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September 24, 2018
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Kano’s latest computer kit for kids doubles down on touch

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Learn-to-code startup Kano, whose products aim to turn kids into digital makers, has taken the wraps off the latest incarnation of its build-it-yourself computer kit.

With the new flagship Kano is doubling down on touch interactions — urging kids to “make your own tablet”. The Computer Kit Touch packs a 10.1″ HD touchscreen, along with Kano’s now familiar bright orange wireless keyboard which comes with a built in trackpad.

While touch is becoming increasingly central to its products, Kano says the keyboard remains an important component of the product — supporting text-based coding apps which its platform also provides access to, as well as the more approachable drag-and-drop block-based coding systems that do really benefit from having a touchscreen to hand.

The kit, which Kano says is generally (but not exclusively) aimed at the 6-13 age range, is on sale from today, priced at $279.99 — via its website (Kano.me), as well as from selected retailers and e-tailers.

The Raspberry Pi powered computer is also getting increased storage capacity in this upgrade — of 16GB. But the main refresh is around updating Kano OS, Kano’s kid-friendly Pi topper, with expanded support for touch controls, according to founder Alex Klein .

Last year Kano combined touch and keyboard based interaction into a single product, the Computer Kit Complete — calling that a DIY laptop.

The 2018 refreshed version looks much the same, with enhancements generally behind the scenes and/or under the hood.

“The big moves this year are advancing the software and content ecosystem,” says Klein. “How it’s all integrated together.”

He points to another coding kit the team has up for pre-order, slated to ship next month — a co-branded Harry Potter gizmo in which kids get to build a motion-sensitive “coding wand” and use it to cook up their own digital spells, helped along by Kano’s software — adding: “With the Potter kit we’re bringing Kano code — to create a system, the ability to blend and change physics engines and sounds and particle systems — to tablets. So we’ve now got a touch-based interaction model for that e-product, as well as mouse and keyboard, and so we’ve brought that software system now to the Computer Kit Touch.

“You can code by dragging and dropping blocks with your fingers, you can paint and draw. You can change the pitch of a loop or a melody by running your fingers up and down and then using a change of a parameter mess with how quickly that melody changes, mess with the number of layers, you can make a beat or a loop using a touch-based digital audio workstation style X-Y plane. You can go into any one of our creative coding apps and pull in touch-based interactions, so instead of just using a mouse, a click and point, you can make an app that responds to swipes and taps, and different speeds, and in different locations.”

“On the touch kit itself there’s also a set of new content that demystifies how touchscreens work and peels back the layer of the screen and shows you what’s behind, and you’re kind of touching the intersection of the different copper wires and seeing what’s happening beneath,” he adds.

“There’s obviously a big hardware upgrade with the new ability to touch it, to take it with you. We’ve refined a lot of the components, we’ve improved the speed, the battery life. But really the core of it is this upgraded software that integrates with all the other kit.”

Talking of other kit, the learn-to-code space is now awash with quasi-educational gizmos, leaving parents in Western markets spoiled for choice of what to buy a budding coder.

Many more of these gizmos will be unboxed as we head into the holiday season. And while Kano was something of a startup pioneer here — a category creator, as Klein tells it — there’s now no shortage of tech for kids promising some kind of STEM-based educational benefit. So it’s facing an ever-growing gaggle of competition.

Kano’s strategy to stand out in an increasingly contested space is to fix on familiar elements, says Stein — flagging for example the popular game Minecraft — which runs on the Kano kit, and for which there’s a whole subsection of the Kano World community given over to hacking Minecraft.

And, well, aside from block-headed Minecraft characters it’s hard to find a character more familiar to children than the fictional wizard Harry Potter. So you can certainly see where Kano’s trying to get with the coding wand.

“We broke our first month pre-order target in one day,” he says of that forthcoming e-product (RRP ~$130). “There was massive coverage, massive traffic on our site, it was picked up all over the place and we’re very happy with the pre-orders so far. As are our retail partners.”

The Potter co-branding play is certainly Kano trying to make its products cast a wider spell by expanding the appeal of coding from nerdy makers to more mainstream child consumers. But how successful that will be remains to be seen. Not least because we’ve seen this sort of tactic elsewhere in this space.

