RT @walter: Top tip for succes…

RT @walter: Top tip for success; Be SuperFuckingAwesome.

RT @dianerbrts: Great opportun…

RT @dianerbrts: Great opportunity for any graduate! http://lnkd.in/VxGjHh

Pitching.

We spend a lot of time talking to people about pitching. And the one main thing that we tell everyone is  to

ENGAGE YOUR AUDIENCE!!

So rather than saying it again I will show you a great example.

Tags: greenhouse, nytech, pitching

Start-up bootcamp webinars

We’ve finally decided on the format for our upcoming series of webinars. Remember these are an extension of our original start-up bootcamps. So you can expect the same type of content; real world info and examples of how to plan, structure, fund, manage and grow your business. No textbook, wooly theoretics but lessons learned in real life business environments shared by people who not only talk the talk but who have also walked the walk!

The webinars are free to participate but pre-registration is required. You can register online here.

Date and time is every Wednesday evening from 7 pm until 9pm starting Wednesday August 25th. We will intersperse the webinars with workshops and other similar event, news about these will follow shortly.

Tags: bootcamp, startup, webinar

Term Sheets, and Terminal Value

There is another great post of Fred Wilsons blog. Freds blog is always a great source for no-nonsense view on business, technology, funding and related issues. It has become a staple in my daily blog-feed.

His recent blogpost deals with Terms Sheets & exit values. Both are inescapable facts for any start-up that trues to raise funding. The contents of Term Sheets as well as the concept of Exit Values can be sometime hard to grasp for fist time fundraisers (and even for those who have done it all before). However the point is to not become blinded by all sheer mass of details contained in a term sheet. Most of this is formality and you should really contract a qualified legal and/or financial professional to deal with those details. What should really concern you are only a few points:

• The amount you are raising
• The amount of equity you are offering in exchange
• Your dilution (i.e. how much of your company will you own after this round of funding)
• The types of shares you are offering (preferential, common etc)
• How all this fits in with your future funding needs
• The exit

The exit, or more exactly the exit value, is what ultimately will decide the amount of money that you will be able to raise. The maths can be very basic; if you’re raising 1 million for 25% equity and your investor expects a 10x return (most expect that or more) than that 25% has to be worth at least 10 million at the time of exit.  This has to be reflected clearly in your financial projections (and oh yeah forget about 3 year financials, 5 years make much more sense).

A lot of this is covered in mind-numbing detail during our bootcamps. But don’t let the mind-numbing put you off.

KNOWING THIS WILL SAVE YOU MONEY

Understanding a VC’s thinking will put you in a much stronger position when the time comes for you to sit across the table from them. It also stops you from looking like a fool…

Tags: equity, exit, fred wilson, funding, term sheet

Extending our bootcamps

We’re now have the first few start-up bootcamps behind us and it has not only been the participants that have learned a lot. On & off-line talks around the topic of these bootcamps has indicated that there is a interest in attending them that extends past the physical catchment area. There have been a number of people from across Ireland and abroad who have expressed an interest in learning what we are trying to teach but who are not in position to physically attend the sessions in Limerick.

This brings back something I already discussed in an early post: Does a start-up accelerator really need a physical presence?In the current times of excellent global communication systems I do not think this is neccesary. As the main benefits of an start-up accelerator (knowledge, experience, insight & network) are intangible it should be possible and acceptable to distribute these via data/voice/video communications. This is only a short step from the current sessions where we have the mentor participating video video link.

So we are now working on putting a facility in place whereby he bootcamps will be sent out as an interactive webinar. We will still have pitching days and a few hands on workshops but you will be able to participate in the bootcamp sessions from the comfort of your own desk.

Stay tuned for more!

Bootcamp session #2: July 7th

The 2nd start-up bootcamp session is taking place this coming Wednesday, July 7th from 6 – 9 pm.

Location: Office Ireland premsises, Castletroy, Limerick.

Topic: “Exits & Valuations”

Costs: NONE

Register here.

SPREAD THE WORD!

Bootcamp session 1: “The business of business” & “The business of investing”.

Last Wednesday saw the first of a series of 10 start-up bootcamps. We were lucky to have David Kirk “in-country” and able to present this event in person. The session took place in the excellent “Office Ireland” facilities in Castletroy Limerick.

