If you read last week’s post, we’ve been thinking about the changing nature of funding, how increased communication and collaboration are making for a more transparent – and fast-moving – marketplace for startups. How startup studios are part of a larger recognition that investors have to bring resources beyond money to the table.
So why, if this is all true, is the market still so bleeping inefficient in so many ways. Why does a Clare-based founder come to me (with a great company that is actually producing the mythical hockey-stick revenues in a market worth hundreds of billions annually) to complain that he can’t get a €10M pre-money valuation on €1.5M revenue/100% YOY growth?
Run the numbers for his company on any valuation algorithm you like and the company is worth north of €25M, perhaps much more in the feverish bubble that is the States. The same is true for at least five companies in the Portershed and around Galway, and I’m sure this picture holds true for most of the country.
Especially post-Brexit, most of these companies will find their quickest road to scale and success is in the US market. And they are likely to find the deepest funding resources, as well as collaborators, partners, supply and distribution channels, VARS, and opportunities for acquisition, IPO, etc. And if we can fill an Ireland-to-USA pipeline with smart, growth-stage companies, we bring more attention to the Irish market and, ideally, more liquidity (as smart investors look to get into deals at an earlier stage). Which means better valuations and more growth options for everyone.
What would growth-stage companies need to set up shop in the States? Collaborative working environment? Mentors who can help them make connections, navigate culture/financial/legal differences, make introductions to new customer segments, new collaborators, new ways to sell? Mentors who can help the companies hit the ground running?
Not a lot else. Irish companies are capital efficient, smart, and English-speaking. They are the rare commodity in the States at the moment. Can we prime the pump with a proof-of-concept?
At this point, we are having exploratory talks with people in the States. Current thoughts center around finding an accelerator that would welcome post-accelerator companies, that have experience with their graduates and the resources required to scale. An accelerator in a target-rich (read: customers, funders, other tech firms) environment. Ideally with a daily flight to and from Dublin.
What else am we missing in the equation? Are there blind spots or game breakers? Are there people with whom we should be talking?
This is where you come in. We’re hoping to move this to a larger discussion and, ideally, a test of the concept this year. Let us know what you think. We’re all ears.
Thanks for being there.
Educator (Associate Professor) / Entrepreneur / Leader of angel
communities /Entrepreneur in residence at PorterShed
and BioExcel / Rarosenberg@gmail.com