Sphero, for example, is now rolling back the other way — shifting away from Star Wars co-branded bots to a serious education push focused on bringing STEM robotics to schools. (Although Kano would doubtless say a programmable bot that rolls is not the same as a fully fledged kit computer that can run all manner of apps, including familiar and fashionable stuff like Minecraft and YouTube.)

“We’re very pleased to see that this category that we created, with that Kickstarter campaign in 2013 — it’s become more than what some people initially feared it would be which was niche, maker ‘arcanery’; and it’s becoming a major consumer phenomenon,” he says. “This notion that people want to make their own technology, learn how to code and play in that way. And not just kids — people of all ages.”

On the hard sales front, Klein isn’t breaking out numbers for Potter kit pre-sales at this stage. But says the various incarnations of its main computer kit have shipped ~360,000 units since September 2014. So it’s not Lego (which has also moved into programmable kits) — but it’s not bad either.

In recent years Kano has also branched out into offering Internet of Things kits, previewing three code-your-own connected devices in 2016 — and launching Kickstarter campaigns to get the products to market.

It’s since shipped one (the Pixel kit) but the other two (a build-it-yourself camera kit and a DIY speaker) remain delayed — leaving crowdfunder backers waiting for their hardware.

Why the delay? Have Kano’s priorities shifted — perhaps because it’s focusing efforts on cobranded products (like the Potter wand) vs creating more of its own standalone devices?

“We are still committed to shipping the speaker kit, the camera kit,” Klein tells TechCrunch. “A big reason for [the delay] is not only the fact that the company is in a position now where we have mass distribution, we have great partners — perennially testing new product ideas — and we want to make sure that products are going to resonate with, not just a small group of people but many, many people, of many different age groups and interests before we release them.”

He also points out that any backers of the two devices who want refunds can get them in full.

Though he also says some are choosing to wait — adding that Kano remains committed to shipping the devices, and saying for those that do wait there will be a few extra bells and whistles than originally specced out in the crowdfunder campaign.

The delay itself looks like the market (and consumer tastes) moving quicker than Kano predicted — and so it finds itself wishing its products could deliver more than it originally planned (but without a wand to wave to instantly achieve that).

This is also a pitfall with previewing anything months or years ahead of time, of course. But the expense and complexity of building hardware makes crowdfunding platforms attractive — even for a relatively established brand like Kano.

“The delay is really unfortunate,” he adds. “We did say they would ship earlier but what we have done is we’ve offered any backer a full refund on the camera and the speaker if they don’t want to wait. But if they do wait they will receive incredible camera, incredible speaker. Both of them are going to benefit from the advancements made in low cost computing in the last year.

“The speaker as well is going to have elements that weren’t even part of the original campaign. On our side it’s critical that we get those products absolutely right and that they feel mass, and that they demystify not only coding and the Internet of Things, which was part of the original purpose, but in the case of the camera and the speaker there are elements that have come to the fore in more recent months like voice interaction and image recognition that we feel if our mandate is to demystify technology and we’re shipping a camera and a speaker… that’s kind of part of it. Make it perfect, make it of the moment. And for any backer who doesn’t want to wait for that, no problem at all — we’ll refund you 100%.”

Beyond reworking its approach with those perhaps overly ambitious connected devices, Kano has additional release plans in its pipeline — with Klein mentioning that additional co-branded products will be coming next year.

He says Kano is also eyeing expanding into more markets. “There’s a significant market for Kano even beyond our traditional leading position amongst 6-13 year olds in the US and the UK. There’s a really strong market for people who are beyond the US and the UK and we’re now at a scale where we can start really investing in these distribution and localization relationships that have come our way since year one,” he says.

And he at least entertains the idea of a future Kano device that does away with a keyboard entirely — and goes all in on touch — when we suggest it.

“Would we move to a place where we have no keyboard in a Kano computer? I think it’s very possible,” he says. “It might be a different form factor, it might be smaller, it might fit in your pocket, it might have connectivity — that kind of stuff.”

Which sort of sounds like Kano’s thinking about making a DIY smartphone. If so, you heard it here first.

The five and a half year old London-based startup is not yet profitable but Klein flags growth he dubs “fast enough” (noting it doubled sales year-over-year last year, a “trend” he says continued in the first half of this year), before adding: “It’s not impossible for us to get to profitability. We have a lot of optionality. But at the moment we are making investments — in software, in team — we have partner products coming out like Harry, we’ll have more coming out next year. So in terms of absolute positive EBITDA not yet but we are profitable on a units basis.”