The evenings event was crammed full of information as David squeezed in two topics: “The Business of Business” & “The Business of Investing”. While it was a lot of information to cram in one evening it was valuable as it addressed a lot of important issues that a lot of start-ups tend to forget as they get carried away in their enthousiasm to develop a product or service. Topics discussed were CAP tables, dilution, equity, shares issued, shares authorised, share options etc. David made clear how getting these things “right” at the beginning can avoid a lot of problems later down the line. If you get your CAP table wrong it can lead to an incorrect valuation later on or the founders equity share can get diluted to nothing when you go looking for outside funding.

Next was a revelealing insight into different types of funding (Friends & Family, Angels and Venture). It showed the differences between the different types, at what stage they are mostly applied and what he benefits and drawbacks of each type of funding are. The insight provided in how VC’s actually make their money and how that impacts on how and when they invest was particularly interesting. The fact that the number that you have put in the box for your year-5 revenue at the back of your financial projection included with your business-plan might have more influence on the VC’s decision to invest than *anything* else in your business-plan is a startling revelation to quite a lot of people.

Also worth considering when looking at the possibilities of securing VC funding is that out of 10 companies that a VC invest in they (on average) expect 3 to fail and another 3 to only return the investment (at best). That means that the remaining 4 companies need to generate a high enough return to pay the VC’s management fee, carried interest and still generate sufficient return for the VC’s Limited Partners. In simple terms that means that you will need to show an average of 10 – 15 times return for every euro that a VC invests in your company.  Food for thought……

Free Start Up Bootcamp Sessions!

The Greenhouse is running a number of start-up “bootcamp” type sessions over the next few months. These will be 3-hour sessions once a week dealing with topics that start-ups will encounter on their road to success. The sessions will be conducted by David Kirk via video-link from California as well as other mentors.

The session will not be going for the feel good factor, they will throw you in the deep end and expect you to get involved. No boring monologues but frank open session providing you with knowledge gained from real life business environments instead of courses and books.

Will you be handed the “secret to your success” on a plate? NO! But we will give you the tools for your potential success and teach you how to use them. It is up to you to do the hard work and make your venture successful.

Read more here….

Start-up bootcamp poll.

Tags: bootcamp, start-up, time

Pay-off!

We got some great news this week! Whatswhat.ie Ireland’s premier online Business Directory announced that not only had Paraic Hegarty joined their company as Director of Strategy and Innovation, Pariac also made a substantial investment in the company resulting in 5 new jobs as well as the opening of a new office for Whatswhat.ie!

Now how does the GreenHouse figure in this? The answer is simple: Sian Phillips (whatswhat’s Financial Director) was introduced to Paraic Hegarty during last Octobers “Business Camp” organised by the Greenhouse. They got talking and follow up conversation ensued resulting in the investment and job creation!

More news like this soon.

A spring breeze.

After a quiet winter period for the Greenhouse we are now full of the joys of spring and working on a lot of new events & activities. Over the next 6-12 months we will run a number of Business Camps throughout Ireland. In addition to that we will start a new Incubation program in June (exact date to be confirmed) and in the run-up to that we are organising a series of weekly interactive sessions dealing with all different aspects of starting your own business. The content of these sessions will vary from “investor readiness” and “operational readiness” to “intellectual property”, “legal aspects of starting your own business” to marketing & sales etc. The session format will vary from web-cast conducted by business experts from around the globe to presentations from local business experts. The sessions will be followed by some quality face-to-face networking.

If you’re a start-up interested in attending these sessions please contact us.

Tags: greenhouse, incubation, start-up, training, workshop

Outvesting: Power to the people!

Some time ago the idea of outvesting was born out of discussions on Twitter and some Irish blogs. The concept was simple; donors chip in 50 euro each and when a total of 5000 euro has been reached the donors vote on which start-up this money should be given to (on a no strings attached basis). Short, sharp & simple.

