From Little Tech - Big Tech Grows

At our BBG forum last week, Tony Surtees shared the opportunity of investing in the tech space and venture capital.

“ It is a real opportunity.... with the ability to get significant returns if managed  well.”

A portfolio approach is key - one  does not know who or which companies will be “home runs” and if you get 1 in 10 - your returns could be exponential! 

For those who do not have the time to manage a portfolio of “startups” one can look at the tech stocks on the ASX.

Australian technology stocks offer investors the opportunity to add a critical element to their existing domestic equity portfolios – that can give them significant growth!

The S&P/ASX All Technology Index’s total market capitalisation has increased more than fourfold to $114B.

The potential for this sector to outperform the broader market is highly likely!

“If you have money you can afford to lose, you need to invest in the tech VC space” 

Australia is currently producing *more than* a unicorn a year.

Great tweet by @nickcrocker 

2011: 

@Canva

2012: 

@10xGenomics

 

2013: 

@Zipmoney

2014: 

@Zoox

 & 

@Afterpay

2015: 

@Airwallex 

&

@ACloudGuru

When you invest - what’s more important - the product or the people

Message from Patrick Schartzenegger

REALLY PROUD & EXCITED TO SHARE THIS NEWS!! 

I wanna share this for multiple reasons but mostly as a form of INSPIRATION. 

Few years ago I was watching SharkTank & EVERY JUDGE told these 3 brothers that their idea wasn’t great. Doesn’t have legs to really make It. Too many coffee brands already out there...just simply wont work. 

I fell in love with these 3 brothers determination & work ethic & personally I loved the concept. I simply slid into their DM’s and struck a deal and the rest is history. 

PERFECT EXAMPLE OF NEVER GIVE UP. I know it’s cheesy but in life you will always encounter people that tell you not to dream so big. You won’t make It. Not possible. And what happens is you start to put a value on other people’s opinions & you begin to fear failure. You lose your confidence. You worry about what others will think of you if the biz doesn’t go perfectly...

DON’T LISTEN TO THE NAYSAYERS & REMEMBER YOUR DESTINATION & USE EVERY DAY TO GET CLOSER TO THAT GOAL. Focus on the NOW. I know I always say this but I find It important to have someone that constantly reminds you that YOU ARE CAPABLE! KEEP PUSHING! 

 #entrepreneurs #smallbusiness #mindset #venturefunding #coffee #dontgiveup #startupstories 

Jim DeCicco Jake DeCicco Jordan DeCicco Kitu Life Inc. Super Coffee

R&D tax incentive (RDTI) A great opportunity to make a difference

The Government has shown they can make decisions and they can make decisions fast.

There is a window of opportunity for government to support innovation in Australia -  and make it attractive for innovators and  IP to stay in Australia. 

They can do this by reigniting the R&D Tax Concession (RDTI) as a tool to encourage Innovation and R&D and  keep Innovators and IP in Oz! 

This should be the focus of the government, rather than its planned $1.8 billion cut to the R&D tax incentive (RDTI). This cut is absolutely the wrong thing to do in a post Covid-19 environment .

Our Treasurer agrees that tax support for innovation is key 

“We need to have a tax regime around intellectual property to attract companies and maintain their investments in Australia,” Mr Frydenberg said in the UK last year.

The easiest way to ignite Innovation is to encourage innovation by expanding the definition  of R&D in the RDTI programme 

Do you agree that the  R&D Tax Incentive to be reignited 

Write “agree” in comments below

 👇👇👇

Seller raises $6.3m led by Square Peg

With Square Peg leading a $6.3 million, fintech - Zeller (founded by Dominic Yap and Ben Pfisterer 2 ex Square execs ) will provide a better alternative financial solution for business banking - covering payment, savings and spending.

It may have taken some inspiration from Judo, the digital business lender which recently surpassed a $1 billion valuation.

Disrupting the big 4 banks seems to be a wave which investors seem to be riding! 

David Thodey Pictorial on Covid and Innovation in Oz

We had a great session with Tony Surtees last week - talking “the great reset” and the opportunities at are coming from COVID-19.

Loved the story of “Monty Python and the Holy Grail having to imitate horses with coconuts - because of a lack of budget !!! 

Tony also shared a pictorial of David Thodey’s Talk on how we might capture the CoVid-19 opportunity - from Gavin Blake 

Some insites from the pictorial 

-  we must be ambitious and realistic

- identify that there are sectors that are seriously struggling - and will continue to struggle - airlines , cafes and events - what will replace the latent demand? 

