visa without having founded a viable company in the us is tricky.

what are your lessons learned until now about starting.up?
number one, carefully preselect your co-founders. e.g. by working on a three month non-profit project with them before founding a company together.
number two, not found in vienna again, but in berlin, london or san francisco. because funding is much more easier there.
product wise, number three, i would focus stronger on the build in viral aspects of soup.io. they should have them in place from the beginning, rather then relying on the initial users we got mainly from friends at metalab. then we would be already ten times as big as we are now.

and number four: never give up. for example seedcamp. we got rejected in the first round (when zemanta won), because the did not understand what we did. we still went to the next mini seedcamp in berlin, explained personally what we did to saul klein und reshma sohoni and they proposed us to try again. and well, we succeeded the second time.

when you hear the words "exit" and "shut down", what comes to your mind?
the good and the bad, the two outcomes. either we are in san francisco, have hundreds of thousands of users and funding or we are back in vienna, broke and start something new.
the possibility of failure is very real, statistically most start.ups fail. but we are giving our best and try to make an exit one day.
although losing soup.io would feel horrible. we can not let our users down, so even if it would not work out, we will keep it running.

final question of part 1: how do handle private life vs. work?
probably i have not learned this yet. for me, the start.up comes first. like moving to san francisco and leaving people behind is hard but i would do it. so i am rather unbalanced on this yet. i want to be sure i tried everything for it.
what i learned was to manage my own expectation. when i am too tired some times and therefore have a none productive day, i know now that´s ok. that takes pressure away from oneself.

this was the first part of the interview with christoper clay of soup. where he sees the need for new start.ups and more, read in the upcoming part two.

"surviving after investment", 6th and final part of the series "six steps to venture capital"

2009-04-04T16:11:00.009+02:00

a successful venture capital investment into a start.up is a big step. having taken this hurdle, it is all now about staying in the game through fulfillment and transparency.

this is the final and sixth step in the series about approaching venture capital, where the systematic approach to acquire venture capital for a start.ups is discussed.

after the motivation got sorted out in step 1, the a-b list of potential investors in part 2 (part 2.1, part 2.2) got filled. the battleground was prepared in step 3, and how to approach venture capital in part 4 (part 4.1, part 4.2). the art of negotiating was the focus of part five (part 5.1, part 5.2). finally now it is all about surviving after the investment.

the entrepreneur has to be prepared to fulfil what he promised when searching for investors. the ultimate consequence of not doing so is simple: losing her job and/or the shares in company.
under-performance in revenues, product delivery and cost discipline lead to additional cash requirements, speaking vc investments. such a „down round“ (lower valuation then in the first round) is mainly done by the first investor. only some start.ups survive this without changes in management and none without the founders loosing substantial shares.

this in mind, a less ambitious company valuation and reachable key metrics (revenues, expenses, cash flow) can lead to a more desirable outcome for the founders already in the mid-term. in vc-language: increase in company value compared to the investment date.

being a start.up, it is evident that not all goals aimed for or promised get reached. ultimately the investor always finds out. many start.ups think they do not - but they always do. from customers, unsatisfied employees and latest when the company runs out of cash.

rather then „performing“ in board meetings transparency is key for survival. no investor, no advisory board member shall ever get surprised in a board meeting (link sun tzu). setting up a three to four week „one-pager“ reporting schema, outlining the good and the bad is one way. involving the investor in a „srum“ like company development process another. demanding input and such giving responsibility to the investor is crucial.

through fulfilment and transparency the so called „shit meeting“ can be avoided. this is the first meeting between investors and start.up after the investment, when the difference between the investment story presented and the reality come to the surface.

recommendation: 1) only promise what can be fulfilled, 2) fulfil what got promised and 3) always be transparent.

this „six steps to venture capital“ series is a guideline on how to get investor on board. every start.up is different, no product, market, investor or founder is alike.
it needs a compelling business opportunity and a thriving start.up team combined with a structured approach and some luck. then venture capital investments are just another task to work on.

"negotiations" part 5.2 of the series six steps to venture capital

2009-03-08T09:40:00.003+01:00

the negotiation process is key for a good contract. in "negotiations" part 5.1 of the series "six steps to venture capital" the general framework got laid out. in part 5.2 it is all about the details.

key points first

time line, term sheet, contract. in that order. never avoid any critical topic at the beginning. they will sooner or later surface anyway, so they shall be dealt with directly.

know the aims
it is vital to know the aims of the negotiations before they take place. the negotiation team has to decide beforehand what they aim for and how much compromise is acceptable.
one way to do that is to sit down for half an hour, discuss, decide and write down the aims to visualize and remember. then destroy the paper, as it must not be seen by the vc by any accident in the meeting afterwords. this holds for each separate meeting. no-one alone compromises the agreed terms in face of the investor. if a rethinking of the agreed aims is necessary, a break out session is necessary.

break out sessions
they are a common way to take speed or emotion out of tense negotiations. every party gets time to rethink, to cool down or to gather required information. start.ups can co-ordinate their negotiation aims. whenever necessary break-out. rather one break out session too much than having agreed to anything without realizing what it means. having experts on stand-by is recommended.

experts on stand-by
lawyers, technical experts, general advisers or friends are source for support during negotiations. they are to be informed ahead so they can be reached when required.

know the terms
drag along, take along, liquidation preference, right of first refusal, pre-post money valuation, milestones, catch-up, pay to play, ratchet, signing-closing, advisory board, due-diligence,... they all can be looked up. e.g. on investopedia or wikipedia. this is investment language, nothing really complicated about. one just has to be able to deal with them, know them by heart and be able to „play“ - meaning negotiate on the different aspects - them.

tiredness
bad negotiation results can not be excused with tiredness. if necessary take break outs, get food, go scream on the balcony - whatever is necessary. then get back and keep negotiating hard.

socialize
vc are (also) humans. they have hobbies, family, worries, hopes. they are like everyone else. avoid the hawks through checking their references (discussed here).

heart & hard
being respectful and friendly is key. negotiating hard at the same time is no contradiction. not only for the negotiations and the daily life after with vc. it also holds for customers, suppliers, sales partners or employees.
at the end of a long negotiation process both parties are supposed to be unhappy with the results - but still happy to have closed the deal. with the negotiations finalized and vc money injected it is all about fulfilling and surviving. more on why it is necessary to deliver in the upcoming sixth and final part of „six steps to venture capital“.

recommendations: 1) define aims: time line & term sheet key elements, 2) take break outs, 3) have experts on stand-by and 4) know the terms.

in the final part of the series six step to venture capital read on how to survive after the investment. clearly not a trivial task.

"negotiations" part 5.1 of the series six steps to venture capital

2009-03-03T13:00:00.007+01:00

finding the right vc is difficult. getting a good investment deal is worse. though with the right preparation, much can be done to achieve a result, which is mutually favorable.

this is the 5th part of the "six steps to venture capital" guide, where the systematic approach to acquire venture capital for a start.ups is discussed. after the motivation got sorted out in step 1, the a-b list of potential investors in part 2 (part 1, part 2) got filled. the battleground got prepared in step3. now it is all about bringing home the money.

experienced investors will take advantage of unprepared start.ups. therefore key topics have to be covered before going into the actual negotiations. to know more about strategy and preparation, see sun zi, moltke and douglas adams for start.ups. basically every contact with the vc can be considered as part of a negotiation process.

overall
time line - term sheet - contract signing & closing are the cornerstones of vc- negotiations. after the 2nd meeting the vc should have figured out the idea, market, business model, competition, exit channels and team - the investment story of the start.up. that done, it is all about nailing down a deal. that´s the same for the potential investor as for the start.up.

time line
the time line outlines the time frame from the beginning of the negotiations until the money flows. agreeing on the time line is rather non controversial and allows to get know to each other. simple does not mean irrelevant. by committing to a time line (especially) the vc has to reserve resources, meaning money.

term sheet
next thing is the term sheet. using common (non lawyer) language, all the important topics of the investment get outlined in it. it is basically a multi-page text document which both parties sign. example see here. whatever key topic relevant to the start.up or vc has to be part of the term sheet.
struggling for compromise is part of this process. moving key topics to be solved „afterwards“ or through proposals of lawyers in the final contract often leads to late break ups. thus involving high lawyer bills and wasting weeks of negotiations. typical time line to reach a term sheet is four to eight weeks. every party covers their own costs. granted that the negotiations were successful, it´s then about fixing a contract.

contract
the final contract gets drafted on the basis of the term sheet. it should merely be a reformulation in lawyer-language. a common lawyer between the vc and the investee reduces costs. based on a well negotiated term sheet, it rarely leads to a break-down of the investment process. the paperwork can produce contracts between 35 to 100 pages.

the costs are typically covered by the start.up after the investor injected money. a maximal allowance for the cost should already be settled in the term sheet, anywhere around thirty thousand dollars/euros. anything above is to be covered by the respective parties.
time line for the contract should be four weeks. two weeks for signing and another two to four weeks for closing finalize the process.

giving the general line (term sheet - contract signing & closing), there are some topics which deserve an in depth coverage, like knowing the terms, break-outs or tiredness.
this will be covered int the upcoming part two on "negotiations" of the series "six steps to venture capital"

linktip: for the MIT 100k participants: executive summaries

updates start.up financing mindmap

2009-03-03T07:00:00.001+01:00

the european business angel network and the european venture market are now @ the start.up mindmap.

the members area of the european business angel network gives an european wide overview of business angel networks in the respective member countries. e.g. germany has four listed business angel networks.

the european venture market takes place for the 11th time. registration for entrepreneur is open. time & location: 19th & 20th of may 2009, berlin. prices for entrepreneur presentations are 450-535€.