Today the results of the first Outvesting round ware announced and while I am delighted that WE CAME SECOND I am even more delighted by the fact that the fantastic KildareStreet won. Go have a look at KildareStreet. It’s a fantastic and extremely worthwhile project giving everyone a direct insight in what and how much (or little) every person in our government is doing. While there are a whole bunch of people involved in the project it is mainly being driven by John Handelaar who is a bit of an enigma. Anyway, go check them out and give them all the help and support you can!

Tags: evert bopp, funding, kildarestreet, outvesting

Announcing a new advisor!

I am constantly on the look-out for experienced, insightfull & innovative people to assist the Greenhouse by sharing their knowledge, experience, opinion and insight.

Some time ago I met an absolute gem in the shape of David Kirk. David is originally from Northern Ireland but moved to the US many years ago. He has build up a very succesful career and has been VP Corporate Information & Business systems for AOL & VP for Cisco systems amongst other positions.

David is now mostly active as business advisor and private investor. He has been very active in stimulating the development of the software industry in Northern Ireland and is a leading member of the “Irish Technology Leadership Group” & NISW.

David’s experience from the cutting edge of business will be an invaluable contribution to the Greenhouse and we hope that it will stimulate others like him to also lend their support.

His decision to support the Greenhouse Incubator is a huge vote of confidence in our venture!

Business Camp Dublin

After the succesful Business Camp Limerick on October 11th we are now running a Business Camp Dublin on December 5th.

Location is the O’Reilly Building on the Trinity College Dublin campus. Starting time is 10 am and talks will end at 5pm.

I will be putting more details online over the next few days but in the meantine you can register here to attend or here to speak.

You can also contact me if you would like to exhibit at the event or if you are interested in supporting this event.

Tags: business, camp, dublin, greenhouse, trinity

Business Camp Limerick

The Greenhouse has organised another fantastic event! On October 11th we are running “Business Camp 09“!

The event is held in the Absolute Hotel in Limerick starting at 10 am and running until 5 pm.

The Greenhouse Business Camp is an free “unconference” for people who are self-employed, starting their own business or thinking about starting their own business. The current economic circumstances have clearly indicated that there is no such thing as a “job for life”. Even the biggest of companies are failing, the financial institutions are in tatters and the public sector is facing mass redundancies. The result of this is that for a lot of people there is only one logical course of action: to start their own business. Once again the SME sector proves to be the backbone of the economy.

Of course there are a lot of pitfalls & unknowns to starting your own business. Besides the financial risks there are legal & fiscal issues. How & where do you find customers? What is the best way to market your product or service? Who can help me and how do you approach them?

Greenhouse Business Camp will provide you with answers to all these questions and more. Not through boring talks and Life-coaching sessions but by meeting and talking to people who have gone through the process of setting up a business (some several times even).  All this will take place in an informal setting. No long droning lectures, no ties & suits, just lots of good relevant information and helpful people.

What happens at Business Camp

During Greenhouse Business Camp there will be a number of presentations and talks from experts in areas related to starting, promoting and running a business. These people will come from all areas of commerce and have proven their worth. You can wander in and out of these talks & meetings as you please. At the same time there will be a number of so-called “break-out” rooms where people can sit down for impromptu discussions and talks on interesting subject.Lastly there will be stands from relevant bodies and companies there who will give you advice and assistance free of charge.

The Greenhouse Business Camp is an free “unconference” for people who are self-employed, starting their own business or thinking about starting their own business. The current economic circumstances have clearly indicated that there is no such thing as a “job for life”. Even the biggest of companies are failing, the financial institutions are in tatters and the public sector is facing mass redundancies. The result of this is that for a lot of people there is only one logical course of action: to start their own business. Once again the SME sector proves to be the backbone of the economy.

Of course there are a lot of pitfalls & unknowns to starting your own business. Besides the financial risks there are legal & fiscal issues. How & where do you find customers? What is the best way to market your product or service? Who can help me and how do you approach them?

Greenhouse Business Camp will provide you with answers to all these questions and more. Not through boring talks and Life-coaching sessions but by meeting and talking to people who have gone through the process of setting up a business (some several times even).  All this will take place in an informal setting. No long droning lectures, no ties & suits, just lots of good relevant information and helpful people.

