My Daughter, Tanya's Year End Formal
Wednesday, November 21, 2007
Sunday, November 18, 2007
Kanwal Rekhi - the Sage of Silicon Valley
Kanwal Rekhi has been called 'the dominant investor & a sage of Silicon Valley' by Forbes magazine and is a renowned leader and veteran of the IT industry. In his phenomenal rags to riches life, Mr.Rekhi invented and built hi-tech products and solutions since the mid 80's, built & sold companies as a serial entrepreneur, actively investing as VC/Investor & advising many Corporations and Presidents.
He holds a Ph.D in Business & Engineering from Michigan Tech University, was the CTO and Director on the Board of Novell (since 1989), then founded, invested and advised several technology companies in the valley receiving numerous awards. A humble man, he continues to mentor entrepreneurs through TiE worldwide (www.tie.org).
Over the last 20 years in the Silicon Valley, he has built solid experiences and wisdom to share, on what works and what does not.
BSI and TIE hosted Kanwal at the Grace hotel on 12 November 2007 where he enthralled 100 + BSI and TIE Members with his thoughts of what is hot in the Valley.
Kanwal’s direct, forthright manner, opinions and advice provided us with the most up to date information and clarity on “what’s hot”, how to build & extend business beyond Australia and create super wealth!
Tuesday, November 06, 2007
Release of open social
Google Press Center, November 1, 2007:
Google, Inc. today announced the release of OpenSocial -- a set of common APIs for building social applications across the web -- for developers of social applications and for websites that want to add social features. OpenSocial will unleash more powerful and pervasive social capabilities for the web, empowering developers to build far-reaching applications that users can enjoy regardless of the websites, web applications, or social networks they use. The release of OpenSocial marks the first time that multiple social networks have been made accessible under a common API to make development and distribution easier and more efficient for developers.
(http://www.google.com/intl/en/press/pressrel/opensocial.html)
Google, Inc. today announced the release of OpenSocial -- a set of common APIs for building social applications across the web -- for developers of social applications and for websites that want to add social features. OpenSocial will unleash more powerful and pervasive social capabilities for the web, empowering developers to build far-reaching applications that users can enjoy regardless of the websites, web applications, or social networks they use. The release of OpenSocial marks the first time that multiple social networks have been made accessible under a common API to make development and distribution easier and more efficient for developers.
(http://www.google.com/intl/en/press/pressrel/opensocial.html)
Friday, October 12, 2007
SILICON Savvy
BRW’s Tony Blackie wrote an article on BSI’s and AlwaysOn event in Silicon Valley. Article in Emerging Companies on 11 October 2007
Excerpts of Article:-
“Companies with Innovative Technology need to pitch their ideas professionally at the source of most venture capital… the United States.”
Christine Tutone fom Aditlast said that the event has become one of the main events for aspiring and global entrepreneurs who want to showcase their inventions, products and services to an audience of more than a thousand technology , media and advertising chief executives, media buyers, venture capital and private equity investors, and the technology media.
Dean Mcevoy, founder of Booking Angel, which provides software to give instant confirmation of online bookings and reservations, said that the event was a vital part in the evolution of Booking Angel, and that all Web 2.0 companies should think Global from the start. Knowing how to get in touch with venture capital companies and investors is the key. He admits he tried to do this on his own a few years earlier… but found it difficult without the network that BSI was able to provide.
“If you have a good idea and can’t get traction in Australia, go to the USA and there is a good chance you will get support.” Says Mcevoy
Glynx Founder, Malcolm Allen, has developed a peer to peer social network site. He said tha as the product has global applications, it was important to access global corporate markets. The tour paid dividends in that he was able to present to several hundred Silicon Valley investors and business people at a lunch organised by BSI.
Allen said that if you think you have a world beating software idea then you have to go where the world-beating software ideas are – Silicon Valley.
The US trip was organised by Business Strategies International, an early stage capital raising, venture capital and business incubator company. BSI has set up shop in San Francisco to get Australian Innovation closer to a source of capital and opportunity. The aim is to get Australian Technologies in front of the right people.
Over the years, the Always on Events have had a star studded speaker list including Google Founders Sergey Brin and Larry Page, Skype founder Niklas Zennstrom Marc Benioff of Salesforce.com, Verisign’s Stratton Sclavos and Jonathan Schwartz of Sun Microsystems.
BSI is planning to take 10 later stage Innovative Companies to the ALwaysON Summit in the First Week of December. Companies Interested in attending should contact Ivan Kaye on ikaye@bsi.com.au or David Brown on dbrown@bsi.com.au
for more information go to http://www.bsi.com.au/exports/article.asp?id=145
Excerpts of Article:-
“Companies with Innovative Technology need to pitch their ideas professionally at the source of most venture capital… the United States.”
Christine Tutone fom Aditlast said that the event has become one of the main events for aspiring and global entrepreneurs who want to showcase their inventions, products and services to an audience of more than a thousand technology , media and advertising chief executives, media buyers, venture capital and private equity investors, and the technology media.
Dean Mcevoy, founder of Booking Angel, which provides software to give instant confirmation of online bookings and reservations, said that the event was a vital part in the evolution of Booking Angel, and that all Web 2.0 companies should think Global from the start. Knowing how to get in touch with venture capital companies and investors is the key. He admits he tried to do this on his own a few years earlier… but found it difficult without the network that BSI was able to provide.
“If you have a good idea and can’t get traction in Australia, go to the USA and there is a good chance you will get support.” Says Mcevoy
Glynx Founder, Malcolm Allen, has developed a peer to peer social network site. He said tha as the product has global applications, it was important to access global corporate markets. The tour paid dividends in that he was able to present to several hundred Silicon Valley investors and business people at a lunch organised by BSI.
Allen said that if you think you have a world beating software idea then you have to go where the world-beating software ideas are – Silicon Valley.
The US trip was organised by Business Strategies International, an early stage capital raising, venture capital and business incubator company. BSI has set up shop in San Francisco to get Australian Innovation closer to a source of capital and opportunity. The aim is to get Australian Technologies in front of the right people.
Over the years, the Always on Events have had a star studded speaker list including Google Founders Sergey Brin and Larry Page, Skype founder Niklas Zennstrom Marc Benioff of Salesforce.com, Verisign’s Stratton Sclavos and Jonathan Schwartz of Sun Microsystems.
BSI is planning to take 10 later stage Innovative Companies to the ALwaysON Summit in the First Week of December. Companies Interested in attending should contact Ivan Kaye on ikaye@bsi.com.au or David Brown on dbrown@bsi.com.au
for more information go to http://www.bsi.com.au/exports/article.asp?id=145
Wednesday, September 26, 2007
Saturday, September 08, 2007
Sunday, August 05, 2007
BFO's from ALWAYSON 07
BSI was proud to lead a delegation of 8 Innovative Companies to ALWAYSON 2007 forum.
For details of Australian Companies Presenting see BSI USA Investor Forum - Summer Summit Australian Collection
Some BFO's that I took away from the conference:-
The Internet is the greatest single innovation in human history!!
Planes, Trains and Automobiles - the extension of the feet
Weapons, Tools, Appliances - the extension of the hand
Cameras and Videos - the extention of the Eyes
Film and Video - the extension of the Imagination
and The Internet - The extention of the human Mind
ALWAYSON 100 Winners have a good chance of hitting that Home Run!
photobucket
Sold for 250m to fix interactive – 39million registered users $6 per user!!
Last.fm – 15m users – Acquired by CBS $280m $30 per user
Need to align emstream with them…
Feedburner - $100m sold to google – fits –
BLINKZ – IPOd shares inc 45% on listing –video search engine $355m
TELLME Networks - $833m to microsoft …integration of voice services to their productivity software..100m people will be able to do quickcall from their apps
Speech and voice recognition
Directory assistance calls. Platform handles ½ directory assisted calls
(Dominos to get a Pizza or American Airlines etc
GrandCentral Connunications – purchased by Google
1 # that rings all their phones
Helps expand googles business of “collaborative exchange between users”
POSTINI spamfilter to google - $625m (where are you ISHerriff?)
