Pure Play

Please sign up. Pretty please

Thanks to Richard Hearn (currently working in Asia). He sent me the link to this great presentation from Josuha Porter in Bokardo who specialises in interface design for social web sites.  

In it he explores the psychology of signup - what is potentially going on in peoples heads/minds when they arrive at a new service on the the internet and how to design your site/service to make it easier for them to make a favorable decision and commit their details to you.

Designing For Sign Up

View more Microsoft Word documents from Joshua Porter.

Elements of it I have seen before but this brings it all together nicely. keith

Quick share - live stream from Techcrunch event in Stockholm

Friend of mine is in the room and I am listening to the discuss in the background



keith

EI Early Stage Investment Workshop - wrapup

Q on what funds are in AIB and BOI? Client was told that there is not a lot of money left in AIB Fund.

He was told that there are plenty of funds left and specifically the BOI fund is a new one.

Sean Baker (Chair ISA) did close. Asked did workshop hit the target for client businesses in the room? Did people leave with a stronger and clearer understanding of the process and in a better position to prepare for having EI participation in a funding round.

Final comment from floor - be really aware of legal advisors who are currently looking to flesh out legal fees by dragging out negotiations around funding rounds in the knowledge that the points being negotiated are not achievable.

Note - I found the workshop really useful to help me understand the dynamic of EI and how to manage it,

keith

EI Early Stage Investment Workshop - Client. Ralph Shaw, Asavie

Ralph Shaw (CEO) spoke about their EI experience.

Formed 2004. They offer services to mobile operators. Funded by EI and private investors.

Company Formation:

Got right advisors in place:

Legal - O'Donnell Sweeney Eversheds (Tony McGovern is contact there)

Tax (and BES) - Farrell Grant Sparks 

Structure:

• Multiple funding rounds envisaged and planned for
• Enable quick decision making
• Support BES and 3rd party investment
• Employee option scheme

They took cost of doing this up front - with less retrofitting required.

Initial Engagement with EI

• Prepare initial plan
• Engage with EI
• DA (Development Advisor) appointed
• Prepare detailed plan
• Get approval

Do your homework before engaging with 3rd parties. Do yourself justice and do not waste their time.

Shareholders Agreement

The initial agreement had to protect:

Company

Founders

Investors

They did not need new documentation on subsequent rounds as it was drafted to be fair to all parties. (note - this is the approach we took with dbTwang - legals were instructed not to be aggressive and to strike a balance).

He made point that to be able to say in USA that they were backed by Irish Government - this compensated for being a smaller business.

They have raised e5M to date (3 rounds) and no VC participation. He reckons they may crop up in the next round as it will be more substantial. They would go that route again - they have developed a pool of strong and experienced private investors who are "smart investors" and act as an advisory board which they can pull from.

Asked about his initial valuation and how he approached it. He said he developed valuation range and then tested against least likely investors to judge reaction. The valuation ended up mid-range and took into account multiple rounds and dilution.

Interestingly they did not cap BES shares - he reckoned that they are taking the risk and so should be exposed to the reward. 

He was asked about how they are doing now. He said they are in a difficult segment (mobile operators space and loads of competition). They are on schedule to hit their turnover targets and all investors have followed through. He approached the answer cautiously - he is aware of the challenges and the lenght of the pipelines in that space. 

BTW he mentioned his engineering/software team build on time and stuff that works - "he fell off his chair" when that first happened as he was not used to it!

Asked about the relationship between DA and Investor Advisor - he said their DA (David Smyth, now in Silicon Valley) pretty much shielded them from the rest of them!

keith

EI Early Stage Investment Workshop - Karole Egan, Legal Team

EI Only Investments

Where there is no external company valuation (do these still happen?)

- Cumulative Convertible Redeemable Preference Shares (8% reducing to 3% and 5 years redemption)

Legal Agreement, Karole mentioned:

Annual and sometimes qrtly accounts

CSO info

Any info required to validate expenditure

13 restricted transactions]

Co-Investments

Valuation set by Professional Investor - terms set by them and they fulfil matching funding requirement. EI take similiar class of shares, similiar terms, similiar warranties (bar convertible loan notes as they cannnot do loads, they will mirror with Pref Share terms)

In either case: Completion Process

• Pre-Approval meeting with legal advisor
• 8 week target turnaround time from approval to cheque
• Draft S/H agreement issued to company and advisors - largely non-negotiable - standard one used for all HPSU's
• Completion Documentation furnished
• Cheque released to company

Challenges in Completion

• Protracted negotiations
• Matching funding not secured (note - could this be a reason for the delays which I referred to in previous post?)
• Company not investment ready (Co Sec stuff)

Address these by:

• Ensuring that advisors have appropriate level of expertise
• Ensuring advisors are instructed 
• Ensuring matching funding is secure

In response to a question EI will hold a max of 10% in a client. They will revert to a preference share with no conversion option if they go over 10%.