Kano closed a $28M Series B last year — and has raised some $44.5M in all at this stage, according to Crunchbase. Is it raising more funding now? “I think any entrepreneur who is looking to do something big is always in some sense keeping an eye out for sources of capital,” replies Klein. “As well as sources of talent.”

He points by way of a connected aside to this study of C-suite execs, carried out by Stripe and Harris poll, which found that access to software developers is a bigger constraint than access to capital, saying: “I read that and I thought that that gap — between the 1% of 1% who can develop software or hardware and the rest of us — is exactly the challenge that Kano set out to solve from a consumer and education perspective.”

“In terms of fundraising we do get a lot of inbound, we have great investors at the moment,” he adds. “We do know that the scale of this particular challenge — which is demystify technology, become synonymous with learning to code and making your own computers — that requires significant support and we’ll be continuing to keep our eyes out as we grow.”

 

News Source = techcrunch.com

Google Street View cars will be roaming around the planet to check our air quality with these sensors

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Aclima, a San Francisco-based startup building Internet-connected air quality sensors has announced plans to integrate its mobile sensing platform into Google’s global fleet of Street View vehicles.

Google uses the Street View cars to map the land for Google Maps. Starting with 50 cars in Houston, Mexico City and Sydney, Aclima will capture air quality data by generating snapshots of carbon dioxide (CO2), carbon monoxide (CO), nitric oxide (NO), nitrogen dioxide (NO2), ozone (O3), and particulate matter (PM2.5)while the Google cars roam the streets. The idea is to ascertain where there may be too much pollution and other breathing issues on a hyper local level in each metropolitan area. The data will then be made available as a public dataset on Google BigQuery.

Aclima has had a close relationship with Google for the past few years and this is not its first ride in Street View cars. The startup deployed its sensors in London earlier this year using Google’s vehicles and three years ago started working with the tech giant to ascertain air health within Google’s own campus as well as around the Bay Area.

“All that work culminated in a major scientific study,”Aclima founder Davida Herzl told TechCrunch, referring to a study published in Environmental Science and Technology revealing air pollution levels varied in difference five to eight times along a city street. “We found you can have the best air quality and the worst air quality all on the same street…Understanding that can help with everything from urban planning to understanding your personal exposure

That initial research now enables Aclima to scale up with Google’s Street View cars in the hopes of gathering even more data on a global basis. Google Street View cars cover the roads in all seven continents and have driven over 100,000 miles in just the state of California collecting over one billion data points since the initial project began with Aclima in 2015.

The first Street View cars with the updated Aclima sensors will hit the road this Fall in the Western United States, as well as in Europe, according to the company.

“These measurements can provide cities with new neighborhood-level insights to help cities accelerate efforts in their transition to smarter, healthier cities,” Karin Tuxen-Bettman, Program Manager for Google Earth Outreach said in a statement. 

News Source = techcrunch.com

Women-only co-working space The Wing is launching an app to help its members stay connected

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The Wing is bringing the physical world it’s created for professional women to the digital world with the launch of a social networking app, slated to become available later this month.

The co-working company created the app to connect its members and keep them up to date on The Wing’s programming. For now, the app will only be available to paying Wing members.

“Our team has been hard at work on ways for members to carry the connections they make with them wherever they go,” The Wing co-founder and CEO Audrey Gelman told TechCrunch. “Through the app, members will have access to features that make The Wing experience even more valuable and efficient and will have access to thousands of incredible women at their fingertips.”

Founded in 2016, The Wing provides co-working and community space to women. It’s raised $40 million in venture capital backing from top-tier investors like Kleiner Perkins and NEA. WeWork has also noticed the value in The Wing’s female-first model; the co-working behemoth led its $32 million Series B last November. As it stands, the company has just four locations in two states: New York and Washington, DC. A San Francisco location is expected this October, and West Hollywood, London, Toronto, Seattle and Chicago locations are all in the pipeline.

To enjoy The Wing’s many perks—brass & millennial pink decor, shelves of color-coordinated books and exclusive access to events featuring Hillary Clinton or New York Senator Kirsten Gillibrand, for example—it’s not cheap. Wing members pay $215 per month for access to a single location. But compare that to the price of a desk at a San Francisco WeWork, about $400, and it’s not so bad.