"approaching venture capitalists", part 4.2 of the series six steps to ventture capital

2009-02-22T09:50:00.000+01:00

at the 2nd round meeting it goes along the same lines as on the first round. know your pitch, stick to your talking time. know who answers which questions. do not correct each other giving answers.

now it is time to hand out your references. and again: set up the schedule (yes or no, negotiation schedule, term sheet, final contract signing-closing). this tests the real interest of the vc, namely through assigning resources for the evaluation. having mastered the 2nd meeting, this either leads to a „no“ or a jump directly into the negotiation part. this will be the next part of the series.

having reached the 3rd round brings one positive problem: the vc´s approached until now were form the b-list. the leanings form the presentations and meetings will pay off, through refining the approach, the pitch. based on this, it is then time to go ahead on a-venture firms. keeping the b-vc as back up can be helpful.
following the same procedure as outlined above it is about making it to the 3rd round with two a-vc. the main difference now being, not to learn & to improve but getting qualified a investors.

there remain some side topic on approaching vc, which are worth looking at: timeframe, lawyers, costs, consultants and exclusivity.

as a general time frame, 6 month from the start of approaching vc until closing an investment are a reasonable timeframe for europe. 4 month are more seen in the anglo-saxon world.

lawyers are generally only necessary after drafting the term sheet. until then common sense suffices as singning anything which would cause obligations on the start.ups side are not necessary.

until a term sheet is signed, no costs of any kind should be accepted from the start.up by a credible investor.

if any kind of corporate finance/m&a,... -consultants which promise to bring investors to the start.up are involved, special care is required. upfront payments may sound plausible but as cash is a scare resource, only success fees should be accepted, based on real cash inflow on the start.ups account. generally start.ups have more then sufficient capabilities to acquire vc interest - if they do their homework. and paying a consultant just to be told to do the homework could be seen a waste of money. the combination of a compelling idea with preferences (see part 3) opens vc doors without the help of others.

recommendation: 1) approach 3 b-vc, 2) follow up after one week, 3) fix 1. meeting/conference call, 4) be prepared, 5)push for go/no + next meeting, 6) reach 2. & 3. meeting. 7) watch timeframe, lawyers, costs, consultants and exclusivity.

how to succeed in the negotiations with the investor will be the focus on the 5th part of the "six steps to venture capital" guide. that much can already be said: the aim is, that both parties are unhappy but still want to close the deal.

"approaching venture capitalists", part 4.1 of the series six steps to venture capital

2009-02-14T09:00:00.001+01:00

„giving and taking“ is the name of the game now. start.ups have bright ideas but no money, investors have, well, money and the need to earn profits. so both parties have a mutual interest to find to each other. therefore mutual respect should be the basis of the interaction on both sides.

this is the 4th part of the "six steps to venture capital" guide, where the systematic approach to acquire venture capital for a start.ups is discussed.

after the motivation got sorted out in step 1, the a-b list of potential investors in part 2 (part 1, part 2) got filled and the battleground got prepared in step 3 now it is time to approach the potential investors.

first thing to do is to contact three venture capitalists from the b-list (as laid out in part 3).

the best way to contact is through references (see here on general discussion of references in the context of venture capital). if that is not possible, it is worth to investigate on how to get in touch best with the respective firms. there has been an interesting discussion on that topic also at web2.0 berlin 2009, see here.

in case of doubt, just call the vc firm and ask which way of contact they prefer. when calling though, be prepared for the (unlikely) event, that you get put through directly to a vc partner or his associate. in this case, either just ask how to forward your project or use the opportunity to try the already prepared (and peer group tested!) 2 minute telephone pitch. depending on the latter, the executive summary could be looked with more or less care at the first screening.

having found out the way to contact, send the executive summary and announce to get in touch personally one week after.

follow up after one week as said. use whatever way fits best, e.g. by using an open approach like, „any questions, additional information wanted“. key is to find out if they interested or not. it is not worth to run after a vc for 2 month. reading the executive summary takes 10 minutes.
2nd thing to find out is how to set up the next step. be it a personal meeting or a online presentation/telephone conference. know how the time frame for meeting will be and who will attend.

when succeeding to get the 1st meeting/online presentation prepare the team: ceo and cfo are sufficient. prepare the pitch and stick to the time frame. decide who answers on which questions beforehand.
also the start.up has to have the questions to the investors prepared. a start.up which has no questions to the vc did not prepare.

at the end it is all about fixing the next steps. when - if not directly - to get an answer for go/no-go and about discussing the timeline for a follow up meeting.

if an invitation for a 2nd round discussion got nailed down, it is a ll about making it to the 3rd found. the basic idea is the same as for the first encounter. ahead of the talk, fix time frame, fix topics, check on participants (investor, start.up). additionally prepare references, have the non disclosure agreement (nda) cleared out in the meantime (so that legal stuff does not waste scare meeting time and legal topics potentially poison the spirit, long story short, that often leads to accept the nda of the vc).

handling the 2nd round meeting comes up at the second part of "approaching venture capitalists", part 4.2 of the series six steps to venture capital.

interview with Andraž Tori of zemanta: part 2/2

2009-01-06T12:44:00.001+01:00

this is the second part of the interview with Andraž Tori of zemanta. the first part can be found here.

Andraž, what does seedcamp and pitching mean for your company?

pitching is a fabulous experience of explaining your idea and trying to inspire other people. pitching is one of the best things, when you have a start.up.

seedcamp was a great experience, because it gives start.ups a chance. that's very important for early stage start.ups. having the possibility to present your idea to somebody that matters can help you to move your idea forward.

seedcamp was a very fortunate event as the timing was exactly right for us. this is the part of the start.up life that you can not plan for. you need to work hard as hell, but at the end you also need to have a bit of luck.

you have already left some tracks in your personal career, informatics olympiad medal winner, co-founder, open source developer and now zemanta. what`s next?

well [laughing], i do like to do cool stuff that interests me, that helps people and has some impact on the world. that's what i am going to do for a long time. but first and foremost we have to make zemanta a big success.

bostjan spetic and your are the founders of zemanta. ales septic, the ceo of your company was not among the founders. how was it to have a non-founder becoming the ceo?
it is an interesting experience. we already worked with ales before and we rely on the good sides of everybody in the team. handing over control was not really a big topic, as we were always running the company very consensually. there is always disagreement about certain topics but it is important to find a proper consensus and then honour the decisions.

semantic technologies are hard to tackle. how do you trade between a very domain specific vs. a more generic approach for your product?
we started with a very generic approach from the beginning. it is just now that we start to add specific things that are required for special areas of application. that is not the usual thinking but that helped us.

anything else you would like to talk recommend new start.ups for the beginning?
be very clear from the beginning of what kind of value you provide and to whom.

the other thing is, just do it. it is not perfect in the first iteration ever. just put something out, see what others say and how they use it. learn on that and create a new thing. it is not a bad thing to be wrong sometimes. then go ahead and improve – you sometimes fail and you just improve again.
that is probably what we haven't still completely consumed from the silicon valley type of entrepreneurship [in Europe]. failing is just part of succeeding. failure is still a failure but it is not the end of the world. it is as good experience to learn and do it better next time.

interview with Andraž Tori of zemanta: part 1/2

2008-12-31T11:57:00.017+01:00

inspired by jessica livingston´s highly recommended book, founders at work, interviews with local start.ups will become part of the regular start.up blog entries. the interviews will be split up in two parts. while the first will focus on general start.up topics, the second will look deeper into the company in focus.

the first company in line is zemanta. founded by Andraž Tori and Boštjan Špetič, zemata provides an intelligent blog extension which automatically generates context sensitive proposals for pictures, links & tags. their firefox plug in can be downloaded here. a live demo can be tried here. winning seedcamp brought zemanta wide media attention as well as reputable vc funding. the interview took place at this year's web2.0expo berlin with Andraž Tori.

Andraž, tell me about the (three) most exciting things about start.ing up your company?
first it was really exciting to see that we had something not many people in the world were doing. the second great thing was winning seedcamp. this was a big achievement, since there are not many start.ups in slovenia.
finally it is great to do stuff that usually can only be done in silicon valley. to do something which is really for the whole world and to see that we here in europe are on the same level [as silicon valley]. that is exciting.

what about the most unfortunate things about start.ing up?
we did not have any big misfortunes. there were hard bits, like getting calls in the middle of the night, when the service [of zemanta] went down and not getting to sleep all the night fixing stuff.

on the business side there are long negotiations about funding. you are of course not happy with all the conditions you get.

there are times when it is hard and tiresome. it is exciting, but not just fun.

what are your lessons learned until now about technology?
prepare to re-do things. you will create solutions to problems, learn that you misjudged things and rebuild. and you have to listen to other people. the collective intelligence of people is always better then a single mind. one has to be persisted and stubborn, but just in the right amount.

when you hear the words "exit" and "shut down", what comes to your mind?
that's t the life of a start.up.

how do handle private life vs. work?
i put a lot of myself in zemanta, but i enjoy it. you have to observe and listen to yourself. when you are over-investing yourself just step back a little. sometimes you have to push to the maximum, but you can not always work in that mode.

this was the fist part of the interview with Andraž Tori. stay tuned for the 2nd part, where a closer look on zemanta will be taken.

