VC Archives - Steve Sammartino

The Silk Road Patron

Posted on September 3, 2013 by Steve Sammartino

Regular readers of this blog will be aware of the Super Awesome Micro Project. And if you’re not aware I’m about to disclose some of the secret sauce. Mainly because between now and when we launch, it is physically impossible to be copied by anyone. For two reasons – the first is that no one else has Raul, and secondly it took us way more time and money than we would ever have imagined.

In fact, what we are doing has been on line for some time for those who wanted to seek it out – the secret, has been out a while on this Ignite talk I did at a global digital event as linked below:

A Stranger From Romania.

As you can tell from this super fast talk, we are building a world first piece of technology – a technology which at this point has no commercial goal – and no other reason for existing other than awesomeness. A pressure test of what is possible when the connected world aggregate small amounts of money with large amounts of thinking. To see what we can build using democratised digital factors of production and a teenage genius.

It was made possible by 40 people in Australia, also known as the Super Awesome Micro Project Patrons. Normal everyday people having a crack at creating part of the technology narrative. Our Modern Day Medici. The facilitators of the future.

What is it?

We are buildng a full size car, built entirely from lego, with an engine built from lego, and the engine runs on air. Actually, let me rephrase this. We have already built it. It is done. We have succeeded.

This is where the Silk Road Patron comes in:

We are at the point where we need to transfer the Super Awesome thing and the Super Awesome kid from Romania to Australia for the launch. The cost of transferring our adopted son and our fantastic plastic machine to our fair brown land rounds out to approx. $25K give or take. It is our plan to airfreight both artefacts human and construction – for time & safety reasons. The truth is, I can’t ask any of the patrons to put in any more money than they have already donated. Every single one of these people has already stretched themselves financially. I personally do not even want to talk about how much money I have put into this, other than to say it is 100+ times more than I thought it would be. This is no exageration. And so what we need is the Silk Road Patron.

The Silk Road Patron is the internet version of a silk road trader of antiquity. Someone who is intrigued by the possibilities of exchange from lands afar. Interested in new minds, methods and techniques. Inspired by and for the benefit of a populous wider than themselves. This Silk Road Patron has nothing to prove to anyone, because they’ve already done it – they’ve crossed the globe, trekked the path and already made bank with their own spice trade. They want to give back – be the final player who connects the possibilities of the #SAMP. The Silk Road Patron is a person, not a corproation. The Silk Road Patron’s gift of participation in this arduous project, is participation itself – a personal satisfaction.

This is something wider and deeper than the #SAMP – it is in fact the search for Australia’s most generous entrepreneur. A VC whose return on investment does not involve percentages or ROI. Their drive is ROH – return on humanity. (It is worth noting we can provide validation and proof of our achievements via private digital methods.)

And so our search for this person starts today. Please let us know if this person is someone you know, or maybe, just maybe it is you.

Facebook IPO repurcussions

Posted on February 20, 2012 by Steve Sammartino

The upcoming Facebook IPO is a very interesting scenario. Not just from a startup / social media or tech point of view but from an economic one. There are a lot of facts and figures being thrown around, but from my point of view I’m interested in just a few of them and what they mean for tech entreprepreneurs:

100 Billion Valuation: If the IPO is successful the expected valuation is 33 times their current revenue. And around 100 times their earnings. For comparison purposes Apple current has a 14 times earnings ratio while Google has 12 times. Both companies which have established and growing revenue streams. I know which companies I’d rather hold stock in.

68 Million in acquisitions: In the past year Facebook invested $68 million in purchasing other companies. They have an appetite for acquisition. And that appetite will only grow when the pressures of being public come to the fore. It means that startups who have invented ways to extract money from the Facebook platform are well placed to be bought by the mothership. If you have an idea on how to do this get moving, because the stock market pressures will ensure that startups with revenue generation via Facebook will be targeted.

The IPO will create 1000+ new millionaires: All of which will feel a sense of ‘owing the tech community’. Many of whom will feel like tech rockstars and want to start their own Angel funds. Which means there will be more startups being funded by the FB IPO gold rush. If there was ever a good time to seek money from the Valley, post FB float will be one of the good ones.

The art of pitching

Posted on May 31, 2011 by Steve Sammartino

I had a catch up with a well known pitch doctor yesterday. He reminded me of some of the most important factors, and regular mistakes we make while pitching.

Biggest mistake: Wasting time talking about ourselves. They already know enough about us, or they wouldn’t be in the room. The right amount of time to allocate talking about ourselves is close to zero.

Biggest Opportunity: Leave some questions unanswered. (counter intuitive I know) This creates the opportunity for real conversation. When we converse, we see how each party thinks. It also enables us to determine if we have the right chemistry to work together.

I don't…

Posted on August 19, 2010 by Steve Sammartino

I don’t have a rich Father

I wasn’t left a sum of money from my Grandma

I didn’t go to Harvard

I don’t live in Silicon valley

I wasn’t funded at Techcrunch 50 or Y combinator

I’m not technical genius

I can’t code the latest killer app

I guess I’ll just have to build my startup the old fashioned way. Work my ass off, invent my own revenue, build a team and improve what I have to offer as I learn from the mistakes I’m bound to make. If you’re still around in 10 years, look me up.