Our Australian Delegation presented at the ALWAYSON CEO Pitches, where 50 Companies have been chosen to Pitch to 900 Delegates and 1000's of Bloggers around the world. Two of our Companies have been chosen to be a TOP 100 Award Winner - Christine Tutone's ADITLAST (Melbourne) http://www.aditlast.com.au/ and Dean Mcevoy's BOOKING ANGEL (Sydney) http://www.bookingangel.com/ . . Lucielle Outhred's DIGISLIDE (miniture projector that will be OEM'd into moile phones, PDAs and Notebooks has caused a stir at the Conference, having previously one a number of awards over the past 12 months. http://www.digislide.com.au/ One of the Most Disruptive Technologies I have come across is Malcolm Allen's and Greg's FREEDOMTEL. http://www.glynx.com/index.php
Friday, July 20, 2007
WEB 2.0 and VC
I was part of a panel at the Churchill Club on 17th July
People on the Panel
Ben Barren - a blogger and futurist/satirist extraordinaire - this guy should be on the stage.... he writes and says what people would wish they had written and said!! Setting the stage - you have to read bens blog!!
Rob Antulov of 3eep web 2.0 start up entrepeneur - ex head of strategy at fairfax multimedia
Mike Cannon - Brookes Founder of Atlassian - young entrepeneur of the year - sharp mind - and selling his enterprise wikki solution to a gazillion countries!!
Campbell Sallabank - CEO of Linkme - web2.0 community for people in the work place, who post their resumes, that can be accessed by recruiting firms and headhunters.... a powerful model that can only succeed!! Sensis have backed them
and Me!!
Attached are my notes and thoughts on Web2.0 and VC
WEB 2.0 is Hot
Web 2.0 – the facilitation of user created content – network and collaboration softweare and the creation of commnities seems to be the next wave of innovations coming through the innovation system.
WEB 2.0 will be major competition for existing advertising/tv and way people spend there time and hours in the day.
People will pay for time saving and specialized information – even small amounts.
Micro-payments will be a key to the growth of WEB 2.0 Companies.
In 2006 VCs invested $844m into 167 web 2.0 deals – 2X 2005 – in fact deals have been doubling every year. (EY Dow Jones Report)
In June 2007 $635m has been funded in 31 Deals (www.venturecapitalupdate.com )
VCs are interested in WEB2.0…. the issue is that do Web 2.0 Companies need VCs?
WEB 2.0 companies are a lot different to WEB1.0 companies in that they have
• Low start up costs
• Little infrastructure (can be virtual)
• Speed to market can be done cheaply through effective viral marketing
The average precap valuation for an investment in a web 2.0 was 6.5m (last year 3.3m)
Technologies and Ideas are not the constraints to Succeed today…. The winners in my view will be the
• Brand Builders
• Effective teams and Managers who will be able to build communities, network and run effective businesses
Youtube, My Space and Facebook – there were 100s of similar Technologies and ideas…. it was the ability of the management team to build the brand and get the company to market –
If the companies get this right – I believe they will cash out for multiples!!
VCs who have the ability to assist companies with identifying the brand managers and providing the transitional managers to these WEB 2.0 companies , will be worth their weight in gold.
WEB2.0 Exit Strategies
Exit 1
There is an opportunity to build a low cost web 2.0 company with the exit strategy in mind to sell to the Search Engines and Whales such as Google, EBAy, MSN and YAHOO. They are constantly looking for communities and are actively looking to acquire WEB 2.0 Companies with strong communities.
This strategy does not need a whole lot of money, and would probably suit an Angel/Incubator or Small Fund.
Example – small company with $50k investment – built a web app technology, built a 100k community in 3 months and google bought it and the team for an undisclosed amount.
My view is that is where the majority of successful exits will occur for Australian Web 2.0 Companies in this way.
Exit 2
Those companies who will scale, whose objective is not to sell to the whales and become one, will need significant investment. This is where I believe the VC s will play.
Examples of some returns are
• My Space – Murdoch 500m – now many $b
• Bebo - Benchmark recently invested 15m
• Facebook – VC $40m – will get great returns
• Zillow – Real Estate
• Jobster -
• EBAY
• Skype
• Kazaa
• Joost
• 2nd Life
THE RISK
Is that VCs have huge $s that they need to put to work – will throw money at these companies that do not need the $s and WEB 2.0 will turn into BUBBLE 2.0.
Based on the low cap valuations ($6.5m) we seem to be a long way off bubble territory.
Providing an Entrepeneur with too much money spoils them. WEB 2.0 companies seem to have learned from the previous bubble…. Companies are tending to commercialise quickly and cheaply.
THE VC ISSUE
VCs with large $s to invest have a major issue
If they have $200m to invest… why bother investing 500k into a venture that will give you a 10 times return – it will only affect the portfolio by 2.5%.
Rather invest $50m in a company that can give you a 3 X return.
The question is – how many WEB 2.0 companies will be able to effectively use this quantum of funds effectively in the business?
What is the Ideal Size Fund for A Web 2.0 Fund – Will there be Specifically formed WEB 2.0 Funds?
Is it better to have a $20m – $40m fund to invest in WEB 2.0 companies which will enable these funds to invest relatively small amounts in WEB 2.0 opportuities with a view to exit to G,Y,MSN, EBAY?
Or Have a $200m fund with view to spend 50m – 100m in a company that will scale….
In Australia my view is that there should be a $40m fund taking advantage of this space.
WEB 2.0 will create a new kind of VC – with a focus on Brandbuilding and Recruiting effective managers for their portfolio companies. My view is that before long there will be funds specifically focused on acquiring WEB 2.0 companies
Having said this – the fundamentals of investing by a VC are still the same…
• Is the management team passionate and effective – can they fulfil their plans
• Whats the USP – how are they going to reach customers
• How is the company going to scale the business and make money
• Show me the model that can scale cheaply, be profitable and throw off lots of cash!
What does this mean for Australian Companies?
This technology and Internet has effectively eliminated the Australian Constraint of “the “Tyranny of Distance” – In fact , a USA company having a partner in another timezone can be seen as a Positive.
Australians are a tech savvy group of people, who are innovative , have amazing ideas and are inherent entrepeneurs – ready to give it a go!!
ADI and Information City are 2 Incubators who we are aligned with and are actively focusing on WEB 2.0 companies – they are in our space. We only invest small amounts, and are comfortable on getting returns on an investment basis verses a portfolio basis.
WEB 2.0 Fits the incubator/small fund model with a view to Exit 1.
In fact in 2 weeks time ALWAYS ON – is having their annual Silicon Valley Conference with 900 people… and there will be at least 10 Australian Companies – many in the WEB 2.0 space presenting – with 2 having been chosen for the Always On top 100 Innovations:-
ADITLAST And BOOKING ANGEL
Other Web 2.0 Australian Companies that come to mind include
• Swapace – swapping community
• Red Bubble - art community
• FunkySexyCool -
• Martian Logic – B2B recruitment Software
• Webit – Webinars and Eventmanagement Online
• Globaltainment - Online Nightclub with Avatars in China
• Oztion; Seek; Real estate.com; RSVP; iSHeriff; DVD Trivia; Bcode; Global IP Video; Emailcash
and I am sure there are hundreds of others
WEB 2.0 is HOT - Money is flowing into this space in a big way, and it seems that the money tree is starting to sprout!!
The reality is that there will be a few winners, some stayers and many companies that will either be acquired or fall by the wayside.
It is early days for WEB 2.0 and it usually takes at least 10 years to become an overnight success!!
People on the Panel
Ben Barren - a blogger and futurist/satirist extraordinaire - this guy should be on the stage.... he writes and says what people would wish they had written and said!! Setting the stage - you have to read bens blog!!
Rob Antulov of 3eep web 2.0 start up entrepeneur - ex head of strategy at fairfax multimedia
Mike Cannon - Brookes Founder of Atlassian - young entrepeneur of the year - sharp mind - and selling his enterprise wikki solution to a gazillion countries!!
Campbell Sallabank - CEO of Linkme - web2.0 community for people in the work place, who post their resumes, that can be accessed by recruiting firms and headhunters.... a powerful model that can only succeed!! Sensis have backed them
and Me!!
