European Venture Contest

The 2nd edition of the European Venture Contest is designed to provide high tech companies a platform to present their business model to key leaders in the industry. Entrepreneurs will have the opportunity to interact and network with investors, corporations and the media.

The next selection round to gain entry to the contest is Monday, 28 August 2006. Registration is currently open on the Contest website.

Going West- Quester opens a San Francisco office

Red Herring picks up on Quester’s new office opening in the US. Quester is one of the few early stage investors in the UK. They make seed and series A investments, managing university challenge funds (targeting university spin-outs) as part of their funds under management.

The fact that Quester are opening shop in San Francisco reflects the level of maturity of the VC market in the UK. Obviously, the big private equity houses like 3i have a US presence, however Quester are relatively small to be operating as a transatlantic fund.

And this flow is bi-directional.

I was interviewed by Library House last week regarding the state of the early stage venture climate in London (vs Cambridge or Oxford). My number one comment was the level of US VCs I’ve been seeing in London- all looking to co-invest, set up shop or float their portfolio companies on AIM.

10 tips for a perfect pitch

The guys over at Fleck have posted their top ten tips for pitching to VCs. It’s pretty clear they’ve been through this more than once.

Tip 3 is a real winner. We’ve run investment readiness programs where the entrepreneurs were filmed giving their pitch and answering questions about the business. The pitch improved 1000x the second time and the body language wasn’t as defensive during questions. It’s a very, very good exercise if you’re preparing any presentation.

Another favorite: Tip 10 – Don’t pick a fight.

Part of my questioning approach is to see if I can rustle an entrepreneurs feathers- simply to see how they will respond or react. It could be challenging the company’s strategy, salaries, valuation, etc. It’s ok to disagree with the VC, but don’t get into a fight. If you fight with me do you fight with customers, partners, employees, and so on?

[Via alarm:clock]

De facto standards and DRM

Red Herring reports

…”This text affirms a new principle—interoperability—which makes France a pioneer country in Europe,” Renaud Donnedieu de Vabres, the French minister of culture, said in widely reported remarks to France’s National Assembly as it adopted the law on Friday. “Interoperability is fundamental for consumers and creators because it allows for a greater circulation of works while respecting copyrights.

Apple’s iTunes has been so successful to date because they control the entire value chain. By controlling the hardware as well, Apple can use DRM that is invisible to the end user (at least I’ve never had any issues) and provides comfort to the record labels. If Apple is forced to open it’s DRM to support other hardware, they lose that control mechanism, which will result in a loss of confidence from the music (and video) industry.

I’ve got issues with DRM like many others, but I can’t see this helping bring more content onto digital devices. Steve Jobs has single handedly opened this market and is bringing video to market as well.

However, in a report released Friday on digital content strategies, the OECD said the rise of proprietary and incompatible standards is slowing the development of digital content. The report states “there are considerable lock-in effects due to the development of de facto standards.”

Lock-in and de facto standards are music to a VCs ears, plus de facto standards = interoperability. Seems like both the OECD and France should support DRM.

EU wants to triple early-stage capital investment

The Commission has set the objective to work towards tripling the annual early-stage investment in the EU from €2 billion to €6 billion by 2013.

While this is a step in the right direction, it’s the asset managers and LPs that need to triple investment into Venture in Europe if there’s going to be a meaningful impact. There are multiple cases of successful funds here in the UK that are struggling to raise funds- despite an impressive track record.