South Yorkshire adds chicken tikka to its pudding

The Asian Business Director's Network (ABDN), with the help of Connect Yorkshire launched its South Yorkshire operation in Sheffield. It was a well supported event and it was really good to meet and talk with many businesses from the Sheffield community.

The event, held at Aroma restaurant aimed to give Asian-led companies access to the mainstream business community. Lynn Harrison, Business Link partnership manager, discussed the Train to Gain proposition; and Insider’s editor Richard Stirling informed that he wants to receive more business news from within the Sheffield community and I, all spoke at the event.

Arshad the chairman of ABDN, made a fantastic speech that was inspiring, he described ABDN as being, “a bit like chicken tikka masala, served with Yorkshire pud.”

He also added; “The ethos of the ABDN is to break through the barriers. We want BME (Black and Minority Ethnic) businesses to break out of dealing with their own communities because that is where the business is, that is where the need is.”

We are looking forward to working with members of ABDN who are looking to raise investment to help grow their business.

We do hope that Connect is not perceived to be Leeds centric; and to reiterate - we are not! This years plan is to hold a total of seven events in Sheffield this Autumn; starting from the 5th October. Don’t miss your opportunity to join us; further details will be displayed on our events page shortly.

Race to the Pole

A documentary on the BBC2; ‘On Thin Ice’ got me thinking……

After almost two weeks of intensive Polar Training in Antarctica; James Cracknell, Ben Fogle and Ed Coates set off to race from the edge of the Antarctica continent, to race over 370 nautical miles across the largest ice cap in the world to the Geographic South Pole.

The racers will face constant challenges throughout their journey: surving in temperatures as low as -50C, navigating and skiing while pulling a 70Kg. pulk, climbing up to 9300 ft. to the South Pole and through everything working together as a team.

The bottom line is that, as in sport, there are no guarantees of success but equally there is no substitute for preparation. That's why coming up with a well thought out business plan is key.
In September we will be holding the InvestorQuest Investment Challenge and we are now seeking applicants to present at the event. It will be interesting to see how many of the business propositions can articulate exactly what they do and why they might be one of the winners...

Each presenting company has the chance of winning up to £1000 of top level Intellectual Property, Accountancy, Legal and Marketing advice from four of our Sponsors (£4000 in total).

Investors look for attributes that they have seen in ventures that have generally made it in the past: clear vision and value proposition, strong management that can navigate through the blizzards to success, understanding of the competitive landscape, a feasible route to market, etc.

The aim of the Investment Challenge is to encourage people seeking early-stage funding and business support to put their ideas forward. The funds involved so far are the Viking Fund, YFM Group and Aquarius Equity Partners. If you’re interested, then check out the InvestorQuest page of our web site for more information.

Open Collaboration: Friend or Foe?

Open innovation is a hot theme at the moment. The idea is that you only know so much within your organisation and outside there is so much more knowledge if only it could be harnessed for (your?) benefit.

The more council you take the more certain you can be that your decision or approach is (the wisdom of crowds sampled by taking point measurements?) However, the more you share your ideas the more open they are to be copied or stolen. Also, your IP position can be a concern or even a sticking point for establishing a win-win situation with a third-party that is bringing something to the table. But the bottom line is that people work together when they can achieve more together than they can alone (which is why mergers take place!)

So like most good ideas there are pros and cons and like capitalism 'it may not be perfect but its better than the alternatives'. Initiative like Connect have a role to play in helping break down barriers, enable cross-silo thinking and generally help catalyse action - if the market participants want to. The region’s ability to commercialise science and technology depends on the strength of its “social business infrastructure” and an entrepreneur’s ease of access to critical resources. We want to make it easier, not harder to start a business or gain market traction.

Experienced people will be willing to give time pro-bono if they get a “return on involvement”: either altruistic satisfaction or the promise that everyone will profit from a rising tide. The development of a “culture of collaboration” that goes beyond mere networking towards a process of co-creation and information exchange that creates trust-based relationships, and so instills a sense of shared ‘ownership’ in both the risks and rewards.

Living in splendid isolation (and having absolute focus on your own bottom line) has its place, but equally there is always space for serendipity, participation and collaboration where everbody wins.

Clouded Thinking?

TeckTalk 2008 on June 17th will debate the issues surrounding 'cloud' computing. How important is it for enterprises to be able to 'hug' their data? Is day when all server machines no longer belt out heat from your own rack but sit somewhere out in cyber space, maintained and upgraded by men in white coats.

The technology promises to bring the cost of application hosting, data storage and connectivity down via 'pay as you go' services and open source tools. But have may of us have already found that's not the whole story and the vendor perspective can be "when we have them by their databases, their hearts, minds and wallets will follow".

