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Venture capital

  • Six questions that rejected Venture Capital seekers could not answer

    Raising funding for an early-stage venture is always difficult. There is no bottled recipe for success, but even if you have a great concept that is scalable combined with a passionate team that can execute the growth strategy, you still need to communicate this in a multifaceted investor’s pitch. Most entrepreneurs can give a fair account of the top line business strategic growth path, dive into the complexities of the product or service offering, put together a good industry analysis, name a handful of possible clients and present enticing year three to five financial projections, but this will not necessarily...

  • How to do market and competitor research that wins investment

    Regardless of whether it’s an angel investor or venture capitalist you are approaching, every funder will narrow things down to one major question: “Who is your target market and who are you competing against?” This is the warning of Alex Fraser, who drives home the fact that preparing a market and competitor analysis is a vital part of any business plan or pitch deck. Fraser is based at at InvenFin, an early stage capital company. She says she often receives business plans with no competitor analysis, leading her to request one from entrepreneurs with the need for more information. It’s...

  • South African venture capital exit to US technology giant

    Graceful exits are often unreported, but one South African venture capital company has done it smoothly with seemingly positive effects for the local emerging markets environment in which it operates. PoweredbyVC, which manages the South African venture capital portfolio of HBD, has concluded the exit of its CSense Systems (Pty) Ltd to US based GE Intelligent Platforms. CSense has been behind rapid process troubleshooting and process improvement software solutions that aim to enhance the performance of industrial processes by indentifying problems before they occur. The latest deal sees GE Intelligent Platforms having now acquired the technology assets of CSense,...

  • Yuri Milner: Making billions in the new bubble

    Craig Mellow, at The Deal Magazine has a fascinating profile of Yuri Milner, the Russian investment banker who runs Digital Sky Technologies(DST), a multi-billion dollar fund. Milner has garnered tremendous amounts of publicity for his investments in Facebook, Groupon and other high flying US companies. Late last year, DST partner Alexander Tamas, defended Groupon’s rejection of Google’s acquisition bid, citing that Groupon could become one of the most important companies on the internet. Tamas also said that DST looks for companies with a valuation of at least US$1-billion and it only invests in internet companies that have the potential to become the...

  • A VC boom in new media?

    Investment banker Kevin Covert is increasing staff at his company, Covert & Co, up to prepare for a mergers and acquisitions (M&A) bonanza in Silicon Valley. Move over social networking, move over ecommerce -- he reckons that the conditions are great for M&A -- "especially in new media". If the recent, high-profile Techcrunch and Huffington Post deals are anything to go by, he may be right. Although these are only two high profile...

  • Umbono: Google launches new African tech incubator

    Google has chosen Cape Town as a pilot for a new technology incubator called Umbono which aims to bring together seed capital, Google mentorship, angel investors, local tech stars, entrepreneurs and business leaders. If successful in Cape Town, Google may take the model to other parts of the globe. Google says it chose Cape Town because the city is in "the process of positioning itself as a hub for innovation and technology". The search engine expects that successful funders will move to Cape Town and work "onsite" to take advantage of the opportunity. The search monolith says the incubator is "in...

  • 8 venture capital sources for your startup

    Raising funds in emerging markets may not be a walk in the park, but the process has become easier. Though some have complained the current economic environment is not favourable to startups, the current mindset is favourable to good ideas - no matter where they are. For startups with global vision based in emerging markets, here are eight sources of capital to consider. Venture Partners The US-based Venture Partners (USVP) has helped build great companies in the last three decades. Since its inception in 1981, USVP has invested more than US$2.7-billion in about 450 companies. After the investment the company’s...

  • Bubbling in the cauldron: Is Twitter a sign?

    "Double, double toil and trouble; Fire burn, and cauldron bubble," chanted the witches of Shakespeare's Macbeth, cooking up trouble. Similarly, are the VCs of Silicon Valley cooking up trouble by helping to fuel a new bubble? Valuations for venture backed companies are certainly higher than they've been in a long time but are we in a bubble? The answer seems to be no. At least, not yet. I spoke with veteran VC Bill Davidow: "When I look at companies such as Facebook, Zynga etc, I see high valuations but at least these companies have business models with proven revenues. Whether they...

  • How to safeguard your intellectual property

    Intellectual Property (IP) is an intangible asset to an entrepreneur. When it comes to assuring investors they are placing their cash in an exclusive product or service that is legally protected, securing your IP is a must. Alex Fraser of Invenfin, an early-stage venture capital company says there are some things you need to know before you take your idea to investors. According to Fraser, not having proper IP ownership is by far the largest problem Invenfin sees when dealing with the thousands of entrepreneurs that pass through its doors. Fraser, who lectures on entrepreneurship and venture capital to students,...

  • Exclusive: Major int’l VC stealthily buying into SA eCommerce sites

    A major US$3.5-billion New York-based hedge fund headed by investor Lee Fixel has been quietly buying up some major eCommerce properties in South Africa over the past five years. The New York-based Tiger Global Management LLC, which recently invested US$20-million in business social network LinkedIn and US$80-million in Facebook, now holds a stake in the country’s largest online auctions site, Bid or Buy. Add to that a growing portfolio that includes key...

  • Where in the world is CrowdFund?

    Almost a year ago, or eleven months ago to be precise, a brilliant crowd-based angel investment project was introduced to the South African tech startup stage, called Crowdfund. The idea, started by well-known web strategist Eve Dmochowska, included big plans for crowdsourcing funds for worthy local startups. The idea behind it all was to provide the capital, know-how and networking capability required by young entrepreneurs to launch prototypes of their ideas, in exchange for equity -- a dream come true for any entrepreneur. Dmochowska’s project shot off the starting blocks like Usain Bolt at the Olympics. By the end...

  • Could Chinese venture capital back African innovation?

    Chinese venture capitalists have clearly stated their desire to see the success of the western venture capital process replicated in their country. State and private firms have begun to take initiatives and institute policy reforms in recent years in order to meet that target. The Hualu Group, one of the biggest Chinese state-owned enterprises which focuses on the audio and video industry, has been quietly forging ahead in the tech sector. In 2010...

  • How to lose a VC funder in one sentence

    Raising funding for a new venture is always difficult. Entrepreneurs going down this road will have to shrug off many pessimists and naysayers along the way.... but sometimes they are their own worst enemies. As a venture capitalist you need to have a great sense of humour as you wade through your dealflow. We receive written requests for backing all the time, and we've kept some of the gems and put together a list of actual funding requests received by PoweredbyVC, a leading South African Venture Capital company, between July and December 2010. Because of confidentiality, some info is...

  • Facebook IPO: ‘Suddenly it feels like 1999′

    The high valuation of Facebook on secondary share markets might be out of line with its revenues but it does show one thing: A large investor appetite for investing in leading Silicon Valley companies. The fact that the investors are making large bets without having access to the underlying financial information is similar to the wild days of the dotcom boom, when companies were able to IPO on the basis of very little...

  • Insights from a VC: Social networks overdone, but storage is hot

    I spoke with Bob Ackerman, managing director of US-based Allegis Capital and a veteran Silicon Valley venture capitalist about some of the trends and issues in VC. Here are some of his insights on the key issues: - Cloud will be big this year and a big buzzword and that worries me because there will likely be too many companies funded that shouldn't be. - Storage is another hot area simply because of the massive amount of data being created daily and the need to make it available online and searchable. - Social networks are overdone and over invested. There have been too...