Archive for Enterprise from United Kingdom

UK Entrepreneurs: Get Your Funding While You Still Can

by on July 20, 2009 at 6:06 pm

[Cross-posted from TechCrunch]

You think you have it bad,
Mr.-Silicon-Valley-entrepreneur-trolling-Sand-Hilll-Road-for-cash? Try
life on the other side of the pond.

Out of 39 firms that were active investors in British start-ups over
the last five years, only thirteen venture firms have £5 million or
more left in their coffers to invest, according to NESTA, the UK agency that advocates for start-ups and also sponsored the recent Traveling Geeks blogger tour.

That’s right: All but thirteen firms in the United Kingdom are
either completely tapped out or have committed the rest of their funds
for follow-on investments in existing portfolio companies. In total,
NESTA estimates there’s about £400 million left that’s uncommitted
among the thirteen, with only half of that available for brand-new
series A deals. To put that into perspective, there’s roughly the same
amount of money in the fund Marc Andreessen just closed than there is for new companies in the entire United Kingdom right now.

This is coinciding with a precipitous drop in UK firms closing on
new funds thanks to the global credit crunch. In 2008, only seven firms
closed new funds, and NESTA expects fundraising to be even weaker in

As most people know, I’m a pretty big advocate of the idea that many
of the next great high-growth companies will be founded outside of the
U.S., but these stats starkly demonstrate a undeniable advantage of
being Valley-based. Even when fundraising slows and VCs save bigger
reserves than usual for current investments, there are still billions
sloshing around to fund new deals. Sure, it’s hard during times like
these even in the Valley, but raising venture capital should be hard.

As with most research reports on the venture business, it’s the
trend line that’s important to note here. It’s probable that NESTA
isn’t counting a firm here or there. But it can’t be too far off.
Indeed, the stat explains a lot of the anecdotal evidence that hit me
in the face as soon as I arrived in London two weeks ago. Many of the
entrepreneurs who’d pitched me on my last visit to London in November
have already shuttered their companies and were unsure of what to do
next. I have exactly one friend in Silicon Valley who has been forced
to that point.

Even the good UK early stage names are struggling to close deals. It took AlertMe—a hot energy home monitoring company that won The TechCrunch Europa
for best clean tech company last week—a whopping nine months to raise
money almost landing the company in bankruptcy. (Index Ventures and
others finally snapped up the deal a few months ago.) “I don’t want to go through that again,” the very polite and British CEO Pilgrim Beart demurred.

It’s that kind of bleak desperation that lead the infamous Paul Carr to pronounce the UK Internet scene dead….just before his own column in the Guardian became its own victim of the economy a few days later. (See Mr. Butcher's TechCrunchEurope rebuttal here.)

Indeed “the scene” may be dead, but there’s an upside here. The
companies that are still around have a much greater emphasis than
Valley companies on making money. The Traveling Geek contingent went to
Accel’s London office to meet with a handful of start-ups, and each one
emphasized revenue and profits in their five-minute elevator pitches.

One that caught me by surprise was Michael Smith’s Moshi Monsters,
a social network/ virtual game for kids. Cute idea, but sounds like it
should be road kill in this environment, right? Nope. Its revenues are
growing 35% month-over-month, it has 85% gross margins, and just five
months after launching the site is cash flow positive. Nicely done,
gents. (BTW, Smith isn’t all business. His house was the setting of those famous Scoble pictures…)

Indeed, there’s always something healthy about startups having to
work within constraints. There will be fewer of them, but it’s possible
that the companies that make it in this environment could well make up
one of the most promising crops of UK companies we’ve ever seen. After
all, Skype was laughed out of VCs’ offices when it started in the wake
of the dot com bust.

In the coming days, I’ll be writing several more posts about the London companies that impressed me the most. Stay tuned.

UK Diary: Friday – Cambridge Startups

by on July 20, 2009 at 3:32 pm

Friday and the Traveling Geeks are in Cambridge, the innovation capital of Europe.

After presentations by Cambridge university representatives and also from government agencies helping startups, the Traveling Geeks take part in a panel and also hear presentations from local startups.

UK Diary: Friday – Cambridge Consultants, Nokia And Microsoft Research Labs

by on July 20, 2009 at 3:26 pm

Friday afternoon the Traveling Geeks visit Cambridge Consultants and visit the William Gates III building for meetings with researchers from Nokia Labs and Microsoft Research Labs (MRL).

Cambridge Consultants has helped bring to market products such as:

Virtually waterless washing machine

The “connected patient

Low cost cellular base stations.

More here.

The Microsoft Research Labs are part of the academic community at Cambridge university and the work is open and peer-reviewed. In the video our guide is Cambridge university lecturer and successful entrepreneur Jack Lang, also Ken Wood, deputy director of MRL, Tim Regan, Research SDE at MRL, and presentations from their colleagues. The video also shows some of Microsoft’s research projects.

