This event was held at the BCS offices in London. Overall it was a well attended, positive meeting. There is money out there but you need to get your ducks in a row to be able to get it! Trend in this climate has been to later stage investments in the lifecycle of the startup.
Some of this is obvious but it does not hurt to remind yourself. These people have real world experience so its worth taking note if you are hitting the same obstacles or can empathise.
Usual routes to money are family and friends, Angels and VC’s. Interesting one that I had not heard of before was approaching potential customers for funding. If they are interested in the product/service then they may give you money to develop more towards their needs or take a slice of the action. Governments support businesses with cash in the form of grants when the business relates to particular areas of interest like research. Most companies are over optimistic when giving sales forecasts. Forecast needs to be challenging but realistic. Know your numbers! The best time to raise money is when you do not need it.
VC’s like customers, profitability, user base, something tangible that they can see, demo’s are important when the product is not fully developed. The (VC’s) also need help to determine what the new areas of investment are.
Its all about the network. Are you talking to the right people in the right area. Don’t take on a market that you don’t understand or someone in the company does not understand because you will fail!
A member of the audience asked what they thought VC’s were investing in and key areas going forward, these included:
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- Travel – like TripIt, and mobile
- Social networking for under 16’s
- Social healthcare
- eCommerce in emerging markets
- mCommerce
- Broadband and set top boxes (future services associated with them)
The view from the panel was that this really is the year that mobile is growing up and becoming a major opportunity (but they acknowledged that people have been saying that since 2001!). See lots of applications that do ‘stuff’ but can these scale to a user base in the millions? (<- isn’t this one of the reasons why a startup would ask for money?)
Web companies perceive that the return from mobile is low but that view is changing. What developers need to consider is that mobile and mobile applications are used away from your home computer and should not be instead of. Replication of the PC experience does not transcend the leap to mobile (yet or ever?). Mobile needs to be considered as another distribution channel.
Overall I enjoyed this event and I learnt something (I think). Will definitely consider going to another Mashup event.
You can find the full writeup from Mashup Investment Opportunities in Digital.