- the Aus Government have been amazing 

- we must not ignore the human element - working from home and balance of life improved 

-  7000cases and 102 deaths 

- NBN and technology (such as zoom)  has been a huge enabler 

- China and 5G

- using renewables 

- innovating using real time data 

The Drivers of Innovation

• Corporate Australia
• digital enablement 
• small Business - having time innovate to survive 
• technology enablement 
• research and development 
• more investment in g th he private sector

I reckon - the opportunity to connect and collaborate and realising the importance of contribution and community!

Tony identified the 6 pivotal technologies that he believes will drive the next wave of innovation 

I look forward to sharing with you insites from Tony’s talk - That came from our #BBGthinktank 

Enko Chem raises $45 million to develop crop protection solutions with AI

Great work by Spencer Maughan and Ingrid Fung leading our latest FVIII investment in Enko Chem with our good friends at Anterra Capital and Germin8 Ventures joining in a ground breaking round for new chemical discovery.  Congrats also to CEO Jacqueline Heard!

#finistereventures #agritech #sustainableagriculture

Read full article here https://venturebeat-com.cdn.ampproject.org/c/s/venturebeat.com/2020/06/26/enko-chem-raises-45-million-to-develop-crop-protection-solutions-with-ai/amp/

Canva doubles valuation to $6B in a year !

Canva has raised $60 million in a round that values the Sydney-based company at $6 billion.

The funding comes less than a year after the graphic design business raised $90 million at a $3.2 billion valuation in October.

Co-founded in 2012 by CEO Melanie Perkins, Cameron Adams and Cliff Obrecht, Canva is backed by investors including Sequoia, Felicis Ventures and Blackbird Ventures. The company has more than 30 million users across 190 countries; it recently opened its first US office in Austin.

In 2019, Canva launched a workplace collaboration platform that allows designers to share tools and marketing materials.

In response to the coronavirus outbreak, the company teamed with FedEx this month to create a digital design marketplace to help small and medium-sized businesses develop branding materials.

A post about smashing through the leadership lid,

#Chutzpah, # Change ,#Action #Vision , #Franchising, #Systems,  the value of a #brand 

Anthony James posted a great Insite today that popped up a day after I was having a conversation with my colleague and friends Bill Mclellan about the opportunity to buy a franchise and how to look to do something different post Covid

“Be willing to see the impossible change. Consider things you never have before. Blow the lid off your life.”

— Brianna Wiest

“Envision and live life without limits! - Eunice C “

Learn from those who have done it before and became successful 

John Maxwell in his book - the 21 laws of leadership - a must read - talks about “breaking through “ the leadership lid - 

The dude - roger bannister - who broke the 4 minute mile - no one had Don this - once he did - and people saw that it could be done - many people broke through 

Experiment of bees - put in a jar -with lid. - when lid was taken off over a few days - bees  could not leave the jar - they were conditioned that there was a lid there.

The dude who “started McDonald’s “  - ray kroc did a deal with the McDonald brothers - he saw a vision - the brothers did not want to change from their one store - but eventually they  agreed 

The McDonald’s Story 

Taking Action 

Kroc’s story is about vision, persistence and chutzpah - he was selling milkshake makers to restaurants - business was failing - he landed a whale - McDonald’s - whose business was growing - And who kept on ordering more shakers -

He saw a vision - left his job - to partner with  them to build franchises 

When Kroc had created 6 franchises he bought them out ....and paid them each $1m and a small royalty . 

• He pivoted - left his deadens job and state and started again - major change 
• Made a partnership with brothers to franchise in 1955. In 1961 n 1961, he bought the company for $2.7 million, calculated so as to ensure each brother $1 million after taxe - plus 0.5pc royalty - they had no regrets! 
• Standards , systems, franchise system - resulted in annual sales of $8b in 1983!
• Ray Kroc fortune of $600m at time of death 
• Married to 
• Ethel 1922-1961 - 39 years 
• Jane 1962-1968
• Joan 1968 -  time of his death 1984 
• At time of her death in 2003 - she left her $2.7b estate to charities - $2.5b to Salvation Army to help under priviliged 
• Richard McDonald died leaving a will of $1.6m 

The Value of the brand 

The one thing that makes McDonald’s special - not just the system - that glorious name .... 

About the McDonald’s Franchise 

About the franchise - who makes the money ? 
Become a franchisee or be a part of the franchisor -
An investor or a worker ? 

They both do ok!!!! 