"preparing the battleground ", part 3 of the series: six steps to venture capital

2008-11-23T14:58:00.026+01:00

this is the 3nd part of the "six steps to venture capita l" guide, where the systematic approach to get venture capital for a start.ups is discussed.

after the motivation got sorted out in step 1 and in step 2 the a-b list of potential investors (part 1, part 2) got started, it is time to "prepare the battleground".

it would not be wise, to contact the top 3 vc on the a-b list to start with. even after the excitement of achieving a list after quite some work, this would be a bad thing to do. first, because the potentially best investors should be kept for later, when a routine in pitching was developed. secondly because what would happen if a contacted (still potential) investor directly calls back and ask for the executive summary and you do not have one yet? and no, sending out something that was just compiled in a couple of hours, is not a good idea. not even for the bottom three vc from your a-b list.

following the advise of general sun zi (read more about sun zi, moltke & douglas adams für start.ups here) you should only go into a battle when you know that you will win. therefore preparation before contacting future financiers is key. there are four things that have to be in place:
1) investor picht slides (30-20-10),
2) an executive summary (2 pages, includes financials),
3) business plan (20 pages total, including all attatchments & 1 page financial summary),
4) references.
the best way now is to work through the list top - down.

plan to spend around one week on preparing your investor presentation and executive summary. follow 30 (minimum font size) - 20 (time of presentation) - 10 (number of slides) guideline from guy kawasaki. stick to this rule, do not try to improve it, it only reduces the chances of funding.
use the following headlines, kawasaki again: 1) problem, 2) solution, 3) business model, 4) underlying magic, 5) marketing and sales, 6) competition, 7) projections, 8) team & 9) status & time line.

the structure is the same for the investor presentation as well as for executive summary. for more details, read "the art of the start", or "reality check" from guy kawasaki.
the executive summary shall not succeed more then two pages. and that includes a summary of the financials (projections for revenues, number of customers contracts, personnel & other costs, number of employees, total cash requirements, sources of funds).

focusing that much requires a clear focus of the aim of the start.up and how to achieve it. if two pages are not enough, more thoughts have to be spent on the start.up.

based on the presentation and executive summary the business plan can be compiled. sticking to a readable 20 pages is key again. no vc will read a 60 page manifesto. after the focusing work was done in the executive summary, filling in the prosa can be done in 2 days. if not, going back to thinking for the exec. summary is imminent.

having followed the chronological order of the "battleground" preparation it is time to think about the start.up's references.
first, who can be the references? choose from former employers, colleagues which already made it, customers, former investors, well connected lawyers, reputable professors. whoever can give valuable, connected reference can make sense. a similar procedure as compiling the a-b list can be applied. not everyone which is known by the members of the start.up is a valuable reference for potential investors though.
as the executive summary is ready by now, it will be easier to get 2-3 references on board, using the key pitch topics is the thoroughly prepared "ammunition" at hand.

being prepared with all the materials required and the investor targets identified, it is time for approaching the investors. this will be the next part of the series, six steps to venture capital.

recommendation: while preparing the a-b vc list, create 1) pitch slides (30-20-10), 2) an executive summary (2 pages including financials), , 3) business plan (20 pages total, attachments & 1 page financial summary included), 4) prepare 2 to 3 references.

six steps to venture capital: part 2.2/6 fund selection

2008-11-10T21:08:00.000+01:00

this is the 2nd part of the "six steps to venture capita l" guide, where the systematic approach to get venture capital money for start.ups is discussed.

part 1 covered "motivation" and can be found here. part 2 deals with the selection of potential funds. the fist section covered fund selection according to investment period, geography and focus. to complete the criteria, let's look at the remaining important criteria:

4) experience
does the potential investor understand your technology, your business model, your market? or would an investment be the “pilot-investment” for a fund e.g. in semantic technologies? if so, a lot of missionary work has to be done with the investor (so b-list). not too much support market and business wise can be expected after investment as well.
smart money, as often described when talking about venture capital, which means that on top of the money from the investor comes a lot of business contacts or business advices, is often promised but seldom delivered. check with reference calls.

on a daily business, it is not “the fund” though, which a start.up is going to interact after investment. it will be a partner and an investment manager. so besides valuing their investment history and their personal background (technology or finance, entrepreneur or big corporate, number of successful relevant exits), it is absolutely necessary, to be able to consider the gut-feeling after a first meeting with them. A start.up should ask themselves the questions: do we like this person? can we work with her also in hard times? If not, then even a otherwise perfect match is useless (lower b-list).

5) cash available for investment
finding out how much cash a fund can invest is vital. if a start.up requires 2 million € and that is all the money a fund has left, that’ b-list of even worse. regular start.ups need more money then they expect, often twice as much as projected. if the fund which did the first investment can not put in additional money the start.up might run out of cash maybe just three month before taking off. finding a new investor without the first round investor putting any additional cash on the table will be very difficult (this is often seen as: the first investor does not believe in the company any more).

6) fund exit horizon
when will the fund close? some funds run for 10 years, some are evergreens.
A ten year fund invests for five years and spends the next five to sell his investments. at the end of the 10th year, the fund has to pay the money to his investors. evergreen have no determined duration. And are therefore a-list candidates. Other funds within their investment period as well.

7) references.
references are important. venture funds will check the references of their potential project – so should start.ups. fund recommendations from fellow entrepreneurs, reference contacts given by funds and even cold calls are possible. only funds with three positive references make it on an a-list place.

recommendation: prepare ranking “a-b list” of potential funds according to 1) investment period, 2) geography, 3) focus, 4) experience, 5) cash available for investment, 6) fund exit horizon and 7) references.

coming up in the next step of "six steps to venture capital" is all about preparing the "battleground".

web2expo berlin start-up lessions review by fabian topfstedt

2008-11-01T13:54:00.006+01:00

fabian topfstedt, freelance developer and start.up co-founder just recently posted his impressions from this year's web2.0expo berlin.

fabian attended business as well as developer tracks and especially for the latter, takes a closer look at rest, oath and the like. to read the full story, visit his website webiste.

the most important thing besides all the inputs from the conference fabinan concludes - after all and never to be forgotten - is to "Have fun!".

moo, fat free sites and user action: best of web2.0 epxo berlin 2008 part 2

2008-11-01T13:27:00.013+01:00

after pitchcamp and yossi vardi at this year‘s edition of web2.0expo berlin, moo, user interfaces and user action through design conclude the best of show sessions.

let's start with number three:

3)moo
stefan magdalinksi, cto of moo allowed open insights into the challenges of building moo. two years after starting, with a team of 30, they are shipping to around 187 countries worldwide.

How we made MOO

View SlideShare presentation or Upload your own. (tags: web2 scaling)

starting their business just before amazon web services surfaced, they build their own infrastructure. to transfer their infrastructure now to s3 would be to complex and thanks to the fact, that storage costs decrease faster then their data growth, costs are kept under control. they use virtually hosted squid caching proxies for $100 per month to speed up u.s. site access.

„ajax is great, but breaks ability to test“ according to mr. magdalinksi. in order to maintain to keep their website up and running when introducing new funcionalites, the developed around 400 rollout test, using watir.

business wise, they share 15 percent of their revenue with they affiliates. marketing analysis is mostly done by looking at actual user behavior. user feedback is currently managed by a mix of self made solutions of salesforce. and while the implementation of salesforece took just two hours and only costs a few hundred dollars a year. the „web 0,5“ style interface slows down customer service.

delivering physical products to the customers is the core challenge of moo. an overall of two percent of shipments get lost on the post. surprisingly canada hast the most unreliable postal system overall. developing the plastic cardholders proved to be one of the big challenges: designed in europe, produced in china, the first shipping of card holders did not meet the quality requirements. coordinating all the production process proved to be more time consuming then expected.

best of show number 4 goes to:

4) mobile user interfaces
creating specialized mobile user interfaces, presented by brian suda, maxed out the capacity of the room.

phrasing the term „fat free sites“ for mobile web sites, he showed why list views can be 2-3 times more efficient in terms of number clicks necessary then drop down menues.

that power user „fat free“ interfaces prefer to have everything on one screen, in order to reduce search times.

Creating a Specialized Mo bile UI

View SlideShare pre sentation or Upload your own. (tags: web2expoeu08 ui)

this leads to the last best of show session of this year's web2.0 expo berlin.

5) user action

„User: Actio n! Leading Users to Action Through Design“ of solana crawford brought not only a driving speaker but a welcomed step away from the tech driven sessions.
her key messages were a) to know your goals - your audience - the action you want users to take on your site and b) realize the power of coulors - shapes - screen layouts.

User: Action! Leading Users to Action Through Design: a presentation by Solana Crawford at O\'Reilly Media Web 2.0 Conference ,Berlin 2008

View SlideShare presentation or Upload your own. (tags: interface user)

so much from this year's web2.0 expo berlin. a experience hopefully to be repeated next year.

how to turn-off investors and what business plans & sausages have in common: best of web2.0 expo belin 2008

2008-10-27T10:00:00.014+01:00

the second incarnation of o‘ reillys web2.0 conference took place at the bcc - well placed at the center of berlin, next to alexanderplatz.

the new location was a welcomed change to last years 60ies-bunker style berliner messe facilites like a „community lounge“ promoted interaction between attendees and with last year‘s food problems solved people were happy to focus on the topics at hand.

besides the „big pictures“ keynotes for tim o‘ reilly, john lily (mozilla), martin varsavsky (fon) et al., the show brought a wide range of in depth topics , ranging from business to marketing and design to development.

the collective presentations of the show can be found on slideshare, respectively on the conference website . going through the (until now) uploaded 42 presentations on slideshare is too much noise, so let‘s setup up best of the show. start with the five best events of the show:

1) pitch camp
pitch camp was a driving event. 12 companies were selected to pitch for two minutes each, in front of a 200+ crowd and a grand jury (ranging from techcrunch and venturebeart to accel and index ventures, see here).

the short intro giving on the art of pitching can be reduced to 3 points:
1) clear view of business
this is necessary to be able to communicate the start.up (business objectives, market segments, problems solved)
2) understand your audience and what they care about
who are they, what do they want, why would they care about you.
3) build 3 month, 9-12 mont and long term business objective

there were book recommendations as well, crossing the chasm (again!) & blue ocean strategy, chan kim, renee mauborgne, understand the problems of your market.

also interesting to note were comments by the jury what turns them OFF, when the listen to pitches.

investors

lack of ambition displayed
lack of character and leadership
homework not done (not knowing the background of people start.ups pitch to, not done the business metrics, not having market figures, competitor ignorance, lack of execution plan, ...)
lack of understanding potential customers, investors, partners

media

old stories
no potential to bring journalist on techmeme/digg for x weeks
clones of anything
no magic sauce begin

potential partners

telling the potential partner how cool the start.up is
not telling or not being able to tell what the partner will exactly (=cash) gain from partnership, when and how.
unfulfillable expectations from partners (like: just put my link on the google landing page...“)

how to get in contact?

through references
email (keep it short, send a compelling 2 sentence pitching email)

not just also judging on the start.ups at pitch camp but also discussing on stage was:

2) keynote speaker yossi vardi

being a serial entrepreneur himself and a rather successful venture capitalists, yossi vardi gave some interesting statements at the discussion with tim o‘ reilly.
that at the end of the days successful vc just have luck, is quite a open statement.
also that it is very important to check the vc a start.up is interested in. is he friendly? do entrepreneurs work repeatedly with him?
and that business plans and sausages have one thing in common: only people who do not know how they are made eat them.

this made the 2nd of the best web2.0expo berlin events. read more about moo, user interfaces and user action through design in the 2nd part of the upcoming web2.0expo roundup.

six steps to venture capital: part 2.1 fund selection

2008-10-15T07:00:00.001+02:00

after being sure, that venture capital is the best choice (see “six steps to venture capital: part 1/6 on funding motivation) , the next step is to select which funds to approach.

