‘Student Loans’ for budding entrepreneurs!

By Andrew Pearce | Published January 24, 2012

You may or may not have heard the cries from UK entrepreneurs over the past week, all of whom are calling for the government to introduce a new funding scheme for young entrepreneurs based on the student loan system.  

Unsurprisingly, these calls have been led by jack of all trades and general business provocateur Sir Richard Branson. Mr Virgin himself was one of five other business people, including Neil Berkett, CEO of Virgin Media, Abdul Khan from ratethatcurry.com, Ronke Ike, CEO of EMI – as well Ben and Zoe Jackson, founders of Living The Dream; each of which signed a letter in the Telegraph which said the government should “make favourable-rate loans available as start-up capital for young entrepreneurs, with the same conditions that exist for much larger loans for…students”

career Student Loans for budding entrepreneurs!

Not all school leavers have the same career path and the introduction of small loans would open up vast opportunities for the countries next generation of business people.

The letter continued: “As university applications fall and young people consider alternative career paths, it is time to review the value society places on a degree above other choices”

In saying that, I believe they made a very fair point. I know many successful business men and women who did not go to university; owners of global corporations, millionaires, serial investors – none of whom went to University. Equally, I know Doctors and Lawyers, all of which did go to University. Higher education provides a skill set that is not necessarily applicable to the world of real life commerce. And in addition to that fact, the jobs market continues to appear less and less stable as the weeks and months go on; meaning, even if a new graduate comes out with a first in their degree, there’s little guarantee of finding meaningful work.

Coincidently maybe, this news comes in the wake of President Obama announcing details to ease federal student loan burdens in the U.S. His plan was to reduce loan repayments for entrepreneurs looking to start a business after ‘College’. Considering most early stage business revenues are very small, if existent at all, I think this was yet another master stroke from Obama, and most definitely a step in the right direction.     

Both schemes need to be pushed through the burocracy and redtape of modern day politics as quickly as possible. Business Zone recently ran a poll asking whether their readers thought the former idea was a good one – of which only 76% of them agreed it was! What an earth is wrong with the other 24%. Have they gone mad??

I’d love to know your thoughts on the matter, so please leave a comment below. Especially if you’re one of the 24%!

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Posted in Advice for SMEs Tagged business zone, coalition, education, entrepreneurs, Loans, obama, President, Richard Branson, telegraph, virgin |

China; a growing VC hotspot.

By Andrew Pearce | Published November 1, 2011

china investment China; a growing VC hotspot.

In the third quarter of 2011, investors put $1.3 billion into 89 deals for venture-backed companies in China, an 84% increase in investment and 19% increase in deal flow over the same period last year, according to Dow Jones VentureSource.

At the same time, VC spending slid 12 percent in Europe to almost the exact same amount; $1.3 billion. Seems VC spending also rose in the U.S to $8.4 billion, up 29 percent – it’s Europe that, yet again, is falling behind in the VC and start-up scene.

Despite fantastic events like Silicon Milkroundabout which was held last weekend at the Truman Brewery’s, East London; the UK and Europe still appear lacklustre about taking risks and investment.

Back in China, the median size of a venture capital deal during the third quarter of 2011 was $11.7 million, more than double the $5.1 million median in the same period last year. Rebecca Fannin, author of new book ‘Startup Asia’ and 2008 page turner ‘Silicon Dragon’ wrote an article for Forbes recently in which she said “China does not have widespread, disruptive technology innovation yet that could threaten Silicon Valley’s dominance, but that doesn’t mean it never will. Far from it.”

Going on further she said, “What China still lacks before its tech prowess can rise to the next level is an educational system that encourages creative thinking, a willingness among entrepreneurs to fail and try again, a talent pool of well-rounded managers with western experience, and a deeper respect for intellectual property protection.”

That said, what China already has is a new-found confidence among its up and coming local entrepreneurs, successful serial entrepreneurs, a government that is pushing forward the innovation agenda and providing financial incentives for startups, an upsurge in new, higher-quality patent applications, and a large market with unique needs.

Since 2005, more than 6,000 startups in Asia—56 percent of them in India and China—have been backed by venture capital. I haven’t personally spoken to any VC firms or start-ups from that side of the world, however I would be extremely interested in hearing your stories if you know (or know of) any. I’d also love to hear what you make of this shift, generally speaking. All thoughts welcome, thanks, Andy.

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Posted in Advice for SMEs Tagged china, Investment, start up, vc, venture capital |

TechStars – heard of it?

By Andrew Pearce | Published September 27, 2011

A new documentary television show, TechStars, aired recently in the U.S with a view to give the public an insight to those high-octane lives of start-up founders. Following every step of their journey from brainstorming to coding to pitching, the show will follow ten selected companies that include a fashion e-commerce site (ToVieFor), a social-classified service (FriendsList), and an e-mail migration business (MigrationBox) amongst others.

