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.
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!
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?”
I have three questions, which help me answer that.
1. “Is this a big market?”
2. “Is this a hot product?”
3. “Is this the team that can deliver?”
But what is a “big” market and a “hot” product? It used to be we looked for a $100M of revenue in year-5 in a $1B market. Interesting how that $100M looks strangely similar to the year-5 revenue for exit valuation? It all comes down to “returns”.
Remember to scale down according to your investment needs and the returns needed by the VC. But even if you scale down, the ratio here is interesting. Basically it projects a 10% market share of the available market [I’ll return to available market later.] That’s a good market share target. Greater than 20% market share and you’ll see eyebrows raised and eyes rolling back. Less that 5% and you don’t have the ambition to get a “yes” to question three above.
OK. Available market. This is important, but skip this section of you already understand this.
There are three elements of market size; total market (TM), total available market (TAM) and total serviceable market (TSM). For starters and simplicity I’m going to ignore Total market – I can almost hear that sharp intakes of breath by countless business school professors! The other two are meaningful:
Total Available Market = size of the market that would buy your product
Total Serviceable Market = size of market that you will be selling to.
By way of example, lets say you have a product that disables a laptop if it is stolen.
The Total Market (which is meaningless) is the total number of PC’s in the world.
But this product only runs of Win XP, so the Total Addressable Market is the total number of PC’s, worldwide, running WinXP. This is the count of your potential pipeline of customers. The target customer. Note, you may also segment this further by identifying further target customer attributes, e.g. English speaking.
And, if you only ever plan to sell in Europe, then your Total Serviceable Marketable is the total number of PC’s, in Europe, running WinXP. Now you have a basis for projecting market share and strategic growth.
Without expanding your territory or adding additional OS support to your product, your market share is projected sales/Total Serviceable Market. You can increase your market, both available and serviceable, by expanding your product and your territories. That’s your business decision. As a potential investor, I just want to know I can make money whichever.
Welcome back to those you knew all that.
Now for your financial projections. The old rule of “no hockey sticks” is still relevant. And year-over-year growth is follows the laws of operational physics. I’ve never seen a $10B company double [outside of acquisition], but I have seen a company quintuple its revenues in the early years. Whilst there is no pro forma for revenue growth, I like to apply an operational realistic growth curve to the first five years of financial projections. If year-1 is N, then
Year-2 over Year-1 can be 500%, giving a projection of 5N
Year-3 over Year-2 can be 300%, giving a projection of 15N
Year-4 over Year-3 can be 200%, giving a projection of 30N
Year-5 over Year-4 can be 180%, giving a projection of 54N
Year-1 MUST be a bottoms up calculation, showing that you know the operational reality of the sales channel for your product, and the channel MUST be scalable. Then just make sure that 54N is between 5% and 15% of your addressable/serviceable market!
Just a truism on business plan financial projections.
Revenue NEVER comes as fast as you think.
Cost are ALWAYS greater than you planned.
I expect that, its not a negative the first time, possibly even the second time … stuff happens, but lets hope the error is on the side of planning, verses execution.
And that brings me back to the final question … “Is this the team that can deliver”. At the end of the day, we invest in PEOPLE. There are LOTS of great ideas, big markets and hot products, but the road to financial nirvana is paved with teams of people that just couldn’t deliver.
I rate the management team as:
A … past champions (serial entrepreneurs), they’ve been up the hill before and just need a sounding board
C … first time in the game, need adult supervision
think Bosack & Lerner and Morgridge [Cisco]
Case and Kimsey [AOL]
Andreessen and Clark [Netscape]
Page & Brin and Schmidt [Google]
B… played in a few games, but never scored
In all cases, with the right VC, you get the operational experience you need.
And that is the first 1% of what it takes to get a company funded and make a bucket load of money.
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…
We have received a huge amount of material & moral support so far helping to get the GreenHouse of the ground and I can’t begin to say how thankfull I am for all the support.
However there are always remain certain things that only money can buy.
Because of this the need has arisen to raise some cash support. Some of you have already offered this but in order to facilitate these offers of support we now offer a facility for you to support the GreenHouse directly by making a cash donation.
All you need to do is click on the button below and follow the online process. Your support is greatly appreciated and will help to support Limerick people to start their own business.
Remember, your support will go towards the expenses of fitting out and opening the greenhouse incubator. Now that we have secured office space we hope to open in June. Our plan is to launch the first incubation cycle shortly after the opening date which means that the first batch of start-ups will “graduate” from the Greenhouse in December this year.
The GreenHouse hasn’t even opened it’s doors and we’ve already organised our first event.
There will be a: “Blogging & social media for business” seminar in the Absolute Hotel, Limerick on June 13th.
Full details here.
As a medium to promote start-ups and an entrepreneurial culture I have decided that the GreenHouse needs it’s own radio-station. We will therefore start doing live Internet based broadcasts. The idea is to do this once a week initially. The broadcast will be streamed live via the website and will also be made available via podcast.
For this I am looking for start-up companies who are interested in getting 30 minutes to talk about their product, service or company.
Business heavyweights get behind The Greenhouse Limerick incubator.
The Limerick Greenhouse start-up incubator celebrates as business luminaries join the advisory board. The Greenhouse Incubator was developed in Limerick by internet entrepreneur Evert Bopp, in January of 2009, in response to a need for an incubator with a different, more businesslike approach.
“We are delighted to add the three new advisors to the board of Greenhouse Limerick,” said Bopp on the announcement.
“The three new advisors are Pat Phelan, the founder and CEO of Cubic Telecom, Kevin Thompstone, former CEO of Shannon Development, who spent 13 years at the organisation before entering the private sector as a consultant and Richard O ‘ Donnell, co-founder of Software Architects International & Redeo.com,” Bopp announced today April 21st.
