October 15, 2007

Entrepreneurs against the abolition of taper relief

I don't want to use this blog for politics (believe me, if you get me started, I'm not likely to stop).


If you want to see the entrepreneurial climate in the UK continue to thrive, please sign up to this this Facebook group.

What's it all about?

In the recent pre-budget report, the labour government has decided to scrap business-asset taper relief. This is bonkers. Why?

If you are an entrepreneur and you sell your company you currently pay 10% on the capital gain.  The new rules will see this roughly double.

Various British governments from both parties have tried a series of initiatives to encourage entrepreneurialism, recognizing that it is a core driver of growth. Some have been failures (Uni Challenge funds, VCTs) but others have been successful, namely the taper relief (tax benefits for entrepreneurs), EIS scheme (tax benefits for angels) and EMI scheme (tax benefits for employees).

What are they thinking?  That they need do no more for British entrepreneurs?  Well sure we're doing pretty well compared to 10 years ago, but we've still got a long way to go.

Please do sign up.

January 21, 2007

2006 Early Stage Venture Capital into European Web2.0

I have now pulled together all the numbers for European Seed and First Rounds into consumer and internet businesses in 2006.  (The final list is  at the bottom of the post in all its glory). 

So what are the headlines?

European Web2.0 investments are BIG and have skyrocketed from last year. 

More than £144mn was raised in Europe across seed and first rounds in 2006 by 54 European web2.0 companies.  This total doesn’t include the “undisclosed investment” rounds, of which there were 16.

The growth is remarkable. 

In the UK in 2005, just £24mn was invested into web2.0 companies.  In 2006 that figure increased threefold with £79mn worth of early stage investments into 21 companies.

VC investment patterns are changing

Active VCs

Index Ventures is the most active. No surprises there.  But a quick look at their syndicate partners shows the (re) arrival of the Americans. Sequoia doing a first round in Europe!? Rather surprisingly the active investors aren’t just the London based mega-funds like Benchmark and Accel: Great to see Mangrove coming out on the front foot after the success of Skype.  Finally the activity of not usually headline grabbing Nordic Venture Partners.

Investment strategy

Astonishing that we don’t see any investments in the area from 3i.  I would have expected to see something from them, not just because they’re the biggest and oldest player in Europe, but also because in 2006 they recruited the incredibly web-savvy Daniel Waterhouse from Yahoo!  Maybe 2007 Daniel?

Also interested to see Atlas Ventures back with a vengeance.  Their investment strategy seems to be following copycat models Daily Motion (YouTube), Koodos (Yoox), and I understand another business (to be announced) is also directly competitive to a UK venture backed web property.  Is this accident or design Fred

Range of web businesses

Companies that make money

Good to see that many of this new breed of web company has very explicit revenue generating capabilities; they are either stores/services (Wiggle, Stardoll,, or they facilitate the process of buying/selling somehow.

Models that build on models

I am really interested to see two types of companies using third-party web-services as a platform. Firstly, eBay is the platform for two VC backed businesses.  Autoquake  helps people sell their cars on eBay, auctioning4u helps anyone sell anything on ebay.  Secondly there are web-services which serve parts of their sites onto other peoples. Examples include Reevoo  serving their genuine customer reviews onto retailers sites, or Dailymotion allowing bloggers to show video on their

Ecosystem 2.0

European politicians should be delighted that we have a thriving entrepreneurial ecosystem which they have been attempting (hoping) to build to compete with the USA, principally the West Coast. 

Interestingly, this ecosystem is not centering on the Universities or the government sponsored funds.

It is instead the Silicon Valley model of second time round entrepreneurs, experienced business angels and VCs who have already been through a few cycles.  So we see the team behind Active Hotels either as Execs or Angel investors at .  We see Mel Morris of as an angel investor into  Firebox founder Michael Smith doing it again with Mindcandy. Pierre Chapaz, founder of is now at Index Ventures. We see  second time round entrepreneurs are Eyeka (CEO Giles Babinet sold Musiwave), the Skype guys doing The Venice Project & Fon's Martin Vavarsky previously founded and Jazztel.

