Archives for category: Startups

Ace 5

 

TL:DR Large corporates really struggle to innovate. Meanwhile startups eat their lunch.

Corporate venturing and accelerators can solve the issue and create a win-win.

If you are a corporate CEO you are probably frustrated by the inability of your company to innovate like a startup. You almost certainly employ some of the brightest people around and may have huge departments looking at innovation or R&D. However, your industry is almost certainly being disrupted by tiny teams of startup founders with new business models and a grasp for frontier technologies such as artificial intelligence and virtual reality.

Corporate executives shouldn’t beat themselves up too much. The odds are weighted against them. It is almost impossible to innovate within the existing corporate structure. Most truly innovative ideas will cannibalise existing business models, change the structure of the company and redeploy the workforce at the very least. It is therefore, extremely difficult for internal departments to gain acceptance from the rest of the company. In addition, risk is a fundimental component of all radical change. Who wants to fail fast in a corporate environment? Yet it is enshrined in startup culture.

The most effective way for corporates to access startup innovation is to buy into it. This can involve either buying early stage startups outright, investing in them or running accelerator programmes. In all cases, there can be huge advantages from having third party involvement. The key is to take a relatively hands-off approach to stop corporate interference which invariably kills the innovation that you are searching for.

Accelerator programmes illustrate this well. A corporate working with a third party can immediately invest relatively small amounts of capital into a small portfolio of interesting early stage businesses. They can provide an environment conducive to growth by giving access to essential corporate assets such as sales channels, engineering resources and other mentors.

At a later stage corporates can invest in more mature startups with a corporate venturing approach. This involves scouting for winners and making individual investments. The challenge is picking the winners and a company like Dreamstake Ventures can help cut through the noise and reduce risk.

Corporate investment in startups, through programmes or individually creates a win-win. The corporate accesses innovation quickly and efficiently, whilst the startup gains resources and support for growth. Corporates need to embrace the startup culture and take their businesses to new heights.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech accelerator platform focusing entirely on taking startups from inception to Series A. Dreamstake identifies promising startups from universities and other accelerators and provides them with access to the resources they need to achieve later stage success. This is achieved through a large programme run out of Google Campus in London and our own network of experts and investors. We run corporate accelerators on behalf of clients and have recently supported Just Eat with a Foodtech accelerator.

Technological progress is threatened by dual threats from Trump and Brexit. The eco-system needs to show some backbone and stand up for our startup values.

trump farage

 

We have seen immense technological change over the last 2 decades, much of it enabled by the global spread of the internet. The pace of this change is only going to accelerate and represents a real opportunity to tackle some of most persistent challenges facing humanity. The internet has spawned a generation of hugely ambitious entrepreneurs intent on building global companies. However, it is exactly this rate of change that is alienating large sections of society who feel left behind.

Over the last 6 months we have witnessed a monumental onslught on our startup values. Trump and Brexit represent a threat to our open and progressive culture. Both would like to focus resources on populist policies such as re-envigourating traditional industries and allaying the fears of their core supporters. Neither understand the fragility of the startup eco-system and how easily it can be destroyed.

Startups thrive in eco-systems such as Silicon Valley and London. They demand a lot of support to prosper and can easily fail if this support isn’t forthcoming. These startup clusters attract the best brains from across the globe and cannot survive without continual access to this talent.

The recent inauguration of Donald Trump and the vote to leave the EU both represent a huge threat to the open and democratic ideals of the startup world. It will cut access to entrepreneurial talent that will be forced to go elsewhere. Trump and Brexit will redirect resources towards re-establishing traditional industries that will prove uncompetitive in the longer term and can’t hope to emulate the growth of digital businesses. This will hold back progress in tackling major issues such as eliminating disease, reducing poverty and improving education. All areas where technology is already making a major impact.