Attached are my notes and thoughts on Web2.0 and VC
WEB 2.0 is Hot
Web 2.0 – the facilitation of user created content – network and collaboration softweare and the creation of commnities seems to be the next wave of innovations coming through the innovation system.
WEB 2.0 will be major competition for existing advertising/tv and way people spend there time and hours in the day.
People will pay for time saving and specialized information – even small amounts.
Micro-payments will be a key to the growth of WEB 2.0 Companies.
In 2006 VCs invested $844m into 167 web 2.0 deals – 2X 2005 – in fact deals have been doubling every year. (EY Dow Jones Report)
In June 2007 $635m has been funded in 31 Deals (www.venturecapitalupdate.com )
VCs are interested in WEB2.0…. the issue is that do Web 2.0 Companies need VCs?
WEB 2.0 companies are a lot different to WEB1.0 companies in that they have
• Low start up costs
• Little infrastructure (can be virtual)
• Speed to market can be done cheaply through effective viral marketing
The average precap valuation for an investment in a web 2.0 was 6.5m (last year 3.3m)
Technologies and Ideas are not the constraints to Succeed today…. The winners in my view will be the
• Brand Builders
• Effective teams and Managers who will be able to build communities, network and run effective businesses
Youtube, My Space and Facebook – there were 100s of similar Technologies and ideas…. it was the ability of the management team to build the brand and get the company to market –
If the companies get this right – I believe they will cash out for multiples!!
VCs who have the ability to assist companies with identifying the brand managers and providing the transitional managers to these WEB 2.0 companies , will be worth their weight in gold.
WEB2.0 Exit Strategies
Exit 1
There is an opportunity to build a low cost web 2.0 company with the exit strategy in mind to sell to the Search Engines and Whales such as Google, EBAy, MSN and YAHOO. They are constantly looking for communities and are actively looking to acquire WEB 2.0 Companies with strong communities.
This strategy does not need a whole lot of money, and would probably suit an Angel/Incubator or Small Fund.
Example – small company with $50k investment – built a web app technology, built a 100k community in 3 months and google bought it and the team for an undisclosed amount.
My view is that is where the majority of successful exits will occur for Australian Web 2.0 Companies in this way.
Exit 2
Those companies who will scale, whose objective is not to sell to the whales and become one, will need significant investment. This is where I believe the VC s will play.
Examples of some returns are
• My Space – Murdoch 500m – now many $b
• Bebo - Benchmark recently invested 15m
• Facebook – VC $40m – will get great returns
• Zillow – Real Estate
• Jobster -
• EBAY
• Skype
• Kazaa
• Joost
• 2nd Life
THE RISK
Is that VCs have huge $s that they need to put to work – will throw money at these companies that do not need the $s and WEB 2.0 will turn into BUBBLE 2.0.
Based on the low cap valuations ($6.5m) we seem to be a long way off bubble territory.
Providing an Entrepeneur with too much money spoils them. WEB 2.0 companies seem to have learned from the previous bubble…. Companies are tending to commercialise quickly and cheaply.
THE VC ISSUE
VCs with large $s to invest have a major issue
If they have $200m to invest… why bother investing 500k into a venture that will give you a 10 times return – it will only affect the portfolio by 2.5%.
Rather invest $50m in a company that can give you a 3 X return.
The question is – how many WEB 2.0 companies will be able to effectively use this quantum of funds effectively in the business?
What is the Ideal Size Fund for A Web 2.0 Fund – Will there be Specifically formed WEB 2.0 Funds?
Is it better to have a $20m – $40m fund to invest in WEB 2.0 companies which will enable these funds to invest relatively small amounts in WEB 2.0 opportuities with a view to exit to G,Y,MSN, EBAY?
Or Have a $200m fund with view to spend 50m – 100m in a company that will scale….
In Australia my view is that there should be a $40m fund taking advantage of this space.
WEB 2.0 will create a new kind of VC – with a focus on Brandbuilding and Recruiting effective managers for their portfolio companies. My view is that before long there will be funds specifically focused on acquiring WEB 2.0 companies
Having said this – the fundamentals of investing by a VC are still the same…
• Is the management team passionate and effective – can they fulfil their plans
• Whats the USP – how are they going to reach customers
• How is the company going to scale the business and make money
• Show me the model that can scale cheaply, be profitable and throw off lots of cash!
What does this mean for Australian Companies?
This technology and Internet has effectively eliminated the Australian Constraint of “the “Tyranny of Distance” – In fact , a USA company having a partner in another timezone can be seen as a Positive.
Australians are a tech savvy group of people, who are innovative , have amazing ideas and are inherent entrepeneurs – ready to give it a go!!
ADI and Information City are 2 Incubators who we are aligned with and are actively focusing on WEB 2.0 companies – they are in our space. We only invest small amounts, and are comfortable on getting returns on an investment basis verses a portfolio basis.
WEB 2.0 Fits the incubator/small fund model with a view to Exit 1.
In fact in 2 weeks time ALWAYS ON – is having their annual Silicon Valley Conference with 900 people… and there will be at least 10 Australian Companies – many in the WEB 2.0 space presenting – with 2 having been chosen for the Always On top 100 Innovations:-
ADITLAST And BOOKING ANGEL
Other Web 2.0 Australian Companies that come to mind include
• Swapace – swapping community
• Red Bubble - art community
• FunkySexyCool -
• Martian Logic – B2B recruitment Software
• Webit – Webinars and Eventmanagement Online
• Globaltainment - Online Nightclub with Avatars in China
• Oztion; Seek; Real estate.com; RSVP; iSHeriff; DVD Trivia; Bcode; Global IP Video; Emailcash
and I am sure there are hundreds of others
WEB 2.0 is HOT - Money is flowing into this space in a big way, and it seems that the money tree is starting to sprout!!
The reality is that there will be a few winners, some stayers and many companies that will either be acquired or fall by the wayside.
It is early days for WEB 2.0 and it usually takes at least 10 years to become an overnight success!!
Fast 100 talk to Young Entrepeneurs about BSI's Journey
THE FIRST 10 YEARS
BSI Started when I left the accounting profession and said to myself that I would never fill another timesheet!
Everything that I did was based on some form of success fee based on a successful outcome for clients. Accessing Government grants was a major focus.
The grants that I focused on were was
• the EMDG – where for every $ spent on marketing and promoting your product overseas, the company gets 50c in the $ back up to $150k per annum.
• Import Credits in the Textile Industry – also export related
• R&D Tax Concessions and Grants – Incentives given to companies who innovate.
These companies had a huge need for business planning, capital, management advice and management accounting services.
2001 -
Enter an old school friend of mine, Alan Milwidsky, who was at the time a partner in a BIG 5 company, specializing in Growth Strategies – looking for a change…. I said Al… come spend a week in our business, have a look at our deal flow, join me in the business and you will make a lot more money and have a lot more fun… I was ½ right…. We have a lot more fun!!
We developed the BSI business plan – the Vision being “To Help Companies Grow” and “ To be a “one stop shop for the entrepreneur”
Providing Grants, Growth Strategies, International Gateways, Capital Raising.
We believed that in order for us to leverage our skill base, we would take equity stakes in Innovative Companies and back Motivated People, and over the years help there companies grow with the objective of getting a return on our investment.
We worked out the money that we needed to grow the business, identified a number of strategic investors and pitched our plan to them.
We were fortunate to raise the money that we were looking for from these parties, together with some of our own money.
With the money raised, we acquired
• A Bizcap team Specialising in Early Stage Capital Raising
• The leading R&D Tax Concession Firm, being run by an old friend of mine,
• a Recruitment Business (which acquired a few more recruiting businesses)
• a Training Business ((which acquired a few more training businesses).
• As well as making a number of Investments in Innovative Companies.
Our model was to set up different Companies with a common brand and Philosophy, whereby each Head would be a stakeholder, and a group policy of X referring Clients, people and knowledge with a common culture.
THE BSI INVESTOR FORUM
It was 2001, and the dot com crash happened…. And there was no environment for the SME innovator looking to raise between 200k and $2m….
Alan M developed the
“BSI Investor Forum” – where every 3 months we showcase 8 innovative companies to 200 HNI and Funds in Sydney, Melb and Brisbane.
Over the past 4 years…. We have had 15 forums, showcased 120 companies, of which +40m have been raised for more than 60 of them.