Q - main differences between VC and EI agreements. Karole said EI's is substantially shorter! Less restricted transactions, no anti-dilution clause, no down round clause, far less warranties. 

keith

EI Early Stage Investment Workshop - John O'Sullivan, Investment Advisor

He started with the DA being the primary point of contact.

When pitch is ready DA speaks to Investment Department.

Starts with Commerical Evaluation - an investment advisor is appointed. Growth Capital is a element of the Investment Department. 

Due Diligence Process

The investment advisor acts independently of the DA. (keith - that is interested, was not aware of that up to now).

Step One - Financial Review

Step Two - Commercial review

Financial Diligence

• All management and audited accounts
• 12 month projected cashflow analysis
• Sales pipeline - current and projected - lots of detail required here
• Full review of the financial data sheet

(note for self - is FDS available from DA?)

Non Financial Diligence

• Examination of the business model
• Overall business plan
• Key issue which may prevent success
• Review of management and promoters experience
• Review of technical assessors report (if relevant)

Following both stages of the review a Commercial Evaluation Meeting is organised and then a Commercial Evaluation report is given to the Investment Committee. The investment committee (16 in total) is comprised of internal (14) and external (2) people. 
 

I asked about dynamic between Development Advisor and Investment Advisor. My take from John's answer - the DA is initially a gatekeeper and over time will hopefully flip to being an advocate. The investment advisor is always independent of the client (less or no contamination!). A follow up contribution confirmed that relationship - the DA may spend quite a while helping the client develop the proposal through iterations and only when ready is the Investment Advisor brought into play. At that point it should be a strong proposition.

Strong Proposition

Management - can they do it

Market - is there a market

Money - can they raise it, can they manage it

keith

Enteprise Ireland Morning Workshop - Early stage funding

Introduced by Jennifer Condon who said that it was developed in conjunction with the ISA and was aimed at giving a less formal intro to how EI work in this area.

About 20 EI clients here and lots of EI staff.

Cathie Hynes, Growth Capital 

Started with slide borrowed from Brian Caufield showing stage of growth and relevant funding for each.

She spoke about the dilema around matching funding when private investors or business angels are not available. www.businessangels.ie relaunched to assist with that issue. Angels generally invest 50k to 500k and usually in the region they live in and sector they are knowlegable about.

Q's they ask - Team? Skills they have? Skills they need? Personal chemistry is very important. Then the usual core businesss questions.

KEY - what monies do you need know, what do you need over next 3 years, how do they get their return.

"There is money out there - for every muddy field bought by a developer someone sold it!" Cathy. She mentioned Diane Roberts who is the recently appointed national co-ordinator. Cathy then spoke about the network of private investors who EI have knowledge of - including serial investors. They also know some international investors.

They also work through intermedaries - banks, accountants and solicitors, stockbrokers. There are 108 investors on the database.

The route to these investors is an introduction by your DA (Development Advisor) to the Growth Capital section in EI. Cathy mentioned working with 8 clients who they arranged UK presentations to UK Angels with and are now doing the same in Ireland. They do prep work with each of those. The route has two streams - ones where EI have made investment decision and ones where the decision has not yet been taken. Former preferable obviously :-)

She then spoke about VC's - more structured and more onerous. Also businesses need to be aware of the life cycle of a VC fund - if you approach in the latter half of the typical 10 year period then you are unlikely to get funded.

VC funds to consider - AIB Seed Capital (fund managed by DBIC and Enterprise Equity) and BOI Seed Funds. Those 2 funds manage e46M in total. They both need to be seen to invest in Irish businesses. 

Interesting - in response to a question I asked Cathy said that there is currently no delay with drawing down investmnet cash at present. Once paperwork is in place which is not always the case. That directly contradicts what I have been told by a number of businesses recently and maybe it indicates that the logjam caused by Dept of Finance has been cleared?

She spoke about an example of a investor teaser for a business called Digitary and the key information it contained.

Mary Cryan asked about current angel investment and was told by Cathy that they are still active - angels take the view that they can control/influence an angel/seed investment more so than stock market or property! Investment dominated by tax based mechanisms (presume BES).

keith

Catholic Church in Ireland

Great and simple idea from Damien Mulley - make the Child Abuse Commission Report the top return for "Catholic Church In Ireland" searches on google.