The Wing also provides lactation rooms, “beauty rooms,” a library, food and drinks, and more.

In addition to being founded by two women, Gelman and Lauren Kassan, the company also boasts an all-female staffa rarity for a company backed by venture capitalists. That includes Lina Dorkhman, who The Wing hired six months ago to lead development on the app. She’d spent the last 3.5 years at BlackRock as an associate.

“I was actually a member first and when I saw that they were hiring a product manager I thought it was a perfect fit,” Dorkhman told me.

She says The Wing wanted to create a product that recognized women as not only professionals, or parents or friends or siblings, but all of those things.

“With products like Linkedin, there is this separation of this is my personal self and my professional self,” Dorkhman said. “What we see at The Wing is there isn’t necessarily a separation of your personal self and your professional self. We want to acknowledge that—that is the future of work. You bring your whole self to work.”

The idea for the app stemmed from member feedback, which asked that the company provide more digital components.

“We hear from our members that there is this really special feeling of entering The Wing,” Dorkhman added. “That feeling that you get in the physical space is something we really wanted to translate into the product.”

News Source = techcrunch.com

Kencko wants to help you eat more fruit and vegetables

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People don’t eat enough fruit and vegetables, that’s despite an embarrassment of options today that include fast grocery delivery and takeout services with a focus on health.

A study from the U.S-based Center for Disease Control and Prevention (CDC) released last November found that just one in ten adults in America “meet the federal fruit or vegetable recommendations” each day. The bar isn’t that high. The recommendation is just 1.5-2 cups of fruit and two to three cups of vegetables per day, but failing to meet it can put people at risk of chronic diseases, the CDC said.

The problem is universal the world over, but perhaps most acute in the U.S, where finding healthy food is easier than ever. Amazon’s same-day grocery deliveries, make-it-at-home services like Blue Apron and various healthy takeout services have helped some people, but no doubt there’s much more to be done for standards to be raised across the nation and beyond.

That’s where one early-stage startup, Kencko, is aiming to make a difference by making fruit and vegetable more accessible. Its thesis is that wholly organic diets are daunting to most, but packaging the good parts in new ways can make it easier for anyone to be more healthy.

The company’s first offering is a fruit drink that can be made in minutes using just a sachet, water and its mixer bottle.

Kencko currently offers five different organic fruit and vegetable mixes

Just add water

Unlike other ‘instant’ mixer options, Kencko uses freeze-drying to turn fruit and vegetable mixes into powder without compromising on health. That process — which is similar to how NASA develops food for astronauts — retains minerals, protein, vitamins and all the other good stuff typically lost in healthy drinks, the startup said. The fruit and vegetables used are organic and sourced from across the world — that’s broken down into more details on the Kencko website — while the mixes don’t contain sugar or other additives.

Kencko customers make their drink by mixing the sachet with water and shaking for one minute. Each sachet is 20g and, when combined with water, that gets you a 160g serving. That’s around two daily portions, and it  has a 180-day shelf live so it can keep. There are six different combinations, each one is a mixture of six fruit and vegetables.

Unlike others that pair with water, Kencko actually includes fruit pieces and seeds — I tested a batch. That’s pretty unique, although it is worth noting that some of the more berry fruit heavy combinations mix less efficiently than the plant-based ones, at least from my experience. As someone who lives in a city where fresh fruit and vegetables are easily found — thank you, Bangkok — I’m not the target customer. But I can readily recall living the busy 9-6 office life in London a decade ago, and back then I’d have been curious enough to at least take Kencko for a spin in my quest to be a little healthier.

Kencko is also affordable when compared to most health food options, which tend to be positioned as premium.

Packs are priced at $29.90 for ten sachets, $74.50 for 30 and $123.50 for 60. The startup offers a ‘Lifetime Founding Member’ package that gives 30 percent off those prices for an initial charge. That’s $32 for those wanting 10 servinggs, $79.90 for 30 and $129 for 60.

Two of my Kencko mixes

More than pressed juice

Kencko — which means health in Japanese — is the brainchild of Tomás Froes, a former tech worker who got into veganism after being diagnosed with acute gastritis.

