Angel Investors???

YouBuyLocal

Hi :-)

Is it difficult to contact and organise meetings with business angels in Ireland if you have no contacts?

My company is developing an on-line trading and marketing platform for small businesses. We have three developers working on it and we managed to get some free office space off a contact for a couple of months, but as I've been working on it myself for over a year, all my savings are drained to the bone. Two of the lads can survive for a few months during development but I need to get some cash together to keep the other lad on board (and also I don't want to let him down and short change him for the excellent work he is doing). So I need to get at least 10k together to pay for business expenses and a small allowance for the lads.

We are all 120% committed to this and believe it is an extremely disruptive & innovative revenue model in an extremely under-serviced market (I know there are lots of trading platforms but give me the benefit of doubt that there is a lot more to it than that).

So has anyone here got any experience with developing connections with investors or otherwise? We don't need much for now (after launch, when we are generating revenue & growth we will look into organising a much larger funding round), but a small amount to keep us alive and able to pay for business expenses would be a huge boost.

I've applied for incubators but up until this month we were not at a reasonable stage of development to be accepted. The incubators coming up are too far away and there is no guarantee we'll be accepted so I am looking at the interim.

Any advice at all? I know about BusinessAngels.ie - is that worth the effort for a very early stage start-up? Can you just contact known business angels directly if you know where to make the connections?

Thanks in advance

smcgiff

Not answering your question directly, but have you (or other investors) invested capital into the company?

You may be eligible for Enterprise boards grant up to 50% of capital invested. A couple of other criteria required. There's also a possibility of equity finance from them that would be the equivalent of an interest free loan.

Also, you can get a portion of the income tax you've paid over the last 6 years from Revenue. Again depends on the amount of investment you've put in, pretty high limits, and some other criteria.

YouBuyLocal

Unfortunately this ain't a capital intensive business at the start. I put my savings into it over a period of a year and from now on the developers are working off bread & water. They are the capital of the business really. So even if they weren't totally useless in the county enterprise boards (I don't tick their boxes:/) that particular avenue wouldn't be available to me.

I've also never paid income tax because when I worked I was in college and wasn't earning enough.

Appreciate the response though.

EamonOSullivan

If your business is innovative enough you could qualify for an Enterprise Board investment and an investment from AIB or Bank of Ireland Seed Capital fund. It does depend on whether you 'tick the boxes' for them, and each manager has their own criteria.

However what I would say is that if your Enterprise Board comes on board, the you are far more likely to get investment from other sources, as the criteria tends to be similar for all funds.

Without further details it is hard to state with any certainty whether you have any chance of getting equity funding, so PM me if that is more appropriate.

YouBuyLocal

Thanks for the reply Eamon,

I've sent a couple of requests to county enterprise boards to arrange a meeting. They won't be able to provide the supports we need but maybe they'll be able to connect us with those who can.

I would really like to meet someone in these organisations who really understood business and entrepreneurialism, and much of it is an art rather than a psuedo-science box-ticking procedural exercise most business studies graduates presume it to be.

EamonOSullivan

The question really seems to boil down to whether you are in a totally new business with little or no competition. There has to be potential for the business to expand exponentially if conditions are right. If you answer those questions positively, then you are in with a shout for funding from the county enterprise Boards and the Seed Capital funds, in my experience. However all you can do is present your case as best you can. Its not down to the quality of your business plan, its down to other factors related to the industry / sector you are in and conditions in the niche you are in.

Good luck with the applications.

YouBuyLocal

a totally new business with little or no competition

Really? That seems a bit counter-intuitive. Many of the best entrepreneurs out-smart the incumbents in very established markets with new technology as larger organisations find it much more difficult to pivot and adapt to knew trends and technological changes. Take Buy & Sell vs Donedeal for a simple example. Take Microsoft and Google. Competition doesn't seem to have as much of an effect as innovation. Larger organisations often have more power to innovate due to advantages in capital and resources. But start-ups are often much more nimble and agile, with less to lose, less people to co-ordinate and novel perspectives.

Many great entrepreneurs will say to concentrate solely on your product or service and your customer-base, and only pay a passing glance at your competition. Even a cluttered & congested market like group deals (bubble) is still ripe for disruption with the right strategy - which is hard, but I don't doubt somewhere across the West someone is working on it.

