Yesterday, we launched an additional cornerstone to the community venture capital model. We see this step as one of many, toward creating a global funding community, with the proper tools to manage and cultivate innovations from all around the world. As several layers of funding institutions already exist, the idea has always been to utilize them together with prominent partners around the world, in creating a value-adding and more efficient operating way, to provide early phase companies with the right tools for success.
Keeping in line with the concept of creating a “Virtual Silicon Valley” and developing new models for more efficient early phase funding Grow VC rolls out the Virtual VC Co-investment Fund to enable VC’s to participate in Grow VC’s seed investments.
The first on board in this Virtual VC Co-Investment Fund is IndiaCo Ventures Limited, a profitable investment management firm listed on the Bombay Stock Exchange.
“The early stage startups space in India is an extremely exciting one and the virtual fund would open doors for VC’s to be a part of this promising market which has tremendous talent and potential given they get access to better funding options” states Rahul Patwardhan Vice Chairman and Managing Director at IndiaCo.
The development of our community has been at a great pace, yet we eagerly await the future where entrepreneurs have more equal opportunities in a global setting. Working with the actors that are passionate about building a better future, with a focus on entrepreneurship, we are confident we can unlock the tremendous potential in global startups.
Altogether, these funds have invested in 36 companies and have had 5 profitable exits. The median initial fund size was $1.3 million, and today the median worth is $2.4 million. While one fund was associated with a college class and had over 200 students participating, the average had about 20 students involved.
If this is in fact the case, then I hope that the authors of this study do not get what they wish for:
According to the authors of the survey, they hope that the report helps increase the quality and performance of the student-run funds and that in response, the broader VC community will offer advice to universities which have these funds.
I hope that they would just keep doing what they have so far and leave the “advice” of the broader VC community to be used only in those VC’s own funds.
Some of the other conclusions from the study:
No funds which have limited investment to only alumni of the university at which they are a part have achieved an exit.
38% of student led venture funds have achieved an exit. One fund has gone dormant.
All funds list education as an objective. 46% of funds list returns as a major objective.
Funds tend to operate as extensions of university’s foundation, independent nonprofit vehicles or as individual corporations.
Today’s educational system seems to be a learning pipeline that ends once you have a piece of paper in your hand and a silly hat. Even as it may cater to the masses, individuals are not alike and there are some fundamental differences in how people learn. For instance, how do entrepreneurs learn and how much do most of them actually benefit from memorizing trivial facts on the school bench?
Where does learning begin for an entrepreneur? I would argue that it begins post the silly hat, in real life when faced with real challenges and opportunities. Entrepreneurs tend to see a puzzle and learn to play that puzzle, in some cases even solve the puzzle. This information or knowledge is tacit afterward, you just know. However, even as the real learning may only start when faced with the appropriate (and often fascinating) challenges, entrepreneurs also need to know a little about everything. Unless you are planning to fix that same puzzle over and over, throughout your whole life – then again, how many entrepreneurs would do that?
Do you remember primary school? When you were taught to memorize states, presidents, historical dates and so on? I sure do. The educational pipeline can span for two decades of an individuals life, a quarter of a long lifetime. Are we making the most of those two decades? In today’s world, where one could argue that printed books often contain outdated information and a whole lot of what we “learn” in school is really only repetition – where is the value of this pipeline for an entrepreneur and furthermore, could there be more value?
In our Podcast a while back with Bjoern Lasse Herrmann, from Supercool School, we talked about learning and how different people learn in different ways. Some entrepreneurs are drop-outs, not because of lacking potential, but lacking the right tools to develop that potential and channel that talent. Shouldn’t our systems cater for those individuals as well? Also, which do you think is worse, dropping out because of ‘not belonging’ and benefiting from the system or being resilient and “surviving” in the system, yet not really getting any value from it?
What we also talked about in the Supercool School approach, was the changing archetypes in teachers and students – both tended to be participating at the self-chosen level and by choice. I would argue that this will have a tremendous impact on learning, from both angles. Imagine listening to someone you wanted to listen to, talk about something you wished to learn – does that sound like your experience from your education? Some of the times maybe, but all of the time?
To be frank, this is quite a selfish post, having sat in the educational pipeline for that two decades, and only in the last years finding subjects I am passionate about. For me, it seems that a lot of that time spent on school benches constituted missed opportunities and untapped talent in many cases.
As an entrepreneur, I’ve chosen to learn in and from the real world – most entrepreneurs do. A big part of that real world constitutes people and often other entrepreneurs. To link this post back to the recent topic of Ecosystems, I believe that the community ecosystem can also foster learning, via new perspectives, initiatives and working together with like-minded people. Learning is crucial, how else will you know you’re making progress?
Learning should always be a top priority, which it also is, in our community. Engaging with people requires so much more that simple wit, and that I believe, is one of the biggest teaching points in our educational system, even today. In global operations and in a global community, you can interact with people whose whole lives are very unlike your own, people who do not share your thoughts, practices and possible perceptions of the world. Talk about a learning opportunity! Not simply about other people and how to interact with them, but a vast learning opportunity to find out about yourself as a person, how you tick and how you make others tick.