Borderless Venture Capital

Posted on January 25, 2010 by Steve Sammartino

This is the third of my crowd sourced blog entry ideas as suggested by Aida_Lee. Aida wanted to get my thoughts on the following: In today’s cheap, quick and global market, what do you see as the blueprint for a border-less venture capital to work?

There is no doubt Venture Capital has been a bit of closed shop historically. And although we’ve seen some opening up of business funding in the USA with vehicles such as the techcrunch 50 and Paul Graham’s Y Combinator, other markets such as Australia are lagging behind quite significantly. My views are the opinion of someone who has raised venture and angel funding before for new ventures.

In my view a thing things need to happen for the traditional structure of Venture Capital to change:

A startup community must evolve in a tight geographic region – this often facilitates events such as those mentioned above in Silicon Valley.
Disruptive technology must become available which breaks down traditional access barriers to outsiders.

Number 1 has happened in only a few locations, namely S Valley, but number 2 has happened all over the world and this is where I see the major changes. The thing that new internet technology has done is brought entrepreneurial communities together. Now we can find each other without having to live near each other. But the funny thing about raising funds for what is considered risky investments, is that it isn’t nearly as much about the idea or revenue potential. It’s about the ability to the team raising to sell themselves. And all real selling requires lots of face time. It’s hard to do this on line, or across borders. So I think that large capital raising wont change a great deal in the future. But, I do see an important capital raising revolution coming:

Crowd funding.

It’s been done already in a few markets, and some entrepreneurs and start ups have already used this technique to raise money for their venture. The idea has been well documented, but a true revolution, such as social networking has yet to happen. The main thing holding it back has been government regulation from the likes of the SEC and ASIC in Australia. What I think the next iteration will be, is a web based business which takes micro payments / investments (a little bit like Kiva) from a large number of punters (for lack of a better word) to fund the new business. Method of which would be like an on-line float for startups. The investors who then would become digital evangelists for the new company. There would be a synchronized ‘investment beta’

The key service of such a site would be to overcome the legal vagaries for all participants and be able to take investments in multiple currencies from multiple markets. There is no doubt this would leverage the quickly building on line entrepreneurial communities. It would also have an important impact the venture capital industry structure the same way digital freelancing websites like elance have respectively.

I’d be interested if there are any sites already doing pure crowd sourcing, and to hear what your thoughts are.

Startup School – 1 seat left

Posted on November 2, 2009 by Steve Sammartino

I’m very excited that Startup School Melbourne is this weekend. We still have a single seat left which is currently being warmed by this guy….

But we’d love to replace him with you. And if you need any more convincing then I’m pretty sure I’ll have done the job once you finish reading this blog entry.

Firstly – here’s a list of topics we’ll be covering in detail:

Idea Generating
Creativity in business. Creative thinking
Raising Capital
Art of Pitching
Legal tips, shortcuts and administration
Successful outsourcing (digital & production)
Building an international work force
Cash flow for startups & budgeting
Simplified project management
Personal & business branding
Selling like a guru
Generating PR and media
Building a Team

All of which is fully documented in a take home working manual so you’ll leave knowing exactly what to do and how to do it. Like I have.

We are also being joined by Yvonne Adele – Globally renowned Creativity and ideas guru!

You can’t learn this stuff in school, books or at University. And I should know as I teach Marketing at Melbourne University. You also get me as an on going mentor as a Startup School graduate with unlimited help in your start up. Which is incredible value give what most consultants (with less real experience) charge by the hour.

We are holding the event in the groovy boutique Lindrum Hotel. Where the space is great and the food and espresso is awesome. I tested it.

All of which is included in the price. You’ll be one of 10 people in an intimate learning environment. Not in a room full of people.

If that’s not enough , Startup School comes with a money back guarantee to blow your mind. I can say this because I know the 2 days will.

No, it’s not priceless – it’s priced at $998.

It will be the best investment in your entrepreneurship education you’ve ever made. it will make and save you thousands. This event is a one off, there is no next chance. If you want to chat about it – call me on the phone number in the right hand side bar of this blog.

Click here to book now.

(Seats still available for Sydney 21st & 22nd of November)

See you on the weekend, Steve.

2 schools of business valuation

Posted on October 10, 2009 by Steve Sammartino

A favourite game of entrepreneurs, especially in the technology industry is discussing whether companies are worth the price they are bought out for. $1.5 billion for Youtube ………. Sales prices with infinite price earnings multiples (because there are no earnings, or they are loss making). Versus a company being sold for a few times it’s annual earnings with a long period of earnings history.

A more relevant discussion would be which school of business valuation was used during the transaction, and there are two:

1. Sale price representing believed potential

2. Sale price representing return on investment reality

Which is more valid? Well it depends on which side of the equation you are residing. I’d say when selling, we should be aiming for potential. When buying we should go with reality. When buying a business the simplest question to ask ourselves is this:

On current earnings, how many years will it take me to get back my original investment.

There’s no doubt certain industries are more likely to sell using the potential valuation method. Burgeoning industries like the internet, IPO’s and even railways 200 years ago are good examples. To get away with selling on ‘potential’ the industry needs to be growing, the future unknown and your company well known. If your startup ever gets enough traction to sell to an incumbent, then take what you can get – sell on potential.