Cloud computing brings together high performance supercomputing capabilities to the masses. Is your application taking off? The promise is that you can scale processing power as your application grows. Backups? All taken care of for you. But what about security? That probably still is the Achilles heel of the cloud - are you going to entrust your precious corporate data to some outside your firewall?

And what about the green agenda? One of the companies backed by the South Yorkshire Seedcorn Fund has a novel approach to server cooling (no not locate them at the North Pole!). Full tilt computing generates a serious amount of hot air where ever the processor is located and that needs to go somewhere.

So on the 17th, let's hope the debate produces some clear thinking and we get demistify what cloud computing has to offer for the future and lets hope it not all vapourware! We have a great keynote speaker lined up from Oracle and a supporting panel to debate the issue: Cloud Computing - Is it all hot air or is there a silver lining? See you there.

Power, Job Titles & Oxymorons

The current controversy surrounding the power residing with the Prime Minister versus parliament and the legislature has similar parallels in business. Tensions mount when shareholders and executives having misaligned interests. Surely a lot of the problems the banks have faced are linked to this disconnect. And any system of remuneration that lacks audit or control is always asking for trouble as the politicians have found. In isolation, one can justify any reward or find good reason for a payment that wouldn't stand up to external scrutiny or a wider perspective, which is why this is so important in keeping reality real.

On the subject of power bases, I am always wary of companies that have job titles that start with the 'Deputy' or 'Assistant' which implies that the person they report to believes themselves to warrant such a supporting cast. Similarly, I am not a fan of joint roles and responsibilities, which just serves to be divisive and confusing to other staff. If you have functional heads accountable for the performance of the company in that area then that focus is beneficial and good. Everyone needs to be part of the team, but in the end someone needs to do something to move things forwards in specific areas. Even more against the grain is the 'Executive Chairman' role which is surely an oxymoron, which was a subject of a previous post 'Are Two Heads Better Than One?'.

Clucking About Geography

A recent Northern Way magazine article by Mark l'Anson highlighted that 70% of the fund management 'capacity' is clustered around London. Is it the quality of the company that drives the deal or does geography really matter? Business angels mare certainly more likely to stay closer to home, but professional fund managers really should be where the action is.

Is this a chicken and the egg problem or has the bird well and truly flown? The relative absence of VC money may actually damped demand is an argument the article puts forward. Is it the role of the RDA's to redress this imbalance and provide regional funding to need local business needs? The Northern Way have recently published its first recommendations report ' Realising the £25bn Potential: Stimulating the long term private venture capital markets in the regions'.

The report to my mind misses a key point - supply and demand - it's no use having regional fund managers in place twiddling their thumbs without activities to support and stimulate the innovation ecosystem. At the end of the day it is a fund managers responsibility to make money - not to redistribute wealth.

Activities like Connect are more orientated to helping to stimulate innovation and enterprise at the grass roots level. Putting too much focus on fund management as a means of economic regeneration without regard for the health of the ecosystem is not optimal. Fund managers are tasked with plucking good opportunities out of the ecosystem and then fattening them up. If there are not enough good opportunities, they will look elsewhere. Hence the focus of regeneration should be on creating an environment where good investment opportunities develop. I can't help believing that if the opportunities are there, the fund managers will come to harvest them.

For What It's Worth...

I will be leading a Investment Readiness Programme seminar on How To Do A Deal: Money, Valuations and Deal Structures on the 20th May. How do you value an asset? In simple terms, it is the discounted value of all future cash flows it can generate plus any comfort or benefit you might derive while owning it! But also if you think an asset will go up 20% from what someone else thinks it's worth today, then you might be seduced into buying it. Equally if you think it will be worth less tomorrow than it is today you would be hard pushed to buy it. Which is why macroeconomics and recessions cause all sorts of problems (at least in the short term). Particularly if the only cash an asset is going to generate is when you sell it (as with our fixation with houses as an 'investment' rather than as somewhere nice to live!).

There are all manner of ways of valuing a company and it it is instructive to see what each method comes up with, but in the end the value of an asset is what someone else is prepared to pay for it. Which begs the question is a company sold or bought? My experience is definitely the latter. I know investors want you to have an exit strategy, but it should be just that. Spending too much time too soon trying to sell something you haven't yet formulated can be counter productive. The key focus has to be creating value and reducing risks, both of which mean a higher valuation at whatever point this is crystalised.

And don't forget price is negotiable, so make sure you hone up these skills to maximise the price you get for you get for all your hard work. And remember if you are only selling part of the company, you have to work with whoever purchases equity from you so implicitly it can't be an overwealmingly good deal. Each side has to be reasonably happy with the outcome. If either side isn't just a little unhappy at the outcome it probably is a bad deal! Balancing risk and reward is what it is all about and remember the lower the risk and greater the future value is realised quicker the more you can expect to get if you sell something today. Do the sums can quickly shed some light on whether your business plan proposals have any chance of becoming a done deal.

To register for the workshop on the 20th May, click here!