This year we have set up a USA office as part of our International Gateway Strategy, and are having our first forum in Silicon Valley at the end of July, where we will be showcasing 10 Innovative Australian Companies at “ALWAYS ON” – the key Silicon Valley Conference – where 900 people are expected.
Our Investment Fund
In 2003, an amazing opportunity presented itself…..
We had the opportunity to acquire a small BITS fund, sponsored by the Federal Government, from a group looking to get out of the early stage marketplace.
This Fund was a dream come true for us…. It gave us Capital to co-invest with our HNI and Funds, and we would not have to use our working capital to invest in these Innovative Companies.
We have subsequently merged with another fund, and together have made in excess of 30 Investments in what we believe that some will be successful world beating companies.
Since 2001 – we have grown from a turnover of 1m – 15m ….
Did I do this…. I have pretty much done nothing besides picking guys who are brighter than I am, passionate at what they do, with the right incentives to help them achieve their goals and objectives.
Where to from here?
We are currently working on a number of projects that will hopefully take us from $15m – 150m over the next 10 years.
Lessons Learned:-
• Have a Vision – “help companies grow” and “ be a one stop shop for the entrepreneur
• Be passionate – if you aint passionate get a job
• Get the brightest and best people, and make sure you look after them like gold. Your people are your assets
• Be able to sell and network
• Keep communication lines open – our biggest failures have been through an inability to communicate
• Cash Flow, Cash Flow, Cash Flow – hire people based on your actual needs , not your projected needs – be nimble and ensure you have adequate cash resources to achieve your objectives.
• Avoid FTI – take action – make a decision and implement it – even if it is the wrong decision – you can always change it
• Your Database is an valuable asset keep it updated, respect it and guard it. Use it for networking
• X referring clients throughout the service lines – providing a holistic service to clients has been important
• Build your Brand – this is where you will get leverage and credibility – update your website, provide links, use professional mweb marketers, create your blog, have events, seminars, attend seminars. Become “the college of knowledge” in your field of expertise. If people perceive you as a leader, performer and creator – then that is reality – PERCEPTION IS REALITY.
BSI Started when I left the accounting profession and said to myself that I would never fill another timesheet!
Everything that I did was based on some form of success fee based on a successful outcome for clients. Accessing Government grants was a major focus.
The grants that I focused on were was
• the EMDG – where for every $ spent on marketing and promoting your product overseas, the company gets 50c in the $ back up to $150k per annum.
• Import Credits in the Textile Industry – also export related
• R&D Tax Concessions and Grants – Incentives given to companies who innovate.
These companies had a huge need for business planning, capital, management advice and management accounting services.
2001 -
Enter an old school friend of mine, Alan Milwidsky, who was at the time a partner in a BIG 5 company, specializing in Growth Strategies – looking for a change…. I said Al… come spend a week in our business, have a look at our deal flow, join me in the business and you will make a lot more money and have a lot more fun… I was ½ right…. We have a lot more fun!!
We developed the BSI business plan – the Vision being “To Help Companies Grow” and “ To be a “one stop shop for the entrepreneur”
Providing Grants, Growth Strategies, International Gateways, Capital Raising.
We believed that in order for us to leverage our skill base, we would take equity stakes in Innovative Companies and back Motivated People, and over the years help there companies grow with the objective of getting a return on our investment.
We worked out the money that we needed to grow the business, identified a number of strategic investors and pitched our plan to them.
We were fortunate to raise the money that we were looking for from these parties, together with some of our own money.
With the money raised, we acquired
• A Bizcap team Specialising in Early Stage Capital Raising
• The leading R&D Tax Concession Firm, being run by an old friend of mine,
• a Recruitment Business (which acquired a few more recruiting businesses)
• a Training Business ((which acquired a few more training businesses).
• As well as making a number of Investments in Innovative Companies.
Our model was to set up different Companies with a common brand and Philosophy, whereby each Head would be a stakeholder, and a group policy of X referring Clients, people and knowledge with a common culture.
THE BSI INVESTOR FORUM
It was 2001, and the dot com crash happened…. And there was no environment for the SME innovator looking to raise between 200k and $2m….
Alan M developed the
“BSI Investor Forum” – where every 3 months we showcase 8 innovative companies to 200 HNI and Funds in Sydney, Melb and Brisbane.
Over the past 4 years…. We have had 15 forums, showcased 120 companies, of which +40m have been raised for more than 60 of them.
This year we have set up a USA office as part of our International Gateway Strategy, and are having our first forum in Silicon Valley at the end of July, where we will be showcasing 10 Innovative Australian Companies at “ALWAYS ON” – the key Silicon Valley Conference – where 900 people are expected.
Our Investment Fund
In 2003, an amazing opportunity presented itself…..
We had the opportunity to acquire a small BITS fund, sponsored by the Federal Government, from a group looking to get out of the early stage marketplace.
This Fund was a dream come true for us…. It gave us Capital to co-invest with our HNI and Funds, and we would not have to use our working capital to invest in these Innovative Companies.
We have subsequently merged with another fund, and together have made in excess of 30 Investments in what we believe that some will be successful world beating companies.
Since 2001 – we have grown from a turnover of 1m – 15m ….
Did I do this…. I have pretty much done nothing besides picking guys who are brighter than I am, passionate at what they do, with the right incentives to help them achieve their goals and objectives.
Where to from here?
We are currently working on a number of projects that will hopefully take us from $15m – 150m over the next 10 years.
Lessons Learned:-
• Have a Vision – “help companies grow” and “ be a one stop shop for the entrepreneur
• Be passionate – if you aint passionate get a job
• Get the brightest and best people, and make sure you look after them like gold. Your people are your assets
• Be able to sell and network
• Keep communication lines open – our biggest failures have been through an inability to communicate
• Cash Flow, Cash Flow, Cash Flow – hire people based on your actual needs , not your projected needs – be nimble and ensure you have adequate cash resources to achieve your objectives.
• Avoid FTI – take action – make a decision and implement it – even if it is the wrong decision – you can always change it
• Your Database is an valuable asset keep it updated, respect it and guard it. Use it for networking
• X referring clients throughout the service lines – providing a holistic service to clients has been important
• Build your Brand – this is where you will get leverage and credibility – update your website, provide links, use professional mweb marketers, create your blog, have events, seminars, attend seminars. Become “the college of knowledge” in your field of expertise. If people perceive you as a leader, performer and creator – then that is reality – PERCEPTION IS REALITY.
Saturday, June 30, 2007
Gems from Scott Berkun, Author of "The Myths of Innovation"
Extracts from Always on interview with Scott Berkun and Always On
http://alwayson.goingon.com/permalink/post/15309
Is there such a thing as a BFO?
An Epiphany, a BFO (blinding flash of the obvious), a hunch, an instinctive sense is generally the tip of an iceberg and comes from many years of accumulated knowledge stored in “the adaptive unconscious”
What prevents Innovators from Commercialising their Innovations?
Commercialising an Innovation generally has little to do with the skills of the Innovator/Entrepeneur . They have to spend more time persuading and convincing others for emotional, financial, or intellectual support, as they do inventing, and many don’t have the skills or emotional endurance for it. The skills for Commercialising are different to the skills of Innovation.
Where do Ideas Come From?
ideas are combinations of other ideas. People who earn the label “creative” are really just people who come up with more combinations of ideas, find interesting ones faster, and are willing to try them out
Is Innovation Structured?
Innovation does not generally follow a straight line. Innovators/Entrepeneurs generally work in chaos, uncertainty with a feeling the odds are against them (club terror!!).
Why do innovators face rejection and negativity?
People are threatened by Change, and it takes much convincing and copelling arguments to get people to change their behaviour.
As a Venture Capitalist/Investor – how do you invest in Innovation?
Invest in People more than ideas or business plans: A great entrepreneur who won’t give up and will keep growing and learning is gold. Very few entrepreneurs have had any real success the first few times out—3M, Ford, Flickr were all second or third efforts.
Adopt a portfolio approach, knowing most ventures fail. Invest based on a spectrum of risk (e.g. 1/3 very high risk, 1/3 high risk, 1/3 moderate risk). Sometimes seemingly small, low risk/reward innovations have big impacts and returns, where large investments fail miserably.
http://alwayson.goingon.com/permalink/post/15309
Is there such a thing as a BFO?