What happens at Business Camp

During Greenhouse Business Camp there will be a number of presentations and talks from experts in areas related to starting, promoting and running a business. These people will come from all areas of commerce and have proven their worth. You can wander in and out of these talks & meetings as you please. At the same time there will be a number of so-called “break-out” rooms where people can sit down for impromptu discussions and talks on interesting subject.Lastly there will be stands from relevant bodies and companies there who will give you advice and assistance free of charge.

More details on the website.

Virtual Incubator..

I announced here last week that we’ve decided to already launch the Greenhouse as a “Virtual Incubator”. This virtual incubator will offer start-ups all the benefits & services of the Greenhouse but without the physical premises.
While we work to finalise the package I can already list some of the services that will be offered offered:

• Individual coaching on business plan development.
• Development of a real Operations Plan and Go-To-Market Plan
• Monthly Operations Reviews
• Individual Mentor program
• Virtual help-desk session via video-conferencing
• Access to large network of industry contacts
• Funding preparation
• Participation in start-up bootcamps
• Assistance with international growth & market-entry
• Access to a cloud hosting infra-structure
• Shared web hosting

However we would like to hear from you what other services you would like, do you want a postal address to use? Fax & phone answering/forwarding? Are there certain areas that you would like more advise & support on?

Please leave a comment below if you have suggestions of services we would need to add.

Announcing the “virtual incubator”!

While everyone involved is working hard to organise our physical premises in Limerick I have decided to use the services and facilities already in place to open a “virtual incubator”.
This “virtual incubator” will offer all services, knowledge, networking and mentoring that will be offered by the Greenhouse once we open our premises bar the physical office space and investment.

That means that selected start-ups will get dedicated web-hosting, access to cloud infra-structure, a whole range of service, access to our network of top level industry contacts and mentoring. All *free of charge*!

We will be announcing the exact details and application process later this week.

Funding By Numbers (Part 2 of 2)…

Last week I put up a guest post by David Kirk on funding your start-up. The post generated a lot of very interesting discussion so i am happy to put up part 2:

Knowing VC arithmetic and fund metrics is only half of the equation. The numbers in your business plan’s financial forecasts need to positively answer the question “Can I make money with this deal?”

And that is the first 1% of what it takes to get a company funded and make a bucket load of money.

Funding By Numbers (Part 1 of 2)

One of the smart people I’ve recently met (through Twitter) is David Kirk. I’ll quote from the NI-tech blog to give you an idea of David’s background:

David Kirk is a successful executive, entrepreneur and investor. During his career – almost four decades of software, networking and telecommunications – he has held executive level positions in engineering, marketing and sales, with start-ups and Fortune 10 companies. He was Vice President at American Online (AOL), where he led the world-wide launch of their online service, and managed the development and operations of their business systems, including billing, eCommerce, Internet advertising and fraud management.

After AOL, David was Senior Vice President at Cisco Systems, where he managed their core software development, and was general manager of their enterprise voice business. Currently David is an active private investor, and has board positions on a number of companies, including Axis Three in Belfast. He is passionate about promoting Northern Ireland as a tech destination.

David was born in Belfast, and now resides in San Francisco, California.”

His main activity is as a business advisor & private investor and he has a very strong interest in developing Irish technology start-ups. In the past 2 months alone he has evaluated 60+ business plans from Irish technology companies.  Based on this experience he has offered to write a 2-part blog-post on how a VC looks at the funding process and how what calculations a start-up looking for funding should use. Below is the first part of his post:

Whether you are an entrepreneur or a VC – I like to think I have a foot in each camp -  we live in interesting times.  Barely a month goes by without a new report showing some “interesting” aspect of investment in 2008/2009, whether it be valuation multiples, return multiples, shift in investment stage focus or just the consolidation of funds out there.

While there is, and always will be, market specific conditions that free or freeze funds, the basics of investing in technology companies, remains somewhat constant, and should always be considered as the backdrop to any specific funding strategy.

When a company seeks funding, they are selling themselves and the investment opportunity that their business represents to the investor.  I’m of the opinion that selling, whether it be ice cream or cars, is always much more effective when you really know your potential “customer” – their needs, their wants, what they look for, hot buttons, turn off’s.  Its no different with VC’s.  It’s a business.  We need to make money, just like you.

