Here are some of the more interest insights from the business angel and startup fund raising world.
How do you share the equity in a startup – when there isn’t any money? Read my article on Rags to Wreckages of how we have used startup team assessments with a tool for devising 3 dimensional equity share models.
Y Combinators – yes, the startup accelerator that helped generated £3bn worth of business in 5 years, is exploring the idea of working with management teams with out an idea. In effect, if Y Combinators can make this work, then this will move the management team up the value chain. So, instead of valuing an idea – per say – we may find that the emphasis shifts to the team.
Of course, this is simply putting things the right way around – ie. business angels care about the team – more than the idea. For the investors the team implies a series of ground breaking innovations and new products – which the market loves – rather than a one-off lucky strike.
Have you ever thought of what life for VCs is like? Well, they answer to someone as well – limited partners of LPs – as Nic Brisbourne explains. This useful article helps to shed light on why VCs demand certain things – they need it to demonstrate to their customers / investors that they are doing a good job. Now, many business angels are of independent means, but that doesn’t mean that they don’t have to account to a husband or wife, or in many cases, their fellow business owners. It is useful to be reminded that we all report to someone!
Seed Enterprise Investment Scheme – or SEIS – will go live in the UK on the 6th April, 2012. Here the BBAA provide slides from a recent HMRC presentation on the operation of the scheme.