Use the phrase Catholic Church In Ireland and link it to the report.

Done, with pleasure.

UPDATE - Damien has produced a short slideshow with excerpts which is shown underneath. I do not often post non-business stuff on this blog, however the reality exposed by this report and the unmasking of a truly evil life imposed on children in Ireland is something worth commenting on.

Catholic Church in Ireland

View more OpenOffice presentations from damienmulley.

keith

Colm Lyons, Realex Payments @ IIA Congress

Started with some words on current situation and recent comments from Mary McAleese which showed rare leadership (rare from anyone in the political space). She said continue to grow, continue to scale and keep aiming to expand outside of Ireland.

From Colm, focus on the recovery. Have absolute belief that you will suceed. Realex have made fundamental changes in last 2 years to move into being an international business.

He then spoke about successful Irish Internet businesses who sell some of or a majority of their services overseas. Directski.com, avvio.com, cartrawlor.com, chainreactioncycles.com (who employ 270 people and who doubled t/o in the last 6 months'ish). Ezetop.com who do not operate in Ireland at all (phone topups for expat communities in other countries).

Realex continue to increase their monthly turnover and have record months.
He gave example of a new service they have just launched for Virgin Atlantic on Tuesday - a global opportunity for them.

Spoke about the Leadership For Growth program with EI, wasn't sure about it going in (he failed his Leaving and did not have faith on Academic learning).

Some of their internal building

Strategy Statement:
Goal, Scope, Competitive Diff, Logic

Values:
Behaviours (their 60 staff took part in the development of their values over a 2 day workshop). Why is this important - because the values dictate how the people behave, their approach, how they do their job. Colm reckons this is a key differentiator in a technical service space.

Some of their values: security, innovation, careers not jobs

He spoke about having people in place who are relevant for where you want to be in 2 years time. Hence Russion Lunches.

He finished off with Internet Growth Alliance where a number of entrepreneurs wanted to build something to support Irish Internet businesses who want to scale. www.alliance.ie

He thanked his colleagues and friends on Realex.

Great talk, grounded and inspiring.

Q. How to enter new countries
A. They serve a common business Market regardless of location. And service it with local presences.

Q on issue of getting merchant ID's
A Colm spoke about risk of CC's and the issues that causes. In other countries they have started to work with credit transfers used to pay and initiated by the account holder - push not pull. He hinted that such a product will happen in Ireland (this year?)

Q what in Ireland exists to support an early stage Internet business
A Colm said it is fragmented and there is a need to challenge businesses earlier in the growth cycle.

Keith

"Basecamp For Danger" - todays Tuesday Push

Build for a niche and from a niche - the approach which I am most comfortable with. As is Robin Blandford who can regularly be found dangling from ropes in dangerous places as part of his voluntary role with a Cliff Rescue Team. This is a shot taken by him during an exercise.

He spotted an opportunity to help teams like his with an online service which captures and analyises relevant information and also helps with team communications.

The Sheriff agrees with him: This app is amazing! It was developed by rescue volunteers, so they know exactly what is needed. Brian Smith, DeSoto Co. Sheriff's Office, Search & Rescue.

www.decisionsforheros.com - have a look. He launched formally this morning and this one will own the space :-)

keith

[part of a bi-weekly push of great Irish Businesses on the net]

The blogs I follow specifically for dbTwang, and why

There are some blogs that are very on target for what we are doing with dbTwang (a focused social network with a freemium/recurring subscription element to it).

They are the ones I read regularly - not skimming but setting time aside to read them properly.

Kissmetrics
They offer a service for analyzing visitor data and have a blog that is very informative on the topic of metrics for e-commerce and conversion driven businesses.
http://blog.kissmetrics.com

Startup CFO
Mark McLeod is a CFO for hire and he took the time a couple of months ago to have a Skype conversation with me. He is informed and experienced and generous with sharing. He also initiated a Startup CFO community on Ning.
http://startupcfo.ca/

Andrew Chen
Andrew is obsessive on the topic of freemium and has published many rich posts on this and related areas. One of which includes a spreadsheet for modeling conversions, user acquisition costs and life time values.
http://andrewchenblog.com

Dave McClure
Dave is an entrepreneur, VC rep for very early stage investments and is also metric obsessed. He rules supreme with his "How to give a VC a Hard On" presentation! I met Dave in San Francisco recently and he took the time to listen and feedback to me.
http://500hats.typepad.com