The Silicon Valley elite have been disappointing in their response to the threat; acquiescing to Trump rather than making a stand. Apart from a few exceptions their London equivalents have been equally feeble in response to Brexit. These are leaders who have access to the most powerful channels for protest in the world. For god’s sake, Trump has shown more gumption in using Twitter than the whole Silicon Valley eco-system put together.

If we want to ‘change the world’ we need to earn the right to do so. We need to get across the advantages that exponential technologies such as AI, genomics, robotics, blockchain and virtual reality can bring to society. We need to lobby strongly to promote our values of openness and diversity and how this will bring benefits to all. Most of all we need to recognise the threat and should voice our disapproval at every opportunity to any injustice being imposed on our friends and colleagues in the global startup community.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech accelerator platform focusing entirely on taking startups from inception to Series A. Dreamstake identifies promising startups from universities and accelerators and provides them with access to the resources they need to achieve later stage success. This is achieved through a large programme run out of Google Campus in London and our own network of experts and investors.

FailsWe all make mistakes, especially when trying to do something for the first time. In fact, I think I have probably made all of these startup fails at some time or other.

The startup world is constantly evolving. However, most of these fails are not new. I would really like other entrepreneurs to learn from my mistakes. Avoiding these simple fails will increase your chance of building a successful startup and reduce the time it takes you to get there.

Don’t build before you are certain there is a burning need

Probably the most common mistake for founders to make is to build an MVP before establishing a need. You may have read articles that suggest that it is important to get an MVP out as quickly as possible. Right, but not before you can verify that there is a burning need for what you are about to build. It is easy to test demand for your product using pen and paper and open questioning. Check that you are solving a real problem and that there are no valid alternatives that the user might use. Obsess at this stage and do not move forward until you are absolutely certain that your solution will address the issue in question. If you do build an MVP without validation of the problem you will find engagement to be slow or non-existant and total reluctance from investors to get involved.

Don’t do it alone

Building a tech startup is a team activity. A single founder will never have the full set of capabilities or bandwidth to launch a startup on their own. At early stage there is very little else, apart from the team, for investors to judge the startup on. As well as the core team, surround yourself with experts. Persuading an advisory board to support you is good way to get validation for what you are doing. If they won’t come in, they probably don’t have confidence that you will make it. Listen to what they say and tweak your proposition if it makes sense.

Don’t be closed-minded

Although founders are expected to be strong, driven individuals, close-mindedness is a red flag to investors (and probably to clients and employees). It is important to listen to advice and decide what to act upon. Select advisors with relevant knowledge; either existing successful founders or individuals with deep sector experience. Don’t look for yes-men. It is much more valuable to find people who will give blunt feedback. Learn how to take tough love.

Don’t misjudge timing

It’s easy to be either to early or too late with an idea. A lot of what you read is hot is from a Venture Capital perspective. However, by the time you have got your startup off the ground the VCs will be exploring the next big thing. If what you are working on seems too familiar then you are probably too late. Many consumer apps are in this category. If you are coming in late, make sure that you can improve on whats already out there and be totally sure that users will switch from what they have become familiar with. It is also possible to be too early. Think Google Glass or the first iterations of tablets. Remember there is a difference between pure research and being a first mover in a commercial marketplace.

Don’t under-estimate how long it takes to raise capital

Raising capital is much more difficult than first-time founders ever imagine. It is also important to remember that it is not just the first round of funding to take into consideration. There is nothing worse than raising a simple seed round only to find that you can’t get VCs (or anyone else) interested, once you have burned through the cash. Work backwards from the VC round and estimate how much you need to raise at the seed stage to get there. Venture Capital firms are moving upwards and this has created a nasty gap, sometimes calling for a bridge round. In building the first seed round, find a lead investor and build around this individual. They will bring confidence and attract other investors. Allow 6 months for each round and make sure that you are investment ready before starting the process.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech accelerator platform focusing entirely on taking startups from inception to Series A. Dreamstake identifies promising startups from universities and accelerators and provides them with access to the resources they need to achieve later stage success. This is achieved through a large programme run out of Google Campus in London and our own network of experts and investors.

foodtechLondon is considered a world leader in the launch and growth of high growth Fintech and Fashtech startups. Few people realise how successful the city is becoming in Foodtech. With a latge and vibrant foodie population situated side-by-side with a rapidly expanding tech community London is set to become the Foodtech capital of Europe.