So how does it work?

The returns on any investment, is governed by its risk.  The riskier the investment, the higher the returns expected.  Investing in technology startup companies is very risky.  Failure rates of up to 90% are quoted.  VC’s expect and plan for 60-70% of their portfolio companies to fail or limp along.  Similarly, investors in venture funds – the Limited Partners – expect a corresponding higher return than safer investments.  The US ten-year average returns (IRR) on all  venture funds in ~17%.

At this point, the discerning reader has all the information needed to determine every ratio and “rule-of-thumb” that will follow.  But there is need for a great big caveat.  Presented here will be pro forma numbers.  I have never seen, nor heard of any business, investment opportunity or fund that mirrors exactly what is given here.  The exactly numbers and ratios are somewhat interesting, more – much more – importantly are the ideas behind the numbers.  Grasp these, and you’ll be able to apply the principles to any, real-world situation.

Right.  Now that’s out of the way, back to arithmetic.

I’m a fund manager.  I have ten portfolio companies.  Being smart (i.e. I’ve lost money in the past) I’m planning for three of those companies to fail without returning anything, and three or four to “go nowhere”, returning, perhaps, the money that was invested.  That leaves three “winners” in the portfolio to generate all the returns for the limited partners, the “carry” for the General Partners, and to cover the management fees.  That means that each of these “winners” has to return x10 – x15 the investment, to cover the “losers” and the “going nowhere”.

My personal rule of thumb is that an investment needs to return x7 – x10 my investment in 3-5 years.

OK.  Next we need some discussion on how to calculate “return”.  On one hand its very easy to calculate, but the simplicity in calculation, belies an ocean of “art” and “judgment” surrounding it.  If my investment in a company buys me x% of equity, then my return is x% of the exit valuation $y.  At this point, given two variables, it could almost appear that we can plug in whatever values for x and y we like, to come up with our investment multiple.  Not quite.  I look for 20%-25% equity in a company (but, full disclosure here, every investor and VC has there own perspective on this).  Less and you lose “influence”, more and you risk demotivating the founders.  But be very careful here, you’ll hear many times the argument, would you like 80% of $1M business or 20% of a $100M business.

Equity understood.  Check!

What about valuation.  This is where you will need to do your own analysis, based on industry, business model, geography, etc..  In general, the exit valuate is based on a multiple of either revenue or profit.  As an interesting sidebar, in the absence of both – as we experience in 1999 – valuation of those dotcom darlings was $1M per developer.  Science?  Nay, magic eight ball.  Over the past 15 years, predominantly in software, I’ve used smaller and smaller multiples.  In the mid-90’s, x5 revenue seemed to fly with trade sales.  Today I use x2, and even that is appearing to be generous.  Exit or investment valuation is 90% art, 10%science and 100% negotiation.  You need to understand this.

OK.  At this point you should be able t answer the last question a VC asks “is this a good deal for me?”  But there is one big variable that will depend upon whether you are looking for investment from a $1B fund or a $10M fund.  That is scale and bandwidth.  An individual VC can only adequately manage a handful, or two, of portfolio companies.  If there are n VC’s in a $1B fund, then the average deal size is likely ($1B/10n)*.60 (where 60% is ration of funds invested initially).  Calculate that out.  Perhaps their sweet spot if $5M – and likely you can find this on the home page of their website.  So now you have a very simple litmus test.

With a $5M investment (ignoring followon money), a 25% equity position, and an exit value of x2 revenue – the revenue in year 5 should be at least $100M.

Big gulp!!!

Part 2 will go into the first three things a VC looks for in an investment opportunity; a big market, a hot product, and a team that can deliver.

Tags: david kirk, funding, invest, vc

Good news wins prizes!

After the last seminar we had some nice goodies left over.

Microsoft, who we partner with through their Bizspark programme, had sent us some software as sponsorship (Office Ultimate 2007, Windows 7 Release Candidate, Windows Vista Ultimate, Halo3 for Xbox 360 & PGR4 for xbox 360).

We also have a few books written by Nora Klaver who recently gave a presentation during the Limerick Open Coffee Club. The book is titled “Mayday, asking for help in times of need“. Nora has given me 2 copies of her book to give away.

