The standard of ideas seeking venture capital in Ireland

SandTiger

For anyone interested in venture capital in Ireland there is a website called Irish Investment Network. This website puts people in touch with venture capitalists and angel investors.

For the previous few months I have been registered as an investor looking for a good opportunity.

I will give you an example of the ideas that are coming from Irish start ups.

A popular idea at the minute is based on the groupon scheme. In fact it is not a variation of groupon but an exact replica.

The first one that stands out is Grushie.

Two lads in their mid twenties have decided that their unique selling point is to get companies to give away free merchandise and they have designed a logo for their website.

Their 'company' is currently value at €166,000.

Their projected turnover in year 1 is a cool €1,000,000 with an operating profit of €470,000.




The second variation of groupon and its many successful competitors is keeping things mysterious by identifying themselves as Y*****.

This is also a pre startup company. They say "We have a unique global route to market which involves partnering with one preferred online local search directory per country".

So this company is going to take on both groupon and google. It gets better...

There are currently two people involved in this:

An economics and finance lecturer along with a person who has many successful startup companies under his belt.

There is no functional website or deals in place and unlike the previous company they dont have a logo either but they are looking for €500,000 to "assist management raise 500,000 euro in equity to complete software development and continued sign up of our international network of local search providers in English speaking countries."


Fund duration: Gives a runway of 1 year!
1 year Objective: Live site and operate in 5 English speaking markets
Breakdown of funds:
- €200k website development
- €150k staff salaries
(CEO/ Product Director/Commercial Director)
- €50-100k Overheads/travel
- €20k -€50k Language conversion

So the lads are basically looking for a few quid to travel the world and have enough left over to enjoy the finer things in life.











These are typical examples of the ideas that Irish entrepreneurs are submitting for investment.

HellFireClub

The reason I've avoided having anything to do with an investor in this country is the fear of running into some ruthless mug who would try to take complete control of me or my business or just not deal in good faith.

I've worked within some seriously manipulative and unprofessional organisations in this country over the last 20 years, run by lads who would now be pretending to be "investors" but are actually just out to rob a good idea wherever they might find one.

Sharp practice and the cute hoorism that is everywhere in this country, turns me off getting into a business relationship with ANY individual that I do not personally know well and trust.

And that's coming from someone with the 200K (self designed) full functional website and the company logo designed and everything up and running!

None of this distracts from the point that you are making though, that you feel that there is a problem with the quality of ideas looking for seed capital and the logic of those behind the idea doesn't stand up well...

EDIT: 200K for a website, what class A drugs are these guys on?

MyBusinez.com

Wouldn't it be worth your while to give a sheet out (or put it on-line) to attempted entrepreneurs with check points of what they should have before they even attempt to contact investors? It would save a LOT of time talking to people who don't have a clue what they are doing.

HellFireClub

MyBusinez.com wrote: »

Wouldn't it be worth your while to give a sheet out (or put it on-line) to attempted entrepreneurs with check points of what they should have before they even attempt to contact investors? It would save a LOT of time talking to people who don't have a clue what they are doing.

There are a lot of folks with idea's knocking around at the moment trying to start up businesses, but I've noticed that many of them have spent years in various multinational organisations based in Ireland and although they think they have an indea or a concept, they are still living back in another era/their past employment when it comes to what they think is involved in starting up a business. I've spoken to some recently who are seeking additional funds from an investor to hire salespeople, IT people, HR people, a "management team", whatever the fúck that is and all sorts of stuff, when the reality is that they could start up small with the funds they currently have and try to wear several hats for the first 12 months and then when/IF things have worked out, expand the business to take on more folks.

EIREHotspur

I think you hit the nail on the head as regards "Business People" in this country.

Everyone got carried away by this Celtic Tiger Gibberish and quiet a few had ideas above their station.

Property deluded every second person into thinking they were a mini property developer and as Napoleon Hill's book says you don't get rich unless you deserve to.

