Take a look under the covers at VC Funds

November 24, 2009

You can now do just that! TheFunded.com is an online community of entrepreneurs to research, rate, and review funding sources worldwide. Membership, which is FREE for CEOs, will give you unparalleled access to the collective wisdom of over 11,500 entrepreneurs and other business leaders, as well as detailed profiles of over 3,900 funds and contact information for over 17,250 investment professionals. In addition, TheFunded.com allows entrepreneurs to view and share term sheets, to assist one another finding good investors, and to discuss the many facets of operating a business.

Check out the Membership Screencast at The Funded website for a guided tour, which will show you first hand how members can access candid reviews of funds by CEO members who have first hand experience of the way they operate.

It’s also worth checking out a presentation by Adeo Ressi, CEO The Funded, who has an interesting take on Venture Capital Trends.

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Plot your company’s Equity Fingureprint

July 21, 2008

The idea of plotting a company’s Equity Fingerprint was devised by Philip Baddeley, a Cambridge based entrepreneur, Business Angel and mentor. An Equity Fingerprint encapsulates the equity structure and valuation of a business, which is essentially an equity map that plots the effect of shareholder dilution overtime as additional rounds of funding are closed.

Apart from being a useful tool for entrepreneurs, the Equity Fingerprint Methodology is also now being used as a research tool and a means of teaching the role of external equity finance in the growth of new ventures. To find out how to plot your own company’s Equity Fingerprint and see examples of other successful high-growth businesses such as Google and Cambridge Silicon Radio download The Essential Guide to Equity for Entrepreneurs.

When considering the possibility of dilution in order to raise additional finance, just remember that in the long run, it’s better to have a small piece of a large pie than a large piece of a small pie!


How to recieve £5million in funding at 0% interest!

February 10, 2008

Raising additional funding for your new venture might not be quite as expensive as you might think. Building on the huge success of its 2007 Entrepreneur Challenge, Bank of Scotland Corporate is maintaining its reputation for being the Bank for Entrepreneurs by launching the Bank of Scotland Corporate £35 Million Entrepreneur Challenge.

In 2008, BoS are looking for established and growing businesses with a minimum turnover of £2 million to impress the judges with their creativity and vision. Each winner will receive up to £5m funding entirely free of interest for 3 years and free of arrangement fees.


Living with the “Living Dead”

January 21, 2008

You could be forgiven for thinking that the title of this article referred to a horror movie, a 70’s rock band or an adolescent teenager recovering from a night on the town. However, in this context the phenomenon of “living dead” investments [1] represents the middle ground of venture capital investing outcomes, lying between “winners” that produce adequate multiples of return on investment and “losers” that result in loss of invested funds. Living dead investments are typically mid- to later-stage ventures that are economically self-sustaining, but fail to achieve levels of sales growth or profitability necessary to produce attractive final rates of return or exit opportunities for their venture capital investors. 

Whilst living dead problems caused by internal management and operational issues can potentially be fixed by VC managers, those caused by too small or too slow markets, industry oversupply, or cut throat competition are largely out of their control or influence. Of the various actions taken by VC managers in dealing with living dead companies, the most common response is to sell or merge the investee firm so they can devote their time to star performers.

References
[1] Ruhnka, J. Feldman, H. D. and Dean, T.J. (1992). The “Living Dead” Phenomenon in Venture Capital Investments, Journal of Business Venturing, 7,pp 137-155.


Raising Venture Capital Finance in Europe

January 11, 2008

raising-vc-finance

For the entrepreneur with a well-developed business proposition, a team which has previous experience of running a successful business and a properly researched market, where the product or service has the potential to capture a leading stake in the market or a carefully targeted segment of the market, the time has never been better to seek venture capital financing. Knowing how to approach venture capital firms is key and it is also essential to have at least a basic understanding how they go about appraising an investment proposition.

A new book Raising Venture Capital Finance in Europe focuses on the entire venture capital process from how to select and approach a venture capital firm, how the venture capitalist goes about appraising the entrepreneur’s proposition, how he or she negotiates the terms of the deal, through the due dilligence process, dealing with warranties and indemnities, post-investment monitoring by the venture capital firm and, to exit routes including trade sales and stock market floatations.

The book is written in layman’s terms, with terminology clearly explained. Practical advise on preparing a business plan in a form suitable for submitting to a venture capitalist, including the key areas of the quality and experience of the entrepreneur and his or her management team. Alternative sources of finance to venture capital are also covered, including government sources, business angel finance anf loan and asset-backed finance.