CompanyInvestorsDescription £MMLocationRoundDate
Aggregator Amadeus , Intel Capital , 3i WebTV 9 UK 1 Jul-06
All Peers Index Ventures , Mangrove Private P2P media sharing W/H UK 1 Mar-06
Auctioning4u Foresight Venture Partners eBay drop-off stores 2.2 UK 1 May-06
AutoQuake Accel Partners Sell cars over the web 3.4 UK 1 Jul-06
Bebo Benchmark Capital Social networking community 8.5 UK 1 May-06
Exabre Eden Ventures itunes plug-in. W/H UK 1 N/D
Koodos Atlas Venture End of line retail. W/H UK 1 Jun-06 Index Ventures, Atomico Consumer audio filter 2 UK 1 May-06
Mform Artemis Online mortgage comparison 2.5 UK 1 Sep-06
Mind candy Index Ventures , New Media Spark Online / offline games 3.97 UK 1 Oct-06
Moo Print Atlas Venture, Index Venture Customized printing solutions 2.83 UK 1 Apr-06
Murcia Solstice Enterprise Ventures Web and text social network 0.55 UK 1 N/D
Netvibes* Index Ventures , Accel Partners Ajax desktop / DLA /Filter 8.17 UK 1 Aug-06
Reevoo Eden Ventures Online publisher of genuine customer reviews 2.5 UK 1 Dec-06
Seat Wave Not disclosed Viagogo lookalike W/H UK 1 N/D
Skinkers New Media Spark RSS publishing 2 UK 1 Jan-06
Soflow Kodiak , Northbridge Social networking for  professionals 2.8 UK 1 Mar-06
Viagogo Index Ventures, Atomico Online Ticket exchange 9.9 UK 1 Jun-06
Wayn Esprit, Angels Social Network for travel 5.5 UK 1 Nov-06
Wiggle Isis ecommerce: online retail 12.5 UK 1 Jul-06
Yuuguu Enterprise Ventures Enterprise collaboration 0.6 UK 1 Oct-06
Jalbum Nordic Venture Partners Web photo album tool W/H Sweden 1 Jul-06
Polar Rose Nordic Venture Partners Online photo search 2.72 Sweden 1 Jul-06
Stardoll * Index Ventures , Sequoia Online dress-up community 6 Sweden 1 Jun-06
Fon * Sequoia , Google , Index WiFi sharing 12.33 Spain 1 Feb-06
Properazzi Mangrove, Angels  Property Search W/H Spain 1 Nov-06
ebuddy Lowland Capital Multiformat IM 3.41 Netherlands 1 Oct-06
Spotzer Undisclosed Ready to air video advertising W/H Netherlands 1 Jun-06
Pigsback Angels Consumer coupon and discount site 2 Ireland 1 Oct-06
SevenLoad New Media Ventures, Stroer Video platform & white label service W/H Germany 1 Nov-06
CoComment Netage Capital Partners Blog comment tracking 0.75 Germany 1 Dec-06 High Tech Gründerfonds Online music Download 0.3 Germany 1 Dec-06
Imageloop Angels European 0.6 Germany 1 Dec-06
Kimeta High Tech Gründerfonds Vertical Search (jobs) W/H Germany 1 Dec-06
Locr High Tech Gründerfonds Photo Tagging 0.39 Germany 1 Dec-06
Nachtagenten Burda Digital Ventures German Clubbing Social Network W/H Germany 1 Dec-06
Page Flakes Benchmark Ajax desktop / DLA /Filter W/H Germany 1 May-06
Qype Partech , Advent Ventures Local search services W/H Germany 1 Aug-06
Spreadshirt Accel Partners  Consumers design  T-shirts, W/H Germany 1 Jun-06
Wazup Innovacom & Wellington Partners Game Search Engine 5.20531 Germany 1 Dec-06
Criteo Elaia, AGF Private Equity Recommendation engine 2 France 1 Apr-06
Dailymotion Atlas Venture , Partech Euro YouTube 4.77 France 1 Aug-06
Eyeka DN Capital , Ventech Mobile video and image market 2.72 France 1 Feb-06
Kewego Banexi Ventures Partners UGC Video 3.4 France 1 Apr-06
Olfo Members-only e-commerce Edmond de Rothschild, OTC Asset Man. 2.1 France 1 Dec-06
Viaduc AGF Private Equity , Ventech is social networking for  professionals 3.4 France 1 Jun-06 Innovacom, Angels Online video 2.5 France 1 May-06
W2.Media Angels "consumer expert" decision-making 0.8 France 1 May-06
Wikio Loic Le Meur, Martin Varsavsky, Pierre Chappaz, Jeff Clavier User managed news search engine W/H France 1 Jun-06
Yoono Social Bookmarking AGF Private Equity 1.02 France 1 Aug-06
Igglo Benchmark , Taivas UGC Real estate 8.51 Finland 1 Oct-06
Quintura Mangrove , OpenView Visual Search W/H Europe 1 Nov-06
Joost Not disclosed Non-linear webTV W/H Europe 1 N/D
Zyb Nordic Venture Partners MobilePhone backup 0.6 Denmark 1 Oct-06

A vintage year for investing. I am honoured to be working with the entrepreneurs who are driving it. Of course, the real test for us all comes of course at exit….