2) fund selection

the best resources out there to find professional risk capital are the european venture capital association (evca) and the local venture capital associations, like avco in austria. on the evca webpage, all the national venture associations can be found.
Other sources are local economic newspapers, blogs (as can be seen in the blogroll, with lists like here), or the webpages of known venture backed start.ups in general, like jaja.

based on that basis research, a list can be compiled from all the vc out there, meeting the requirements of

1) investment period,
2) geography,
3) focus,
4) experience,
5) cash available,
6) fund exit horizons and
7) references.

the result will be an “a-b list”. “a” for your hot hits, “b” for the maybes.

1) investment period
start.ups will be looking for early stage, seed funding focus or even incubators. funds having no investments and no mission to do so will not make it on the list. funds having no early stage investments but write that they want to get into, are on the b-list.

2) geography
most investors stay within their local area. looking at their profile and their portfolios will tell that easily. if for example a uk fund has no investment outside of uk, chances are low, that they will invest e.g. in romania at all. if they are otherwise a perfect hit, make them a b-list candidate. we will see later why those are needed as well.

3) focus
there are different investment philosophies existing. funds can focus on investment stage or selected industries (horizontal or vertical). it is important to be in the funds focus, otherwise an application means wasted time.
if a fund has similar companies in it’s portfolio, for example three other software companies in the field of telecommunications, then that is an a-list candidate. because this fund should have an deep understanding of the technology, the business models, the market addressed. just to dig deeper on one point here: the technical due diligence will be faster and more accurate, as the funds typically use their portfolio companies to evaluate potential new investments.

coming up in the next post (six steps to venture capital: part 2.2) are the relevance of fund and investment manager experience, why cash matters and checking out the investors.

six steps to venture capital: part 1

2008-10-07T07:00:00.004+02:00

recently established self financed start.ups have tight cash restrictions. sooner then later, further financing will become a main issue. in order to approach the financing process in a sustainable and therefore successful way, founders shall consider the following six steps.

1) funding motivation
2) fund selection (part 2.1, part 2.2)
3) preparing the battleground
4) approach (part 4.1, part 4.2)
5) negotiate (part 5.1, part 5.2)
6) survive after investment

each single step will be discussed in upcoming posts and brief recommendations will be given about how to handle them best. let’s start with number one:

1) funding motivation

before getting on the roller coaster-one way road to venture capital (vc), start.ups should take a short break and think about the motivation to get risk capital for early stage companies. why looking for vc money, besides the pure cash-requirements?

when the initial enthusiasm of a start.up is gone, cash is running out in some months, bug-fix lists are growing, market feedback is slow and long nights start to take their toll it is time to discuss some real basics. where should the company go? developers sometimes loose motivation, after the proofed they can do it - not everyone likes to upscale until finally becoming a legacy application. marketers and sales people might struggle hard to find first and paying customers, after the initial marketing bravo wore off.

there are three main paths after all: a) full steam up the hill or into the wall, b) bootstrap, bootstrap & bootstrap or c) stop it right there.

in a situation like this, and every start.up goes through that now or then, it is time for the whole team to sit down and discuss. at the end of the process one of the paths will be taken.

those who do not fully support the decision better leave then, so the company can move ahead united and focused. there is nothing worse then a company funded with millions of vc money, which actually does not really want to grow the fastest possible and (in reality) hand over control to the investors. and this is true for the founders, co-workers, customers and the investors.

recommendation:
- match growing ambitions with sources of fund: vc for j-curve, bootstrap for the rest.
- make sure all the founders and the core team support the direction of the company. those who do not, should leave the company. make a written note of the meeting and let everyone sign it.

having cleared the basic strategy of the company's direction strongly determines the next step in acquiring vc money. assuming that risk capital is the right choice, then the next action point is fund selection. this will be discussed in part 2 of ”six steps to venture capital".

ignite session at web2.0expo berlin

2008-10-04T18:33:00.005+02:00

there is not only a slot about "how to pitch" as recently reported at this years web2.0expo berlin. also a "start.up ignite web2.0 epxo europe" (this name is a bit long, but well...) session is announced. the time line is rather tight though: 10th of oct. to apply.

pitching "how to" session at web2.0expo berlin

2008-10-01T21:05:00.000+02:00

events coming in at a steady pace now: web2.0epxo berlin pitch camp x.0 - how to pitch your company for fame and fortune. 21. oct. 2008, berlin. techcrunch moderated.

upcoming european pitching events

2008-09-30T20:10:00.005+02:00

a brief roundup of upcoming events to present start.ups:

FOWA
TechCrunch UK has a contest for startups in the field of Future of Web Apps coming up. location london, 8-10. oct. 2008.
a 60 second video is required. there are plenty of examples up here. this one is especially worthwhile looking at.

leWeb
already mentioned here, now they just posted their participants as of 25th of Sept, 375 people coming form 19 nations. application is open until the 10th of oct. details see here. high praises about the event with detailed program here.

Venture Lounge
...is coming to vienna on the 21st of november. apply here until the 10th of nov. 2008. detailed program can be found here.
update (01/10/08): and there is their technology and media event coming up as well, munich is the location and the 28th oct. 2008 the day. applications until the 20th of oct. 2008 possible.

three things to consider when pitching. impressions from the ESTC business idea contest

2008-09-29T18:22:00.017+02:00

the winners of this year's ESTC business idea contest 2008 are: innoraise (3.), D.O.O.M (2) & sind ice (1.). congratulations! three things to take away from this year's contest: 1) prepare for your audience, 2) choose your name carefully & 3) show a demo.

innoraise' focused presentation made people following their lines. they explained the problem, market size, business model and the like. the audience feelt respected and taken serious. that always arrives well, regardless if it is a jury, a vc, a customer or a new employee. some competitors tried to reuse presentations that they had produced for other events. That did not work.

D.O.O.M. gave a good presentation. they made it on the 2nd place by a focused business idea and through actually showing screenshots of their software. not insisting on taking the world over instantly helps. but simply showing what they did, made the point instantly. the name however, should be worth a reconsidertion.

sindice made their point - and to sell a kind of semantic meta api is not an easy job from the beginning - by showing a live demo. that's risky however briought involvement of the audience. showing what they did or can do with their project, simply transported the message.

standing up, presenting your ideas in front of colleauges, scientists, potential consumers & competitors and venture capitalists clearly payed off well.

pictures courtesy of wolfram anderle.

and the seedcamp winner is: SOUP.IO!

2008-09-20T08:19:00.008+02:00

congratulations to the soup.io team!

they are one of the seven winners of the recent seedcamp 2008 round. seeing the recent develpments of former seedcamp finalist zemanta, this can be a worthy boost of soup.io's development.
just to give an idea how, look at zemanta. they just secured another investmet from union square ventures, also involved in twitter, del.icio.us, feedburner, and the like.
this supports the thesis, that pitching can help progressing a start.up a lot, as already discussed here.
Update: And even if not all agree, winners are winners!

leweb´08 startUp registration opened

2008-09-15T19:00:00.004+02:00

too late for the ongoing seedcamp competition this time? the next possiblity to pitch on an european level is coming up.

leweb´08 startUp competition is now open for application. the competition is organzided by seedcamp. leweb was added as a link in the blogroll.

for all those who need some more presentation preparation and which went through all the demo videos already, there just starting ignite/web2.0expo new york will film the presentations, so keep watching for them.

linkroll: multible angel rounds, ff shares, plan b

2008-09-12T17:30:00.000+02:00

what are "series ff preferred shares"? they can bring early money to the founders of start.up companies, like powerset. details are described in the post "putting founders first". also found on the updated start.up linkroll.

how to deal with multiple angel investment rounds is the the 2nd add to the linkroll. if you can not decide whether to take convertible debt or make an equity round, this blogpost is a good read.

finally a common history of a venture based start.up called "plan b for fund raising", written by guy kawasaki. a bitter-sweet history. as entertaining as we expect from guy, he indirectly referes to the bootstrapping idea in his book "the art of the start".

two austrian seedcamp finalists: congratulations!

