DISQUS

Absolutely correct - couldn't agree more. I've been through various stages of a start-up and one of the big issues for us was that the first offer we had on the table enabled us to have a level of security.

Don't get me wrong, we weren't looking to drive Porsches or pay off mortgages, but it was tempting to not have to worry about bouncing school fees that month.

We didn't take the offer and a few years later, when trading was tougher, we all had to bail sooner than we would have liked, as personal agendas changed.

I think that there is no "one size fits all" solution but the idea that the founders, especially those who may be older and have commitments, can afford to live on baked beans for three to four years is short-sighted.

I think a lovely example of "nowhere to hide" is the current WrapIt meltdown.

For those that don't know, WrapIt is a wedding list servce that went into administration at the start of the month.

These disgruntled customers set up a forum http://www.wrapitcustomers.com/popular/all and *then* found links to a management conusltancy news site that alleges that directors got some loans paid back a few weeks before the company went bust. This information would only have been available to specialists ten years ago.

Couldn't agree more. My background is magazine publishing and I made the jump over to mobile content three years ago. The majority of the moco firms are staffed by techies who know their symbian from their javas but don't understand that content, on its own, is not enough. They think brand, positioning, values, entertainment and voice are all gooey fluff that keeps us marketing bods in Ivy lunches :-) Whilst I agree that there is a huge element of wibble in my profession, one only has to look at massive value built up by IP focused business' to realise that done properly, its a goldmine.

I've recently come to realise that its not too late for the carriers (and for carriers read technology based firms generally) to change their approach, they still control the customer, its just that they don't think that way.

Culturally it would be like asking a bunch of magic circle lawyers to become drama teachers and "act like trees", they're just not wired that way.

Hi Nic
Only way I can put this: doesn't the gherkin look a bit, well, phallic?

Probably my twisted perspective but thought I better mention it.

Love the blog.

Cheers

Chris

We need sites that people want to visit. I check my mail, check some stocks and a few other time sensitive issues but we still need a mobile web killer ap. Until then the industry will be hype and not much else.

Hi
Thanks for the explanation.

I have a follow-up query. How does this relate to the providers of the debt that funds the majority of VC deals?

I had assumed that the debt would have a similar chance of going pop(i.e. there can't be many companies that are financially robust enough to service their debt but generate no return for the VC) but surely the debt has a limited upside?

Or am I simply confusing the sort of LBO deals that get broadsheet headlines with the more speculative technology investments.

Chris

Great points and anything that creates a more transparent environment the better.

If we are honest, we all use the free-option play during our careers, whether its with suppliers, customers or even collegues. It just *feels* more sinister when you know its a VC doing it. :-)

Bearing in mind that they are trying to "sell" the company to potential/current investors I think that the figure is pretty steep. I wonder what their "worst case" figures were?