Startup communities tend to thrive where there is a logic for them to be situated. This usually means that they have a large successful sector thtiving in close proximity to the resources required to build them into technology businesses. For example, London is strong in financial services and has therefore built a leading position in Fintech. The same applies to fashion. We tend to forget the third Ftech, Foodtech. London has all the ingredients necessary to create a thriving Foodtech eco-system.

So what makes London so special in this domain? We have a very large, prosperous population with a huge appetite for some of the most diverse cuisines in the world. This has created an amazing opportunity to offer all sorts of culinary experiences, exactly where and when people demand them. In the midst of this melting pot we have a highly developed technology startup scene and the investor community needed to fuel growth. This has lead to the emergence of a whole host of providers covering everything from insect protein through to vertical farming. We already have our own food delivery unicorns such as Just Eat and Deliveroo with hundreds of new players emerging all the time.

For investors there are a whole host of opportunites to look at, including; food ordering, restaurant management, supply chain and waste management, new food production techniques, new sources of protein, diet management and many others. Food is the world’s largest industry sector and is only set to grow. London is extremely well placed to be at the centre of the foodtech revolution.

We strongly urge founders to look at solving real problems across all points in the supply chain; from farm to fork to bin and not to limit themselves to simple delivery apps which is rapidly becoming a crowded market.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech accelerator platform focusing entirely on taking startups from inception to Series A. Dreamstake identifies promising startups from universities and accelerators and provides them with access to the resources they need to achieve later stage success. This is achieved through a large programme run out of Google Campus in London and mentoring with our own network of expert investors. We are currently running a Foodtech accelerator with Just Eat. Investors please register for demo day here.

Me

You have identified a large and growing market, built an MVP and acquired a few customers. You believe that you will have a business that will be attractive to VCs in 12–18 months but you need £250K to hit the metrics that they demand. Everyone is telling you that you need to find an angel investor or more likely a group of angels. However, finding them is easier said than done.

I was chatting to a Russian investor yesterday. He has made investments in London, Silicon Valley and Tel Aviv and put forward the view that early stage investment was often controlled by a small group of insiders. In the Valley, for example, the best startup investment opportunities are never put out to the broader investor community. He is sometimes asked whether he would like to ‘join’ an investment opportunity as if it is a special privilege.

It got me thinking about the London investor scene and whether something similar exists here. I believe it does, but it is much smaller and therefore even more difficult to penetrate.

Some of you will be familiar with those lists of investors that have circulated on groups like London Startups on Facebook. Well, surprise, surprise, these are not reliable. The VCs are usually accurate because they are easy to identify simply through their websites. However, the angels are either already invested out, were never investors at all, are in the wrong territory etc.

I started to think how best to build the ‘real’ list and realised how important it is to identify the movers and shakers. These are the guys who have been there and done it before. The founders of startups such as Just Eat, Transferwise, Shutl, Songkick, Love Film and the likes. In addition to these there are small numbers of potential tech investors embedded in the main angel networks plus a group of newbies who have the money but not experience. These are good to build a round behind the lead investors.

I have ended up with a list of 100 influencers. These are people that I believe can make a round happen by bringing a combination of expertise and capital. I am meeting as many as possible and inviting them to review the startups on our platform. I have learned that building a round is very strategic. Founders need to be well prepared and pitching at the right level. They don’t get many bites of the cherry, exactly because it is a small community of investors.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech startup platform to match over 16,000 founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders create profiles on the platform and get curated introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

MeWe would like to wish all our investor friends a great summer holiday period. It is a good time to reflect on the Brexit decision and make an assessment of the implications before the next HoxTech Angels event at the end of September.