David Cohen, the founder and CEO of TechStars (the shows namesake), the funding and mentoring start-up accelerator based in Boulder, Colorado, says “the show will offer a glimpse at the unadorned life of a tech start-up. You’ll see success, and you’ll see failures. We didn’t change anything about TechStars to do this.”

techstars founder and ceo david cohen TechStars heard of it?

TechStars founder and CEO David Cohen

Since TechStars was founded in 2006, it has risen in prestige among start-up circles and investors. According to the founders, each year about 600 start-ups vie for a spot in the mentorship and funding program. Ten are selected, which essentially makes it harder to get into than Harvard or Yale.  With good reason too: TechStars entrepreneurs are given funding, mentorship, and access to some of the world’s most respected executives and venture capitalists, including Fred Wilson, Brad Feld (who is one of the founders), and Gary Vaynerchuck. About 70 percent of TechStars start-ups go on to raise angel funding or venture capital.

Having watched the first episode, which can be found over the Bloomberg website, I can confirm the show really does make for compulsive viewing for anyone remotely interested in the world of Start-ups. Choosing between entrepreneurs who are on their first, second or third companies and other businesses who have million dollar revenues already was never going to be an easy task – but watching the process in action, seeing them whittle down near 600 to the choice 10 makes Dragons Den look like Coronation Street.

It begs the question; could a show like this work in the U.K? Could a UK accelerator such as Springboard for example take this model and run with it?

As the Tech Stars hash tag (#techstarsbtv) on Twitter pointed out, the show is sort of ‘America’s Next Top Model’ viewing; except for a male audience.

Cohen asserts though that TechStars, the show, will not conform to the cliches of reality television. He promises that the show, which will air over six episodes, will offer an inside look at the life of a TechStars entrepreneur.

“Bloomberg’s audience is global and affluent,” says Cohen. “You won’t be watching a bunch of geeks just sit there and code. It really gets into the stories of these companies. People will be able to identify with the entrepreneurs but also the investors and the mentors.”

He added, “There’s no voting anyone off the island and there are no rose ceremonies.”

For me at least, this has the potential to be one of the most exciting shows on TV. Has anybody else seen it yet? Let me know what you think, or check out the first episode here, TechStars – Episode One, and then get back to me.

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Posted in Advice for SMEs Tagged accelerator, David Cohen, startup, TechStars |

Spam anyone? LinkedIn drops another ball.

By Andrew Pearce | Published September 23, 2011

The spotty, least-cool brother of the social network family – LinkedIn, seems to have further damaged my already dubious opinion of it recently.

Two things appear to have happened: 1) I have been receiving numerous requests from people I don’t know, even by six degrees of separation, and 2) Many people I know have been receiving fake emails from LinkedIn themselves.

The second issue can be explained by researchers from Barracuda Labs who discovered a spam email operation with spoofed headers making the messages appear to be from LinkedIn.

The threat is unique in that the operation is utilizing an exploit toolkit which circumvents HTTPS protection and allows the downloading of a password sniffing Trojan.

“Early on the morning of August 23 the spam monitors at Barracuda Labs started detecting a large number of emails claiming to be from LinkedIn.  The quantities were significant, tens of thousands an hour, and these were pretty convincing messages,” Barracuda reports.

A sample of the suspected spam emails appears as the following:

linkedin11 Spam anyone? LinkedIn drops another ball.

What makes this attack more insidious is the use of an exploit kit which may prevent users from knowing that the malicious code is being executed.

linkedin21 Spam anyone? LinkedIn drops another ball.

“But this attack is different and much more serious. Each of the malicious domains such as linkedin-reports.com or linkedin-alert.com hosts an exploit kit, a set of malicious payloads that quietly attempt to take advantage of weaknesses in the Web browser and its helper applications. Clicking on the ‘follow this link’ hyperlink in the message doesn’t appear to have any effect. Nothing seems to happen; however there is a lot going on behind the scenes,” Barracuda reports.

So all I’m saying is: watch out!

In regards to the huge amounts of ‘less malicious spam’ I receive though, it seems there isn’t as simple an answer. Who the hell are these people that add me from small Taiwanese firms, or these giants of cotton industries in northern Canada? For a company that prides itself, and in fact bases its whole business model on connecting the right people, this is madness.

I can understand a few accidental requests, but there have been so many recently I just can’t understand it. Is anyone else having the same problem??

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Posted in Advice for SMEs Tagged LinkedIn, Spam, Trojan |

Coalitions New Tax Inspectors Won’t Help, Right?

By Andrew Pearce | Published September 20, 2011

The Lib-Con, or should that be Con-Lib coalition and the Treasury are set to crackdown on tax avoidance by the UK’s wealthiest people by recruiting 2,250 more tax inspectors.