Kinetic^

YouBuyLocal wrote: »

Really?

Yup, they want you to create a market rather than compete in an already existing one. Less of a gamble from their point of view. Not something I agree with but I can't see it changing anytime soon.

YouBuyLocal

Kinetic^ wrote: »

Yup, they want you to create a market rather than compete in an already existing one. Less of a gamble from their point of view. Not something I agree with but I can't see it changing anytime soon.

Ok, thanks for that. I hope they have a clear idea of "creating a market". Seems to me that there would be a very fine line and no strict definition. No new business has absolutely no effect on other businesses in the market. As the football pundit would say about the off-side rule: "If he is not interfering with play then whats he doing on the pitch!?!"

Unregistered.

OP, have you called into banks, credit unions and applied to Dragon's Den? I wouldn't hedge your bets all on these angels and Enterprise boards. Give everything a shot and if the worst comes to worst then you'll be no worse off regardless.

YouBuyLocal

Unregistered. wrote: »

OP, have you called into banks, credit unions and applied to Dragon's Den? I wouldn't hedge your bets all on these angels and Enterprise boards. Give everything a shot and if the worst comes to worst then you'll be no worse off regardless.

Hi,

Thanks, yeah I know what you mean, you have to take every route and see where you get traction. Unfortunately I'm young and have no collateral, so when I talked to a Bank (Bank of Ireland), I had all of my projections and everything could gather in terms of market research, but it is just too high risk for them. Lots of people are developing "web-platforms" and you tend to get short-shrift with these types of institutions in this type of market. Might have better luck though now that I am further down the line and have a team behind it. I'll look into it :-)

Had a good meeting with DLR County Enterprise board today though, gonna go back in a few weeks and he seemed to be reasonably convinced of our "bona fides". Best meeting with one of these types yet actually :-)

mari2222

there exists some online platform for matching angels and entrepreneurs it is called ifund or ifunded or something like that - a guy in mayo runs it. it was featured on radio business show a few weeks ago

Unregistered.

http://www.ifund.ie/

EamonOSullivan

YouBuyLocal I wanted to take you up on a few points there:

In relation to new businesses, would you agree there are less compititors in a relatively new business? Lets assume you agree - therefore it makes sense to compete in that space rather than in one where there are many incumbents. Less competition means higher profits, if you believe economists.

Take the example of car dealerships. There are many existing car dealerships, but only a few deal solely with electric cars, and those guys seem to be doing okay. As a new entrant to the market, does it make more sense to compete with the hundreds of traditional car dealers or to look at a new sector of the market i.e. electric cars?

What I am saying is look at a new sector where the profits are better and there is less competition.

I take your point about Microsoft and Google, they are the exception and are totally innovative companies, who have changed how the world does business, but a discussion about them is like discussing Ferrari V Bugatti - interesting in a general way, but of little relevance when starting a new business, and when trying to attract funding for new ideas.

YouBuyLocal

EamonOSullivan wrote: »

YouBuyLocal I wanted to take you up on a few points there:

In relation to new businesses, would you agree there are less compititors in a relatively new business? Lets assume you agree - therefore it makes sense to compete in that space rather than in one where there are many incumbents. Less competition means higher profits, if you believe economists.

Take the example of car dealerships. There are many existing car dealerships, but only a few deal solely with electric cars, and those guys seem to be doing okay. As a new entrant to the market, does it make more sense to compete with the hundreds of traditional car dealers or to look at a new sector of the market i.e. electric cars?

What I am saying is look at a new sector where the profits are better and there is less competition.

I take your point about Microsoft and Google, they are the exception and are totally innovative companies, who have changed how the world does business, but a discussion about them is like discussing Ferrari V Bugatti - interesting in a general way, but of little relevance when starting a new business, and when trying to attract funding for new ideas.

I don't think comparing Ferrari V Bugatti is the anything like comparing MS to Google and I also noticed you skipped over my example of Buy & Sell V Done Deal to make me sound a little overly dramatic.

I know that no large incumbent is doing what I am doing so in that sense there is no competition at the moment. There could easily be a start-up that I haven't heard of that is comparable, but what we are developing is a totally new type of trading platform for the real economy. Anyone that reads our business plan recognises that it is totally new and there is no incumbent out there that is serving our customer-base the way we plan to.