Methods. This has been a mixture of old fashioned primary research, desk research and most significantly help from readers: thanks to all those who posted or wrote with deal deals, many of which were missed by the mainstream deal databases.

*These deals have had Seed and First rounds in 2006 and total funding has been summed in the table

Reference sources used: Venture Source, CalibreOne research

November 28, 2005

European vs. US venture deal pricing

European VCs face price competition not just from corporate acquirers but also US VCs.

VentureSource stats suggest 2004 Median pre-money valuations were at $12.5 in the US, but only €5.5mn in Europe.

It is true that the European venture market is still a little behind the US when it comes to competition on deals (Private Equity conversely are well used to the harsh winds of competition). It’s one of my jobs to tell VCs when they have lost a deal and I promise you, when it does happen, they don’t like it.

I recently asked a European VC about this US vs. Europe venture price discrepancy: Why, I asked, does it exist?

“From the demand side, there are comparably less VCs with smaller funds chasing deals”

But the next bit was what surprised me:

“From the supply side, European entrepreneurs are not sophisticated enough to run competitive processes and decide to go with an investor pretty early in the process”.

November 13, 2005

Web 2.0: forthcoming London event

So we have decided to follow up on our previous two events (opensource and mobile multimedia) with one event which, in my mind, draws many of the themes we've been discussing together under the moniker of web 2.0. I know there are many people who hate this term and many people who think it very useful ; I think it's a very convenient way of pulling together the themes that I see pre-occupying many of the more visionary VCs and underlying the more strategic acqusitions.

If you want to come along drop me a mail or apply via our website:

Its a great speaker panel:

John Battelle Founder of Federated media publishing

Judy Gibbons, Board of Directors, O2. Corporate Vice President, MSN Global Sales and Marketing.

Simon Levene, Managing Director, Corporate Development Yahoo!

Nick Kingsbury, Global Software Head & Partner, 3i.


Web 2.0: disruption creates opportunity

"Thomas J. Watson famously said that he saw no need for more than five computers in the world.

We now know that he was wrong…

...we now know that he overestimated the number by four."*

Web 2.0 is here but how do VCs and entrepreneurs make sense of the disruption and identify where the real opportunities lie?


The speakers are:

* John Battelle, Founder and Chairman of Federated Media Publishing. Previously, Battelle was founder, chairman, and CEO of Standard Media International (SMI), publisher of The Industry Standard and Prior to founding The Standard, Battelle was a co-founding editor of Wired magazine and Wired Ventures. He is the author of "The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture" (Portfolio, 2005).

* Judy Gibbons, Board of Directors, O2. Corporate Vice President, MSN Global Sales and Marketing.

Judy founded the MSN business in the UK and then went on to manage MSN Europe and then MSN International. She was most recently responsible for MSN sales and marketing across the US and 39 other markets worldwide. Prior to joining Microsoft, Judy held positions in systems engineering, applications development and marketing with Hewlett Packard and Apple Computer. In 2004, she was presented with an award for 'Thought Leadership' by the IVCA for her contribution to the digital economy.

* Simon Levene, Managing Director, Corporate Development Yahoo!

The Yahoo! corporate development group reports to Terry Semel, Chairman and CEO of Yahoo!, and is responsible for developing corporate strategy and leading transaction activities across the company worldwide. Prior to Yahoo!, Simon was at AOL Time Warner, Excite@Home, Goldman Sachs and the LEK Partnership.

* Nick Kingsbury, Global Software Head & Partner, 3i. Nick's role involves setting the strategy for investment in software and he is a key member of the team reviewing all software investments globally. He also works closely with the major IT corporates to ensure that 3i understands their strategies, and makes introductions at very senior levels for 3i's portfolio companies.

*Credit to Clay Shirky.


The Internet is being transformed by lightweight & compatible software services, business models that rely on efficient lead generation, a very low cost of entry, and an equally low cost of scaling with huge operating margins.

ASPs, mashing, P2P, user generated content, monetising the long tail, podcasting, blogging, media convergence, AJAX, REST, cooperating internet services, multi device software, data syndication. What is this brave new world and where is the smart money going?

If the web is truly becoming one big operating system in the sky, how should VCs differentiate between the fads and the longer term trends?

This event is bringing together key individuals from the venture capital community, the entrepreneurial community and industry to stimulate ideas and discussion, through a number of short presentations from industry leaders, followed by a panel debate.


Registration will commence at 8.15am with coffee and pastries, with presentations commencing at 9am. After the debate there will be an opportunity for networking, and the event will finish at 11am.

This seminar is by invitation only, and is open to venture capitalists, strategic investors, business angels and entrepreneurs.