In 2011/2012, most will start paying 20% tax at £7,475 and 40% tax at £42,475 and 50% on earnings above £150,000, regardless of whether you earn £151,000 , £1,000,000 or £50,000,000.

Ok so we all resent paying taxes, especially when we see how badly this as all previous governments manage to waste it, but that’s a whole different conversation.

This tax regime, allows the super-rich to work with the best tax advisors and planners to find loop holes to avoid taxes (look at Phillip Green).

Now, instead of addressing the problem at the source and re-working the tax system, the Government is wasting more time and money trying to catch the avoiders rather than encourage them to pay their fair share of.

There is an astronomical difference in how 50% tax affects those earning £150,000, in comparison to say, those who earn £1 million plus. And therefore what I would like to propose, even though he got accused of starting a class war because of it recently, is something which President Obama seems to advocate – a ‘Buffett tax’ on the ultra wealthy and easing of rates for the middle band.

philip green1 247x300 Coalitions New Tax Inspectors Wont Help, Right?

A very fat cat indeed: Philip Green

By offering a top rate tax bracket of 35% on salaries up to £240,000, and ensuring those earning more than $1 million a year paid at least the same percentage of their earnings as middle-income taxpayers – the U.S might have just about cracked it.

Widen the band in the ‘middle’ for those who are rich enough to reinvest and create wealth; get it circulating back in the economy, instead of hiding it, and just watch what happens. A fine case in point is, before Thatcher came to power, the top tax was an astounding 82.5%, with an additional 15% surcharge for “unearned” income (i.e interest). This left little incentive to create wealth. The top tax was slashed overnight to 40% and the well documented result was an increase in tax collection within a few years.

Why do the UK Government continually attack those in the middle – why not those at the top? Is it because of all the back handed deals? Is it because those earning millions are more important to the Government than the rest of the country?

Mr Buffett (who the proposed U.S tax is named after), the world’s most successful business investor and an informal advisor to Mr Obama, wrote earlier this year that the mega-rich were ‘coddled’ by a ‘billionaire-friendly Congress’. He also said that he was taxed at 17.7% on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000 was taxed at 30%.

He is one of the few who have seen the light and understood that it the mega-rich themselves who should be volunteering to do this.  As the third richest man in the world, he understands if the mega-rich were taxed just marginally more, it would not make the slightest bit off difference to them, yet it would make a whole world of difference to the state of their (and our) economy. France’s mega-rich are saying ‘tax us more’ too, with 16 of the richest people in France having signed a petition asking the French government to increase their taxes. So why are the UK so reluctant?

Hiring 2,250 more tax inspectors at a cost of* roughly £101,250,000** could be completely avoided by simply raising the tax for people earning a million plus by a small fraction.

Where do you stand on this?

*Complete Guess    **(£45,000 X 2,250)

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Posted in Advice for SMEs Tagged Coalitition, Mr Buffet, obama, Philip Green, Tax, Treasury |

Top Tips for Securing Investment

By Andrew Pearce | Published September 16, 2011

Having been asked this question on more than a couple of occasions, I thought I’d share with you my top tips for securing private investment. It’s something even seasoned entrepreneurs can struggle with and most first time ‘pitchers’ find terrifying. In reality though, with a couple of handy hints and much time given to seriously thinking about what it is you’re asking for, it needn’t be so hard.

investments pg Top Tips for Securing Investment

Be aware of what you are asking for and have a deep understanding of what you are doing. Without doubt investors want to know that you comprehend and identify with every aspect of your businesses. Thereafter, they will want you to explain exactly how their involvement, whether monetary, personal, or both will help you reach your goal.

Understand the people you are pitching to and how best to engage with them. Remember, people are different, and as such you should really try to appreciate what it each different person may be looking for. By researching your Angel or VC and/or their firm, you will be able to adjust your pitch accordingly. Some investors may simply want large returns whilst others may have expertise in your field and be able to add value to the company in other ways as well.

Run your idea by other entrepreneurs first. They may have secured funding before and be able to point out holes in your pitch. It’s also good to role play and get them to ask questions they think you will be asked. If you reverse the roles, hearing your own pitch back can also give you a fantastic new perspective.

Look your best. As a general rule of thumb you can never overdress. That said, you should try and represent and embody your company ethos. If investors feel they can connect with a person then they are a lot more likely to make a deal. It’s as much about the person as it is the business, so remember who you are and try to be confident.

Ask for enough, but not too much. If you pitching from an idea only stage, then ask for enough to get you to prototype; similarly if you are in the prototype stage, then ask for enough to get you to market, and finally if you are at market, then ask for enough to scale.  Be realistic about the valuation of your company and never ask for ludicrous amounts. Be sensible, because if the investor really believes in your company, he or she will want to see you grow and be prepared to help out again further down the line.

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Posted in Advice for SMEs Tagged business, business tips, Investment, small business, SME, startup |