blog archive
Blog Archive - January, 2009
-
22 January 2009
Prof Tom McKaskill on Exit Strategies
If you're thinking about exiting a business now, or in the future, Professor Tom MacKaskill has these suggestions to maxmise the realised value, which he shared with participants at the 2008 Angel Summit.
• Valuation is all about future potential under the new owner, so 6-10x multipliers are not necessarily the maximum.
• You may not have to build the business completely before selling it.
• You may need 18 months to build a relationship with a potential buyer– educating him on synergies and potential.
• You must have competitive tension—meaning at least 5 potential buyers of your business.
• Ensure your business is scaleable before selling.
• Prepare the company for sale from the onset by introducing processes, governance etc.
• Earnouts almost always end in disputes. The only way to get good results is if key events are in the control of a third party. -
22 January 2009
6 Tips on Angel Investment from Stephen Tindall
The 2008 Angel Summit offered many words of wisdom for existing and potential angel investors. Here's what Stephen Tindall had to say on Angel Investing.
= Expect 12-15 years to pass to maximize the return
=Always reserve some cash for 2nd and 3rd round funding projects.
=Don’t take more than 10% first-up.
=Don’t go on the board but use the further funding “needs” of the company as leverage to get the company to make “mid-course corrections.”
=Expect growth curves to be flat—then tending upwards. Do not expect 45 degree growth curves (or better).
=Do not expect 1st round funding will suffice.
Of 10 investments:
1 might be a superstar, 2 might be good, 3-4 will be marginal, And the rest will fail, so it isn't necessarily wise to put all your eggs in one basket.
General Word of Wisdom:
As a precondition to investment, assess if the founder is willing to step aside and work for a proper CEO. Get it in writing in advance - or don't invest.
-
15 January 2009
Have your say… the business or the person?
When considering chances of long term success of a start-up... do you think it's more important the business concept is sound, or the person driving the business to success has the skills and determination to make things happen?
-
15 January 2009
NZVIF Gives Angels a Halo
NZVIF has just launched the eagerly-awaited Halo Fund. The new $5 million angel investment fund is targeting investors in a bid to boost the capital available to seed and start up companies. Basically, the fund allows registered angels to take a passive stake in a diversified portfolio of startups that have been selected by the rest of the significant angel community in New Zealand, and SCIF (the government Seed Co-investment Fund). Halo will contribute 50c for every dollar invested into a business by the Seed Co-investment fund to a maximum of $125,000.
It’s a brilliant concept, in that it allows people to buy a diverse portfolio of 15-30 qualified investments. Angels can put in as little as $25,000. Proceeds from liquidating investments will be distributed to investors immediately. Once the fund closes there will be no further opportunity to invest.
The fund will operate for 10 years and it is the result of NZVIFs desire to recruit 1000 new Angel investors.
-
15 January 2009
Dfi – Moving on in Style
The Dunedin Fashion Incubator will move to the Otago Polytechnic on 26th January 2009. After seven successful years helping both emerging designers and fashion businesses, the Fashion Incubator is being relocated to the Otago Polytechnic in a move to achieve synergies with the Otago Institute of Design, and the Design Department. The team at Upstart are delighted the Fashion Incubator has found such a good home where it will be able to keep working with Dunedin's thriving fashion community. Over the years there have been many highlights with 13 full time business clients, and hundreds of Outreach and Hatchery clients. Clients have shown at both New Zealand and Australian Fashion Weeks, and a number of clients now sell widely throughout the country and offshore. This year one of our full time clients, Sarah MacDonald and her label Doe-a-Deer, won the Otago Chamber of Commerce business award for Design with their innovative mix of functional, design led clothing for women who hunt, fish and work in the great outdoors. The team at Upstart look forward to following the progress of all our graduates, and those transferring to the Polytech, confident that Dunedin will remain at the forefront of the fashion industry, and proud to have played our part.
-
12 January 2009
Otago Entrepreneurs Well Supported
Otago has featured prominently among the list of finalists in the Vero Excellence in Business Support Awards with the Otago Chamber of Commerce recognised in the Not for Profit category, and the the Dunedin City Council's Economic Development Unit again receiving acknowledgment for it's contribution in the Local Government Body category. Upstart Business Incubator has been selected for it's contribution to entrepreneur education. The selections are a reflection of a combined, concerted and managed effort by local government, tertiary institutions, as well as local entrepreneurs and Angel investors to put Otago "on the map" as THE PLACE to kick start an entrepreneurial journey to success.
-
12 January 2009
Upstart Selected as Finalist in Vero Awards
Upstart has once again been selected as a finalist in the Vero Excellence in Business Support Awards, in the category of Education. Judges commented that one of the reasons for Upstart's selection was the ability to demonstrate measurable and tangible success as an educator of both business incubation clients, and interns participating in the highly innovative Entrepreneur Intern Programme. Being selected as a finalist is quite an honour given the quality and quantity of submissions received in 2008 for the 2009 award. Upstart was the High Growth category winner in 2008, with the 2009 winner in each category being announced in May.