Froes, who is from Portugal and once ran an artisanal hot dog brand in China, was told that his ailment was treatable but that it would require a cocktail of pills for the rest of his life. Seeking an alternative, he threw himself into the world of alternative health and, after settling on a 90 percent fruit and vegetable diet, found that his condition had cleared without medicine.

Keen to help others enjoy the benefits of his journey, he began talking to nutritionists and experts whilst trying to figure out possible business options. In an interview with TechCrunch, Froes said he settled on a new take on the existing ‘health drink’ space that he maintains is inadequate in a number of ways.

“The end goal is to help consumers reach the recommendation of five servings/portions of fruit a day,” he explained. “That would be impossible to do if we excluded the seeds and bits of fruits like cold-pressed juice companies do. They press the juice out of the fruits, leaving the most nutritional part from pulp and the seeds out.”

“We blast freeze fruit and vegetables at -40 degrees which allows us to maintain the same nutritional properties as fresh fruit for longer periods. We then use a slow heat process of 60 degrees to evaporate only take the water-based parts without damaging nutrition,” Froes added.

Added that, Froes said, Kencko helps cut down on the use of plastic by using the same mixer, return customers only require new sachets.

As proof of Kencko’s versatility, he brought his mixer and sachets along to the vegan cafe we met at earlier this year when I visited London, putting me to shame for buying the cold pressed option — which was no doubt more expensive, to boot.

Kencko is based in New York but with a processing facility in Lisbon, Portugal. It is heavily focused on the U.S. market where it offers delivery in 24-48 hours, but it also covers the UK and Canada. There are plans to increase support, particularly in Asia.

Kencko’s Apple Watch app is in beta with selected users

Building a health food brand

Kencko was formed in 2017 and, after landing undisclosed seed funding, it launched its product in March of this year. Already it has seen progress; the startup recently entered the TechStars accelerator program in London as one of a batch of ten companies.

“I’m excited to work with Tomas and the Kencko team,” Eamonn Carey, who leads TechStars in London, told TechCrunch. “I first read about them on ProductHunt and bought into their mission straight away. Once I tasted the product for the first time, I was sold — both as a subscriber and an investor.”

Froes told TechCrunch that drinks are just the first phase of what Kencko hopes to offer consumers. He explained that he wants to move into other types of food and consumables in the future to help give people more options to get their daily portion of fruit and vegetables.

Up next could be Apple-based snacks. Foes shared — quite literally — a new batch of snack that’s currently in development and is made from the fruit. He believes it could be marketed a healthier option than crisps and other nibbles people turn to between meals. Further down the pipeline, he said, will be other kinds of food that maintain the 100 percent organic approach.

Beyond food, Kencko wants to build a close bond with its customers. It is developing iOS and Apple Watch apps that help its users to track their fruit and vegetable consumption, and more generally make their diet and routine healthier.

With the membership package and apps, it becomes clear that Kencko aspires to build a brand and not just sell a product online. That’s double the challenge (at least), and that makes the company one to watch.

Already it has found some success within tech circles such as TechStar’s Carey — people who aspire to eat and drink better but are pushed for time — but if Froes is to even begin to deliver on his mission then Kencko will need to go beyond the tech industry niche and attract mainstream consumers. For now though, the product is worth close inspection if you think your lifestyle is in need of a fruit boost.

News Source = techcrunch.com

What every startup founder should know about exits

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The dream of a startup founder can often be summarized by the following well-intentioned, and mostly delusional, quote: “We’ll raise a few rounds and in a few years we’ll IPO on Nasdaq.”

But a more likely scenario looks something like this.:

You invest a few years of hard work to build something of value. One day you receive an acquisition offer out of the blue. You’re elated. And you’re not prepared. You drop everything to focus on this opportunity. Exclusive due diligence starts. Your company is a mess (IP, contracts, burn). Days become weeks; weeks become months. You’ve neglected business and fundraising. You’re running out of money. M&A is now your one and only option. The buyer says they found a bunch of cockroaches in the walls and drops the price. Now what?

Sounds unlikely?

This is still a favorable situation: you had an offer! Think about how much time you invested in your various funding rounds. The hundreds of names and Google spreadsheet or Streak-powered quasi-CRM process.

Have you spent even a fraction of that on understanding exit paths? If you’d rather not live the situation described above, read along.

