What’s The Strategic Exit Value Of Your Company?
Why Do Big Companies Buy Small Companies?
Big companies buy small companies because small companies are simply better at innovation than larger companies. Employees of a big company do not want to be seen as trying out a new idea and then abandoning the venture midstream if it does not work. The career of managers wishing to move up the corporate ladder do not want to have failures in their history. Now the world of innovations is such where small companies develop new products and services, gather early customers at high cost, and then sell the business to a large company. These large companies can use their existing distribution and/or manufacturing organization to turn the company bought into a large profitable business.
Employees of a big company do not want to be seen as trying out something and then abandoning the ventures midstream if they are not working out as expected.
Should Your Company Be Valued Based On Financials Or Strategic Value?
Many entrepreneurs view the… Continue reading
Californication of a European Startup
Have you ever wondered what would be the right time to transfer your startup to Silicon Valley? For our mobile startup (originally based in Finland) we quite early realized that it would be right away in the beginning. As the biggest interesting market, most potential (and knowledgeable) investors as well as the eventual exit would be in the US, it was an easy decision to make. The journey is still in the beginning, but I thought I’ll share some of the lessons learned already now.
If you already have a company which has undergone its first seed investment round, you may be too late already. Even though within Europe transfering a company from one country to another can be relatively easy (and tax-free) with share swap, it is not possible between EU and USA. This means the transaction would technically be a “sale”, leading among other things to capital gain… Continue reading
Did Nokia kill the Finnish Startup Ecosystem?
Yesterday 11/2/11 was the day of the big news. Nokia ecosystem in Finland is going to be shut down.
Hey wait, what ecosystem? Well, the one around Nokia and Symbian, based on Nokia buying services from subcontracting companies. It could be defined as a system where one big giant defines the game and the others follow. Too bad if that one horse dies… like happened yesterday.
It of course could have been otherwise. People always keep asking what would be the next Nokia for Finland. It’s a wrong question, based on very old Finnish understanding of military-like chain-of-command. Riding on a one-horse-only strategy is bound to fail.
One of the big problems of the last decade was betting on one horse only. Well, it’s not of course fault of Nokia if everybody wanted to work there instead of being entrepreneur. Working for Nokia was cool, being an entrepreneur was… Continue reading
There’s An App For That – Five Predictions For 2011
As the year 2010 is approaching its inevitable end, it’s time to make some predictions for next year.
Here are my takes for the predictions in the mobile arena:
Prediction #1: Apps Come From The Cloud
It really doesn’t make any sense the Apps you use to stay disconnected from rest of your digital life. What will happen is that the Apps you use actually remain in the cloud, and you’ll be accessing them with whatever device you have (or with all of them). It also means that there is no need for synchronization, and anything you do is always up-to-date. It’s much more than just using HTML5 for a simple App. This means the smart Apps, independent whether they are based on HTML5, native (or both) will be built such a way that they take the advantages available.
Prediction #2: Mobile App War Moves To The Next Level
There’s… Continue reading
Introducing Equity Crowdfunding
Venture Bonsai is now open! It still requires an invitation, but it’s easy to get one. Just make sure you include your LinkedIn profile link and briefly explain whether you’re an entrepreneur with a start-up looking for funding next year or an investor, willing to invest 5000 euros to one or more companies. Brief introduction is here.
This first release of Venture Bonsai already enables two very important things:
- It has an end-to-end process (following the financing regulation) for an entrepreneur run a funding round
- It has an end-to-end process for the private investors invest money in the companies
Crowdfunding for entrepreneurs
You can learn more about how to prepare for a funding round (as an entrepreneur). The whole process (preparing and running the round) has been implemented from a view point of an entrepreneur (as we are entrepreneurs ourselves and know what we’re talking about). One of the… Continue reading
The Future of Mobiles: A Remote Control For Your Life
It’s year 2010.
Ten years ago many of us who were already part of the mobile business, had a vision. It was about future mobile services that would revolutionize the world. There were so many things that gave people ideas what all could be done. And yet the reality was in a way far away from the current state of affairs.
In reality the phones were clumsy, networks were slow the and apps were not there.
Then the future happened.
Many of those things envisioned by mobile software houses and giants-of-the-age such as Nokia, were suddenly here. That was the iPhone phenomenon that was about to start.
But you know what, there will be new future.
And as much as I Like Apple, the future may be also something else than Apple 11 (remember Apple II…) as well. You know, Steve won’t be here forever.
So what would the future… Continue reading
The Statue of Liberty was Crowdfunded
So you knew crowdfunding is not actually a new idea. It was, after all, used already for years in the music and movie industry.
But did you know that it dates way beyond that. Even The Statue of Liberty in New York was in a way “crowdfunded”. The statue was a gift to the United States from the people of France. They agreed that the French finance the statue and the Americans provide the pedestal and the site.
But the Americans ran out of money.
Here’s the story…
The price tag for building the pedestal and erecting the Statue topped $300,000. The American Committee raised half this sum between 1877 and 1884. Then a crisis occurred: the Statue was due to arrive, funds had run out, and work on the pedestal stopped. In March 1885, publisher Joseph Pulitzer and his newspaper, The World, came to the rescue with a highly successful… Continue reading
Entrepreneurship vs. Sailing
It’s that time of the year, the sailing season is starting. Well, at least here in Finland where it’s between May and September…
Some time ago, I thought about comparing entrepreneurship to sailing. Let me explain why.
First of all, as an entrepreneur you are in control of your boat. You’re the captain. You have the power and the responsibility.
There are many different sizes of boats, as there are many different sizes of companies. The boat size affects the crew requirements, you can sail 35 feet boat with your wife but for that 65 feet boat you need quite a bit of crew.
When your company grows, the crew requirements change. With a bigger boat you may sail faster, and reach destinations further away. You may want to practice with a smaller boat first.
Unless you already have a boat, you need to buy one. Like as an entrepreneur,… Continue reading
Silicon Valley Early-Stage VC & Angel Investor Event
Today I had an opportunity to participate a pitching event arranged by FundingPost.com, in Palo Alto, California. The event consisted of group of entrepreneurs pitching for the audience and then the panel of Venture Capitalists giving comments on the state of the industry and the presentations as well.
It was stated that Friends&Family investment rounds can typically be up to half a million dollars (unless you have really rich friends and family) and VC investments typically start at 2 million. So there is a great gap in between, and that has increased the deal flow for angel investors. At the same time “time to liquidity” ie. time from investment to exit has doubled. Today, investors may have to be prepared to stick with the company even more than 10 years.
As always, some companies are more “hot” than others. That influences the interest to invest. In the best position is… Continue reading
The Art of Productization – Part 2
Launching with ‘good enough’ productization
Last week’s blog series ‘art of productization’ continues with more insights from Kati Riikonen, our guest writer in this week’s blog.
Yes, it’s true, ’good enough’ is not measured in the amount of features or the length of specification. For productization, the key customer promise is a top priority it seldom requires all possible features to be showcased.
Often there is no need, nor it’s feasible, to do full productization journey before going out to market making mode.
The level of necessary productization is depending on many variables. Most importantly one should crystallize concrete goals for the post-launch actions. There are also big differences on targeted audience is B2B, B2C or C2C. In reality, the limiting factors for productization often tend to be time and money.
The following provides examples of productization check points for various types of launches.
Idea launch
- Examples of next… Continue reading