Posts filed under 'Private equity / venture capital'
The objectives of open source will change over time. As open source evolves and proves its capability, it will move beyond technology, beyond specific industries, to all other aspects of our society. This has been suggested in the past. However, existing organisations are not sufficiently motivated to apply advances in technology to promote development. Business, social and political entrepreneurs that establish online networks are likely to be the primary force for change.
This article outlines the first four stages of the development of online networks and the .Net boom. The objective of the online network in each stage is identified.
Continue Reading March 24th, 2007
China has one trillion dollars in foreigh reserves. This has been accumulated over many years of patient and successful exporting. China earns US$140 billion per year from the United States alone. Apparently, most of the one trillion dollars is invested in low-yielding US bonds. According to the IMF, China only needs 650 billion (65% of one trillion) to provide a safety buffer to operate its economy. China is considering reallocating US$350 billion into other investments that may provide a higher yield. With ongoing trade surpluses, it could invest one trillion dollars over the next yen years. China could become the world’s largest private equity investor.
Continue Reading March 19th, 2007
A brief overview of the type of information required by a due diligence process can be downloaded here (word document). The document lists the necessary information in escalating stages of due diligence. I would encourage anyone going through a due diligence process to get the third party to qualify their interest in an opportunity as quickly as possible. This should be done by sending them a quality set of quality initial information. The due diligence process could easier if the business stored key business information in a single online platform. Please review the Online business and accounting system and the Templates Category for more information.
Continue Reading January 4th, 2007
The cashflow forecast template may be downloaded by clicking here . This is one of a series of templates provided to assist with business planning. Please read all posts in the Templates category . This template could be dynamically linked with the complex financial forecast template .
January 4th, 2007
I have provided some other templates to assist with preparing a business. The available templates are listed in the Templates category. I have always been reluctant to provide these templates. They are many years old and are a start to a four to six week process. Business plans are more art than science. It is difficult to provide a generic guide which successfully satisfies the specific needs of a company. I offer these templates as something that can provide an insight and may save you some time.
Continue Reading January 4th, 2007
On 1st November 2006, the Isle of Man’s new Companies Act came into effect. The legislation included the ability to create “Protected Cell Companies”. “A PCC is a company with an internal structure that allows for the legal segregation of assets and liabilities into different cells and a central core. This framework is designed to offer increased protection to investors in individual cells from the liabilities and creditors of other cells.”
A PCC would appear to be a viable and useful structure with many applications. Only time will reveal its competitive advantage against other types of structures and the innovative uses this structure may be used.
Continue Reading November 30th, 2006
Over many years, I have developed a simple Microsoft Excel template to support a transaction process. Transaction types included a merger or aquisition, IPO’s or private equity capital raising. This template is a starting point and needs to be customised to meet the unique requirements of each company and the specific transaction being pursued. To download the template, click on Transaction process template .This template is part of a series of templates used in a transaction process. It complements my previous post Financial forecast model: A Microsoft Excel template could become an Open Source project
I will contribute the other templates as time permits. The business plan template and Investor presentation templates are still to be posted.
Please review all the available templates by selecting the Templates category .
August 4th, 2006
Australia has a population of 20m, compared to Europe’s 460m. Per head of population, Australia raised more capital for buy-outs than Europe, but invested an equal amount in early stage companies. Europe offers early stage companies greater opportunities to attract investment and achieve an exit. Europe invested US$4.2b in early stage investments compared to Australia’s approximately USD150m. Acquisitions of startups in Europe amounted to US$7.5b compared to a nominal amount in Australia. Australia has achieved stunning investment returns from buyouts (a 25% IRR over 5 years), exceeding the returns from the same class in Europe. Not surprisingly, buyouts dominate private equity in Australia. Australian buyout industry is liquid, but early stage investing is small with few opportunities for exit.
Europe may offer a greater addressable market for the early stage entrepreneur, more opportunities to raise capital and a greater probabiltiy of achieving an exit. If a country is not an active investor in early stage companies, the entrepreneur may consider moving. Most of the industries currently of interest to investors can be based anywhere.
Continue Reading July 3rd, 2006
“Of course, it’s been a 20-year bull market because of the victory of the world’s central banks over inflation following the Paul Volcker, post oil shock recession of 1982. The previous 20 years produced a long-term sharemarket return of about 7.5%, which was a real return after inflation of zero (the real return of past 20 years has been about 8%): Alan Kohler”. I believe the recent correction is a “Tipping point” that will usher in an era of investing in a rising inflation environment. This will have a dramatic effect on portfolio weightings, share price valuations and drive greater interest in private equity. “The best strategy is to build a small portfolio of high-quality, 20-year stocks and not try to time the market”: Alan Kohler
Continue Reading June 30th, 2006
I found a great blog for startups - onstartups.com . It contains some interesting perspectives from an experienced entrepreneur. I have extracted the key points from two of his articles below and then provided brief comments of how I have applied similar principles to my current startup. I encourage you to read the original articles and subscribe to the RSS feed.
Continue Reading June 15th, 2006
The BVI has incorporated over 700,000 companies, which by some estimates represents approximately 40% of companies registered in “offshore” jurisdictions. It has achieved its leading position by offering a specific mix of corporate law, investor protection, simplicity and privacy that others have since copied. The BVI has unique attributes that mean it is always considered as a place to incorporate. It has a cost-effective regime that has been recognised by the British government, the International Monetary Fund, the Organisation for Economic Cooperation and Development (OECD) as being compliant with the relevant international standards. Although, these same organisations also demonise offshore jurisdictions to discourage their use and protect domestic tax bases. Eleven BVI companies are listed on the the AIM stock exchange including an E-Gaming company.
Continue Reading June 14th, 2006
Financial modelling is highly specialised. A template is useless unless the skills are available to customise it for a specific need. The skills required include Microsoft Excel, a knowledge of accounting standards and being able to communicate the business model by using a financial model. I was reluctant to provide this model, but it does represent a “start” for many people. If you improve the spreadsheet, I would also welcome the opportunity to include those improvements here. Perhaps, we will create an “Open source” financial forecast model for the world. Maybe, the world only needs one and this can be our contribution to the world.
Continue Reading June 12th, 2006
The internet would appear to facilitate greater participation in the “listed company” market by the offshore stock exchanges. Offshore centres can list companies at a fraction of the cost of onshore exchanges. Onshore equity markets are expensive and can only be used by large companies. Does the current standard of compliance and regulation mean that small companies can not get capital for growth so that they become large? What does society gain from ensuring effective capital allocation to early stage companies? In the internet era, the offshore stock exchange may ultimately have a greater role.
Continue Reading June 9th, 2006
Web 2.0 was a phrase to describe new web companies that emerged over the last year. I could not understand how many of them were going to make money. Crash 2.0 may become the reference to the failure of these companies over the coming year. Companies will always fail as a result of poor execution. Investors that fund companies with bad ideas, non-existant revenue strategies or in unattractive markets may also fail. It is all part of the capitalist system which ultimately moves capital from those that pick losers, to those that can pick winners. The coming .NET, or Nextnet, boom is likely to based upon greater substance than the .COM boom. Crash 2.0 may be one of the early chapters in the .NET boom, or could it be the final chapter?
Continue Reading June 6th, 2006