An Epiphany, a BFO (blinding flash of the obvious), a hunch, an instinctive sense is generally the tip of an iceberg and comes from many years of accumulated knowledge stored in “the adaptive unconscious”
What prevents Innovators from Commercialising their Innovations?
Commercialising an Innovation generally has little to do with the skills of the Innovator/Entrepeneur . They have to spend more time persuading and convincing others for emotional, financial, or intellectual support, as they do inventing, and many don’t have the skills or emotional endurance for it. The skills for Commercialising are different to the skills of Innovation.
Where do Ideas Come From?
ideas are combinations of other ideas. People who earn the label “creative” are really just people who come up with more combinations of ideas, find interesting ones faster, and are willing to try them out
Is Innovation Structured?
Innovation does not generally follow a straight line. Innovators/Entrepeneurs generally work in chaos, uncertainty with a feeling the odds are against them (club terror!!).
Why do innovators face rejection and negativity?
People are threatened by Change, and it takes much convincing and copelling arguments to get people to change their behaviour.
As a Venture Capitalist/Investor – how do you invest in Innovation?
Invest in People more than ideas or business plans: A great entrepreneur who won’t give up and will keep growing and learning is gold. Very few entrepreneurs have had any real success the first few times out—3M, Ford, Flickr were all second or third efforts.
Adopt a portfolio approach, knowing most ventures fail. Invest based on a spectrum of risk (e.g. 1/3 very high risk, 1/3 high risk, 1/3 moderate risk). Sometimes seemingly small, low risk/reward innovations have big impacts and returns, where large investments fail miserably.
Sunday, June 10, 2007
Maximising Opportunities in the USA for Australian Exporters
Gems from the session from Angela Lowrey angela.lowrey@austrade.gov.au at the 2007 ECAL Conference at Twin Towns - Tweed Heads – Monday 4 June 2007
Summary by Ivan Kaye - Monday 4 June 2007
I was delighted to hear of Austrade’s activities in the USA, and BSI looks forward to working with Austrade to Leverage the Power of Australia to assist Clients Export Succesfully into the USA Marketplace!
Austrade open for business in the USA:-
Austrade has recognized the importance of the USA as a trading partner for Ozzie Companies, and have come to the party by appointing 20 Austrade Offices around the USA… split up into 8 Industry Groups.
They have been involved with
150 promotional trade events
20 Inward Buying Missions
500 Media Mentions
Various Marketing and Business Guides to assist exporters navigate the market.
Bring strategic Players/Buyers to Australia
8000 Australian Companies have been trading with the USA in some way over the past few years, and 54% of all EMDG claimants promote and sell their products into the USA Market place.
Alignment of the Stars for Aussie Exporters
There are a number of factors that have aligned to assist Australians enter the USA Marketplace:-
Americans love us
We talk the same language
Support of American Policy
Australian Wine has led the way – the Yellow Tail Story
We have an outback image – “the Crocodile Hunter”
The Wiggles
Actors and Actresses – Russell Crow and Nicole Kidman
News Limited – the success of Rupert Murdoch
A strong Expat Network – who call Australia Home
What this does is something invaluable – it opens the door so that you are able to do your 30 Second Elevator Pitch!
Although we speak the language – we have a different culture, and a successful exporter into the USA has to play by the USA rules….
We need to “brag” – why is our product so good that you need to be compelled to buy? Focus on the WIFM factor – don’t beat around the bush – tell the Customer what is in it for them! Tell them what the deal is - quickly.
USA is
Wealthy
Competitive
Consumer driven
Mass Market
Segment Driven
Market for anything
An example of the opportunity – Coles and Woolworths represent 70% of consumer market in Australia. There are 42000 supermarkets in USA.
A company with Gourmet Foods can deal with “Bristal Farms” who will possibly take all their supply.
Ensure that your packaging and pricing is done correctly – everything needs to be in lbs and ozs.
You need to be able to segment the market place… what is your Unique, Competitive Niche? Be able to articulate it!
How are you to be heard above the noise. At trade shows or events – position yourself so you can be heard. PR is key!
Before going to USA, do your market research – ensure that you have the ability to be a long term sustainable player in the marketplace.
There are many ways you can enter the market – is it with a Distributor, JV agreement, Agent, you own office. What have other companies done in your space… do your research.
Some are concerned that a successful businesses will sell the business/IP/Technology to a USA Company. This is not a bad thing. If successful, the entrepreneur will sell for ++ $s… this is great for the Australian Economy, as the successful Entrepreneur will understand the opportunity, and does it again, returning the wealth to Australia.
USA Sustainability Factors
Long term commitment
Relationship/network development
Success and reputation in Australian
Patience and perseverance
Entrepreneurial spirit
Unique Selling Proposition
Market Selection
Overseas Experience
Cultural Awareness
Sustainable Exporter Profile
Passionate about international business
Committed to new export markets and opportunities
Committed to exporting …despite short term setbacks
AUSTFA Opportunities
Government empowerment GSA’s
Enhanced access
Decreased tariffs
Increased Quotas
Ease of Market Restrictions
Opportunities include but not limited to:-
Agribusiness
Food – Gourmet, Wine and. Meat, Seafood, Dairy
Sell to Government – Security, Defence, US Gulf Coast redevelopment
Auto
ICT
Specialty Goods
Services
Things an Aussie Exporter needs to do to get traction in the USA Market
Tradeshows – and follow up on every contact
Buyer missions
PR
Market Research
Perseverence and Persistance
A thick Skin
Passion about your product
Ability to leverage on people who have done it before
BSI USA Gateway
Austrade
EMDG
DFAT
State Overseas Offices
Alliances
Relationships
Alex Daniel runs BSI USA Gateway office in Los Angeles. He will help you with your Journey into the USA Marketplace.
About BSI
BSI assists Companies access International Markets, Raise Capital and Maximise Government Grants.
For more Information about accessing the USA Marketplace, contact Alex Daniel on
adaniel@bsi.com.au or Ivan Kaye on ikaye@bsi.com.au
For more Information about Maximising your Export Market Development Grants (EMDG) contact Harvey Gartrell hgartrell@bsi.com.au , Andri Damoko adarmoko@bsi.com.au , James Roberts jroberts@bsi.com.au or Ben Milner bmilner@bsi.com.au .
Summary by Ivan Kaye - Monday 4 June 2007
I was delighted to hear of Austrade’s activities in the USA, and BSI looks forward to working with Austrade to Leverage the Power of Australia to assist Clients Export Succesfully into the USA Marketplace!
Austrade open for business in the USA:-
Austrade has recognized the importance of the USA as a trading partner for Ozzie Companies, and have come to the party by appointing 20 Austrade Offices around the USA… split up into 8 Industry Groups.
They have been involved with
150 promotional trade events
20 Inward Buying Missions
500 Media Mentions
Various Marketing and Business Guides to assist exporters navigate the market.
Bring strategic Players/Buyers to Australia
8000 Australian Companies have been trading with the USA in some way over the past few years, and 54% of all EMDG claimants promote and sell their products into the USA Market place.
Alignment of the Stars for Aussie Exporters
There are a number of factors that have aligned to assist Australians enter the USA Marketplace:-
Americans love us
We talk the same language
Support of American Policy
Australian Wine has led the way – the Yellow Tail Story
We have an outback image – “the Crocodile Hunter”
The Wiggles
Actors and Actresses – Russell Crow and Nicole Kidman
News Limited – the success of Rupert Murdoch
A strong Expat Network – who call Australia Home
What this does is something invaluable – it opens the door so that you are able to do your 30 Second Elevator Pitch!
Although we speak the language – we have a different culture, and a successful exporter into the USA has to play by the USA rules….
We need to “brag” – why is our product so good that you need to be compelled to buy? Focus on the WIFM factor – don’t beat around the bush – tell the Customer what is in it for them! Tell them what the deal is - quickly.
USA is
Wealthy
Competitive
Consumer driven
Mass Market
Segment Driven
Market for anything
An example of the opportunity – Coles and Woolworths represent 70% of consumer market in Australia. There are 42000 supermarkets in USA.