2008-09-09T19:20:00.000+02:00

the recent announcement of the seedcamp finalists contains two austrian start.ups: soup and tripwolf. congratulations!

challenging your start.up idea before pitching investors is a great way to get exposure, train presentation skills and to get rapid market feedback.

besides seedcamp, there are plenty of other platforms out there to compete. the start.up mindmap lists alone nine international competitions, and several of the listed platforms are interesting hubs as well. venture lounge and estc business idea contest got recently covered and have running applications.

new start.up blog topic (mind) map

2008-08-09T14:00:00.004+02:00

to easily access all the topics covered in the start.up blog, the new "start.up blog topic map" has been created.
the new mind.map shows all the areas covered by the start.up blog until now. it allows easy discovery of topics around starting.up a successful high-tech start.up. the mind.map allows fast drilling down into the different topics and direct access to the relevant blog posts through links.
enclosed a fist glimps, to fully enjoy it is recommended to open the map in a full browser windows.

new blobroll category: incubators/competitions

2008-08-03T20:00:00.000+02:00

staying up to date with all the business competitions around the world can be tricky.

those which have their own rss feeds can now be found in the blogroll of this blog under the category incubators/competitions. so it is simple to follow them for everyone interested. those which are still without rss feeds can be found in the start.up financing mindmap. anyone is invited to post infos about additional ones existing which are not on the map yet.

venture lounge - apply & compete for vc attention

2008-07-29T21:40:00.000+02:00

venture lounge is a platform for start.ups to pitch vc and get in touch with them directly afterwards.

originated in germany and supported by catcap and neuhaus partners the best start.ups get selected to present. different events have special themes. the upcoming lounge in berlin on the 2nd sept. 08 will be about "web 2.0, iptv, mobile & games". look out for the upcoming events, venture lounge will bei in munich on the 28th oct. 08 and in vienna/bratislava on the 21st nov. 08. apply using the document here. be aware of the 90€/100€ excl. tax price tag.

seedcamp application opened

2008-07-26T11:00:00.005+02:00

uk based seedcamp has started another round of their challenges. the online application is open until the 10th of august. apply here.
looking at the progress of the former seedcamp finalist zemata, this can be a worthy investment of time.

semantic business ideas - ready to compete?

2008-07-23T08:54:00.003+02:00

the 2nd edition of the semantic business idea contest is open for applications!

the competition is hosted by the european semantic technology conference. outstanding ideas in the field of semantic technologies from scientists, entrepreneurs and young start.ups compete against each other.

applicants challenge their ideas with the semantic business community, leading scientists and to potential investors. the winners will walk away with great exposure in the semantic community, the media, venture capital and cash prices and hopefully enjoyed the ride all along.

the start.up financing mindmap, which gives a wide overview about financing opportunities as well as similar competitions got updated accordingly.

what start.up success & football have in common

2008-07-06T15:16:00.005+02:00

building a successful start.up is a tough competition. from the early preparations, the foundation, financing and breaking-even it is a ongoing competition. against all the nay sayers, against one´s own doubts, against all the other strong competitors.given these characteristics, creating a successful start.up is no different then competing in the recent european football championship, like turkey did. the match turkey vs. croatia showed how not giving up until the game is over, leads to outstanding results. turkey was behind in terms of goals and they were considered to be inferior to croatia. still, turkey went until the very end with their spirits high and won the match.

overcoming setbacks by well thought fast and tough offensive play - and not defensive resignation made them win in the end.the did not win the championship though, but speaking in terms of start.ups: not everyone will be the next google - but it´s o.k. to on the upcoming top 50 companies of the ict sector! and who says, turkey (respectively a recently founded start.up) will not win the upcoming world championships. therefore the field manual crossover from successful played football to creating successful start.ups is:„the start.up competition is not over, until the final whistle sounds.“

barcamp salzburg 2008 round up - part 3/3

2008-06-27T21:42:00.008+02:00

start.up financing and concluding remarks

with my talk about start.up financing i was well in line with the bandwidth of topics. only some barcampers already had some experience with financing topics. therefore common financing language like „venture capital“, „business angels“ and the like were probably as easy to understand for most of the barcampers as some pure lines of C to me. the discussions afterwards gave me the impression thought that i could bring some core financing messages across:

* there are plenty of funding opportunities out there,
* they are challenging though &
* there is a place to look them up.

friendly people, interesting topics and too less time for everything. thanks to the organizers and the sponsor. the barcamp salzburg definitely was worth the journey.

enable2start

2008-06-27T11:10:00.005+02:00

the start.up financing mindmap got another entry:
enable2start is a financial times germany supported 5x50.000€ star.up initiative.

linkroll update

2008-06-25T14:28:00.002+02:00

four worthy new linktips in the LINKROLL.

barcamp salzburg 2008 round up - part 2/3

2008-06-24T20:53:00.011+02:00

or why barcamps are the consequence of self organization

ever been fascinated by „swarm intelligence“, heavily entertained and slightly afraid by the novel „prey“ or michael crichton?
i definitely was and still am. alex baumgartner outlined the laws and determinants of „self organization“ (see presentation here). then, using the program netlogo he showed live, how the seemingly intelligent behavior of birds, ants or fish occur.
50 to 100 lines of code are sufficient for the simulations. that made me wonder - somewhat of topic - what military research will bring upon us in the near future with swarms of armed drones.

barcamps, per definition un-organized events, also form structures and patterns by themselves (or are a consequence of them). they are somehow a similar phenomena as the elegance of moving swarms of birds. there are simple rulesets which lead to great results.
there are some formal rules like active participation, blogging about the barcamp or voting with ones legs. and there are less formal ones. being open and friendly to each other. share your insights with the others and not use the barcamp as a sales ground.
the results are easy communication with the other barcampers. information flows well and people looking for business are not often seen twice.

there is a tipping point - one of the essential elements of self
organization as well, where the numbers of barcampers reach a certain number, such that more and more people the event. barcamps are now an established elements of the austrian netculture, from salzburg, bodensee, klagenfurt, graz to vienna. and while on a micro level every barcamp appears to be somehow different on the macro level, the show a high degree of similarity.

in following part 3 of the salzburg round up, there will be three core elements of my start.up talk outlined as well as my concluding remarks on the barcamp.

barcamp salzburg 2008 round up - part 1/3

2008-06-22T09:51:00.010+02:00

the scope of the june 2008 barcamp salzburg was wide. from media culture and internet history, right through modern programming approaches. game programming and the laws of self organization where there as well as a slot from me about start.up financing. around 20 people - i will call them barcampers - gathered at the arge kultur „studio“.

read in part 1 about or why presentations including actual programming code should not make one afraid. the upcoming part 2 explains what self organization has to do with barcamps and 3 part finishes off with thougts about the start.up presentation and concluding remarks about the barcamp salzbug 2008.

starting around two o‘ clock in the afternoon and personally having to leave for vienna already at six p.m. it was an intense experience. the „studio“, a regular site for concerts and theater plays is located in the cellar and is all painted in black . that definitely pushed everyone in the topics. the „bunker“ feeling made it easy to not get distracted and a missing wlan connection for the first half of the sessions kept everyone focused on the topics presented.

the wide array of topics made this barcamp interesting and (positively) difficult for non programmers like me. this forces one to think outside of the normal paths which is a worthwhile and fruitful exercise already by itself.

presentation lines like „“ do not make my attention wandering away, neither do details from michael raidel about the open id authentication protocol (presentation found here). on the contrary. besides the sheer beauty of well written code this would have made me missing organizational developments around programming like „scrum“.
scrum forgets about the old heavily specification focused programming towards a result driven approach. thomas r. koll, recently back from working as a developer in london, where they "lived" scrum obviously enjoyed the experience. not only were they more productive as a team but also had more fun on the way. see his presentation here.

the talk of brigtitte jellinek about internet history in salzburg even gained the interest of the ORF. brigitte digged back casual style into the roots widely undocumented past of austrian internet history. it was only around 1991 when the first IP connection was established in salzburg. in these days the then european backbone was powered by a 256kb connections.

start.ups where somewhat missing at this barcamp. martin herfurt was the exception. he planned to present the challenges of his start.up toothr after i headed back to vienna.

read why the barcamp is the consequence of self organization in the upcoming 2nd part of the round up.

barcamp salzburg 2008

2008-06-20T20:56:00.002+02:00

looking forward to visit the barcamp salzburg 2008.

PR add-on to the start.up resources bonanza

2008-05-29T08:58:00.003+02:00

interesting add-on for the start.up resource bonanza about pr secrets. with a nice controversial discussion about the article. found under pr @ start.up resource resource bonanza post.

start.up resources bonanza

2008-05-24T09:36:00.007+02:00

starting a high tech business is an outstanding challenge. the amount of internet start.up ressources can be overwhelming for novices. while one type of entrepreneur prefers to jump in the cold water, some try to avoid common mistakes. books are an alternative. they are structured, but can take some time to get through.

googling "start up rules" on the other hand gives some 9.300.000 results. separating the relevant "signals" out of this noise is time consuming. scanning the steady stream of blogposts of the start.up blog blogroll resulted in the following qualified linklist:

financing

half-assed startup: how do i start my company and keep my day job

how to save money running a start up

hot to get a vc: greg msadoo, partner at sequoia capital (podcast)

general

how not to start your start.up

10 rules for startups

sequoia elements of sustainable companies & writing a business plan

lessons of ycombinator: things i´d do differently after 2 startups

sales

hot to ask for the order

four words: make big promises; over-deliver

what´s the best material for the pre-pitch introduction to a vc

what not to wear, when you see the vc (not so serious link)

management

management trinity one on ones (podcast)

how to fire someone (well, almost) (podcast)

personal

17 tips to help you get leaner and fitter

a guide to cutting back when you feel overwhelmed

pr
pr secrets for startups

get ready to challange your ideas, encore!

