November 26th, 2011
Simon
I am a serial investor. To date, via the fund I manage, we have invested in 11 different Internet businesses. These investments range from a hundred $100k right through to $2m. We have been lucky, the investment of $6m has grown to be worth north of $20m in just over 2 years.
We invest in Internet businesses that are generally in the classifieds or editorial segments, are in their early stages (but not at pure start up phase) and are in emerging countries.
Some when we invest, what do we look for?
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November 25th, 2011
Simon
Many of the companies I invest in have the stated goal (or internally hoped for goal) of floating – that is IPO’ing or listing on a stock exchange. Now in theory this makes sense as it provides a liquidity event for all shareholders and a market for the company’s shares. However, having been the CEO, Chairman and a Board Member of a number of small listed companies, the reality of being listed isn’t always as good as hoped for.
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November 24th, 2011
Simon
I thought I would follow up from the article yesterday on the optimal board structure with an article today on how I think a good board should operate. To often I see a board that is either ineffective or, at worst, dysfunctional. In fact one of the Board’s I serve upon now is highly dysfunctional and more time is spent on internal “BS” than in driving the business forward.
So what does a highly functional Board look like?
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For those unaware I invest in a number of different companies and one of the consistent topics all businesses have is “what is the best board structure”? Now often the Board is made up of shareholders or the founders. Now in the very early days of the business this is critical however as the business grows, you need to expand the Board structure to get the right skill sets involved and to challenge some of the mind sets of the shareholders. This posting looks at what i think are the right ways to look at Board structure.
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It is believed that Leonardo Da Vinci coined the phase “simplicity is the ultimate sophistication”. At its core, it is challenging all of us to keep it simple and for many this is a real challenge.
How often do you sit through a meeting in which you walk out the other end going “what was that all about”? It happens all the time when looking at new businesses. I often ask the person doing the pitch to explain the business in 30 sec – a minute maximum. If they cant, how will they ever explain it to a customer!
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November 21st, 2011
Simon
As mentioned yesterday, i had an interesting discussion with a property portal from Russia that was looking to raise money. As part of the discussion they sent through a P&L with their projections for the next 12 months. This was all to help me understand how they expected the business to grow and what their capital requirements would likely be. The problem with this was they were cutting it way to close and in my expectation, they would run out of capital in the middle of the year.
Therefore, the question that all investors ask is, do you have enough capital to either reach profitability or to deliver enough results that demonstrate great progress and will ensure more capital can be raised?
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On Friday I had the chance to talk to a group about their property portal in the Russian market. They were looking to raise additional funding to drive growth and wanted to know if i would invest. Naturally we spent chunk of time looking at the P&L projections for the business.
The first thing that jumped out was the enormous growth they were projecting. Revenues going from 1.6m euro in year 1 to 58m euro in year 4. Suffice to say i nearly feel off my seat, especially since their current revenues are ZERO! The next step was to look at the drivers of revenue and to understand even if these numbers were possible.
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Have you ever had the situation where a customer rings up with a request and before you know what has happened, you have said “yes, we can do that”? You then put down the phone, scratch your head and then realise that you just may have a problem. This is an all too familiar occurrence for many business people.
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