• $1m - Sales $2.7m pa - yearly profit of $150k - 6pc net 
• Contributes innovation and products 
• $45k up front and - rental fee 10pc And 5pc franchise - 2014 $24b revenue - $20b franchises 
• McDonald’s - the Franchisor makes the money 

Ray Kroc and the McDonald’s Insite 

They were busy - they made the best burger and the systems- they did not have the DESIRE to expand ....

It took another to blow the leadership lid and expand the vision 

Some Comments from Anthony James’s article about breaking the leadership lid 

This is great and inspiring Anthony J James we have to believe in ourselves and try new adventure, we have to trust and enjoy them, we can grow when we leave our comfort zone which is dreams killer to embrace new things ,keep motivating people around the world

Syveda J - a lecturer from India 

Absolutely... if at all we are willing to see the impossible change, we need to change our mindset, broaden outlook, be insightful and change the way we normally think... we need to consider things we never came across before, we need to think out of the box... we need to take the risk and just let things happen as per the plan... 

And

In another article he wrote 

our actions are driven by the situation... generally,  nobody hurts others intentionally... it's the situation,  that makes one behave in a certain way. Emotional intelligence,  is all that is needed,  in such a situation. People who possess such a quality definitely show maturity to deal with the situation where others hurt them, intentionally or unintentionally... we need to be empathetic and definitely,  mature, to understand people and their situation... 

Clare Evans

Seeing the #change makes the #impossible #possible

The #problem in the #past is that #people seem to have #lost their #vision as well as #lost #sight of the #real #problem at #hand.

#micromanaging #largescale #globalproblems will never be #successful.

#identify the #rootcause then find the  #system for the #solution.

Brianna Wiest

Are your assets protected?

Michael Mak - BCODE

One of our gems that we invested in through ADI (an incubator we owned and managed)  was a company called BCODE  led by an amazing 32 year old entrepreneur called Michael Mak.

He presented at our BSI investor forum - to a room packed with HnI and VCs and there was effectively a bidding war to invest in this amazing company with patented technology led by an energetic smart actuary.  

Together with our small fund , we partnered with a number of VCs and high net workers individuals and raised $5m in a mixture of debt and equity. 

https://www.afr.com/companies/the-pitch-and-the-deal-20060921-kabbt

https://www.businesswire.com/news/home/20091028005433/en/bCODE-Launches-World’s-Largest-Mobile-Couponing-Redemption

A few years later, Michael was found dead in a hotel room and the business went into liquidation .

http://www.mega-nerd.com/erikd/Blog/michael_mak.html

The loans made by the shareholders were unsecured - and the sphere holders loans were lost! 

The lesson - ensure your biggest assets (your key people are protected through an insurance policy - so your business can still survive.

Is your business protected? 

An easy way to have secured the investment would have been :-

1. A key man insurance policy taken out by the investors ( minimal annual outlay)
2. A loan document secured by that policy (cost $399 and $99 per year)

Comment below and I will send you details of how this can be done for your business 

Venture Capitalism at its finest

How to sell 8 cows from 2

The Yield Raises $11m helping farmers feed the world without wrecking the planet

Tasmania’s Ros Harvey Helping farmers “feed the world without wrecking the planet.”

The Yield - Ros Harvey’s Tazzies (Oz)  agtech start-up has just raised $11 million led by Japan's Yamaha Motor Ventures making the total raise to date $32m. German Company, Bosch, who provides the sensors is it’s largest investor.

Microsoft News describes Ros Harvey as a ‘force of nature,’ using tech to help with  sustainable farming and better working conditions.

“She has always been a pioneer and a force of nature. She can see into the future and translate that into action before anyone else.” Chris Vein, who was the U.S. deputy chief technology officer under President Obama

What does it do 

The Yield – helps agricultural farmers “feed the world without wrecking the planet.”

The Yield’s goal is to use its flagship product -  Sensing+ for the worlds 500 largest agribusinesses. 

Sensing+ provides insights and predictions, using sensors measuring inputs such as light, wind, leaf moisture, salinity etc using artificial intelligence.

It helps farmers best manage their crops, predict what yield to expect, and when to harvest. The local data provides better than information from far-off weather stations.

Examples 

For instance, ASX-listed Costa Group has Sensing+ installed at its farms where berries are grown beneath polythene "tunnels". Costa relies on Sensing+ to tell them what's happening in the micro-climate, and give them information they can use to optimise how they prune, irrigate and harvest," Ms Harvey told Michael Bailey of the AFR 

Sensing+ has allowed another customer to double the time window in which they could spray pesticides and remain in compliance with environmental guidelines.

"It’s all about the Data - says Ros Harvey. Using data, Farmers  can more accurately estimate yields and de-risk their crops as much as possible.

