Value and the Perception of Value

David Kirk made a guest post on the Loughshore blog.

(Referring to the LinkedIn IPO) So if the margin of error of a private company going public is 100%, imagine what it’s like for a pre-revenue, startup?

In this past two weeks, I’ve had an investment conversation with four companies in Ireland and Northern Ireland. In every case the answer is the same … valuation is 100% negotiation! But, the key, as always, to successful negotiation is knowledge and preparation.

I had exactly this problem when trying to negotiate with a potential investor in StartVI. They wanted to value every company at $0 whereas I was valuing every company entered in the programme at a notional $100K. Because what’s on offer is a percentage of the company.

I understand that a actual (as opposed to notional) valuation of a company in its infancy is going to be zero – but I found it hard to communicate the sharing of risk as we attempted to turn companies with an actual value of $0 into companies with an actual value of $500K+

So, faced with this, looks like we’re going to have to walk – mostly because I’ve so far failed to communicate the value of half a dozen companies that don’t even exist yet.

Greylock launches Fund II in Europe/Israel

From Techcrunch:

Well known US VC house Greylock Partners is launching a brand new $160 million fund aimed at internet technology companies, with the fund being deployed between Europe and Israel.
We’ve confirmed that the fund will be run from London by Laurel Bowden, a Partner, and will cover investments from early stage and beyond.

As the fund is being run from London, I wonder how many of our local digital content companies will take advantage of the cheap flights and go and present themselves to Laurel Bowden, the Partner and manager of the fund. And if not, why not?

Race for Life in aid of Cancer Research

This is my annual begging letter on behalf of my wee girl.

My 9 year old daughter, Meggan, is doing the Race for Life for Cancer Research – it’s this Sunday so please sponsor her by clicking through that link. If you can’t sponsor her, then please send on to some other people or retweet as often as you can!

She’s been doing the race for a few years now ever since she lost her granny to cancer. I’m extremely proud of her for doing it.