I think you'd have to read it before assuming we are getting in over our heads. It is a fact that large corporations have significant disadvantages in maintaining "feet on the ground" innovation when they turn into large corporate bureaucracies, which allows new businesses in. This happens all the time, and Google is a perfect example. It is not extravagant to talk about them in this context, they were a start-up once with very unrecognised quality. Nobody believed that the incumbent search engines would be beaten by a couple of Berkeley students' class project.

PS It is not always hubris to think of your plan as exceptional. If people here always assumed from the start that a plan is too ambitious without taking time to examine the fundamentals then Ireland would NEVER have a large corporate leader. No real entrepreneur limits his/her dream, but always sets practical 3-6 month targets to allow him/her to get there.

EamonOSullivan

When you discuss Google and Microsoft, my point is that they are one in 100 milion businesses - nothing else. Therefore why take lessons from a one in a 100 million business, when there are many other sucessful businesses out there who have prospered without being a Google or a Microsoft.

Re-reading your posts here, I do think we would probably all need to read your business plan to grasp what you are talking about, because you have a good grasp of what your business is about, whereas we as readers can only guess.

The more I think about it, you should be talking to a tech funding specialist. If you don't already know someone, please feel free to PM me for some recommendations ( not me I hasten to add ) and I can facillitate an introduction.

YouBuyLocal

EamonOSullivan wrote: »

When you discuss Google and Microsoft, my point is that they are one in 100 milion businesses - nothing else. Therefore why take lessons from a one in a 100 million business, when there are many other sucessful businesses out there who have prospered without being a Google or a Microsoft.

Re-reading your posts here, I do think we would probably all need to read your business plan to grasp what you are talking about, because you have a good grasp of what your business is about, whereas we as readers can only guess.

The more I think about it, you should be talking to a tech funding specialist. If you don't already know someone, please feel free to PM me for some recommendations ( not me I hasten to add ) and I can facillitate an introduction.

Thank you for the offer.

Absolutely, there are a hundred million businesses out there and 9/10 start-ups fail, especially when pitted up against large incumbents. But start-ups succeed for subtly better understandings of the business they are going into. Buy & Sell are being beaten at every turn by online start-ups despite the fact that their brand put them in, initially, the best position to capitalise on the growth of the web. Unfortunately for them they knew little or nothing about the internet and the market changes.

That is an example, not an attempt to say that that is the only thing that could come to fruition. Life in general, and especially business, are totally uncertain, but trusting in my own reason and rational faculties, I can only see this as being worth the attempt. In fact, it has to be done, despite the risk, because the potential gains for ourselves and the wider real economy are enormous.

Unregistered.

YouBuyLocal wrote: »

Buy & Sell are being beaten at every turn by online start-ups despite the fact that their brand put them in, initially, the best position to capitalise on the growth of the web. Unfortunately for them they knew little or nothing about the internet and the market changes.

Really?

YouBuyLocal

Unregistered. wrote: »

Really?

Ok, I'll clarify, Done Deal and other classifieds websites like Adverts.ie have outdone Buyandsell.ie.

Unregistered.

YouBuyLocal wrote: »

Ok, I'll clarify, Done Deal and other classifieds websites like Adverts.ie have outdone Buyandsell.ie.

Is there figures for items sold on each of these sites? Is there figures for revenue generated? For my own curiosity.

YouBuyLocal

Unregistered. wrote: »

Is there figures for items sold on each of these sites? Is there figures for revenue generated? For my own curiosity.

Not sure if this answers the question: http://trends.google.com/websites?q=donedeal.ie%2C+buyandsell.ie%2Cgumtree.ie&geo=IE&date=all&sort=0

Look to the bottom left of this page, under ebay: http://siteanalytics.compete.com/donedeal.ie/
Donedeal gets more than 10 times the traffic of Buyandsell.ie and I'm not even sure if buyandsell.ie is profitable.

http://siteanalytics.compete.com/donedeal.ie/
Adverts.ie has just less than 10 times the traffic that buyandsell.ie has.

Unregistered.

