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Venture capital

  • Why you should network when raising funds for your tech venture

    The value of attending networking events is often hard to quantify, as it takes valuable time, but it is worth the effort especially if you are considering starting your own business; building an innovative product or trying to raise funding. Funders invest in companies and founders they know Although we receive many proposals through our website at the VC firm I’m part of, all of the deals that we have concluded (i.e. invested in) to date, have been sourced through our networks. An essential part of our business is the relationships that we’ve been building and nurturing with various suppliers and...

  • AngelHub: Investors come together to foster startup growth

    You may believe tech creates jobs, you may believe it destroys jobs. Whatever the case, we know that in the tech world we are seeing entrepreneurial activity like never before. It’s not surprising that there is so much written about venture capital and startups in the tech world, and that there are so many incubators popping up Enter AngelHub. Launched in September of last year, AngelHub connects early stage investors with capital seekers. The funds,...

  • How do VCs get their money? They pitch too

    Every two or three years, VC’s gear up to raise money for their next fund. They create a pitch deck, come up with a list of investors actively investing in venture capital funds, make sure they get introductions to them from trusted sources — or go direct if they already have the relationship, and pitch the investment strategy and how they plan to provide better returns than the industry average. Sound familiar? For established funds with a solid track record (an established team with a specific investment style and realised returns on previous investments) it can be as easy as...

  • VC funding is not a blank cheque with no strings attached

    Receiving venture capital (VC) funding is a significant accomplishment for any entrepreneur as it takes months of hard work and negotiation. Some entrepreneurs believe that once they have secured a funding commitment from an investor, they will have carte blanche with the cash and can report back to their investors as and when it suits them. Nothing could be further from reality. A VC will not write you a cheque for the full amount allowing you to spend it as you please. An early-stage funder will typically fund your business in stages. This means is that you will get funding for...

  • Steve Jobs would never succeed in today’s Silicon Valley

    I recently watched a documentary on Steve Jobs called “One Last Thing“. It was well done, mixing a fair bit of the good, the bad, and the ugly about the life of the man. There was also a lot of praise for the “marketing genius” of Steve Jobs. Then it struck me: If Steve Jobs were starting out today in Silicon Valley, he would have trouble getting funding because he’s a “marketeer” — not an engineer. Venture capitalists(VC) generally won’t fund startups without a tech lead. For example, Mark Suster, a popular VC blogger, writes on his blog “Both Sides of the...

  • Pitching perfection to investors: A 10-step guide

    Enthusiastic entrepreneurs looking to raise funding must realise that a great business case alone is definitely not enough to guarantee a favorable outcome. Not preparing adequately for a presentation to an angel investor or a venture capital fund is a sure-fire way of guaranteeing failure. The power of a strong, well polished pitch to funders cannot be underestimated and it warrants considerable time and effort to make sure that you hit the mark first off. Here are some tips on what funders might expect from entrepreneurs hoping to make a good impression. 1. Perfect your micro pitch This is your 90-second introduction,...

  • What happens after Venture Capital funding is secured?

    Many Venture Capital (VC) articles, blogs and the like focus on how to secure VC. But not many disclose that the real work starts post-investment. While the investment decision is critical to portfolio performance, VCs spend more than 60% of their time on post-investment activities in order to grow investments for lucrative exits. These activities can be separated into monitoring (protecting the interests of the investor) and value-adding activities (strategic influence, mentorship and access to networks). It should be noted that because of the many different VC management styles, VC involvement post-investment vary greatly — ranging from informal interaction to...

  • Down and out in Silicon Valley: The dark side of easy VC access

    The Valley is the tech centre of the Universe and you’re unlucky if you’re not based there. That’s what popular culture will have you believe. The image of Mark Zuckerberg waltzing into Case Equity in his night gown and slippers and telling Mitchell Manningham that Sean Parker says F You is what pop culture will have you believe a tech founder on his way to business success must look like. There are many businesses like oil drilling and bio-tech that need a large initial investment or they simply aren’t feasible. Software businesses are not one of them. A small group...

  • Funding your business: 8 ways to win over VCs

    In the world of venture capital (VC), ideas are plentiful but fundable businesses are hard to find. Despite the perception, VCs do not fund ideas alone, no matter how solid passionate entrepreneurs believe they are. To negate risk, VCs evaluate proposals based on several characteristics, often in-line with their specific funding mandate, to bridge the huge divide between a cool idea and a fundable business. Differentiated VC funds are inundated with requests for capital to get start-up businesses to the next critical level but very few offer significantly differentiated product or service in the eyes of their target market. The tech...

  • Why emerging markets need startup accelerators to produce gold

    While I was living in Silicon Valley for a couple of months earlier this year, I had the opportunity to see how a number of the startup accelerators over there function, and also to speak to a number of tech entrepreneurs that passed through their programmes. The formal definition of an accelerator is a “programme designed to assist startup businesses with financial and/or operational resources that will increase their chance of growth and success”. After seeing them for myself, my definition is slightly different. I would suggest that: “Accelerators are schools for entrepreneurs, primarily tech entrepreneurs, where you can do your...

  • Gone in 30 seconds: How Venture Capitalists screen your business plan

    “The average time that a Venture Capitalist spends analysing a business plan is 22 seconds” – Speaker at the 26th Venture Capital Institute, Atlanta, 2000. Since this realisation more than 10 years ago I’ve often wondered whether it was entirely fair towards entrepreneurs who spend significant time and resources to develop a comprehensive business plan. But top tier venture capitalists (VC’s) deal with hundreds of business plans a year, and a decision on whether to take the proposal to the next level or to reject it is often made in less than 30 seconds. This is how: Consider the ‘Flight-Path’ of...

  • Here comes the flood: VC firms funding corporate media push into social media

    Somewhat lost in the news because of Google’s acquisition of Motorola, Buddy Media, a New York startup raised US$54-million at a US$500-million valuation. Buddy Media helps corporations set up and run their presence on a wide range of social networks. From Buddy Media: We are in the midst of a massive shift online from a search and intent-based world to a social, people-based world. The last three years were about the consumer side of social platforms, as we watched Facebook, Zynga and Twitter grow exponentially. The next three years will be all about the enterprise side of social, and how companies engage and...

  • 5 Common mistakes startups make when applying for funding

    There is a perception among entrepreneurs that a revolutionary idea is enough to secure the venture capital needed to kick-start their businesses. This is simply not true. Here are five of the most common mistakes made by entrepreneurs when applying for VC funding. 1. No WOW! Factor The first rule in the VC game is that your business proposition must have an exceptional differentiating factor. You need to know what your sustainable...

  • Markets fall: What will happen to Silicon Valley recovery?

    Turmoil in global financial markets and economies is never good for Silicon Valley despite the fact that the regional economy has its own boom and bust cycles that operate on a different timetable. Currently, Silicon Valley has been booming, recapturing the trend that was in place in the second half of 2008, before the financial meltdown, of growing VC investments and jobs. It has to be asked though, whether like that recovery in 2008 which ran smack into an economic crisis, this recovery will again be nipped in the bud. Maybe. Profits at the large Silicon Valley companies such as Google...

  • Forget the bubble, the rise in VC investment is unsustainable

    The latest MoneyTree Report from PricewaterhouseCoopers LLP (PwC) and the US-based National Venture Capital Association (NVCA), based on data provided by Thomson Reuters: Q2 2011 VC investments jump 19% to $7.5 billion in 966 deals. Year ago: $6.3 billion in 814 deals Latest quarter is highest total since Q2 2008. These high levels are not sustainable says Mark Heesen, president of the NVCA: “For the past three years, the venture capital industry has been...