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Fred Wilson, one of the world’s most prominent venture capitalists, shares the three big coming trends in tech. He has invested in the early stages of companies like Twitter, Tumblr, Foursquare, Zynga, Kickstarter and Bitcoin. His ideas about business trends are really interesting, both for investors and for startup entrepreneurs. Wilson talked at LeWeb conference in Paris (December, 10, 2013) and he used as an example for each megatrend, some startup companies from his own portfolio (USV).

“We don’t think about technologies, we think about trends, we think about what’s happening in society, what’s happening with people, in terms of how people behave. The technologies are important; but we don’t like to invest in mobile, or big data, or machine learning or those kind of things. We think about them, they matter to us, but we really think about things from a behavioral and a societal point of view.”

Megatrend 1: Technology Driven Networks are Replacing Traditional Bureaucratic Hierarchies

Bureaucratic hierarchies are the way that the world has been organized for the past couple hundred years. Markets, governments and businesses have one person on the top of the pyramid organizational structure controlling everything. Transaction and communication costs were so high in the industrial era that that was the most efficient way to organize work. But we are now in the information age, where technology-driven networks are replacing  bureaucratic hierarchies. Some examples are: Continue Reading…

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Chasing the Dream

Some business projects require exorbitant figures of funding in proportion to the entrepreneur capital. These projects are out of your reach, unless your father is a millionaire or you’re a genius. This idea seems obvious, but some entrepreneurs love their idea so much that they do not see it that way.

I remember an entrepreneur presenting his project in a forum of investors. He needed three million euros, because he needed to set up a manufacturing plant. Continue Reading…

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It is said that a startup has two options: raising funding or bootstrapping. Bootstrapping is in reference to the famous saying “pull yourself up by your bootstraps”. Bootstrapping in business means starting a business with the very little capital that entrepreneurs have, managing their companies with a lot of creativity instead of money.

Nowadays, it is a pity that bootstrapping is not a choice for many entrepreneurs, but the only option they have, due to the difficulty to raise money. Continue Reading…

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fff. Photo by Filipe Ferreira on Flickr used under a Creative Commons licence

A couple of years ago I attended a conference where I was struck by something that Honorio Ros, founder of the startup Laexperiencia.com, said, “being from a big family helped me as an entrepreneur”. He explained that thanks to his large extended family, he had convinced some of them to invest in his startup. He was sure that without the economic support from his family, he would not have been able to launch his startup.

The way Honorio received financing is known as the three F’s (or FFF), family, friends and fools. Continue Reading…

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Entrepreneur and business angel

In the beginning of the XX Century an angel was a wealthy person, who provided money for Broadway theatrical productions. The term angel began to be used in the USA in 1976 after a university publication reutilized it in reference to investors who supported entrepreneurs. Since then the term in the USA is angel investor, while in Europe we called them business angels.

These investors are essential in the financing of thousands of companies in the USA. In 2012 each of the 268,160 angel investors invested an average of $85.435 in a total of 67,030 companies. (35% of them startups). A total of 23,000 million dollars! The average angel deal size was $341,800 and the average equity received was 12.7%. Source: unh.edu

These dizzying figures don’t have anything in common with those in other countries Continue Reading…

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Marco Polo, first entrepreneur who raised venture capital

Marco Polo, the Venetian merchant, who arrived to China in the thirteenth century, was one of the first entrepreneurs who got venture capital. He convinced several wealthy Venetians to finance his commercial expedition to Asia. Marco Polo promised that he would share his profits of this risky venture with them. These funders were a kind of precursors of the current venture capital, which main characteristics I describe below in a simplified form: Continue Reading…

What is Crowdfunding?

31 July, 2013 — 4 Comments
crowdfunding

Crowdfunding. Photo by Colbrain on Flickr used under a Creative Commons licence

Crowdfunding is the action, by which a person, company or organization asks a multitude of people to finance his/its projects via Internet, each of them giving a small quantity of money.

Some entrepreneurs and organizations have developed different crowdfunding platforms. They are web platforms that offer projects creators a display space to publish their projects in order to get financing. These platforms also allow the projects to use a secure payment page to ensure that the projects receive their money. In exchange, most platforms receive a commission based on the amount collected.

Which kinds of crowdfunding exist and what do the financial backers receive in exchange? Continue Reading…