In a changing world, we need to be humble enough to accept the gaps in our understanding and courageous enough, to embrace our passion for learning. Growing as an entrepreneur, and as a human being, builds on the premise of constant learning.
UPDATE (Sat 26th of June): It seems that the conference is canceled. Waiting for more information.
UPDATE 2 (Mon 28th of June): Cancellation is confirmed. There is no PGI conference of any kind this week.
Today we’re talking about the importance of actors from all over the world, coming together and building a vast network and therefore we’re calling this episode “Connecting Continents”. We had our lovely guest Tanya Noel, founder of Partners for Growth and Innovation on the Podcast and discussed the conference on the 28th to the 30th of June in Viareggio, Italy, where Valto also will be speaking and the underlying reasons to why conferences like these are so important.
You can listen to this brief Podcast below in the player or on iTunes.
Here’s some discussion points:
Conference program
Slowing down the pace and getting away from the ‘white noise’
Creating deeper connections
Getting entrepreneurs to “slow down” and the value of pausing
We’re now moving in such pace that some of the new stuff we do, quickly becomes yesterdays news and I almost forgot to share our yesterdays announcement also in here. Hit this link to read the release. In our release we announced our own Service Investment round with some great new members joining our team and also that we are now opening our own first funding round.
In case you didn’t know, Grow VC have been fully self funded for past two years, but now we feel ready and confident that it’s time to add a dose of rocket fuel and kick in another gear to extend our reach and add even more speed to our progress. Based on requests we get all the time, it feels that’s also what the people are expecting from us.
As mentioned in our release, we are planning to follow our own rules here and do our own funding round in the “Grow VC style”. So we are looking to do this as part Angel round and part crowdfunding.
For crowdfunding part, we still have some stuff to figure out, as using the community funding model we now have in our service, would perhaps be unfair for others if we would just jump in – so we are also thinking additional ways to structure it so that it would not be taking anything away from others in our service and ways where everyone can really feel to be part of Grow VC. – Naturally if we find a good new model, we will release that for everyone else in our community to use as well.
So far, when meeting different people and also talking about us doing crowdfunding to Grow VC we have mostly got; “yes you should” -type of replies and many have even suggested it without us even asking. So we do think it would be only natural for us to do it and also feels it’s what’s expected from us.
Naturally we would like to get your feedback as well, so feel free to voice your opinion in the comments below, so we can get some discussions going
Should Grow VC crowdfund part of it’s funding round or not?
The Red Herring editorial team selected the 2010 Finalists as the most innovative companies from a pool of hundreds from across Europe and there are some familiar companies among these finalists. Cellictica and Zonerider of these we have also covered in our podcast and newsletter.
“Simply Magical Mobile Apps that Listen to You, Understand You and Talk to You!”
“LumoFlow is a seamless collaboration environment for businesses. Share documents, have discussions and get projects done.”
“Zonerider turns ordinary wifi networks into secure Hotspots. we see a world where anyone can share broadband and get paid via ads or fees”
As I was asking if we can mention each of the startups in this post I also got a call from Cellicticas CEO, Kimmo Sainio from some additional updates. Kimmo told me that they are in process of closing their funding round within a month or so that they have in part also been raising external to Grow VC. So, those of you that have been looking at their direction with an intention to jump on board, may want to make sure you don’t miss the boat. Needles to say what’s the easiest way to do that.
Here’s also their latest video about their Trippo VoiceMagix launch for iPhone US-market, enjoy!
Announcing the winners
The Finalists are evaluated on both quantitative and qualitative criteria, such as financial performance, technology innovation, quality of management, execution of strategy, and integration into their respective industries. The 2010 Red Herring Top 100 Europe will be announced in Paris on May 27 at a special award dinner at the Red Herring 100 Europe event. A perfect occasion to celebrate the exceptional accomplishment of European technology companies and entrepreneurs, while exploring the future of the region as a global player.
Echelon 2010 is Asias leading web technology conference taking place in Singapore on June the 1st and 2nd. We are thrilled to be a part of such an innovative and forward oriented conference, and will be presenting our contribution to our collective futures there as well. More information on Echelon can be found on their homepage, here.
Living in a network society, we want to give attendees the opportunity to network, prior to the event, as well as after in our Virtual Silicon Valley. So for the first time ever we are also going to sponsor all of the 50 startups that are presenting at the event, by giving a one month free access to our Virtual Silicon Valley. Also, at the event Jouko will separately select or organize a vote for 5 of the startup companies to get their free account extended for 3 months.
For everyone else at the event you may want to look up Jouko as he going to be handing out limited number of “free visas” at the event to our Virtual Silicon Valley.
I came across this great article in Bloomberg Business week with a topic “Why Boulder is America’s Best Town for Startups“, the article talks about Boulder and how they have build their startup ecosystem and also what is a good role for government. I think this is a very timely topic to many cities around the world, so I wanted to also cover this topic here as well.