YouBuyLocal wrote: »

Not sure if this answers the question: http://trends.google.com/websites?q=donedeal.ie%2C+buyandsell.ie%2Cgumtree.ie&geo=IE&date=all&sort=0

No it doesn't. Without good, solid estimates of how many unique vistors translates into a sale. And the revenue generated per unique visitor. I'm basing this on the assumption that the success of these websites is measure on a) number of items sold through each site; b) profit.

I'd prefer actual figures though. As opposed to something like "Donedeal gets X amount of traffic than Adverts, therefore makes amount X amount more sales". Sure, in terms of advertising on the websites, then you might reasonably expect more eyeballs to translate into more revenue. But that's only one side of the coin.

YouBuyLocal

Unregistered. wrote: »

No it doesn't. Without good, solid estimates of how many unique vistors translates into a sale. And the revenue generated per unique visitor. I'm basing this on the assumption that the success of these websites is measure on a) number of items sold through each site; b) profit.

I'd prefer actual figures though. As opposed to something like "Donedeal gets X amount of traffic than Adverts, therefore makes amount X amount more sales". Sure, in terms of advertising on the websites, then you might reasonably expect more eyeballs to translate into more revenue. But that's only one side of the coin.

Well find it yourself then. Donedeal has over a million turnover and I've read about Buyandsell in the Sunday biz post recently being in decline but developing a new web-focused strategy. Unfortunately they are late to the game, like mister bendunne.com was. Traffic is a good indication for established classified ads websites because they actually do exactly the same thing with subtly better/worse functionality. This is a forum, not an academic peer review journal.

Unregistered.

YouBuyLocal wrote: »

Unfortunately they are late to the game, like mister bendunne.com was.

Wasn't buyandsell.ie launched years before donedeal? An issue I have with quoting Unique Vistors in the manner you have is that it does not measure return users. i.e. a U.V. might come and go only once or might visit that website everyday for the rest of their lives. There are a bunch of things a U.V might do on a website which would not contribute to it's revenue.

YouBuyLocal

Unregistered. wrote: »

Wasn't buyandsell.ie launched years before donedeal? An issue I have with quoting Unique Vistors in the manner you have is that it does not measure return users. i.e. a U.V. might come and go only once or might visit that website everyday for the rest of their lives.

All you say is correct, and pedantic. Just investigate it yourself if you want to be certain, but it is a fairly safe bet that DoneDeal is the most successful (by revenue, traffic, return users and profit) classifieds website in the country (barring international rivals).

calahans

Have you thought about going to checking out Dublin Web Summit? Lots of investor types there. Go through the lists of the attendees and try and contact them before saying that you will be there and would like a quick chat. I know some people who did that at the last DWS and got to talk to a couple of investors.

Best of luck with it, and let us know how you get on.

AstonMartin

Irishinvestmentnetwork.ie

am I right in thinking that your software facilites the purchase of goods and services online? How can the current software be improved upon? Do you have to get all the major banks/credit card companies on board to make it work?

link to county enterprise requirements for capital investment?

YouBuyLocal

AstonMartin wrote: »

Irishinvestmentnetwork.ie

am I right in thinking that your software facilites the purchase of goods and services online? How can the current software be improved upon? Do you have to get all the major banks/credit card companies on board to make it work?

link to county enterprise requirements for capital investment?

You are correct.

Many ways, small businesses currently do not have a comprehensive solution to developing an online presence easily, at little expense, where they can be found easily by customers.

No.

We are meeting a member of DLR County Enterprise Board to discuss our progress in a couple of weeks after an extremely encouraging first meeting.

EamonOSullivan

A ticket for the Dublin Web Summit is priced at Euros395, and thats the Earlybird Special. Is this not beyond the reach of most start-ups?

YouBuyLocal

EamonOSullivan wrote: »

A ticket for the Dublin Web Summit is priced at Euros395, and thats the Earlybird Special. Is this not beyond the reach of most start-ups?

True, but that is also a disincentive to "spammers", for want of a better word. But it is unfortunately out of my price range:/

calahans

EamonOSullivan wrote: »

A ticket for the Dublin Web Summit is priced at Euros395, and thats the Earlybird Special. Is this not beyond the reach of most start-ups?

I'd agree it is very expensive but it does have a lot of EI/Investor types there. If you got to talk to three or four of the investors it could be worth it. I wouldn't go for the talks as they tell you nothing TBH.