Sensis+ sweet spot and patents are around  the "last mile weather forecasting" for speciality crops such as almonds, apples, avocados and even medical marijuana.

Inspired by Michael Bailey who can be contacted on Twitter or email  at m.bailey@afr.com

Click here for afr article

TAIWAN: No Lockdowns, No Closed Businesses, Non-WHO Member, and Relatively Unaffected by COVID-19

Brian Shilhavy - Editor, Health Impact News 

reports that Johns Hopkins University had predicted that Taiwan would have the second most COVID-19 cases in the world, due to its close proximity to Mainland China.

But astonishingly, in spite of being only 80 miles from the coast of China with over 400,000 of its 24 million citizens working in China, as of mid-April, the country only had 400 cases of COVID-19, and only 6 deaths. And the vast majority of their 400 cases came into the country from abroad.

All of this has happened without shutting down the country with lock downs, and with almost all of its businesses continuing to operate. Is Taiwan doing something else the rest of the world is largely missing?

This video explains why.....

- Taiwan created a central monitoring station, social distancing and travel restrictions as soon as it heard of the potential outbreak in January. They were badly affected by SARS outbreak and took precautions immediately, treating the outbreak seriously.

- people where masks outside 

- all people coming in and out were tested at the airport and monitored for 14 days to show that they were isolating

- there people trust their government

- they used technology to monitor positive cases movement (similar to Australians Covid App) 

About Taiwan 

The island may be small, but the country is a regional and worldwide powerhouse. It’s the 21st largest economy in the world (19th if counting by PPP), despite having a population of just 24 million. It ranks 11th in GDP per capita, comparable to Denmark and Sweden.

It’s also an important partner with Communist China as one of the leading investors, trading partners and bankers for the PRC. Consequently, Taiwan hosts quite a bit of contact with the PRC.

For comparison sake, the United Sates saw about 3 million visitors from China in 2018, while Taiwan hosted 2.6 million visitors from China in 2018.

That’s why the results from Taiwan in fighting China’s Wuhan flu—as they call it in Taiwan—is so extraordinary.

Source https://healthimpactnews.com/2020/taiwan-no-lockdowns-no-closed-businesses-non-who-member-and-relatively-unaffected-by-covid-19/

Sam Sicilia’s strategy of Hostplus investing over $1b in VC Funds - will be regarded a VC Visionary

Hostplus has invested over $1b in VC funds - $100m in Blackbird, Squarepeg, Artesian , Safar, Carthonna and Carnegie .....

Some wins to date .... Canva and CultureAmp - you only need one.

Every fund should have a percentage allocation to VC for so many reasons!!!

What do you think? 

Aussie Innovation raises $6.1m seed round from Google, Slack and others

Cofounders of Hugo, Josh Lowy and Darren Chait have just raised a $6.1m seed round led by Google’s AI-focused investment fund, Gradient Ventures. Slack Fund, Founder Collective and Entrée Capital.

The Pain 

With more and more virtual meetings taking place , insights from meetings stay siloed inside different teams and get lost.

 

There needs to be a methodology of sharing and collating meeting notes across teams within companies, to reduce redundancy and improve information accessibility.

The Painkiller 

Hugo is a productivity app that does this via collaborative note-taking - it’s sort of like a wiki software.( Notion, which recently reached a $2 billion valuation. )

Hugo’s innovation is a platform that integrates deeply within a user’s calendar, recognizing things like past notes from a meeting with a specific person.

The platform uses various software integrations such as Jira bug reports , Zendesk ticket requests, Slack and Google’s G Suite.

Hugo is free for up to 40 users, charges a flat $399 fee up to 100 users and relies on custom pricing beyond that. 

The Customers

Hugo’s customers include teams at Netflix, Dropbox, Shopify and Twitter.

How’s this for an advisory board

President Donald Trump Sure knows how to pick his team!!!

This week named dozens of executives from industries including technology and healthcare task  force to work with the White House to outline how the U.S. can reopen parts of the economy post COVID-19 pandemic. 

Here are 15 executives who have joined the White House's tech task force: 

1. Apple CEO Tim Cook 

2. Google (Alphabet) CEO Sundar Pichai 

3. Oracle co-founder and CTO Larry Ellison 

4. Oracle CEO Safra Catz 

5. Salesforce CEO Marc Benioff 

6. SAP co-CEO Jennifer Morgan 

7. Microsoft CEO Satya Nadella 

8. Facebook CEO Mark Zuckerberg 

9. IBM CEO Arvind Krishna 

10. Intel CEO Bob Swan 

11. Qualcomm CEO Steve Mollenkopf 

12. Cisco CEO Chuck Robbins 

13. Advanced Micro Devices CEO Lisa Su 

14. Broadcom CEO Hock Tan 

15. Micron CEO Sanjay Mehrotta 

Are you positioning your business for a 20X value by 2027?