“The vast expertise of these three business luminaries will be a great advantage to start-up companies using the Greenhouse Incubator in order to grow and expand their businesses. The experience of the three advisors includes working at SME, mid-size and large companies in a whole gambit of arenas. They bring with them a thorough knowledge of both the private and public sector” added Bopp.
Media and business interest in the Greenhouse Limerick incubator continues to grow as the organisation starts to work in the Limerick area. Evert Bopp, Greenhouse Limerick founder has been in demand across the country to try and install similar incubators in other recession hit towns and cities across Ireland.
“We started because a lot of the existing enterprise incubators were either state run or owned by Institutes of Technology. These academic or bureaucratic environments are by their nature not conducive for creativity, entrepreneurship and decisiveness,” Bopp added.
“Greenhouse Limerick is completely different. It is independently funded, which allows for more flexibility. Irish start-ups now have to go through an application process during which they are judged on their business idea & management team in order to determine their chances of success. If the board of management decides that the start-up has a more than average chance of success they will be offered a place in a 6-month incubation cycle. During this incubation cycle the start-up will not only receive office space and facilities, they will also be able to avail of a wide range of in-house professional services (legal, accounting, mentoring etc.). We will foot the bill on their developments costs. In exchange we take a small equity stake in each start-up.” added Bopp.
The Greenhouse incubator in Limerick will offer top of the range office facilities (fully furnished offices), excellent IT services & support, meeting room(s), canteen facilities (real coffee!), web hosting & development services, 24-hour access, postage & courier pick-up and delivery, central reception services and more.
At the moment the Greenhouse is looking for key sponsors and investors to provide those services that are required to fit out the facilities. There are lucrative benefits available to those sponsor companies.
Please do not hesitate to get in touch if you are interested in sponsoring, investing or applying for a place at the Greenhouse Incubator in Limerick.
Contact: if you are interested in finding out more or if you would like to become involved in the GreenHouse incubator please contact Mr. Evert Bopp on +353 (0)86 8645099 or by email on info@greenhouselimerick.com
For media enquiries or interviews please contact Michelle Daly, pr@greenhouselimerick.com +353 (0)86 8675210Board of advisors.
The GreenHouse has received a lot of questions asking when we will open our doors and when (and how) start-ups can apply for a place on our program.
While everything is still in a very fluid state it looks like we will be opening our doors in 2-3 months. There is still a lot to do, the offices are still bare concrete spaces and we can do with any help we can get on fitting them out and furnishing them.
We also expect to open up for applications for the first round of start-ups within the next two weeks. There will be a dedicated online facility outlining the process and allowing you to submit your application online.
A new start-up incubator will be opened as a direct reaction to the recently announced redundancies in the Limerick region. Evert Bopp, a member of the Limerick Open Coffee Club (a business networking group), has announced that he is opening up a new incubator that will put function before form.
“It has become apparent to me that there is an inherent conflict in expecting a public sector body to stimulate private sector enterprise. The involvement of a public sector body in a private enterprise (a start-up in this case) brings along a large amount of bureaucracy and red tape. It’s simply a fact of life and not a negative reflection on the public sector. However the last thing a start-up entrepreneur needs is to become entangled in paperwork & red tape and any other activity that does not directly lead to product/service development or revenue.” says Bopp
He follows by outlining his idea:
“Start-ups would have the option to pay rent like a “normal” tenant or if they are short on cash to agree to pay equity in lieu of rent for the first 12 months.
Tenants will have to go through a “vetting” process similar to Seedcamp, Dragons Den etc. They will be vetted on the strength of their business plan and management team NOT on how well they can fill out forms.
The primary goal of the incubator would be to let the entrepreneurs and start-ups concentrate on developing their business by removing all “non-essential” activities from their workload and offering them not only work space but also advice, guidance and hands-on participation if needed. We will not only tell you how to do it, we will also show you how to do it.
The center will have ALL facilities necessary. Not just a shared reception and meeting room but also good canteen facilities (real coffee), in-house postal service, courier drop-off & collection, storage facilities etc.
IT services will be second to none.
There will be in-house legal, accounting and investment services.
There will be short term leases and hot-desking facilities available.
Sufficient (free) parking for you, your employees and your customers.
24-hour access.
Daily or weekly “Open Coffee Club” type meetings in a shared room in the center. This is an essential part of the center. You meet, you discuss and you share. No hiding away in your office and not talking to anyone.
The concept rotates around a management company that will operate the incubator. All the investors in the centre will be shareholders in this company and will receive a return from it in this way. However this is not just a commercial operation. The aim is to stimulate entrepreneurship and initiative in the Limerick region and thereby improving the local economy and community. Everyone will benefit from this initiative by the creation of employment and revenue. It is time that people no longer look at the public sector for help. The real strength lies in everyone doing their bit towards the good of everybody!
So how can you help? While Bopp has already received a generous offer for free office space in the center of Limerick city as well as a a range of business services there is a need for a lot more. Below is a list of items that the incubator is still looking for. As it is a voluntary initiative the incubator is looking for sponsorship or donations. In return the sponsors will receive a mention in all publicity and press releases as well as a prominent mention on the incubators website.
Office fit-out: plasterwork & painting, raised floors etc.
Office furniture & equipment(desks, chairs, coffee machine(s), whiteboards etc.
Lighting fixtures
Telecoms & IT equipment and services
Legal services (in-house)
Accountancy services (in-house)
Investment (private, institutional)
If you can offer support or want to find out more details you can contact Evert Bopp via email on: contactevert@gmail.com or via telephone on: 086/8645099.