London has an extremely strong tech scene which will continue to boom over the next few years.  Tech Angel investing delivers extremely high annualised IRR in relation to most other asset classes so long as investors act responsibly and diversify risk across portfolios of quality startups. Our mission at Hoxtech Angels is to identify the best tech startups from over 1,500 on the Dreamstake platform and curate them into selected angel investors.

I would suggest that the startup investment scene was already changing before Brexit.  European tech investors had been responding to fluffiness in Silicon Valley valuations by focusing on more tangible propositions, addressing real problems and with more proof points. The Brexit decision has simply reinforced this.  Expect to see less angel investment in social and consumer apps and more going into sectors like Fintech, Healthtech and Edtech.  As far as technologies are concerned, we are on the cusp of a revolution, with the UK in a great position to exploit leadership in areas such as Artificial Intelligence, Machine Learning, Virtual and Augmented Reality.  We can also expect to see demands from investors to see high levels of traction and lower valuations. However, to repeat a common cliché, great startups will always attract the capital they need to grow.

Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

About 6 months ago I heard a presentation given at Campus London by Daniel Kraft from Singularity University.  A similar presentation from him can be found as a Ted Talk.  The talk blew my mind away and opened it up to the amazing possibilities facing the medical world from the exponential growth of several technologies in parallel.  The combination of low-cost gene analysis, improved computerised bio-informatics, robotics and increased connectivity will revolutionise the way we interact with medicine.

The amazing growth and connectivity of technologies such as connected digital medical records, robotic surgery, nano-medicine and genomics will provide us with a health eco-system that will allow greater emphasis on preventative health and re-direct medical budgets on improving quality of life rather than focusing it on the last few years of a patients existence.

Health services the world over struggle to deal with a variety of problems; increasing cost, unfavourable demographics, access variability, fragmentation, waste and the slow adoption of technology.  Technology can have a positive impact in addressing all these issues.

The increasing power of the smartphone alone is providing a new and increasing range of innovations. It is already possible to test for STDs, blood sugar levels and many other symptoms using sensors or patches linked to smartphone apps. Graphene patches will be even smaller and cheaper.  We are seeing a massive increase in the adoption of quantifiable self solutions. The popularity of wearable wristbands and smart-watches allow us to monitor our health in realtime and take preventative actions. It will not be long before clothing will incorporate sensors that will monitor all aspects of our health and warn us of any problems.

Another area of huge change is in imaging, which is getting increasingly faster and provides far higher resolution. This enables improved diagnosis and supports the surgeon in decision making.  Advanced robotics also provide surgeons with the tools to conduct operations that would not previously be possible.  This can be combined with internet connectivity to allow sharing of information by surgeons during surgical procedures.  Technologies such as augmented reality and even motion detection have potential in medicine, for example in detecting or monitoring stroke victims.

Medical scientists are also carrying out extremely advanced research on devices that allow brain-computer interface as a means for helping quadriplegic patients to restore certain functions.  Artificial retinas will help restore sight and robotics are either replacing or augmenting limbs.

The reduced cost of the genome sampling to less than $100 will allow us to predict the likelihood of developing certain hereditary disorders , this combined with environmental data, and will allow us to take preventative actions.

In general, technology offers the possibility to bring a new approach to medicine that focus resources on prediction and prevention, bringing a higher level of personalisation and participation.  In so doing, technology will increasingly help to empower patients, enable physicians and enhance wellbeing.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

 

 

Lean has served the startup world well and is still applicable to 90% of technology startups. It was designed for high growth, low capital intensive startups as defined by the likes of Steve Blank. It has never been for everyone but I find that it is often ignored through laziness or in some cases pure arrogance.

I would now argue that lean will also be adapted over time. In the case of really simple startups, I would suggest we will see a kind of leaner than lean approach, where the tech has zero cost (wix etc.) and it is quicker to simply build a product to test both problem/solution and product/market simultaneously.