The Startup
This European site covers (as you would expect!) EU based startups.
http://www.thestartup.eu

Sean Ellis
Startup Marketing is his baby and he speaks from a background of having taken 7 VC backed businesses to market.
http://startup-marketing.com

Venture Voice
This is the single podcast I always listen to. Frequency is irratic and the lenght (at an hour usually) is longer than usual yet the style of conversation is great to listen to and the stuff you can learn from the entrepreneurs Greg Galant talks to is worth it.
http://www.venturevoice.com/

Hope some of those are of interest.

keith

Enterprise Ireland's first official blog

This is great to see (and I helped out a tiny bit with it). Enterprise Ireland have launched what will hopefully be the first in a series of blogs targeted at various audiences in Ireland and abroad.

Built out by Jason Roe and featuring an integrated forum have a look at http://researchcommercialisation.ie/. It only launched yesterday so early days yet!

keith

Bizcamp Belfast, on in just over a week

My 3rd visit to Belfast coming up Saturday week (May 16th) when I will attend Bizcamp Belfast. I missed the one in Limerick (too soon after our Dublin event) and am now looking forward to this.

Some of the speakers at this free day where entrepreneurs will share their experiences with each other, I am definitely going to see Michael beeney talking about Auto Register:

Launching a classic car website — The challenges of researching and launching a new classic car website business in Northern Ireland. I'm particularly interested in how a niche business can reach its client base successfully.— Michael Beeney (@autoregister)

Moving Creative Ireland Forward — Trends and turns in the digital media space. What's happening and how we move the conversation forward— tim kelley (@timspeak)

Expanding your business in a downturn — I'll look at possible ways of expanding your business to new markets and clients in the current down turn, steamlining your business, getting your pitch right and cutting out the non sense. — Russell McQuillan (@wiseguyrussell)

This time next week, Rodney... — SonicAcademy.com is a cutting edge e-learning business based in Belfast. I'll share our experiences of the last 12 months - including launching a web business; how not to go bust whilst trying to raise money; pitching to angels and VCs; securing investment (we've now done this) and other related topics!

— Kev Traynor (@kevtraynor)

10 Steps to Kill Your Business — Kelley's Top 10 - If you do these, you cannot help but strangle any hope your business has of succeeding. Don't miss it — tim kelley (@timspeak)

Doing Better Business — Social media can help businesses do better business - by being more open and conversing with their customers. — Campbell Scott (@campbellscott)

Setting up a niche search engine — The challenges involved in setting up a niche search engine. I will be speaking alongside James Kennedy. — Caelen King (@revahealth.com)

The Minimum Viable Product — Deciding what functionality to include and what to leave out in an initial product release - specifically as a start up entering a new market.
I'll discuss some of the lessons learned from our launch of niftynosh.com and our approach to future phases of our product.— Barry Lynch (@niftynosh)

keith

Join us for coffee tomorrow in Kilkenny?

Kilkenny Open Coffee happens tomorrow 6th May @11am. The location is Kilkenny Café in Market Cross, if you are unsure where that is you can check the map.

Its a small group of us who work in or enjoy the internet and technology. Informal and chatty. Come along, share and learn :-)

keith

I hope Simon Palmer was not serious....

...as it could be difficult for him to be taken seriously as a PR professional otherwise.

There are a number of posts kicking around this morning about a piece in the Sunday Business Post yesterday (Bernie, Damien, Tommy are the 3 I have seen).

In a long article Simon makes a number of comments, the one that motivated me to tear the page out was this one:

"Ideally the Irish blogging sector should have a professional membership body....even better they could come under the remit of a watchdog for blogs...."

I can't even begin to find words to describe just how ridiculous this idea is without writing something I might regret. What is a blog? Essentially nothing more than a very regularly updated web page. (Comments and tone make them very different but neither were touched on in his article).

So his proposal would/could/should apply to every regularly updated web page or site? In Ireland presumably. Hosted in Ireland, or written in Ireland, or written by somone who is Irish, or by someone who covers Irish topics, or which has a .ie domain even if hosted in another country?

And that would presumably include facebook, bebo, linkedin and the other social sites whose use lends them to regular updating? Obviously only those pages though which could be shown to be written by someone within the jurisdiction. How difficult could that be?

As an entrepreneur I would expect any PR person I engage with to be connected to reality and I know of plenty who are. They can cope with the changing landscape and engage constructively with it while still providing a valuable service to their clients.

keith