2008-04-30T07:30:00.005+02:00

the seedcamp competition 2008 is coming up again. applications will be up around the mai/june timeframe on their website. expect to hand in the applications during july/august. more details @ their website. and there will be opportunities to meet the seedcamp staff at paris, zagreb, berlin and @ various other locations, more details found here.

besides the already numerous opportunities to pitch one´s start.up idea, another one opened: start.up 2.0. the start.up mindmap got updated accordingly. registration ends today (30.4.08)!

challenge your start.up idea before pitching investors

2008-04-11T12:30:00.001+02:00

venture and business angels money for web start.ups is scare around vienna. thus, when approaching them, there is just this "one" first chance to leave a good impression. meeting other entrepreneurs and discussing your start.up idea before can be crucial therefore. there are three different approaches to that. work up from step three to one.

one, compete and challenge on an international or european level.
participipate at seedcamp, pitch at library house or apply for the upcoming demo in munich (if you can afford so). find more on those competitions on the start.up mindmap. this international exposure gives a good indicator on the competitiveness of the start.up sector.
there are plenty of good ideas, smart brains and enthusiastic people out there, all fighting for investments, staff, customers and media attention. fearing to compete against them is no different then to hide one´s head in the sand. like last years bootcamp finalist, zemanta, funding can get a lot easier.

two, go out an present at the national level. look out for the barcamps around. there are plenty around. spending 30 minutes to present and discuss your start.up in from of a smart bunch can not only be challenging, but as well inspiring. do not mind to present more then once, showing your progress every time. there you can expect to get feedback from hardcore tech topics, user interface desing to grafical ideas, depending on the crowd present. barcamps are no one way story though. just trying to "get" something will not work. share your insights, give opinions and trying to help out others with what you already learned is an imperative.

three, again one scale smaller, visit even more casual community events. visit webmontag or open coffe club. for the webmontag @ werkzeugH or metalab in vienna, be prepared for a five minute pitch, no more. open coffe club is more casual. just sit down and talk with people. at the 6th open coffe club vienna for example, there were around 20 people. star.ups in every stage, bloggers, people which just came back from international engagements or just moved from london to vienna. willingness to share information is required, such that events like these work.

this three steps require little in funds but a lot in willingess to take feedback and give it back tho the community. they can substantially increase the likelyness to succeed.

ten more financing sources for start.ups

2008-03-21T13:05:00.004+01:00

ecva, avco, bkv, web mission, plugg, leweb, web2.0 expo, demo, fit-it and impulsprogramm are now @ the start.up mindmap.

evca, the european venture capital association gives an up to date overview about the european venture capital players. on the national level, the austrian venture capital association (avco) and the german equivalent, the "bvk" provide good starting points for a vc-longist.

another international start.up competition, the "web mission" also found its way on the start.up mindmap. while mainly for uk startups, it’s always good to scan new ventures.

there are launchpads/conferences like plugg, le web, web2.0 epxo and demo as well. furthermore the public subsidy programs fit-it and impulsprogramm were added, which provide subsidies/grants from areas like semantic systems to design.

applied guerrilla marketing apple style

2008-03-19T19:04:00.004+01:00

call it permission marketing seth godin style. or call it guerrilla marketing the conrad levinson way. the effect is the same.

the stories that your customers tell about your product are worth more then (often expensive) classic pr/marketing campaigns. and they are free.

see here, here and here.

considering the regularity of their appearance since the launch of apple’s macbook air, this might as well be just part of their regular promotion. if so, it’s well done

imagine it! - stanford entrepreneurship challenge

2008-02-23T14:51:00.008+01:00

add value to a post-it within six days to create the basis of a business. that´s the challenge of the "imagine it!" entrepreneurship week at stanford university.

the promo video gives a good idea about what it is all about. imagine to replace the post-it by any itc commodity. be it a fax, a regular email, a memory stick, name it. gread mind exercise.

there is a whole film to download about it too, for those who want to seed full coverage of the quest.

why permission marketing is bootstrapping

2008-02-20T10:22:00.006+01:00

his own experience learned seth godin, that old marketing rules are partly obsolete.

not the 30 second "super bowl" ad makes the difference any more. nor the top down political marketing campaign. bottom up is the "new" blue! but did not start.ups alway to do that - somehow?

back to the start. in seth godin´s book "permission marketing" he describes how he had the opportunity to spend $6 million in old style marketing ways. putting up big adds, tv commercials, big sponsorships. only to realize that the return on business was negligible. his conclusion he wrote down in his book in typical american business book style.

he finds out, that it is necessary for marketers to shift from attention to permission marketing. establish a customer relation in steps from light involvement to heavy. and always give back to the customer one every deepening of relationship.

this is nothing new for start.ups. let aside the internet bubble this is how start.ups are forced, limited by financial constraints, to approach their customers. it is called "bootstrapping". keep costs low, focus on your most likely target. approach it in the most cost effective way, such that a long term relationship can be established.

this might not please the egos of the big marketing spenders in the big corporations. their pr/marketing agencies will promise them to establish also permission marketing campaigns for them. "big" surely in money terms.

what start.ups can take from the ideas of godin is, how they can structure and monitor their way to approach their customers. to find out what is behind godin´s five steps is worth reading therefore for start.ups.

more incubators in uk and us

2008-02-19T10:01:00.009+01:00

more incubators mean more opportunites to pitch ideas. and they provide ideas about current valuation of ideas. it is recommended to use those opportunities as long as they are that plentyful.

another chance to pitch your start.up: 7-8th march, london: startupcamp.

in the us, launchbox digital is looking for innovative ideas. see also the respective techchrunch article. the start.up mindmap was updated accordingly.

five words describe your business

2008-02-16T10:27:00.005+01:00

it requires severe effort to describe a business in five words. if a company, an entrepreneur or any employee can not do this, then big chunk of work lies ahead.

the idea to describe what makes a company unique and differentiates it from their competitors in five words gets quite some focus by jay conrad levinson in his book "guerrilla marketing". although being a 1985 first published classic marketing book, nothing of its relevance is lost.
how this simple idea often is ignored showed a recent information and telecommunications trade fair, the "itnt" in vienna.
what information does a potential customer get at an it-fair about companies describing themselves as "software solutions", "it solutions" or "the it company"? other then that they do what all the others do and that they are not anything special at all. one could even think, those companies do not know by themselves what they stand for. the rather do whatever you dare to give them money for.
there are exceptions though. a company called "comnet" for example. while already their name gives an indication, that communication and networking is their business, they describe their business as follows "connect-protect-controll". seeing that, one gets what they focus on. the bit extended slogan goes "we create value through networks". while their business is not of much interest here, it has to be acknowledged, that they are clear about their message. and if one counts, there are not more then five words to do that. there is room for improvement though. for example, what are they doing better then the others can not be seen.
five words to describe what a company does, how it differentiates itself from all the others remains a tough job. one worth to tackle though.

fatfoogoo´s financing success factors

2008-02-07T07:00:00.006+01:00

@ the last barcamp vienna martin herdina, ceo of the austrian start.up fatfoogoo named three main success factors for their subsequent funding rounds:

1) use contact networks

they used their existing contacts for angel funding. and kept leveraging the angels contacts to acquire their first vc round. and guess how they are looking for their next investment? by using the network of their first round investors.

2) sell and convince

their contacts with the potential angel investors did not spare them the job to sell them the idea of fatfoogoo. they had to convince them about their visionary idea and the resulting business opportunities.

3) believe in yourself

strong believe in their ideas and abilities were and are necessary to push ahead successfully, not only in terms of financing.

there is nothing to add to that.

6 minutes to tell your story: demo08

2008-01-30T07:00:00.000+01:00

again, demo2008, a launchpad for new high tech start.ups in the u.s. is running.
the idea of demo is, that around 70 start.ups unveil their companies in front of broad a venture and press audience. everyone gets around 6 minutes on the stage to tell their message.
besides all the press-fuzz, attending demo does not at all guarantee you bringing home plenty of vc money and it´s pricy.

however, there is a great thing about demo for every start.up.
all the pitches can be followed live (no firefox on windows though) or offline. that gives plenty of examples, how others present their company. something you normally would not get a chance to, because that happens in the closed offices of VCs.
there are good and bad examples, sure. but what a resource to learn to focus. to bring across the message in 6 minutes, how to present and make anyone want know more about you and your start.up.

for anyone who likes to search the archives, system one, an outstanding austrian high tech start.up, was there in 2006.

social entrepreneurship

2008-01-29T09:27:00.000+01:00

enjoy the barcamp vienna january 2008 presentation on "social entrepreneurship".
please note that thanks to valerie there are now even more interesting books in the link list.

| View | Upload your own

barcamp vienna 01/2008 1st round up

2008-01-27T10:49:00.000+01:00

barcamp vienna was a great experience again. werkzeugH was full of people, there were three parallel tracks running all through the day. meaning you always were missing at least on interesting session.

fatfogoo, recently successfully funded austrian start.up, showed how they use up to date "web 2.0" marketing to reach out with their idea of an traiding platform for virtual (game) items.

max kossatz´ hack for a better blog search gave the audience quite a bit to think. and his statement that to make a search engine like google is nothing special after all was brought forward with strong confidence.

the track about "social entrepreneurs" enjoyed quite an audience. thanks to the quite controversial standpoints of valerie hackl an me, there was a vibrant discussion going on.

the track "gläserner mensch dank social media" (transparent humans thanks to social media), of jana herwig, revealed the potential burden of everyones´s internet history and the need for a thoughtful use of social media. this stands for those who publish as well as for those which use data from the internet to "judge" about someone.

the discussion with paul böhm on "startup financing" was drawing a not too optimistic picture of funding possibilities for web start.ups in austria. thanks to fatfoogoo, interesting insights of a recently venture funded start.up were shared among the audience.

that one of the founding members of netvibes cames from austria, namely "capitan" alexander kirk came as interesting news to me. making the audience some appetite for the upcoming release ginger of netvibes, without handing out invites for the beta though. they are running their service on just around 40 servers. that´s a challenge.

thatmuch the brief roundup of the sessions i could attend full-time. interesting discussions all along the way were the "salt" in the already tasty "soup de barcamp vienna".

a big "thanks" to the sponsors and the organizers for their efforts and support!

"social entrepreneurs" session linklist: barcamp vienna 01/08

2008-01-27T09:46:00.000+01:00

this is the linklist for the barcamp track "social entrepreneurs" of valerie hackl and hannes a. schwetz.
the presentation will be online soon.