The second area is highly complex products. As we move towards more impactful use of tech building an MVP will not always be possible. This could include hardware, chips, drones, blockchain etc. For the time being I will still relate all startups to the lean stages but with an open-mind in the above situations.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

 

Dreamrate

We would all like to be able to spot the next big startup success before anyone else.  We could be that smart investor who gets in first and makes millions or we could sign-up as a team member or co-founder. It’s also exciting to be able to compare notes with friends about the latest cool apps. But why does it matter to founders and why should they provide valuable data to people like us?

Validation is essential at all stages – We have moved away from the days when startups emerged from stealth mode to a surprised customer base. Unless you are involved in pure research or developing deep IP you need to be sure that other people buy into what you are doing. Ratings can determine where you are in the process. Have you established problem/solution fit or are you well on the way to scaling?  It is important to know. It will determine which investors you talk to and the valuation of the business.

It’s helpful to know where you are – You often don’t know what you don’t know. A rating system can help establish the gaps you need to plug.  You may be a single founder with a cool idea. However, if you don’t have the necessary technical experience you won’t build a successful business. A rating system can provide an objective view of where you stand in the startup lifecycle and help you to address issues.

It’s tough getting discovered – You will need your startup to be discovered by investors, potential team members, the media and customers. The startup world is becoming increasingly crowded. There are millions of apps submitted to the App Store and without a objective ways of listing and rating it is impossible to be discovered.

It helps investors build portfolios – Investors need to diversify their risk. They do this by spreading their investment across a broad portfolio of companies. However, it is extremely hard for them to know which startups to invest in. Most investors will not attend generic networking events in the hope of discovering a winner. It just is not good use of their time. They will also not read unsolicited business plans from startup founders. They simply can’t see the wood for the trees and have no objective way to evaluate what’s been sent to them.

A rating system enables all interested parties to ‘discover’ the next big thing.  It allows us to categorise our database and curate deal-opportunities to investors that are interested in specific sectors or funding stages. If you would like to be discovered we would encourage you to create a startup profile on our platform. Each month we select the most promising startups to pitch at Hoxton Hotel London. We also match startups to angels or VCs depending on the funding stage.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

 

 

baby unicornAngel investors are often cautious about diving in too early when it comes to investing in early stage tech startups.  They argue that it is highly risky and that there is little quantitative data on which to judge performance. Of course this is correct but does the situation get any more favourable if you leave participation until later? We all know that even VCs have a poor record of picking winners. Surely it is better to make a larger number of smaller bets at early stage than risky larger amounts on later rounds when the valuations are poorer and you have less influence? Here are a few reasons for getting in early;

You can cherry-pick the best opportunities

In the current frothy market there is strong competition for VC ready startups.  However, at seed stage, there is the possibility of spotting a gem. Admittedly it takes more work and you may want build a relationship before committing but you can construct a portfolio of startups that play to your personal strengths and experience. I would advise networking like crazy in your designated sector, learn whats attracting VC investment and get in before the rest.

You can influence the outcomes

If you are first in, you can have a strong influence on the strategic outcomes of the startup that you invest in. You will want to pick strong founders in industry sectors where you have previous knowledge and contacts. You can build a powerful relationship in an advisory role and take away some of the burden from the founder in building the first full funding round. You can also bring the benefit of your experience and help the founder attract other investors.

You get a better valuation 

Clearly the earlier you invest the more favourable the valuation you will secure. This has the advantage that you will be able to construct a portfolio in which you hold equity in a great number of startups with higher equity share. The diversification of your portfolio is an essential part of achieving a higher return on your investment. If you spot opportunities early enough you will find that quite small individual investments can have a major impact.

I would advise founders to start building their funding rounds, bottom up, from very early in their startup lifecycle. They should identify smart investors who are able to add value during the early days and later bring in other investors to construct the full seed round. Most founders fail to realise that they will need a lead investor anyway. It is better for both parties to build the relationship early to obtain maximum benefit.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.