The Latest SBA International Venture Academy – April 2019

This article was originally published by the Sophia Business Angels

FIRST CLASS INTERNATIONAL INVESTORS, COACHES AND ENTREPRENEURS ILLUMINATE THE SBA INTERNATIONAL VENTURE ACADEMY WITH ARTIFICIAL INTELLIGENCE, ART, TECHNOLOGY, AND VAST EXPERIENCE

On Friday 12^th of April 2019, the Sophia Business Angels (SBA) presented its Spring International Venture Academy at the Skema Business School in Sophia Antipolis on the Côte d’Azur, France. This event was sponsored and supported by Team Côte d’Azur, the RETIC Interreg project and Skema Ventures.
This coaching day gathered more than 55 participants from all over the world, including 10 startups; some looking to become investment ready and some looking to start scaling their projects on an international level. Please see the list of startups below.

The 33 coaches and judges were serial entrepreneurs and investors from 15 countries spanning Europe, Middle East, Africa, Asia and The Americas. Their sole purpose was to help startups improve their Investor Pitches and bring their projects to a state of “Investment Ready”.  Some entrepreneur and investor discussions started on the day, at the event.
The SBA was honoured to have three exceptional Keynote Speakers share their vast experience and knowledge:
– Charles Sidman (Founding member of the American Angel Capital Association and Managing Partner of ECS Capital Partners, LLC, an innovative early-stage venture fund based in Bar Harbor, Maine, USA) gave an inspirational speech on “Producing Happy Marriages between Entrepreneurs and Investors”
– Jesper Jarlbæk (Chair of DanBAN, Danish Business Angels, Vice Chair DVCA, the Danish Venture Capital Association and Board Member and Treasurer of EBAN) shared his lifetime experience and provided useful tips on “Building a Portfolio from the Business Angel perspective”
– Helen Wang (CEO of BGTA, a London-based and corporate backed accelerator and incubator focused on UK, Europe and China; founder CEO of Cambridge Innovation Academy) spoke on “Opportunities in China: Go To China Venture Camp”
Startups made a first presentation in the morning while the audience gave constructive comments, then during lunch time coaches and startups gathered in small groups to improve the presentations both in content and form. In the afternoon, each startup made an updated and improved presentation while the audience assessed them in terms of presentation quality, vision, market positioning, financial projections, business planning, investment approach and strength of the team.
 

The event allowed for ample networking time with a pre-event cocktail on Thursday evening at the home of SBA and EBAN President Emeritus, Candace Johnson, overlooking the Mediterranean and Cannes. The day after the event, a farewell brunch was given, overlooking Saint-Paul-de-Vence and Nice, where Marco Landi, former COO and President of Apple Computer, shared details of the Artificial Intelligence projects he is supporting in Sophia Antipolis, Montreal and China. His wife, Diana Landi, spoke about the combination of Art and Technology with entrepreneurship.
Four awards recognized the best companies in the following categories:
 – The Most Investable company: Tousfacteurs
 – The Best Presentation: OmniUp and Halbestundeueben (joint winners)
 – The Mike Rogosin Prize for the Best Team: YouClap
 – The Best improved presentation: Football Hall Of Fame
Youssef Tagemouati from Tousfacteurs, winner of the Most Investable company award commented: “The Venture Academy allowed me to test my pitch before experienced and caring investors and entrepreneurs to make it more impactful. Having won the first prize of the Most Investable Company confirms me in my timing of fundraising. We are ready to scale up!”.
Marcel Dridje, President of SBA, concluded the day stating: “each participant in the International Venture Academy is a winner because all entrepreneurs benefit from coaching and exposure to serial Entrepreneurs and Business Angels and the latter get a chance to look at qualified deal-flow.”
The SBA presents the International Venture Academy twice a year in April and October. If you’d like more information or would like to join us as an entrepreneur, investor or coach at the Autumn 2019 event, please contact:
Géraldine Quetin, Business Manager, at: businessmanager@sophiabusinessangels.com
 
List of the 10 startups selected to pitch their project:

The article was republished with permission from The Invested Investor.
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From experience, even on a successful exit, founders find it tough – not just the stress of the process but what to do afterwards – having a boss for the first time in years or leaving immediately or soon into unemployment (albeit with some cash). 
However, this blog is about when a company shuts due to failure.  Let’s start with some objective analysis, before addressing the emotional aspects of a closure.
Of my 81 start-up journeys (14 where I have been sole founder or co-founder and 67 as an investor), 26 have closed for one reason or another, 5 of which gave a positive return to funders.
Shut by founders: 16, of which 7 had external equity investors, of which 5 gave positive returns
Shut by funders: 8
Shut by bank: 2
Shut by funders: Those closed by funders are generally a much bigger proportion than the circa 30% in my stats so far.  When external investors are involved studies show the proportion to be over 75%. This occurs when the company has not reached break-even and thus is relying on external equity to survive.  If the investors have lost faith in the founders and the founders cannot find new investors then the company must shrink down to break-even, or close.  Hopefully solvently with no money owed to trade creditors, such as employees and the taxman.
Shut by founders: Closed down with no return to shareholders – 11 of the sample above.  The reason is usually that the market has not developed as expected or one or more of the founders has decided they do not want to continue. This could be for personal reasons (e.g. moving to a new country/continent, retiring) or the opportunity cost has become too high (i.e. the company has plateaued or is shrinking).
Shut by the bank: In the last decade, early-stage companies have rarely been able to access debt from banks.  My two companies that have been closed by the bank were founded in the 1980s, when banks had a different philosophy to lending.  Venture debt is sometimes available for later stage start-ups – this is from specialist suppliers, where the interest rate is high to reflect the risk, and the debt provider usually has an equity-warranty based bonus on successful exit.
Money lost by creditors: 5
In my book, I describe how a failing company should try and avoid trade creditors losing money as this is bad practice and will affect the founders’ ability to raise funding for a new venture.  Note that the shareholders will almost always lose their investment.  Five of the failures were insolvent and hence 21 closed, or were sold, with no loss to trade creditors.
Now let’s look at the very different outcomes for investors and the entrepreneurs.
For the funders who ideally will have a portfolio of investments, my view is that once payment is made the money should be considered lost and any return is positive, even if a fraction of the original investment.  Of course, if one can help the company one should – with advice and more money.  I have written before about not regretting the investment – an investor should learn from the loss and move on.  Of course, the UK’s generous tax reliefs do ameliorate the situation.
For the founders the situation is completely different.  Their dream has been smashed, they may feel they have wasted several years of their life (although they will have a learnt a lot), they have probably lost money – a lower salary for several years, maybe losing some directors’ loans, maybe they haven’t been paid for a few weeks or months. They will have suffered serious stress, they may have had to make employees redundant and certainly will have to do at the end.  They will be questioning their abilities and self-confidence.  I went through that in 1990, reducing Camdata from nearly 30 staff to 8, then zero.  I hadn’t paid myself for 12 months. And that was in the days of a 15% base rate, meaning the company debt and our personal mortgage were a multiple of those in the last decade.  Hence, I have strong empathy with founders who either close or watch their company being closed.
So, what can we conclude from this?
As described in an early newsletter, the life of an entrepreneur is tough and the chances of a successful exit are not high, but I hope that the life-long lessons and experiences from the journey provide sufficient compensation.  Do try again if you fail.  But also bear in mind, the opportunity cost of struggling on – there is often light at the end of the tunnel but, to use a cliché, that may be an oncoming train.
Yours,
Peter Cowley
 

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