General
Wikipedia-Social entrepreneurship
The next step for microcredit, Interview with Muhammad Yununs

Podcasts
Inbusiness-BBC-Peter Day, Not just for profit
Social Enterprise Coalition

Examples
Kiva-Small change, Big Payoff
Social money lending service Techcrunch Artikle
Mondragon Cooperative: Wikipedia, Brandeins

Income distribution
Longterm Trends Income Distribution in Austria - Update - Wifo

Blogs
Social return on investment
Social Entrepreneur
Guy Kawasaki
Private Sector Development Blog
Social Edge Blog

Social Entrepreneurship Platforms

Schwab Foundation
Ashoka
Ashoka Germany
Social Edge (von Skoll Foundation)
Skoll Foundation

Conferences
Skoll World Forum
"Doing good doing well" by IESE Business School Barcelona
Social Enterprise Conference by Harvard Business School
Annual General Assembly and Conference by European Foundation Centre (EFC) on 29-31 May

Social Venture Funds
Bonventure

Books
"Finanzierung von Sozialunternehmen" von Ann-Kristin Achleitner, Reinhard Pöllath, und Erwin Stahl von Schäffer-Poeschel
"Ökonomie für den Menschen" von Amartya Sen
"Globalization and Its Discontents" von Joseph E. Stiglitz
[UPDATE 29.01.2008]
"Die Welt verändern" von David Bornstein
" Social Entrepreneurship" von Johanna Mair et al.
" Social Entrepreneurship" von Alex Nicholls

barcamp vienna 26.01.08 coming

2008-01-21T09:05:00.000+01:00

i am looking forward to the upcoming barcamp vienna 01/08. together with valerie hackl i will propose to discuss "social entrepreneurship". located again at the wergzeugH i do expect a creative open atmosphere.

ray ozzie´s two start.ups documents

2008-01-06T12:33:00.000+01:00

jessica livingstones´ interview of ray ozzie shows how two documents can be essential for start.ups.

the complete interview with ray ozzie is part of the book "founders at work". this highly recommended reading shows what for more or less successful founders worked and what did not.
ray ozzie got famous for his lotus notes history. he had numerous moderately successful start.ups with groove being the last one. after groove got acquired by microsoft he became microsoft´ chief software architect.

so how does ray ozzi starts his companies? he sits down an writes two documents:

founding document 1: outside view
describe the challenges/problems solved for the end user.

founding document 2: inside view
describe on a technical basis how to solve scenarios described in document 1

this approach gives founders a structured way to organize their thoughts. without being afraid of having to write an "executive summary" or even a "business plan".
having done that, he collects the core team of people he already worked together. to do that, the above docs show their first payback. future team members get the main start.up idea and can decide fast, if they are interested to join in or not.
he get’s a big open office and a whiteboard. together with the team he works out the technical details on how to solve the challenges, the toolchain, languages used, architecture. then the coding starts.

p.s.: looks like the business guys are left out for quite a while.

„long tail“ financing? 2/2

2007-12-23T17:01:00.000+01:00

second, if tackling the tail from the right end seems to take too long (either because the business opportunity is gone by then or by lack of patience), a 2 phase approach is possible

having a long tail business in mind, start with the sweet spot core business. after gaining grip there, reach out to the tail. amazon did start to sell books with the differentiators of free delivery, consumer reviews and easy search in the beginning. those provided an outstanding new shopping experience. successful growth in the core business brought in investors, closing the first phase. only after that, in phase two, the long tail got explored. (an similar approach can be expected with their web services.)

this requires a business, where competitive advantages already exist in the classical core business – and not only in the long tail. in that case, write your business plan, build your working prototype, bring along customers and core team. then approach venture capital (preferably through introductions).

„long tail“ financing? 1/2

2007-12-23T16:50:00.001+01:00

starting a „long tail“ business means challenging financing conditions. micro financing and/or a 2 phase approach could work.

chris andersons´s book “the long tail” points out that sustainable business can be build on large amounts of low turnover items. but how to finance such a business, where investors will see a return only in the long run? two proposed approaches seem applicable.

first, micro finance it. avoid costs (using free open source software for development, a business which hardly requires any own stocks or heavy capital investments, evangelise and build your – working for free and enjoying it - core team, use guerrilla marketing). prepare to keep the day job and drive the idea for as long as it takes to generate cash flows.

institutional investors will, at least in central europe, not be interested to finance this stage. how to still get them aboard, read the second part of the “long tail financing”.

selected business angels or incubators which see further ahead then most of their colleagues could be interested. bringing along limited but sufficient financial resources, like €20.000 per investment, they focus on developing and driving the business model. the downside for founders is, they can be expecting up to 50 percent of the company. therefore real business value has to be found within their business networks (marketing, sales, finance, people).

if giving away shares is not the preferred way, but small initial cash requirements can not be covered buy the founder, convertible loan agreements can be interesting. handing out tranches not lower then €10.000 per investor and putting them all under one trustee agreement keeps administration at a minimum. this micro finance allows to attack the long tail from it´s tail.

start.up finance mindmap update

2007-11-23T18:31:00.000+01:00

the mindmap "start.up finanzierung"/start.up financing has been updated with business angels links.
thanks for feeback on the mimpdamp to smime.

start.up company success rates

2007-11-23T10:23:00.000+01:00

with a 30% success rate, serial entrepreneurs outperform first-time company founders by 12 percent (18%). founders which failed once before have a slightly higher rate of 20% to make money out of their venture.

this is one of may results of the studies of gompers et al (“skill vs. luck in etrepreneurship and venture capital: evidence from serial entrepreneurs”, 2006).

“soft money” of venture capital investors does not bring real value in terms of higher success rates to serial entrepreneurs.

start.up weekend & seedcamp

2007-11-20T15:14:00.000+01:00

the mindmap "start.up finanzierung"/start.up financing has been updated with: startup weekend.

a recent presentation of seedcamp from the web2.0expo berlin, slides can be found @ slideshare.

web2.0 berlin & start.ups

2007-11-07T20:06:00.000+01:00

besides all the web2.0 buzz, what´s relevant for founders?
one: use technology offers to bootstrap to the max.
two: use technology to develop consumer enjoyment.

tech
g.ho.st, an web-operating system - they prefer to call them "virtual computer" - extensively uses amazons web services. this allows them to massively reduce their start.up costs & concentrate on their vision and it´s implementation. and not on buying, installing, mantaining, backing up,... expensive hardware.
that´s bootstrapping thanks to technology and a start.up living this essential ingredience for start.up success.

business
jesse garrett in his keynote speech focused strongly on creating products that are "1) beautiful, 2) elegant, 3) solutions that 4) work". strongly pointing to apple´s approach on how to make complex things: lovable, presentable, solving/creating a need you can not live without once you tried it while staying extremely simpel.
is your idea/produkt/website like that?are there rumour sites about what you will do next with your start.up or are you still trying to "bruteforce" community building.

thatmuch for a start from the web2.0 berlin expo, which brings an intersting crowd together. developers, entreprenerus, investors and plenty of speakers.

How NOT to start your StartUp

2007-10-03T09:26:00.000+02:00

i prepared the following notes for the oktober barcamp
in vienna. unfortunately a flu was keeping me away. so here are the notes, i am looking fortward to discuss that @ the next barcamp.

SLIDE1

++ 70% of companies fail because of internal reasons
(KSV, 2006 Insolvenzstatistik)

++ Out of 100 applying Start.ups 10 get "aws Seedfinancing" funded,
5 survive the next 10 years

++ --> 7 of the 140 techchrunch40 conf will survive

++ youtube owners made 1,65B$ in 21 month

++ 12 year old co-founder gets 6,5M$ investment (playspan)

++ Full disclosure: i work at www.awsg.at
investment manager ict high-tech startups
quite an portfolio
quite a while

SLIDE 2

++ What you want (maybe)
Stay alive (personally, company)
Keep old & make new friends
Make people happy
Have fun
Change the world with your vision in mind
Do good & talk about
Earn money

++ What you do NOT want (maybe again)
Heart Attack before floating on the stock market
Loose friends
Make people unhappy
Be frustrated
Give up
Keep it secret
You and your friends/family/fools get bankrupt

SLIDE 3

++ "Recommendations"

+++ *Tech Founder*
Cross out Life in life-work balance
live on coke, pizza and sweeties until you overtake "super size me"
friends/family/partner shall only be important if it helps your company
never leave the net/phone/... for more then 1 hour
do not delegate
Insist, believe and act upon:
know everything better then your co-founders and (potential) customers & investors
The customers will come by themselves,
as soon as they realize that you are a genius and
that your product is "the" product

+++ *Marketing/Sales/Finance/Operations/Quality/you name it*
Who needs any of those?
Therefore do NOT build a complete team
so you do not have the problem, that:
someone knows about it
anyone shall ever buy your product/chrossing the chasm
invest in your company + knowing when you run out of cash
actually ever deliver and service your product
have a satisfactory working product
...

