Openfund

Taxibeat Closes a New Funding Round of €0.5 Million

Tue, 28 Aug 2012 21:26:00 +0900

The Openfund is eager to announce a new funding round for Taxibeat. The round, in the form of a €0.5 million convertible note, is contributed by a syndicate of 7 both existing and new investors to the company.

15 months after the initial Openfund seed round and 8 months after the previous angel round of €0.25 million, the company now features a fleet of 1500 in Athens, Greece and a 20% monthly increase in rides, along with a fleet of 400 in Rio de Janeiro, Brazil one month after launch. September will find Taxibeat launching in Sao Paolo, Brazil, Paris, France, Oslo, Norway and Bucharest, Romania.

Together with investments in local subsidiaries, the company has now raised more than €1 million on its quest to redefine private transports. The new round will help the company extend its edge both in its world class technology and on the road to new geographies.

In contrast to the current economic context, the Openfund considers this round a further testament to the team's capacity to execute, as well as to the growing maturity of the technology ecosystem in the region.

Taxibeat raises a new angel round

Tue, 06 Dec 2011 18:24:00 +0900

The Openfund is excited to announce a new funding round for Taxibeat. Seven months after the initial seed investment, the company has raised a syndicated funding round of €250.000, coming from 5 angel investors.

Being a prime example of innovation and development even under the current tough economic conditions, the company will now accelerate its international expansion and further fulfill its vision to redefine private transports.

Taxibeat joins the number of Openfund portfolio companies to have already raised an external round of funding. More updates to be announced soon.

The 5th call ends, all rounds in hindsight

Fri, 06 May 2011 04:25:00 +0900

To get this out of the way, we expect to deliver the first round of feedback to all applicants by Monday the 16th along with the first go no-go.

Following that, two weeks' time will be given to the teams that don’t have a business plan to write one. As always, if you feel comfortable about your idea you may skip ahead and start doing that based on our guide.

We thank all the entrepreneurs that shared their ideas and aspirations with us and vouch to make the best we can out of them whether we end up working together or not. We pride in offering feedback to every founder, on both what we liked and what we didn’t like. Even if you don’t end up being selected you will know what (in our humble opinion) you should work on improving.

With the 5th call having just closed, we wanted to take a look backwards and look at what we have achieved in the Openfund.

The following graph shows the accumulation of applications over time. Even though we advise that you send these in early, similarly to every previous round, the founders took the maximum allowed time to refine their submission.

It also corroborates to the myth of Greeks doing things “last minute” -- even though all countries seem to be trigger happy in the last two days.

Two also interesting stats is the percentage of foreign submissions. After these 5 rounds and accounting for regression it’s safe to say that 41% of applicants come from the rest of Europe and 8% from beyond. We’re flattered by that, especially given that we don’t actively promote outside Greece.

We’re also proud to have proven that we’re more than interested in investing in any country where a team of talented founders lives.

Another tidbit worth mentioning is the (lack of) evolution with respect to the skillset of the people that are interested in seed funding. The above bars reveal the self-evaluation of people with respect to certain skills.

Clearly this dispels the mythical geek in a garage startup. The teams that apply are mature, well rounded and become even more so over time.

Future updates regarding all those that participated in this round will arrive at their inboxes.

Round IV Winners are Announced, Round V Applications Open Up

Thu, 17 Mar 2011 00:38:00 +0900

Today is a big day for the Openfund. We are thrilled to announce 3 more companies entering the Openfund and the next call for proposals for you to become the next one.

The teams selected to participate in the fourth round of our operations are:

- TaxiBeat, a team of three from Athens, uses the mobile technology to connect taxi drivers and passengers by enabling taxi drivers to advertise their location and availability to nearby passengers who are searching for a taxi using their smartphone.

- GourmetOrigins.com, a team of two from London and Barcelona, is an online platform that aims to address the increasing consumer demand for unique foods and food related experiences. GourmetOrigins.com aspires to become the point of reference for premium food items and their delivery across Europe.