There’s no denying the power of the Silicon Valley as the global leader when it comes to startups. That said, it really does not help so much the people outside the Valley and even less the cities around the world that are trying to build their own vibrant startup ecosystem and that’s why I personally see the case for Boulder Colorado, much more appealing for cities around the globe to take a note.
The history of Silicon Valley goes all the way back to great gold rush, so it’s easy to understand, that the model to build a such ecosystem can not really be learned from the Valley alone.
There have also been many posts about this topic, like this Article by Fred Wilson “Startup Ecosystems Take Time“, where he also points to some other articles. The main point about these discussions is about “how long does it take?”
If Silicon Valley have been 50 years of making, Fred and others seem to agree that for any new ecosystem it will still take decades to build and get it work, but here’s where I disagree. – It does not need to take that long and that’s good news for cities that are just starting to see the undeniable change force of the entrepreneurship and are in their early days of building a functional local startup ecosystem.
I think this article in Bloomberg Business week explains a great example of how long (or short) in reality it can take to build a vibrant ecosystem, when it’s driven with passionate people and the whole city is behind it. As shown in Boulder it only took about 4-5 years and that’s half or less that what Fred and others are thinking.
So what are the new factors that accelerate the process of building the local startup ecosystem:
First, there’s no denying the power of the Internet here, access to information, tools, people etc. is just so much easier than what it’s been a decade ago, and this leads to faster cycles of learning everywhere. It’s got a some what similar effects of what you have in “living in a small town” where everyone knows each others and news, gossips etc. move so much faster.
This enables these new ecosystems to tap into these people as well to enable to accelerate their local ecosystem developments like newer before, like the TechStars in Boulder have done as well.
My favorite method to showcase the fast pace of online is this video from Socialnomics author Erik Qualman, where he also describes the size of Facebook as; “if Facebook would be a country it would be the 3rd largest country in the world”.
This says a lot, but at the same time if all Internet users would be a country it simply would be the largest country in the world, and there too a startup ecosystem is needed and that’s why we are building the Grow Venture Community.
One of our messages when we are describing Grow Venture Community, is that we are building a Virtual Silicon Valley. That explains a lot about the way we think about the future of the startup ecosystems.
In that article, there’s also a great side note about what governments should do and this is a very important detail to take a note:
When I ask longtime players about local government, they shrug. When I ask them about state government, the common refrain is that the best thing it can do is invest in education and otherwise stay out of the way. The lesson here is that it doesn’t take billions in government spending to create a thriving industry cluster. Instead, with a little luck and lots of hard work by residents, local economies can be shaped from the bottom up.
I strongly agree, this is crucial for any government and other public organizations to understand – the best thing they can do is to facilitate, but other than that let people shape it.
In global level this is very much our own position as well, as it’s not about what we do – as it is about people coming together to start great things and to solve problems of all kinds. – So we too only build tools to facilitate this and host these activities for Virtual Silicon Valley, by taking our role to develop and serve the needs and activities for those using our platform. And we also want to open our platform for others to develop for it as well.
But we also want to help the local ecosystems to make it easier to tap in to global resources and that’s why we are building local platforms that are globally connected, because by combining the virtual an physical worlds and activities together, that will be the real winning combination for everyone.
“Idea behind this emerging Crowd-funding model is to fix the current inefficiencies of private seed funding for firms” says The Business Times article. Singapore based The Business Times is Asia’s leading business daily. I had an honor to write an article for the paper. I will also talk about this topic in Echelon 2010, Asia’s Leading Web Technology Event, organized by e27 in Singapore on June 1 and 2. Echelon 2010 speakers are a rich combination of startup ecosystem professionals from the US and Asia.
The Article continues “EARLY phase startup funding requires new solutions. Venture Capital (VC) companies are moving their focus to more mature companies and institutional investors are decreasing investments in VC funds. Entrepreneurs want to have more competition and transparency in the funding market, and business angels require better tools to locate good startups and for easier deal-making.”
The final conclusion is “The startup funding market is one of the areas where new online services will make a lot of changes during the next two years. The traditional VC model is not enough anymore; we need a more effective, transparent and global market for startup funding.”
You can read the full article from The Business Times’ web site (subscribers only) or see a copy here.
Grow VC will host sessions in this year Next Conference in Berlin. On May 11 & 12 the next conference is taking place at STATION-Berlin. The Next Conference is one of the most important networking and trend conferences within the European web industry.
Organizers are expecting a hundred international speakers and up to 1.500 participants. Amongst them will be decision makers of the media, technology and advertising sector, agencies and service providers, investors and start-ups. It is the only conference that unites the Internet community with brands and leading companies.
Grow VC will host a workshop session “New Funding Models – Crowd-funding and Co-op Communities” on May 11, and Grow VC has a presentation “Virtual Silicon Valley – everyone funding startups” on May 12. The theme of conference is “Game Changer”. It is exactly the point of Grow VC’s sessions too. We are going to tell, how the funding models are changing, how crowd-funding open new opportunities, and how Grow VC wants to make the whole funding world more open and transparent.
management firm listed on the Bombay Stock Exchange.
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