As you can imagine, I get to know quite a number of start up and early stage EIPP (and related) vendors, both here and across the pond. At the same time, I have also attracted a number of potential investors and acquirers seeking startup and early stage EIPP vendors. In these cases, with permission from both parties, I am able to make the necessary introductions.
More recently, due to my involvement in the technology startups through OpenCoffee, NW StartUp 2.0 and Mashup Manchester, the requests from investor community have broaden to include telecom companies.
Are you a startup or early stage company looking for seed corn, second or third round of funding? If so, it makes sense to get in touch privately so that I have a better understanding of your funding needs. As always, the information will remain confidential.
Whilst you may think that only start up and early stage companies require funding, I am aware of mature companies who have been in discussions with investment community in order to seek funding for growth. In these cases, funding is generally needed for geographical expansion. It is much easier for mature companies to raise funding than startups or early stage companies. While this is the general acceptance, courting potential investors for 8 to 12 months without closing the deal quickly, do put a significant strain on the business.
Given that EIPP is a growth market, almost every company continue to make losses year after year. Yes, I accept the cash flows are beginning to improve for companies such as OB10. Except those acquired by the banking and card sector, without further funding, their aggressive growth cannot be sustainable simply through cash flow generated. So how do they satisfy their funding needs? It then becomes a question of debt to equity ratio. Bank debt usually supports for short term working capital needs and not geared for high growth requirements. As one expect, these companies are significantly shy to mention their funding needs, as they believe that the need for additional capital will be badly reflected in the market place.
At the same time, the world continue to become a smaller place due to daily improving communications, both in terms of speed of communications and level of collaborative tools being launched. This environment makes competitors to meet each other and collaborate easily than ever before. Good examples are Facebook and LinkedIn. Whilst the LinkedIn functionality is somewhat limited and their Groups do not offer any functional support, most companies are using these on-line environments to seek potential partners and investors in addition to new customers.
In one occasion, whilst I was safeguarding a confidential discussion I had with one of the mature (simple rule of thumb: been around for more than 5 yrs) vendors, the market knew more or less of their funding needs. How is this possible? Do companies or advisers working on behalf of these companies leak limited information intentionally to test the market reaction? Surely, an advisor will not leak such information without the consent of their client, if they are to do breach confidentiality, they would not have clients for long. Damaged credibility is very hard to repair.
If you are a startup, early stage business or mature company, you might be interested in having a confidential discussion so that I might be able to introduce you to potential investors. At the same time, if you are a potential investor and seek investment opportunity into this segment including telecom, please get in touch. I love to see EIPP market segment flourish with more vendors in the market place.
Disclaimer: Whilst I used the name of OB10, none of the content is written with OB10 in mind, except the sentence in which OB10 was mentioned.