- Kamibu, a team of seven from Athens, is the company behind Virtual Life (working name), a revolutionary browser-based 3D MMORPG for gamers with a PC or smartphone. Gamers may engage simultaneously online and in real-life through short quests like going to the movies or planting trees in the park, provoking real-life and online interactions.

All teams will receive, next to seed funding, extensive support from the Openfund executives and advisors on all things start-up, enabling them to launch great products within the next few months. We are thrilled to have already started working together with these teams, and we look forward to leverage on their vision, commitment and talent to make three successful companies happen.

In the context of this announcement, we are equally excited to open today the call for proposals for the Openfund’s fifth round of operations. Entrepreneur teams are welcome to apply by filling the form here. As usual, early applications enjoy the advantage of timely feedback, enabling a resubmission before the deadline.

Founders are also encouraged to take a close look at what we are looking for, our process, the FAQ and best practices that may be found across this blog before proceeding with their application. The selection process is set to begin on May 1st, with the final decisions being made in the beginning of June. Similar to our latest round, winning teams will receive 30.000-50.000€ for 15% of equity.

We are looking forward to make the most of our resources to help entrepreneurs start-up and make great prospects materialize. Applications close Saturday, April 30.

As the 4th Call for Proposals Ends, the Real Action Begins

Wed, 01 Dec 2010 23:59:00 +0900

The call for proposals for our fourth round of operations was closed this midnight. First of all we would like to extend a warm "thank you" to all the entrepreneurs who entrusted us with their applications and the responsibility to review them. We cannot help being excited by the volume and quality of the proposals that came in and we are now hard at work to make great start-ups happen.

Here are a few more details and demographics on the applications received, next to the steps and dates to the selection process to follow.

The submissions span 24 countries, mostly Europe, but also India, Brazil and the States. Applicants from Greece stood for a diminishing 50% of the total, while the European map below pictures the geographical distribution of the applicants in more detail.

The next graph provides a closer look at the time distribution of the applications received. No surprises here, almost half of the applicants submitted in the last couple of days before the deadline.

Another interesting perspective regards the skills spectrum, as it was reported by the applicants themselves. The graph reports a wide blend of capacities across the founders, both in technical and business issues.

What now follows is the selection process, which takes place in three stages. First, selected executive board members and advisors will review each one of the applications received. The full reviews and feedback collected will be returned back to the applicants by Friday December 10, next to the decision to proceed to the next stage or not.

Successful applicants will then be required to submit a full business plan, before getting interviewed from our full executive board. Interviews will take place on Monday, December 20. Finally, the best teams will get to present in front of our executive board, investors and advisors on Saturday January 8, 2011, with the selected teams being announced right after.

We are enthusiastic for this round and confident that, with such a great pool of entrepreneurs and partners, fantastic start-ups are in the making; stay tuned for the updates.

Tips to get seed funding and support 6/6 - Technology and Goals

Mon, 22 Nov 2010 23:26:00 +0900

To complete our application but also in order to generally have an as well-rounded a submission as possible for any purpose (in other words the beginnings of a business plan) you need to address a few other issues too.

Technology

It’s important to demonstrate how you plan to implement what you’re suggesting and of course that you have the capability to deliver. Although the latter is partly covered in the members’ profile section, it’s a great opportunity to show off your experience when talking about what technology you plan to use.

Overall, we are interested to get a better idea about your grasp of the technology and how you plan to use it. It’s not necessary to go into full detail about the implementation - just make sure to mention your backend and database choices, any frameworks you plan to use, collaboration software you’re familiar with and so on. If there are any particular reasons to make certain choices (other than your experience in it) make sure to mention them too - we like to know we’re dealing with knowledgeable and opinionated founders.

Needless to say, as long as the technology makes sense we have no bias towards particular platforms or solutions nor will we require you to use something you’re against. At the same time, there is no need to select the most state-of-the-art architecture and the latest version out there. As long as you can get the task done, that’s what matters - you can even choose from ready-made solutions if that’s more efficient (nobody expects you to write your own blog engine). You can expect however to be exposed to new services and ways of doing things as part of our mentoring process.