A company with Gourmet Foods can deal with “Bristal Farms” who will possibly take all their supply.
Ensure that your packaging and pricing is done correctly – everything needs to be in lbs and ozs.
You need to be able to segment the market place… what is your Unique, Competitive Niche? Be able to articulate it!
How are you to be heard above the noise. At trade shows or events – position yourself so you can be heard. PR is key!
Before going to USA, do your market research – ensure that you have the ability to be a long term sustainable player in the marketplace.
There are many ways you can enter the market – is it with a Distributor, JV agreement, Agent, you own office. What have other companies done in your space… do your research.
Some are concerned that a successful businesses will sell the business/IP/Technology to a USA Company. This is not a bad thing. If successful, the entrepreneur will sell for ++ $s… this is great for the Australian Economy, as the successful Entrepreneur will understand the opportunity, and does it again, returning the wealth to Australia.
USA Sustainability Factors
Long term commitment
Relationship/network development
Success and reputation in Australian
Patience and perseverance
Entrepreneurial spirit
Unique Selling Proposition
Market Selection
Overseas Experience
Cultural Awareness
Sustainable Exporter Profile
Passionate about international business
Committed to new export markets and opportunities
Committed to exporting …despite short term setbacks
AUSTFA Opportunities
Government empowerment GSA’s
Enhanced access
Decreased tariffs
Increased Quotas
Ease of Market Restrictions
Opportunities include but not limited to:-
Agribusiness
Food – Gourmet, Wine and. Meat, Seafood, Dairy
Sell to Government – Security, Defence, US Gulf Coast redevelopment
Auto
ICT
Specialty Goods
Services
Things an Aussie Exporter needs to do to get traction in the USA Market
Tradeshows – and follow up on every contact
Buyer missions
PR
Market Research
Perseverence and Persistance
A thick Skin
Passion about your product
Ability to leverage on people who have done it before
BSI USA Gateway
Austrade
EMDG
DFAT
State Overseas Offices
Alliances
Relationships
Alex Daniel runs BSI USA Gateway office in Los Angeles. He will help you with your Journey into the USA Marketplace.
About BSI
BSI assists Companies access International Markets, Raise Capital and Maximise Government Grants.
For more Information about accessing the USA Marketplace, contact Alex Daniel on
adaniel@bsi.com.au or Ivan Kaye on ikaye@bsi.com.au
For more Information about Maximising your Export Market Development Grants (EMDG) contact Harvey Gartrell hgartrell@bsi.com.au , Andri Damoko adarmoko@bsi.com.au , James Roberts jroberts@bsi.com.au or Ben Milner bmilner@bsi.com.au .
Thursday, May 17, 2007
BSI sponsors UCLA Andersen’s 22nd annual Entrepreneurship conference
ONE of Australia’s leading business advisory and consulting companies has set its sights on the United States, launching its international operation at the prestigious UCLA Anderson School of Management’s annual entrepreneurs conference.
Business Strategies International, which has helped hundreds of Australian exporters launch international campaigns, has spread its wings to Los Angeles.
BSI launched its USA Gateway program with its support of the UCLA Andersen’s 22nd annual Entrepreneurship conference that was held on 18 May 2007.
Keynote Speakers were Alan I. Rothenberg ,Founder of Major League Soccer and Founder & Chairman, 1st Century Bank and Jane D. Wurwand Founder, Dermalogica, Inc. and The International Dermal Institute.
The Conference included 16 Industry and topic specific panel discussions and workshops , a Networking lunch and cocktail reception
The UCLA Anderson School of Management is one of the top Business Schools in the world, supported by major corporations and industries in the USA.
It also has a landmark MBA program.
BSI is investigating tapping into the program as one of a range of initiatives for its clients.
BSI assists companies access a range of government grants to underpin their international ventures. Its focus will be on innovation.
The USA operation is run by Alexander Daniel, who has a focus on building sales forces for clients.
“We are looking to partner with companies, institutions or Individuals who are interested in assisting Innovative Australian Companies with commercialising their Innovations.” says Daniel.
“Australia is a great test market, but to get value, innovative companies need to have a presence in the USA. “
He pointed to BSI client IMCEDA – a compression software firm that had a turnover of $500,000 pa in Australia.
After establishing an office in the United States, they invested in a sales force and sold the business within 2 years for US $70 million.
“ Australia has great education, innovation , research and development, government support and great lifestyle - but has not got the population to enable ICT companies to get the scale that it needs,” Daniel said.
“As a result, companies need to be born global, and we need to be the bridge for taking these innovations to the USA.”
He said the Australian Government gives 50% of all marketing to assist Australian Companies access overseas markets through the Export Market Development Grant Scheme.
For more information contact
info@bsi.com.au
or
Alexander Daniel on adaniel@bsi.com.au
Business Strategies International, which has helped hundreds of Australian exporters launch international campaigns, has spread its wings to Los Angeles.
BSI launched its USA Gateway program with its support of the UCLA Andersen’s 22nd annual Entrepreneurship conference that was held on 18 May 2007.
Keynote Speakers were Alan I. Rothenberg ,Founder of Major League Soccer and Founder & Chairman, 1st Century Bank and Jane D. Wurwand Founder, Dermalogica, Inc. and The International Dermal Institute.
The Conference included 16 Industry and topic specific panel discussions and workshops , a Networking lunch and cocktail reception
The UCLA Anderson School of Management is one of the top Business Schools in the world, supported by major corporations and industries in the USA.
It also has a landmark MBA program.
BSI is investigating tapping into the program as one of a range of initiatives for its clients.
BSI assists companies access a range of government grants to underpin their international ventures. Its focus will be on innovation.
The USA operation is run by Alexander Daniel, who has a focus on building sales forces for clients.
“We are looking to partner with companies, institutions or Individuals who are interested in assisting Innovative Australian Companies with commercialising their Innovations.” says Daniel.
“Australia is a great test market, but to get value, innovative companies need to have a presence in the USA. “
He pointed to BSI client IMCEDA – a compression software firm that had a turnover of $500,000 pa in Australia.
After establishing an office in the United States, they invested in a sales force and sold the business within 2 years for US $70 million.
“ Australia has great education, innovation , research and development, government support and great lifestyle - but has not got the population to enable ICT companies to get the scale that it needs,” Daniel said.
“As a result, companies need to be born global, and we need to be the bridge for taking these innovations to the USA.”
He said the Australian Government gives 50% of all marketing to assist Australian Companies access overseas markets through the Export Market Development Grant Scheme.
For more information contact
info@bsi.com.au
or
Alexander Daniel on adaniel@bsi.com.au
QUOTE OF THE MONTH -- "THE WORLD IS NOT FLAT."
"Global innovation does not occur in one place anymore. It occurs through networks. Thomas Friedman said that "the world is flat". The world is not flat, it's a waffle. It's a bunch of peaks of excellence at different places that need to be connected through networks for innovation to grow." -- Dr. Bill Miller, Silicon Valley legend, as told to Australian Anthill, May 2007. Read more at http://www.australiananthill.com/main.php?page=ed_hard_way21
Sunday, May 06, 2007
BSI Hosts David Gold
Ivan Kaye, David Gold and Lisa Donath
On Tuesday, 20 March 07 David Gold the Founder of dstore explained what it takes to do business in the world of Technology today.
He said a major mistake was to have a large number of investors on the board making decisions based on vested interests.... Much time was spent on accomodating investors vs running the business.
David's skill in raising capital from investors is exceptional, starting from his success in his involvement in Looksmart, where he was involved with Business Development.
An interesting anecdote was when he was trying to get the rights of this amazing software in the USA... he set up a meeting with the CEO, and found the business run by this school kid running his business from the kitchen, with his mother ensuring that he was not being taken advantage of!
David has recently exited from Azure Wireless, creating great returns for himself and his Investors.
"In Melbourne's Chapel Street, wireless hot spots are being established it seems within sight of every coffee machine around. It's got a kind of Sex in the City groove about it, and David Gold, former dot.com wunderkind, is hoping its appeal will grow beyond the froth of the cappuccino and into more extensive hot zones.