UK Diary: Friday – Cambridge Startups

by on July 20, 2009 at 2:32 pm

Friday and the Traveling Geeks are in Cambridge, the innovation capital of Europe.

After presentations by Cambridge university representatives and also from government agencies helping startups, the Traveling Geeks take part in a panel and also hear presentations from local startups:

Alert Me


Hot Prints

Magic Solver

Movie Storm

Pocket Places



An Israeli’s Take on UK Startups

by on July 20, 2009 at 12:34 am

Ayelet Noff of Blonde 2.0 and contributor to TechCrunch Europe, The Next Web and Social, talks about her experience on the Traveling Geeks tour to London as well as some of her favorite startups. Below, we’re chatting outside the TechCrunch Europa Awards event in London.

Wonga’s Short Term Loan Solution

by on July 19, 2009 at 11:45 pm

Wonga_logo_spring Wonga’s CEO and Founder Errol Damelin talks to me about their short term lending solution.

Wonga, an Accel Partners funded company based in the UK, focuses on short term cash advances, which is also suitable for mobile. Over 100,000 loans have gone through their system already and it’s growing.

People are using Wonga today to solve short-term cashflow problems. One of the things that is making people adopt it so quickly is that it’s fast, easy, convenient and easy to use.

Within an hour, you can have short term cash in your hands and the whole application process only takes a few minutes. Tune in for more below.

Sam Opens Falafel Stand in Brick Lane

by on July 19, 2009 at 4:01 pm

I ran into Sam El Abd in one of my favorite parts of London, Brick Lane.

We’re close in age and his background is IT, but like so many I know, got laid off because of the credit crunch.

He talked to him about his dream of opening a falafel Stand in Brick Lane, the first stall in the area’s well known curry mile. (think: best curries in London. They’re hot, but they’re amazing). Listen to his dream. He officially opened it last week.

In the MOO’d to be Creative? Richard Moross Has Some Fun Ideas for You #TG2009

by on July 17, 2009 at 5:18 pm

While in London last week, I had the delightful opportunity to meet the founder and CEO of If you haven’t seen all the great things you can create with your images and Richard’s printing capabilities, you should click below to check out the options.


Richard Moross of

Richard Moross of

Day 54 - MiniCards
Image by brianjmatis via Flickr
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UK Diary: Thursday – Ecoconsultancy At Shakespeare’s Globe – Why Innovate?

by on July 16, 2009 at 7:03 pm


Thursday afternoon the Traveling Geeks are at The Swan, which is attached to the recreation of Shakespeare’s Globe theatre on the Southbank.

The event is organized by Econsultancy , a digital marketing firm, and led by Ashley Friedlein, CEO and Co-Founder (See my photo above.)

There are about a hundred people gathered in a large room. I’m sitting at one of several tables, crowded with people and bottles of water, and we’re talking about innovation.

There are many people from large UK firms at the table, all talking about how they try to encourage innovation within their companies. It’s not easy.

I make several points about innovation. The most important one is that large companies want innovation badly but they can’t innovate. But they want to innovate because there is no end of consultants that tell them they will die if they don’t innovate.

Well, they will die anyway. There is a finite lifespan to large organizations and that’s just the way it is — innovation or not.

An organization is successful because it knows how to monetize a particular business process. Each organization is very bad at changing its culture of monetization. Much better to buy-in the innovation.

Afterwards, I talk with Mathys van Abbe, the founder of Moby Picture, a fast growing Dutch startup (and one of my current favorites.) “Why don’t corporations just concentrate on doing what they do better? They can’t innovate and they don’t need to.” I agree.

UK Diary: Thursday – A Visit To Accel Partners – UK Is Tough On Startups

by on July 16, 2009 at 5:11 pm


Thursday morning the Traveling Geeks head to Accel Partners, one of the top European VC firms, to hear presentations from:


  • Errol Damelin, founder and CEO of Wonga


  • Kristian Segerstrale, founder and CEO of Playfish

Alfresco Logo

  • John Newton, founder, Chairman and CTO of Alfresco



  • Michael Smith , Founder and CEO of  MindCandy


[Please see Susan Bratton: ]

Accel is still making investments, which is very rare among European VC firms (and Silicon Valley firms too).

I chat with John Newton, an American based in London and CEo of Alfresco, and also Joe Cohen from Seatwave, about the UK startup scene. Here are some highlights:

– It is much harder to found and run a startup in the UK.

– Government policies do not favor startups, there are unfavorable tax provisions for stock options. And the government doesn’t get the digital economy.

– It is hard to find the right people with the right skills in the UK and they cost more.

– Government buys software from the large vendors, very little from startups, 85 per cent of government spending on IT goes to the top 8 US vendors.

– Large US companies headquartered in London tend to tie up much of the top local talent.

– Some UK startups are restructuring outside of the country to take advantage of more favorable tax and other conditions.

– London has a huge number of foreign nationals. You can run a foreign office from the UK by hiring any nationality, it reduces need for larger staffs in local regional offices.

– Risk taking in the UK is changing for the better.

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