The E-word: A strange taboo

Investors live by exits, but many founders keep dreaming of unicornization and avoid the “E-word” until it’s too late. Yet, in 2016, 97% of exits were M&As. And most happened before series B.

Exits matter because that’s when you, your team and your investors get paid. Oddly enough, and to use a chess metaphor, we hear a lot about the “opening game” (lean startup), the “mid-game” (growth) but very little about this “end game”.

As a result, founders miss opportunities or leave money on the table. This is a shame. Our fund, SOSV, has over 700 companies in portfolio. We want the best possible exit for each of them. And fortune favors the prepared! Now, how to get 700 exits (and counting)?

To explore the topic, organized a series of Masterclasses tapping corporate buyers, bankers, investors, lawyers, and startup CEOs with M&A or IPO experience in San Francisco. It was a group that included the founders of Guitar Hero — bought by Activision; JUMP Bikes — a SOSV portfolio company bought by Uber, Ubiquisys  — bought by Cisco, and Withings — bought by Nokia. Each one for hundreds of millions).

Their observations can be summarized below.

Maximize optionality

“Founders must be aware of what contributes to an exit. This means understanding partnerships and how they are formed in the business space the entrepreneur is working in,” said one MasterClass participant.  

As founders, you build your product, your company and… optionality. You need to understand the options open to your company, and take steps to enable them.

The most likely one is an acquisition but there are others like IPO (including small cap), RTO, SBO, LBO, Equity Crowdfunding and even ICO.

“Exit is not a goal ​per se, but as a CEO it is something you should think about as early in your cycle as possible, while being business-focused,” said the London-based investor Frederic Rombaut, of Seraphim Capital.

Indeed, most participants said that exits should always be on the chief executive’s agenda, no matter how early in the process. “Exits should be on the CEO agenda. Not front and center, but on the agenda. M&A is a by-product of a great business and targeted BD. IPOs are always an option once you’ve built significant cashflow forecasting.”

It’s important to ask questions like: How many “strategic engagements” with potential buyers have you had this month? Is your message and value clear in their eyes? Have you considered an acquisition track in parallel to a fundraise?

It doesn’t stop there:

  • Equity crowdfunding might help close some gaps at seed stage.
  • Early IPOs on smaller exchanges can be an option to raise over $10M — the robotics startup Balyo went public and raised 40MEUR on Euronext to get rid of a critical ‘right of first refusal’ option held by one of its corporate investors.
  • Reverse mergers can work too: the medical exoskeleton company EKSO Bionics went public this way.

One thing is sure: the time to exit is not when you’re running out of money.

Companies are bought, not sold

Unicorn or not, the most likely exit is an acquisition.

As George Patterson, Managing Director at HSBC in New York said, “Good tech companies are bought, not sold. The question is thus: how to get bought?”

Patterson says it’s important to understand how mergers and acquisitions actually work; how to prepare a startup for an exit; and how to develop a “feel” for the market you’re exiting through and into. ;

How M&A works

Hearing from corp dev veterans from Cisco, Logitech, Dassault and IBM, a few key ideas emerged:

Motivations vary

It could be (from least to most expensive, or as a mix), as listed by Mark Suster, Managing Partner at Upfront Ventures:

  1. Talent hire ($1M/dev as a rule of thumb — location matters)
  2. Product gap
  3. Revenue driver
  4. Strategic threat (avoid or delay disruption)
  5. Defensive move (can’t afford a competitor to own it)

How corporates find you

Corporates find deals via the development of partnerships, investment (CVC), their business units, corp dev research, media, and investor connections.

Asked about the best approach, Todd Neville, Manager of Corporate Business Development and Strategy at IBM (who gave the most detailed description of the corp dev process), said, “Do something cool to one of the IBM customers. If they rave about even a POC, we’re interested.”

In other words, business development is corporate development. 

Get the house in order

Buyers typically want to know three things:

  1. Is your IP really yours?
  2. Is your team capable?
  3. Will your customers stick around?

For IP, they will check your contracts (staff and contractors), run some automated code analysis for proprietary code and open source use. They will evaluate potential IP infringement. No point buying you if you end up costing more in lawsuits!

For your team skills: sitting down with your engineers will tell them plenty enough without understanding the details of this or that algorithm. Be sure the last thing a corporate wants is to be accused of stealing!