DAVID GOLD, AZURE WIRELESS: I think we're going to see increasingly, more and more applications. Things like watching TV wirelessly. Things like, you know, movies - downloading movies in real time.
Gaming - there's a whole range of things that we just don't envisage necessarily today that people will be using wireless broadband networks for tomorrow.
GEOFF HUTCHISON: Give me a sort of cafe-scenario five years down the track. What will it look like and what will people be able to do there?
DAVID GOLD: I think it will become a commodity, just like anything else. You know, where can you get your water and you know, like public places and you can get electricity etc, etc. And wireless Internet will just be something that's standard in most places.
Start-up champion
Article in Smart Company
Tuesday, 20 February 2007 By Amanda Gome
Ivan Kaye is a rare breed in Australia. The former accountant runs advisory company BSI and two venture capital firms, ADI and Information City. He chooses to invest small amounts of money in high-risk start-ups in hot new industries, a space ignored by most venture capitalists in Australia.
He tells SmartCompany how … and why he invests in emerging technologies.
“I am into innovation. All the fun is investing in early-stage companies because after that it becomes different – full of managers, accountants and lawyers. I am also an entrepreneur. And you can’t invest in start-ups with five people unless you are an entrepreneur and have run a start-up with five people.
“At present we invest between $50,000 and $300,000 in a start-up. We specialise in web 2.0, wireless, software, ASPs, new media and mobile applications. Very few people invest in Australia at such an early stage so many people come to me and ask for money.
“Often they’ll say, ‘I have this great technology and I need $3 million’. But they don’t need $3 million. They need relationships, grants, programs to help them commercialise and get to the next step like COMET (the Federal Government’s Commercialising Emerging Technologies program) and Export Market Development Grants. We get the companies ready for a fee (usually between $1000 and $100,000.)
“If the guy is right and the chemistry is right, we invest. Initially it might be $50,000 but if the company needs more – like $700,000 – we will get co-investors. Of the $3 million we have invested since we started in 2000, we have raised $35 million in co-investment.
“Often entrepreneurs just need ideas. I just had a great session with Rex Hunt. He asked me, ‘How do I take my brand worldwide? Why not go fishing with a star like John Travolta and get him to tell you his life story and put that on primetime TV?’
“My biggest tip to entrepreneurs? Avoid indecision. If you can’t make a decision you are in limbo. So it’s better to make a decision even if it’s the wrong one. At least you learn by that.
Don’t sack the entrepreneur
When the business is so small, it will not survive without the entrepreneur. Once the business starts making decent sales, of $5–7 million, that’s when you start to think about replacing the entrepreneur with a management team because the business needs new skills at that stage.
“If we invest in 15 companies, we’ll get seven to the stage of needing $1–3 million and then four of those to the stage of needing $3–6 million. When they need $12 million we’ve made our money.
“Our biggest success was investing in digital company Quickcut, which was worth about $750,000 10 years ago and recently sold for $50 million.
Is it a world-first innovation?
“When someone comes to see us with technology they often claim it is a world-first. What do I know? I am an accountant. But I know all the experts. If it’s wireless, I ring Walter and I say what do you think? There is always something similar being developed somewhere so being first to market isn’t everything. It’s usually innovations that are second or third to market that make all the money.
“So many venture capitalists take the attitude in Australia that they love the technology but to take the company forward, they want to sack the entrepreneur. But if the entrepreneur is committed to making it work, mostly it will work. And I have rarely seen a business work where they have sacked the entrepreneur.
“The biggest danger is the entrepreneur saying, ‘I am off to do something else’. The big question is: will the entrepreneur stick around until the business is sold? But there is no way to be certain about this before you invest; it is just one of the risks you take.
Best time to invest
“At present we have a $7 million fund and we are raising money for a $40 million fund.
I feel this is our time. We started after the dotcom crash and have done the hard yards.
"This is also the time to invest in Australian companies. You can get in at very low prices and if you take them to the US, you get 20 times the return. We are approaching another bubble and people should come along for the ride!
“There is lots of money available and it is so much easier to get three or four rounds of funding than it used to be so you don’t need to take companies to IPO.
“The biggest change we will see in the next few years is the superannuation funds investing their money in start-up emerging technologies. New growth businesses around the internet will be hot. Everyone is communicating by VoIP, on their mobiles, by internet. That all has to be monetised. And so there are going to be people who are going to make a lot of money.
“At the moment superannuation funds are all focused on buyouts but soon there will not be the deal flow for all that money. Once a few investors make millions investing in early stage, they will follow and then we’ll really have a bubble.”
Tuesday, 20 February 2007 By Amanda Gome
Ivan Kaye is a rare breed in Australia. The former accountant runs advisory company BSI and two venture capital firms, ADI and Information City. He chooses to invest small amounts of money in high-risk start-ups in hot new industries, a space ignored by most venture capitalists in Australia.
He tells SmartCompany how … and why he invests in emerging technologies.
“I am into innovation. All the fun is investing in early-stage companies because after that it becomes different – full of managers, accountants and lawyers. I am also an entrepreneur. And you can’t invest in start-ups with five people unless you are an entrepreneur and have run a start-up with five people.
“At present we invest between $50,000 and $300,000 in a start-up. We specialise in web 2.0, wireless, software, ASPs, new media and mobile applications. Very few people invest in Australia at such an early stage so many people come to me and ask for money.
“Often they’ll say, ‘I have this great technology and I need $3 million’. But they don’t need $3 million. They need relationships, grants, programs to help them commercialise and get to the next step like COMET (the Federal Government’s Commercialising Emerging Technologies program) and Export Market Development Grants. We get the companies ready for a fee (usually between $1000 and $100,000.)
“If the guy is right and the chemistry is right, we invest. Initially it might be $50,000 but if the company needs more – like $700,000 – we will get co-investors. Of the $3 million we have invested since we started in 2000, we have raised $35 million in co-investment.
“Often entrepreneurs just need ideas. I just had a great session with Rex Hunt. He asked me, ‘How do I take my brand worldwide? Why not go fishing with a star like John Travolta and get him to tell you his life story and put that on primetime TV?’
“My biggest tip to entrepreneurs? Avoid indecision. If you can’t make a decision you are in limbo. So it’s better to make a decision even if it’s the wrong one. At least you learn by that.
Don’t sack the entrepreneur
When the business is so small, it will not survive without the entrepreneur. Once the business starts making decent sales, of $5–7 million, that’s when you start to think about replacing the entrepreneur with a management team because the business needs new skills at that stage.
“If we invest in 15 companies, we’ll get seven to the stage of needing $1–3 million and then four of those to the stage of needing $3–6 million. When they need $12 million we’ve made our money.
“Our biggest success was investing in digital company Quickcut, which was worth about $750,000 10 years ago and recently sold for $50 million.
Is it a world-first innovation?
“When someone comes to see us with technology they often claim it is a world-first. What do I know? I am an accountant. But I know all the experts. If it’s wireless, I ring Walter and I say what do you think? There is always something similar being developed somewhere so being first to market isn’t everything. It’s usually innovations that are second or third to market that make all the money.
“So many venture capitalists take the attitude in Australia that they love the technology but to take the company forward, they want to sack the entrepreneur. But if the entrepreneur is committed to making it work, mostly it will work. And I have rarely seen a business work where they have sacked the entrepreneur.
“The biggest danger is the entrepreneur saying, ‘I am off to do something else’. The big question is: will the entrepreneur stick around until the business is sold? But there is no way to be certain about this before you invest; it is just one of the risks you take.
Best time to invest
“At present we have a $7 million fund and we are raising money for a $40 million fund.
I feel this is our time. We started after the dotcom crash and have done the hard yards.
"This is also the time to invest in Australian companies. You can get in at very low prices and if you take them to the US, you get 20 times the return. We are approaching another bubble and people should come along for the ride!
“There is lots of money available and it is so much easier to get three or four rounds of funding than it used to be so you don’t need to take companies to IPO.
“The biggest change we will see in the next few years is the superannuation funds investing their money in start-up emerging technologies. New growth businesses around the internet will be hot. Everyone is communicating by VoIP, on their mobiles, by internet. That all has to be monetised. And so there are going to be people who are going to make a lot of money.