As mentioned, it’s important to let us know how proficient you’re with the tools you plan to use. Man-months spent is a first measure but nothing speaks better than your previous works - and how exactly you participated in them. It’s also key to let us know who will be the chief technician who will bear the main responsibility of getting the job done and who will be there to support him or her (if any).

Goals

It’s crucial to have definite and ambitious yet achievable goals in mind for a predefined period of time when starting a project. That gives you something tangible to work towards and going through the process of outlining your targets forces you to make a reality check on your project.

Definite goals means something you can measure or quantify. Examples include number of users, non-paying customers, user conversion or retention, even revenue if you think you can make it that far within the incubation period. It can be (actually, it should at least be) having implemented an alpha or a beta version of your product, with specific features tested and launched. It can include having researched the market to understand associated costs and competition parameters, then digest this information to iterate on your priorities and strategy. It can include having secured a number of enterprise deals. Basically, as long as you have some structure and actual numbers to avoid vagueness you should be fine.

Of course, the suggested goals should be within reach given the time you allocate to them. It’s probably not believable if you claim global expansion within a few months time and you can’t probably get thousands of active users in a similar duration. Be realistic and try to connect your estimates with the actual tasks you plan to undertake, previous similar work you’ve done or at least similar projects carried through by others. It’s also wrong to set your goals too low - playing it safe will probably cause inadequate results - better to err on the side of excess. And as usual if the task of setting goals seems daunting it’s useful to categorise them into short, mid and long term goals.

To sum up

This post completes our short guide at submitting a successful proposal in a seed funding vehicle - based on the Openfund application form. Although there are a number of similar articles online on the issues covered we believe that by going through our suggestions you can significantly improve the quality of your submissions. We are looking forward to them!

Tips to get seed funding and support 5/6 - Funding

Tue, 16 Nov 2010 01:40:00 +0900

Another very important aspect of your application in any seed funding vehicle like Openfund is how you plan to handle the money issue. This involves how much you expect to spend to reach your targets, how you plan to use the money requested if successful and what your burn rate will be over time.

One of the common mistakes we see in the applications we receive is startups claiming they need an order of magnitude more than we can give - which - simply put - is a waste of everyone's time. However, if you have done some work projecting all your revenue and expenses for the next few years and expect to need up to 50K in the first few months and the rest over time, then we'd like to hear about it. In other words, if you can get a working pilot of your business for up to 50K, then it's ok to perhaps mention larger numbers - for information and context purposes only though.

On the other hand, requesting something closer to the lower end of our range - even though you might be eligible for more given the number of people in your team and provided the money is enough for what you’re planning - might be a good way to make your application attractive to us in yet another way. This of course works best when combined with solidly supported expected expenses and profits in your plan. In other words, do not ask based on what is offerred, but instead try to estimate how far on your big plan the Openfund push can get you and describe your path on how to get there.

A common question we get is whether the budgeting should include pay for the founders. The answer is yes, and it’s why we insist that team members are required to focus full-time on their project. Since they will have some income from the seed funding it should be possible to give everything to their effort. But remember that when it comes down to allocating expenses, the startup's viability should be an almost as important concern as your own. In other words, you should probably not expect to earn as much as if you were employed - or indeed as much as you consider you’re worthy of; after all you're investing your time in your own company.

Other than that, the more detail you include in your planning, the better. Be sure to cover expenses such as unusual hardware required, software and other licenses, patent costs and anything relevant to your startup in particular. Allocate some funds for you and a separate amount for marketing and promotion. Be sure to break down the latter per actions that you plan to take. Also make sure to allow for some unexpected expenses. The Openfund may be able to provide you with studies and surveys to make informed business decisions but - depending on the nature of your proposal - you should also allocate some funds for that purpose too, if necessary. Finally, you should also keep in mind that there is a small associated legal- and accounting- related cost for setting up and running the company, yet we have done our fair share of research to keep this at the bare minimum.