+++ *Product*
Leave "under the radar screen" before you have something to show and say
Release first public version before core functionality is there
Do not keep your alpha/beta community interested by
rolling out new functionality every 2 weeks
respecting their feedback and maintaining the forums alive
Announce ambitious release schedules and never keep them
Focus on features, not your on the (product) core (vision) or even customer benefit

SLIDE 4

++ Others
- Never prepare your pitch
regardless of your audience, be it sales guys, techies, any customers, finance people
neither adapt to "their" interest or specific questions on language
nor prepare, as your genius will always bring you through
no presentation under 50 slides
- Use consultants for everything
without selecting them according to their proven (reference calls) success for
your specific requirement
without keeping them under strict control (topic wise, timeline, hours they want you to
sign of) this will help you to keep your cash burn rate high

SLIDE 5

++ Links
Do NOT look at those financing opportunities:
finance mindmap @ http://www.startupict.blogspot.com

Do NOT read any of those:
founders at work, jessica livingston
the art of the start, guy kawasaki
the startup company bible, michael stathis
crossing the chasm, geoffrey a. moore
guerilla marketing, jay c. levinson

And NEVER ever look at this one:
einführung in die allgemeine betriebswirtschaftslehre, lechner/egger/schauer

NOR listen to the podcast:
www.manager-tools.com

For the ones which want/can make the crossover from military strategy to start.up business
do NOT look at:
the art of war, sun tzi

Finally do NOT read this Start.up guide:
The Pmarca Guide to Startups, part 1: Why not to do a startup
(link thanks to brundo haid, www.systemone.at)

++ What would you NOT do?

case study: papermint.at

2007-08-19T17:34:00.000+02:00

unter dem titel "the second life experience" bringt net.culture.labs einen 360° blick auf massive online multiplayerwelten. kurzfilme , selbst ausprobieren, rechtl. analyse u.a. stehen an. und ein weiteres beispiel neben second life aus österreich: papermint wird gezeigt.

um nicht gleich in den wachsenden topf der second life clongemeinschaft geworfen zu werden, sei folgendes zur differenzierung dargestellt: klarer fokus, hinsichtlich zielgruppe. optische abgrenzung durch 2d avatare in einer 3d welt. kommunikation als zentrales element und nicht fotorealismus.
wie die nächste evolutionsstufe nach second life stellt sich diese zuckerlfarbene welt dar.

fragen aus start.up sicht gibt es viele: ob die angestrebte zielgruppe groß genug ist, ob sie schnell genug erreicht werden kann, ob sie im spiel bleiben, wie die firma finanziert wird (i5 ist schon dabei), was bringt nachhaltig umsatz,... aber manchmal muss man nicht alle fragen stellen - auch nicht alle beantworten, sondern es vielleicht einfach ausprobieren und spass haben: www.papermint.at.

start.up finanzierung mindmap wächst und wächst

2007-08-07T21:05:00.000+02:00

einige updates zur mindmap "start.up finanzierung". die ursprünglich beim juni barcamp in wien entstanden ist und kontinierlich weiterwächst.
es wurde eine neue kategorie eingeführt für "platformen", auf denen man sich "netzkulturmäßig" P2P ohne irgendwelche intermediäre austauschen kann - auch zum thema "wie habe ich meine ideen/startup finanziert".

are YOU venture capital compatible?

2007-07-30T20:40:00.000+02:00

5 out of 10 to reasons to invest for venture capitalists are related with the entrepreneurs experience and personality.
this was true in the 80ies when this survey has been done, but still holds when looking at today’s investment scene.

if you want to prepare yourself for funding, take care of the following . * mark personal criteria of the founder. failing more then two criteria gives good chances for not getting financed.

* capable of sustained effort
* knowing your market
5-10 times return for vc possible
* ability to evaluate risk and act accordingly
investment can be sold easily
big market growth
* track record in field of new venture
* ability to express
intellectual property rights protect able

while the analysis was new york focused, expect experienced venture capitalists applying the same in europe. which means: take care of sun zi.


p.s. by the way, why as an entrepreneur not evaluate your potential vc on the same criteria?!

source:
ian c. macmillan, robin siegel, p.n. subbar nar asimha, "criteria used by venture capitalists to evaluate new venture proposals", journal of business ventureing 1, 119-128 (1985) in: venture capital, volume II, edited by mike wright, harry j sapienza, lowell w. busenitz, edward elgar publishing.

seedcamp

2007-07-19T14:57:00.000+02:00

die anzahl der initiativen für europäische high tech start.ups wächst weiter.
seedcamp bietet eine neue platform an: 3 monate london boot camp, 10% der anteile, 50k€.
die mindmap wurde upgedatet.

sun zi, moltke & douglas adams für start.ups 3/3

2007-06-22T23:00:00.000+02:00

frei nach douglas adams:

"nimm immer ein handtuch mit". daran läßt sich der schweiß der sorgen abwischen. und den kunden, lieferanten und finanziers die hoffnung verkaufen, dass es schon wesentlich mehr gibt, als man sieht bzw. da ist...

literatur: zitate jeweils aus den sehr lesenswerten büchern. wikipedia links als allgm. pointer.

sun zi sagt: "So sucht im Krieg der siegreiche Stratege nur dann den Kampf, wenn der Sieg bereits errungen ist, wogegen jener der zum Untergang verurteilt ist, zuerst kämpft und danach den Sieg sucht."
http://de.wikipedia.org/wiki/Sunzi_%28General%29

moltke sagt: "No battle plan survives contact with the enemy." http://en.wikipedia.org/wiki/Helmuth_von_Moltke_the_Elder

douglas adams sagt: "Was jedoch noch wichtiger ist: ein Handtuch hat einen immensen psychologischen Wert. "
http://de.wikipedia.org/wiki/Douglas_Adams

sun zi, moltke & douglas adams für start.ups 2/3

2007-06-20T22:03:00.000+02:00

frei nach moltke:

"kein businessplan überlebt den erstkontakt mit dem kunden."

es ist ein grenzgang zwischen unbeirrt seine ziele zu verfolgen und auf marktfeedback zu hören. darum einmal pro monat einen realitäts-check zu machen hilft. wo bin ich?, wo will ich hin?, was sagen mir meine kunden?, welche konsequenzen ziehe ich?

interessant dazu: "founders at work", wo sich für mich als ein wesentlicher erfolgsfaktor für erfolgreiche high tech start ups herauskristallisiert, flexibel zu bleiben: hinsichtlich produkt und geschäftsmodell.

mindmap start.up finanzierung update nr. 3

2007-06-19T21:33:00.000+02:00

wesentliche erweiterungen der mindmap zum thema start.up finanzierungsmöglichkeinte im bereich inkubatoren:

mindmap start.up finanzierung

sun zi, moltke & douglas adams für start ups

2007-06-18T21:30:00.000+02:00

sun zi, moltke & douglas adams wurden vermutlich für high tech gründer geschrieben. wieso? dazu eine kleine trilogie. links zu den einzelnen autoren in teil 3.

sun zi, moltke & douglas adams für start ups 1/3

frei nach sun zi:

"gründe nur dann ein start up, wenn du bereits davon überzeugt bist, dass es erfolgreich sein wird."

wenn eine klare positionierung des zukünftigen unternehmens gepaart wird mit auergewöhnlicher technischer, wirtschaftlicher und vertrieblicher kompetenz, hat man die notwendigen grundsteine gelegt.
wenn eines dieser elemente fehlt, dann zurück an den start. wenn man eine technologie hat und ein problem sucht: weitersuchen, nicht gründen.

mindmap start up finanzierung

2007-06-12T16:45:00.000+02:00

mind42 hat soeben ihr system gepatcht: die mindmap ist somit online.
die mindmap ist offen für inputs und erweiterungen:

mindmap start up finanzierung

für die bearbeitung ist ein gratis mind42 account erforderlich.

UPDATE (15.06.07): die mindmap wurde um links erweitert.

barcamp track "start.up finanzierung"

2007-06-12T11:52:00.000+02:00

anbei die im track entwickelte mindmap als jpg, bis die verlinkung auf mind42 funktioniert. auf mind42 sind dann auch kommentare zu den einzelnen elementen ersichtlich.

barcamp vienna juni 2007

2007-06-11T11:01:00.000+02:00

interessierte entspannte kreative offene atmosphäre. crossover von kreativen bis codern mit platz für einen finance track.

sobald im high tech finazierungs track gezeigte mindmap via mind42 publizierbar ist kommt hier noch der link.

spannende veranstaltung mit hohem wiederkommenswert.

estc contest

2007-06-05T21:09:00.000+02:00

bei der ersten europäischen konferenz für semantische technologien (estc) nutzten 5 nominierte entrepreneurs die chance, sich erstmals der öffentlichkeit zu präsentieren. die besten 3 wurden von einer unabhängigen internationalen jury ausgewählt und in ansprechenden rahmen im palais ferstel prämiert.

semantische technologien sind in der wissenschaft ein mittlerweile etabliertes thema. auch tummeln sich schon einige unternehen auf diesem sektor. die anzahl der start-ups in diesem bereich ist zumindest in zentraleuropa noch gering. folglich ergab sich die idee, mit dem semantic technologies business indea contest, innovative ideen richtung markt zu bringen und entrepreneurs zu unterstützen - sowohl mit geldpreisen, aber insbesondere mit der chance sich einem breiten publikum zu stellen.
jury mitglieder mark greeves und benjamin grosof von vulcan ventures, klaus matzka von gcp
waren da. auch thomas ecker von tecnet capital war auf der konferenz vertreten.

mehr zum contest auf www.estc2007.com/contest

motto: spannende plattform für interessante ideen.

warum zum barcamp?

2007-05-25T21:00:00.000+02:00

also: ich bin in der öffentlichen hochtechnologiefinanzierung tätig. interessiere mich für spannendne technologien jeder art. möchte gern mal das barcamp nutzen, um zuzuhören, was sich so alles in wien dazu tut.

möchte und kann auch gerne meinungen zur finanzierung und den stolpersteinen im bereich der start.up phase austauschen.

nachdem das mein erstes barcamp wird, bin ich mal gespannt, wie es wird und freue mich schon drauf.

look, listen, learn & execute

2007-05-24T23:00:00.000+02:00

wer ein high tech start.up gründen möchte tut sich was gutes, wenn er davor ein wenig nach:

rechts: was machen andere im umfeld
links: wie werde ich mein ziel erreichen
vorne: wo will ich hin
hinten: wo liegen meine kompetenzen, was fehlt
schaut.

strukturierte anleitungen gibts genug. empfehlen kann ich:
guy kawasaki, the art of the start
staths, the startup company bible.

das spart viele leere kilometer.

barcamp vienna juni 2007

2007-05-24T09:53:00.000+02:00

nachdem barcamp nach einem blog verlang, soll es so sein.