Talent in itself or a great idea alone won't make you money.

These guys sound like a lot of chancers who talk big and act Flash (Gordon).

200k for a website sounds like it is these guys first cousin pitching. Ridiculous.

MyBusinez.com

HellFireClub wrote: »

There are a lot of folks with idea's knocking around at the moment trying to start up businesses, but I've noticed that many of them have spent years in various multinational organisations based in Ireland and although they think they have an indea or a concept, they are still living back in another era/their past employment when it comes to what they think is involved in starting up a business. I've spoken to some recently who are seeking additional funds from an investor to hire salespeople, IT people, HR people, a "management team", whatever the fúck that is and all sorts of stuff, when the reality is that they could start up small with the funds they currently have and try to wear several hats for the first 12 months and then when/IF things have worked out, expand the business to take on more folks.

Well said HellFireClub. You have to crawl before you can walk and walk before you can run. You're better off starting a business on your own rather than with masses of staff. Do the sales, marketing, accounts and planning yourself as it gives you a better understanding of how difficult it can be to run a business. It is the learning curve you need to work out to become more successful. Plus, you'll have less loans hanging over your head when you start making a profit. If a crash ever happens again, you'll know how to survive if you have to downsize.

A wise man once told me that running a business can be the the loneliest place on earth. You don't have co-workers who can help you on your way. You are the only decision-maker and are expected to know everything even at the start. You don't have many people to talk to even though you need to learn, learn, learn.

Bigcheeze

I would expect there to be a lot of chaff in an open pitching system such as this. Most of the ideas will be crazy and nearly all will be rejected, including some good ones. Of those that get funding, 90% will fail....that's the failure rate, VC's expect. I think it's a positive that there are networks such as this in place. In many countries, people would have no idea how to connect to investors. You can be sure that most of the ideas coming in to Kleiner Perkins are me-too variations of Groupon and Social media.

unklerosco

MyBusinez.com wrote: »

Well said HellFireClub. You have to crawl before you can walk and walk before you can run. You're better off starting a business on your own rather than with masses of staff. Do the sales, marketing, accounts and planning yourself as it gives you a better understanding of how difficult it can be to run a business. It is the learning curve you need to work out to become more successful. Plus, you'll have less loans hanging over your head when you start making a profit. If a crash ever happens again, you'll know how to survive if you have to downsize.

A wise man once told me that running a business can be the the loneliest place on earth. You don't have co-workers who can help you on your way. You are the only decision-maker and are expected to know everything even at the start. You don't have many people to talk to even though you need to learn, learn, learn.

Completely agree with all that, I've my own company now with my wife with around 12 part time staff. We started off 3 years ago, I worked full time for 3 years while building up the business, any money the business made went back into the business, never took a loan out... It was tough going and fairly stressful but was worth it in the end.. And I've learnt a few skills along the way, basic accounts, web design, marketing, HR... I'm able to take a wage now and the business is expanding steadily..

MyBusinez.com

unklerosco wrote: »

Completely agree with all that, I've my own company now with my wife with around 12 part time staff. We started off 3 years ago, I worked full time for 3 years while building up the business, any money the business made went back into the business, never took a loan out... It was tough going and fairly stressful but was worth it in the end.. And I've learnt a few skills along the way, basic accounts, web design, marketing, HR... I'm able to take a wage now and the business is expanding steadily..

Great to hear you are doing well unklerosco. I hope your business continues to grow

DubTony

EIREHotspur wrote: »

I think you hit the nail on the head as regards "Business People" in this country.

Everyone got carried away by this Celtic Tiger Gibberish and quiet a few had ideas above their station.

Property deluded every second person into thinking they were a mini property developer and as Napoleon Hill's book says you don't get rich unless you deserve to.

Talent in itself or a great idea alone won't make you money.

These guys sound like a lot of chancers who talk big and act Flash (Gordon).