Lawyers engaged early can help. The later the clean-up, the more costly and painful.

Develop a feel for your “market”

Develop relationships and create champions within corporates. It will help promote your deal when the time comes, and will let you keep your finger on the pulse of corporate strategy to time your moves.

Do you read the earning calls of Cisco or IBM (or others relevant to you)? This is where strategies are presented. Are your keywords coming up there or in their press releases?

Chris Gilbert, former CEO of Ubiquisys (sold to Cisco for over $300M) was very deliberate in planning his exit.

Selling start on day one and is a leadership-only function — work out who will be your buyer. Only the CEO can do this. Constantly articulate why a company should buy you,” Gilbert said. Bring clear messages into the acquiring company so it can be presented upwards: give them the presentation you would like them to show their boss! When the time is right, force decisions through competition. If you know they have to buy you, your starting position is strong.”

The dark art of price discovery

There are dozens of formulas (from DCF to comparables) to evaluate a deal  —  which also means none is ‘correct’. What matters is: how much would you sell for, and how much is the buyer ready to pay?

Gilbert, at Ubiquisys, described how close interactions with his banker helped drive the price up among the bidders assembled.

Just like buyers, we meet bankers and lawyers too rarely at startup events, but there is much to learn with them. They make deals happen, avoid value erosion and optimize price. They often also make introductions before you engage them, to build goodwill and earn your business.

And if you worry about fees, the right banker handsomely pays for itself by finding more bidders, and playing “bad cop” for you, avoiding direct confrontation with your future employer. Do you want a slice of the watermelon or the whole grape?

Final twist: Exits are not exits

When asked about what happens after an M&A or IPO, buyers said that they generally hoped the founders would stay with them for many years. Often using re-vesting, earn-outs or shares of the acquiring company to incentivize them. Neville, from IBM, mentioned a security company they acquired whose founder is now the head of one of the largest IBM divisions.

In the case of IPOs, supposedly the ultimate “exit”, any block of shares sold by founders would face extreme scrutiny and might cause a price drop.

So who’s exiting during those deals? Investors (and not always).

Eventually, if the average age of a startup at exit is 8–10 years, the active duty period of founders (if not replaced in the meantime) extends even more. Better love the problem you’re solving, and your customers!

Thanks to speakers, participants and supporters of this Masterclass series:

London: Frederic Rombaut (Seraphim Capital), Joe Tabberer (FirstBank), Chris Gilbert (Ubiquisys), Jonathan Keeling (Crowdcube), Fred Destin, Tony Fish (AMF Ventures, James Clark (London Stock Exchange), Denise Law (SGCIB).

Paris: Frederic Rombaut (Seraphim Capital), Manuel Gruson (Dassault Systemes), Pierre-Henri Chappaz (Rothschild Global Advisory), Christine Lambert-Goue (All Invest), Olivier Younes (EXPEN), Eric Carreel (Withings), Fabien Bardinet (Balyo), Xavier Lazarus (Elaia Partners), Pierre-Eric Leibovici(Daphni). Jean de La Rochebrochard (Kima Ventures), Jeremy Sartre (SmartAngels), Gwen Regina Tan (Entrepreneur First).

San Francisco: Natasha Ligai (Logitech), Matt Cutler (Cisco),Will Hawthorne, (CODE Advisors), Ryan Rzepecki (JUMP Bikes), Charles Huang (Guitar Hero), Jeff Thomas (Nasdaq), Shahin Farshchi (Lux Capital), Ammar Hanafi (Moment Ventures), Adam J. Epstein (Third Creek Advisors), Nathan Harding (EKSO Bionics), Kate Whitcomb, Anthony Marino and Ethan Haigh (SOSV).

New York: Todd Neville (IBM), George Patterson (HSBC), Ryan Rzepecki (JUMP Bikes), Aaron Kellner (SeedInvest), Jeremy Levine (Bessemer Venture Partners), Taylor Greene (Collaborative Fund), Adam Rothenberg (BoxGroup), Eli Curi (Fenwick & West), Ian Engstrand and Salil Gandhi (Goodwin), Warren Spar(Sparring Partners Capital), Duncan Turner, Vivian Law and Sheng Ge (SOSV).

News Source = techcrunch.com

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