Paul Bassat has given some great advice to his portfolio companies at Square Peg today 

“Cash is king and make sure you have a profitable and sustainable business.“

In the last few years, Markets have been rewarding growth at all costs 

No more

Going forward markets will be rewarding profitable growth. ”

The next few years will be tough - be sure to make your business profitable and sustainable .

Cash is king.

More money must come in than go out

Be cautious in the immediate term and identify innovative ways to reduce expenditure, ideally, in a way that minimises the impact on your teams.

Seeks experience in the Dot Com Crash and beyond 

For Seek - The period from 2000-2003 - the dot com crash was both a tough period of managing through a crisis but also a major period of value creation. 

They entered the Dotcom crash as the market leader, albeit in a highly competitive market and with a large cash burn. 

Seek emerged from the Dotcom crash as a profitable business and with a dominant market leadership position. 

As a result its share price increased more than 20x from 2003-2007. 

Your daily zoom call - best comic strip wins a prize!

Share a comic strip of a zoom call - 

Copy and paste your screen ..... 

get an app like “Pixomatic” - and put  text on your picture .

Best comic strip wins a prize !

Here’s an example of bsi E’learning’s daily zoom call .

Sequoia advises its Investee Companies

We could be facing a recession ... for most it will be bad... for those with an abundant mindset and a solid vision - it could be really good.  

Many of the most iconic companies were forged and shaped in difficult times - vis-à-vis 

• Cisco - took advantage of black Monday in 1987.
• Google and PayPal negotiated their journey after the Dotcom crash 
• Airbnb , Square and Stripe were founded in the GFC.

Challenges focus the mind - and provide fertile ground for creativity and innovation .

Taleb - who wrote the book “black swan” talks about the effect of the black swan to different people .... 

“what may be a black swan surprise for a turkey is not a black swan surprise to its butcher; hence the objective should be to "avoid being the turkey" by identifying areas of vulnerability in order to "turn the Black Swans white"

 https://medium.com/sequoia-capital/coronavirus-the-black-swan-of-2020-7c72bdeb9753

1. Have enough cash! Have enough access to money to ride out the tough period (toilet paper?) - and have enough access to money or “currency” to make the great acquisitions. Remember the core principal that my grandmother taught me - buy low and sell high!!! Seize opportunities when your competitors have been battered! In a downturn - revenue and cash levels fall faster in a recession 
2. Be prepared to change - be adaptable - as Darwin said - those who survive “are not the strongest or the most intelligent , but the most adaptable to change.
3. Face facts - False optimism can be destructive - face the facts and take decisive action. Look at your overheads, Capex and budgets and reassess.

Investible launches it’s $22m early stage fund

Trevor Folsom and Creel Price’s Investible has closed its first early / seed stage venture capital fund of $22 million early stage funding in Australia run by veteran Daniel Veytsblit.

The fund plans to make 40 investments of circa $300k and 7-10 follow on investments of $700k -$1m. This will de risk the investment in startups says Veytsbilt. 

To date, the fund has backed 10 companies such as seafood auction platform Manettas Seafood, hotel pricing optimisation platform Hotelmize, tourism attraction big data start-up Dexibit and diversity recruitment company WORK180.

One of the early investors into the new fund was son of Primo Smallgoods rich lister Paul Lederer, Rob Lederer, who has been an angel investor for about five years and has built up a portfolio of 30 investments.

Mr Lederer said the $1.45 billion sale of Primo Smallgoods in 2014 had put him in a position to be an investor.

"All the maths shows to have a decent portfolio you need at least 25 investments.

"Through Investible's “club” fund they'll be able to back 40 start-ups, so by investing in this fund, I should get that diversification, as well as their experience and due diligence. The team have the capability, processes and bandwidth to do the relevant due diligence and ensure that the investments are looked after. 

The fund uses 16 criteria to guide its investments, incorporating 250 data points, covering the strength of a start-up's business model plan, pitch, investor deck and the chemistry of the founders.

Hopefully the successes of the fund will be a catalyst for further investments in early stage funding.

Source .... 

https://www.afr.com/technology/investible-raises-22m-for-new-angel-fund-20190925-p52uq0 

By Yolanda Redrup https://www.afr.com/by/yolanda-redrup-j7gdq