200k for a website sounds like it is these guys first cousin pitching. Ridiculous.

Based on my reading of Napoleon Hill, I think that should say that you don't get rich unless you BELIEVE you deserve to.

TheCostumeShop.ie: Ronan

SandTiger wrote: »

These are typical examples of the ideas that Irish entrepreneurs are submitting for investment.

Look registering for a site does not make you a qualified investor and most VC's and Angels I know wouldn't be picking up deals this way. But also most entrepreneurs with a track history wouldn't be pitching on this sites because they already have a network.

Even still VC's look at about 200 - 1000 plans for every investment they make. So it seems a bit bad form to be putting down all us entrepreneurs and people who want to start a business because it's not making your life easy.

Obviously those two deals were a joke, but you need to get out and network to find the real talent out there and invest in the people as much as the ideas.

SandTiger

The reason I am surprised at the standard of ideas being submitted is that with the banks restricting credit and more qualified people being made redundant I expected the standard of both people and ideas submitted on a website like the Irish Investment Network to be higher than they would have been in years past which is not the case.

TheCostumeShop.ie: Ronan

Just to clarify though, the website CHARGES Entrepreneurs who are cash strapped and trying to start a business for €149 - €249 to have the privileged of having contact with some faceless people like yourself (unless your real name is Tiger, which would be awesome) who "Might" consider their business plan, might thieve it, might not be able to afford the level of investment?? With no promises or risk reversal.

I apologise for sounding cynical but to me it appears your business model is the reason you have poor quality leads. Entrepreneurs are risk takers, but at least its an educated guess. This isn't an intelligent way for them to seek capital and if I saw someone with cash issues on their balance sheet, spending money like this and then ask for my money to continue funding their spending... well it wouldn't be pretty conversation.

Not that it's bad what the site is trying to achieve, but you need to re-jig your business model because it's fundamentally broken.

SandTiger

I don't see a problem with entrepreneurs paying a nominal fee to get in touch with investors who they may have no other way to contact bar submitting their proposal to a large VC firm.

They don't put their business plan on the website, just a general outline so that they can get in touch with investors who are interested in their idea and both parties can see if they are a match.

Their submission is available to be viewed through a network of websites with over 20,000 angel investors and provide live events so that entrepreneurs can interact with investors.

Personally I would see it as a smart decision for an entrepreneur to submit a proposal to this network and get in touch with a wide range of interested parties rather than going to one or two VC firms or their local contacts.

TheCostumeShop.ie: Ronan

So in summary you think your business plan is a great idea and it's the entrepreneurs fault for not being smart enough to spend their money to make your life easier?? So you've decided we're all idiots. :rolleyes:

I'd love to see that pitch go on the website - I have this business model that has a track record of not giving us the results we desire, but rather than changing it we plan on doing a lot of complaining about how stupid our customers have become and hopefully the customers will realise how smart we are.

Mate I'm not trying to be mean here but your far to close to your project to realise the obvious. Trying to be cruel to be kind.

SandTiger

TheCostumeShop.ie: Ronan wrote: »

So in summary you think your business plan is a great idea and it's the entrepreneurs fault for not being smart enough to spend their money to make your life easier?? So you've decided we're all idiots. :rolleyes:

I'd love to see that pitch go on the website - I have this business model that has a track record of not giving us the results we desire, but rather than changing it we plan on doing a lot of complaining about how stupid our customers have become and hopefully the customers will realise how smart we are.

Mate I'm not trying to be mean here but your far to close to your project to realise the obvious. Trying to be cruel to be kind.

1. The entrepreneur is the one with the business plan.

2. Myself (the investor) is the one looking to work with the entrepreneur initially through funding and later through sales and finance.

3. I didnt call anybody an idiot. I am showing examples of bad ideas which we all have or good ideas with a poorly thought out route to market or suspect financials.

4. There is a chance you meant to post this in another thread so I'll leave it there.