4 ms·

While I agree with the sentiment of the article, depending on where you are in Europe it can be very hard to sell your big ambition vision to conservative angel

While I agree with the sentiment of the article, depending on where you are in Europe it can be very hard to sell your big ambition vision to conservative angels who have grown their wealth in traditional industries - sometimes you raise £250,000 because that's all you can raise - especially when you are pre-revenue, convertibles on £150K with a 45% preset conversion is not uncommon. The mindset needs to change from both sides, investors and entrepreneurs. Also, the exit path is less obvious in Europe, you're basically praying that the same tech gods that do tech M&As in the US will want to in Europe

ahomescu1 13y ago
> Also, the exit path is less obvious in Europe, you're basically praying that the same tech gods that do tech M&As in the US will want to in Europe Do you really need an exit? For most traditional companies (non-startups), the goal is "become the biggest/most profitable player in your market", not "sell to the highest bidder".
adwf 13y ago
Yes exactly. The end of the article summed it up nicely, the seed funding sometimes feels impossible over here. It's very difficult to find an investor who will give a decent SV-comparable valuation when you are pre-revenue. It's even worse when you actually have a small cashflow coming in, then they'll just value your company based on revenue x5 - if you're lucky!
- simonbarker87 13y ago
  x5 valuation?! They must have been really impressed with you to give you that. Generally we've found that small VCs are better than angels, but breaking the link between revenue and valuation is tough.
  - adwf 13y ago
    Just an example, not me personally. Yeah it's depressing.
mattmanser 13y ago
Interesting startup by the way, did you guys get funding? How hard was it with a hardware startup? http://www.radfan.com/ http://www.radfan.com/ for those interested.
- simonbarker87 13y ago
  Thanks - yes we've had a couple of rounds of funding. VC mainly and DECC as well. First £35K was through competition wins and business link (before that disappeared). It was very difficult to garner interest from investors pre-revenue. The hardest thing for a hardware start up is explaining the enormous working capital requirement that exists thanks to payment terms and delivery times. We launched the product and first 1,000 units on about £150k (not all in one go) over 2.5 years including tooling etc. It's getting easier now as we can start to sell the vision but people are still terrified of hardware.

ahomescu1 13y ago

> Also, the exit path is less obvious in Europe, you're basically praying that the same tech gods that do tech M&As in the US will want to in Europe Do you really need an exit? For most traditional companies (non-startups), the goal is "become the biggest/most profitable player in your market", not "sell to the highest bidder".

adwf 13y ago

Yes exactly. The end of the article summed it up nicely, the seed funding sometimes feels impossible over here. It's very difficult to find an investor who will give a decent SV-comparable valuation when you are pre-revenue. It's even worse when you actually have a small cashflow coming in, then they'll just value your company based on revenue x5 - if you're lucky!

simonbarker87 13y ago
x5 valuation?! They must have been really impressed with you to give you that. Generally we've found that small VCs are better than angels, but breaking the link between revenue and valuation is tough.
- adwf 13y ago
  Just an example, not me personally. Yeah it's depressing.

mattmanser 13y ago

Interesting startup by the way, did you guys get funding? How hard was it with a hardware startup? http://www.radfan.com/ http://www.radfan.com/ for those interested.

simonbarker87 13y ago
Thanks - yes we've had a couple of rounds of funding. VC mainly and DECC as well. First £35K was through competition wins and business link (before that disappeared). It was very difficult to garner interest from investors pre-revenue. The hardest thing for a hardware start up is explaining the enormous working capital requirement that exists thanks to payment terms and delivery times. We launched the product and first 1,000 units on about £150k (not all in one go) over 2.5 years including tooling etc. It's getting easier now as we can start to sell the vision but people are still terrified of hardware.