So how can you win?

Simple; leave a comment below illustrating a recent business “success story”. Something that happened to you recently or that you have heard about that will show us that it’s not all doom and gloom. This could be from securing a great order to how you using social media has benefited you in your business. No restrictions, no holds barred. Give it to me the way you experienced it!

As I have several prizes I will choose one winning comment every day this week, however I “demand” at least 5 comments per day before I will draw a winner. This so there will be no winner by default.

That’s it, get writing!

Big giveaway.

As promised in the run up to last Saturdays’ “Blogging & Social Media for Business” seminar on Limerick we are giving away 2 nights b&b for 2 people in the fabulous Absolute Hotel in Limerick.

I threw the names of all people who attended in a hat this morning and had an independent person pull out one name.

And the winner is: Sian Maloney from Gifts & Vouchers!

Sian, congratulations and the voucher will be posted out to you.

Tags: absolue hotel, limerick, prize

Seminar report

Last Saturdays “Blogging & Social Media for Business” was great success!

18 people showed up on the day which made the group managable and created lots of interaction and discussion. Surprisingly enough there were very few participants from the Limerick area and we had people from all over the country.

The facilities of the Absolute Hotel were as always superb with plenty of good strong coffee. After a short opening word by myself Krishna De kicked of the day. As expected Krishna gave a fantastic, informative and engaging presentation covering subjects such as Linkedin, Facebook and online networking in general. She explained clearly to everyone what the posibilities, benefits and options of online networking are.

Krishna was followed by Campbell Scott. Campbell is the CEO of IGOpeople Irelands’ first and premier online network. Campbell gave a good insight in the thoughts behind IGOpeople, how it works, who it’s for and what plans they have. Campbell’s presentation can be found here.

After Cambpell it was the turn for Fred Caballero from Channelship. Fred is a specialist in video blogging and gave everyone an insight in the do’s & dont’s of video blogging. Entertaining details was that his presentation was the most filmed one during the seminar. At one point there were cameras recording the presentation.

Next it was time for a lunch break. As was to expected the chefs in the Absolute Hotel had prepared an excellent meal.

With everyone refreshed was time for the enigmatic Bernie Goldbach. Bernie gave a a deep insight into the workings and benefits of Twitter. His talk was as entertaining as it was informative as he admitted to having multiple Twitter accounts and frequently talks to himself through them.

Last up was Peter Donegan of Donegan Landscaping. Peter was able to show how a “non-techie” business can benefit from using an online medium such as blogging (and twitter). Peter started his talk with a newly made 3 minute video summarising the last 2 .5 years of his life.

He really managed to engage the audience by showing how social media worked for his business but also emphasised the pitfalls and risks involved by creating an online presence.

We ended the day with a Q&A session and by setting a few people up with their own Twitter accounts. This was followed by drinks in the Absolute bar (which lasted well into the night). It became clear from comments made by people attending and speaking that this was a very succesfull event and I will definetly be organising more events in the near future.

There was also a lot of tweeting going on during the event and as we were using the hash-tag “greenhousesocial” these tweets can be followed here.

I will also over the next few days post up more content such as presentations, pictures and video footage on the site so keep checking back.

Tags: blog, evert bopp, greenhousesocial, linkedin, twitter

Applications invited!

We have now opened our applications process.

You can find the required form by clicking on the “Apply” link in the top navigation bar.

The process is outlined on the application page but just to make matters clear again, we do *not* require big lengthy business plans or 5-year financial forecasts. If you have these please do submit them but we will give as much credibility to them as to a person who just submits an outline of an idea.

Remember it’s about who *you* are and how good your idea is, NOT about how well you can type, how flashy your Powerpoint presentation is or how many pages you have typed up…

GOOD LUCK!!

Tags: application

Learn about social media and win!

Next Saturday, June 13th, the Greenhouse is running an excellent seminar on how to use Social Media for business.

We have already got a good number of sign-ups so far but to ensure maximum attendee numbers we’ve decided to run a competition!

Sign up for the event before Thursday June 11Th and you can win 2 night accommodation in the Absolute Hotel (on B&B basis) for 2 people!

So get signing up now!

Full event details here.