The Fubra Blog
Calling all start-ups
Fubra is looking to invest in more successful web start-ups than any other UK investment business in 2010. So if you are running a business online and think you could grow it bigger with our help or investment then you should think about getting in touch.
Before you approach us though, I thought it would be good to give some hints of what we are looking for and what we can offer to you in return for shares in your business. In addition to reading about our company and investments on our site, to see what we are doing, these hints should give you more of an idea what to expect in a meeting with us.
Did you know? In 2009 Fubra invested £250,000 into private companies. In 2010 we want to invest double that if we can find enough good prospects.
But why are we special?
1. We are investing our own time and money not other people’s.
This is quite unusual in the investment space as most investors work on behalf of governments, pension funds, large institutions or wealthy individuals. They are paid to manage others’ money and then paid an extra fee called the ‘carry’ if they make good investments on behalf of their backers. Unsurprisingly because it is not their money most of the time they mess up in fact you would be hard pushed to find many venture investors who have made any real money for their backers in the last 8 years or so.
2. We focus on the earliest stage ventures where risks are highest.
Most venture investors will look to back businesses at a point when they don’t need the money in fact one we recently spoke to even boasted of it. We think this kind of pride in cowardice is exactly what a company looking for investment shouldn’t want. There aren’t many people or firms you can approach who will back an early stage idea or just people but we are just that and even less of those who do shout about it as most prefer to get qualified enquiries through their networks only. We want to cast the net wider for reasons that will become clear later in this post.
3. We care about the bottom line first and the big prize second.
One thing we have noticed is that a lot of investors tend to invest in first time entrepreneurs and through a process of transference decide that the entrepreneur is ready to take their company global and deal with huge challenges even before they have learnt to turn a profit. This is all very well for the investor who can later dilute the entrepreneurs equity when they need more funding because of the lack of profit but not great for building sustainable long term partnerships with entrepreneurs.
4. We don’t expect your business plan to do our job for us.
We would prefer you to spend time learning about us, deciding on what you need from us very clearly, and seeing how your business can fit in what we are already doing. Our job as investors is to know the market you are in we can tell you how big it is and we don’t just get our figures from second hand research reports. We look at real numbers and what is actually going on. All that means if you can tell us the benefits your idea is going to bring to customers of your business, we can figure the rest out. Most investors are not like this because they are investing in things they don’t understand and they want you to hold their hands.
5. We have access to loads-a-money if you can handle it.
Fubra invests small amounts initially from £5k to £50k is the range we like and the reason for this is that if you can’t build a business with this much money something is wrong. You shouldn’t think this means we can’t support you as you grow though because if you really need more money in the business and you can prove you can make a good return on it safely there is plenty more funding either directly from Fubra or from our extensive range of contacts who are keen to invest alongside us. Our investment partners can often add even more value to your business as many are very successful entrepreneurs in their own right. They know Fubra partners with the companies we invest in so they are very keen to work with anyone we are vouching for.
6. If we help you build a billion pound business we only want £300m
The main reason we want you to keep funding low is so that you can retain a good stake in your company. Some businesses think the equity we take up front is high as it is usually around 30% of the business, but if you take a typical venture route and have multiple rounds of funding you will typically end up owning less than 10% of your own business. We think hard work and turning a profit early on to give you real independence and a strong partnership with us is the best way to work together but it’s up to you to choose the best model for your company.
If you like the sound of what we are doing perhaps you should get in touch and find out 4 more reasons we are special. We only let people know all 10 when we actually invest.
You might also like to read my business partner Paul’s take on what we have to offer and are looking for here.
Before you do get in touch though please read what we don’t want too and get prepared:
Commercial or marketing founders with an idea but no one to help them build it. Lots of them tend to think technology is an easy afterthought they buy with investment. We respectfully disagree and some want us to help with the technology but as we are only getting 30% of your business so we are not going to build it all for you too. The advice I always give to marketing or commercial ideas people is get a co-founder if your strengths are marketing find a techy then come to us together.
The other way round, too. Whilst most technical people understand that to build a business you need to take something that costs 50p and sell for £1. However some lack this basic commercial acumen and are more interested in the technology itself than the business benefits of what they are doing for customers. If you can code we might back you as a one person business but we want to know you care about the customers you are going to be delighting with your software as well as the microprocessors that are going to be exposed to it.
Finally if you just want a small business, or you’re only in it for the paycheck. We are looking for ambitious people who really do want to grow the next Microsoft. It’s fine by us if you don’t have the idea for licensing Windows to IBM yet but what is not ok is if we think you would be satisfied if you were to build a small business. We want people on a mission to change the world not just people looking to line their own pockets get a nice house and retire to the bahamas. If any of our Entrepreneurs sell their business we would ideally like to see them investing like us and helping more new aspiring entrepreneurs start their own exciting journey which is what we think it’s all about.
You might think we sound a little keen to invest which may appear strange given the economic situation and you would be right. If you are wondering what the reason for that is you only have to read a bit about the world’s most successful investor who once said “to be fearful when others are greedy and greedy when others are fearful” Not to put too fine a point on it but we have been saving up for the recession which we believe we are now entering as we think it is the very best time to meet people who want to change the world rather than buy a flash car. So we are very excited about all the gloom which is good news for entrepreneurs as it means we will act quickly and help you get on with things, we hope you are too there is a lot of opportunity out there!
Tags: Business, Funding, Investment, Web Start-ups