“At the moment superannuation funds are all focused on buyouts but soon there will not be the deal flow for all that money. Once a few investors make millions investing in early stage, they will follow and then we’ll really have a bubble.”
Sunday, March 11, 2007
BSI Launches its Gateway to USA programme at GDAY USA 2007
Alex Daniel (BSI USA) Peter Johnston (BSI Queensland) Dieter Bohm (Catchlog) and Ivan Kaye at the Premier Gday USA Event.For pictures of the event and "FIshing with Rex Hunt" click here
BSI Launched its Gateway to the USA programme during Gday USA, Australia's Premier Showcase of products and services to the USA.
BSI Opens Doors in the ICT Arena
Article by Tony Kaye written for the Digital Harbour Website
Even with a fantastic idea, getting good projects off the ground is often difficult without the right knowledge, the right connections and ready access to capital.
But the path for many innovative Australian ICT companies has been made a lot smoother, thanks to the efforts of Digital Harbour-based Business Strategies International.
BSI, formed in 2001, actively assists ICT companies with raising capital, accessing government grants and business advisory – effectively opening doors that most start-up ventures would not even know about.
Every three months, BSI holds investor forums in Sydney, Melbourne and Brisbane, where it showcases innovative companies to around 200 high net worth individuals and funds. These companies have great technologies and the potential for exponential growth to export markets.
“Our whole purpose is to help companies to grow,” says BSI director Ivan Kaye, who co-founded BSI with business partner Alan Milwidsky. “Over the last three years, BSI has showcased 110 companies and, of those, 50 have raised finance in one form or another. In total, more than $30 million has been raised.”
BSI is sponsored by the Victorian Government through its VicStart Program, and by the Federal Government, which supports BSI’s Australian Distributed Incubator (ADI) fund. ADI is a $7 million fund that invests in ICT companies and has a joint venture to invest with another fund, Information City. Both ADI and Information City have invested in 35 companies since the program started.
Leads also come through from the Federal Government’s COMET Program, which provides finance to help companies get investor ready and validate their products for export markets.
“COMET rates BSI as a leading player in the industry and they refer a lot of companies to us to help them in the quest for raising capital and getting investor ready,” Mr Kaye says.
BSI is also a leading player in accessing the Government’s R&D tax concession and tax offset. “If you have tax losses and spend less than $1 million on R&D and turn over less than $5 million, you can actually cash in those losses as opposed to increasing the size of your tax loss,” Mr Kaye adds. “We help companies maximise that rebate and work on a success fee.”
Other support is for companies seeking to access the Export Market Development grants program run by Austrade.
Among the many interesting companies that BSI has supported is the automated document delivery group ConnXion, which is now listed on the Australian Stock Exchange. BSI has also incubated a company called EMStream, which streams music and video content to more than 200 pubs and clubs around Australia.
“We have supported many very interesting companies,” Mr Kaye says. “I love every one of those companies. They all have potential for exponential growth. They are all in various forms of incubation – not large companies but hopefully one day they will become large companies. It’s great that we’re supporting their foray in Digital Harbour.”
BSI has also invested significantly in assisting companies on a recruitment level, particularly given the specialist expertise required in the ICT sector.
“Over the years, as our clients have increased in value, and have increased their staffing levels and turnover, a major constraint that they’ve had is to recruit the right people,” Mr Kaye says. “We acquired a recruitment business (BSI People) in 2001 that has grown from three people to 30 people thanks to the skills and leadership of William Maudlin.” BSI People have acquired focussed recruiting companies, including Livingstones (recruitment of office and administration personnel) and Learned Friends (Legal Recruitment).This year, BSI People won the prestigious SARA award of “best executive recruiter of the year.”
BSI has also ventured into the Training Space, and together with Graham Raspass heading BSI Learning, they have developed a training business that provides strategies consulting and training in the areas of change management and leadership skills. As that business has grown, it has acquired other registered training organisations including Southern Edge Training and Hume Learning.
BSI holds regular events for the innovation community and has an entrepreneurial Masters Class Series involving high-profile speaker presenters. Last month Martin Hosking, a co-founder of Looksmart, presented to 80 people at Digital Harbour.
BSI is on a strong growth path, and in the last four years it has grown from a turnover of $1 million to $15 million. The company was voted the third-fastest upstart company by BRW magazine.
“We work strongly with alliances and view alliance partners as a major part of our business,” Mr Kaye says. “We’re very proud and look forward to the next stage of our journey, which hopefully will include setting up BSI internationally into marketplaces such as the US, Israel, Europe and South Africa.”
Even with a fantastic idea, getting good projects off the ground is often difficult without the right knowledge, the right connections and ready access to capital.
But the path for many innovative Australian ICT companies has been made a lot smoother, thanks to the efforts of Digital Harbour-based Business Strategies International.
BSI, formed in 2001, actively assists ICT companies with raising capital, accessing government grants and business advisory – effectively opening doors that most start-up ventures would not even know about.
Every three months, BSI holds investor forums in Sydney, Melbourne and Brisbane, where it showcases innovative companies to around 200 high net worth individuals and funds. These companies have great technologies and the potential for exponential growth to export markets.
“Our whole purpose is to help companies to grow,” says BSI director Ivan Kaye, who co-founded BSI with business partner Alan Milwidsky. “Over the last three years, BSI has showcased 110 companies and, of those, 50 have raised finance in one form or another. In total, more than $30 million has been raised.”
BSI is sponsored by the Victorian Government through its VicStart Program, and by the Federal Government, which supports BSI’s Australian Distributed Incubator (ADI) fund. ADI is a $7 million fund that invests in ICT companies and has a joint venture to invest with another fund, Information City. Both ADI and Information City have invested in 35 companies since the program started.
Leads also come through from the Federal Government’s COMET Program, which provides finance to help companies get investor ready and validate their products for export markets.
“COMET rates BSI as a leading player in the industry and they refer a lot of companies to us to help them in the quest for raising capital and getting investor ready,” Mr Kaye says.
BSI is also a leading player in accessing the Government’s R&D tax concession and tax offset. “If you have tax losses and spend less than $1 million on R&D and turn over less than $5 million, you can actually cash in those losses as opposed to increasing the size of your tax loss,” Mr Kaye adds. “We help companies maximise that rebate and work on a success fee.”
Other support is for companies seeking to access the Export Market Development grants program run by Austrade.
Among the many interesting companies that BSI has supported is the automated document delivery group ConnXion, which is now listed on the Australian Stock Exchange. BSI has also incubated a company called EMStream, which streams music and video content to more than 200 pubs and clubs around Australia.
“We have supported many very interesting companies,” Mr Kaye says. “I love every one of those companies. They all have potential for exponential growth. They are all in various forms of incubation – not large companies but hopefully one day they will become large companies. It’s great that we’re supporting their foray in Digital Harbour.”
BSI has also invested significantly in assisting companies on a recruitment level, particularly given the specialist expertise required in the ICT sector.
“Over the years, as our clients have increased in value, and have increased their staffing levels and turnover, a major constraint that they’ve had is to recruit the right people,” Mr Kaye says. “We acquired a recruitment business (BSI People) in 2001 that has grown from three people to 30 people thanks to the skills and leadership of William Maudlin.” BSI People have acquired focussed recruiting companies, including Livingstones (recruitment of office and administration personnel) and Learned Friends (Legal Recruitment).This year, BSI People won the prestigious SARA award of “best executive recruiter of the year.”
BSI has also ventured into the Training Space, and together with Graham Raspass heading BSI Learning, they have developed a training business that provides strategies consulting and training in the areas of change management and leadership skills. As that business has grown, it has acquired other registered training organisations including Southern Edge Training and Hume Learning.
BSI holds regular events for the innovation community and has an entrepreneurial Masters Class Series involving high-profile speaker presenters. Last month Martin Hosking, a co-founder of Looksmart, presented to 80 people at Digital Harbour.
BSI is on a strong growth path, and in the last four years it has grown from a turnover of $1 million to $15 million. The company was voted the third-fastest upstart company by BRW magazine.
“We work strongly with alliances and view alliance partners as a major part of our business,” Mr Kaye says. “We’re very proud and look forward to the next stage of our journey, which hopefully will include setting up BSI internationally into marketplaces such as the US, Israel, Europe and South Africa.”
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