Avoid allocating too much to outsourcing expenses and certainly do so only for non-crucial but still necessary needs. Keep in mind that you should keep your most vital and innovation-heavy activities in house, we do not consider subcontracting houses as selectable start-ups after all. Travelling budgets should also be kept at a minimum unless there are particularly good targets (conferences, trade shows etc) that are uniquely good opportunities for your business which are being planned in the next few months (a sign of good organising actually). If an office and common hardware and software are required, the Openfund can probably help, particularly for startups based in Greece, but we can possibly deliver for applicants abroad too.

In general, it is a good idea to justify costs and to explain both why they are necessary and to why they are as you claim (e.g. by quoting offers, linking to example prices etc). In any case, dropping numbers on their own and with no justification isn’t helping. If you think, this entire exercise is complicated, it is a good idea to try breaking it down by time periods (months, weeks, etc). In any case, it’s something that needs to be done sooner than later and the more you understand your business in advance the better. Obviously, however, you don't need to put all those details in the initial application though, you'd rather just summarize the basic numbers and keep the exact breakdown per month for the full business plan which will be requested from you in the next stage.

Finally, you should be able to make an estimate of what your burn rate will be at the end of the ‘incubation’ period by assuming things went according to the plan - or a bit worse. That’s essentially the amount you need to spend per period of time for your company to keep working - regardless of whether it will have started generating revenue. It’s important to have such an estimate in order to understand what the margin of error is if something goes wrong as well as how quickly further funding will need to be found. Obviously, the burn rate should be as low as viably possible and broken down per expense to justify the figure.

Getting the numbers right is not a trivial task for a startup and that’s a good reason to start attacking the problem as early as possible. One may even argue that there are no 'right' numbers; however, in any case, it is of essence for your endeavor to do the math and have a plan with a basic estimate of your required budget and it's breakdown. There’s a lot of help, guides and blog posts out there with useful advice so you should at least be able to put something basic together to begin with. And once you made some progress you can revisit it and improve upon it.

Next week, we’ll wrap up this series of posts by offering hopefully helpful advice on items not covered elsewhere like goals and technology. Also, if you have any questions regarding the application process, feel free to share them in the comments or in our contact form.

Tips to get seed funding and support 4/6 - Competition

Fri, 05 Nov 2010 19:13:00 +0900

Another important aspect of your proposal and, if all goes well your business, is your competition. And although in practice there’s very little you can do about it if you’re just starting up, you can still use it while planning to better understand and position your product.

We’ve found that a significant portion of startups applying for funding and support rush to say there isn’t any competition to their very innovative idea. Be conscious of saying that as it’s very unlikely: your idea (at least with some modifications) has been in all likelihood tried before - you need to find those other attempts even if just to learn from them. If you look for it thoroughly and there is indeed no competition, that’s not necessarily good news: it might be an indication that perhaps your idea is not that necessary or technically or financially feasible. In this case, you should re-examine its basic premises, perhaps run it against some of your friends of a target group similar to what you’re after. That can only be helpful after all.

If you do find there is some competition, even indirect, at least some basic facts about it should be collected and documented briefly. What’s their core offering, their main revenue streams, the demographic they target, the size of their market. We understand it’s hard to find such information and especially quantify it but it’s important that you start familiriasing yourself with the process and the industry. At the very least, you can use some slightly outdated reports or estimates for numbers you can’t find. The best course of action is to be as honest and thorough as possible. At the very least find out about the major direct competition and the most relevant indirect competitors. Try to draw some practical insights from their business - which soon you will hopefully be sharing.

Having gone through researching the competition the most likely and actually useful outcome is to outline a business opportunity based on it, the so called carving out of a niche. This is important as it allows you to aim for a specific place in the market which is relatively safe. In other words, you will be offering something that is both needed by the market and at the same time not given by other businesses in it. For example, you can offer to do something really well for a particular vertical when so far only generic solutions exist. Or you could offer a solution for small or one-man companies when only for medium- and large-sized ones exist. Or you could try a different combination of features - the possibilities are unlimited.

It’s also a good idea to show if there are any future competitors that might emerge in the near future. If for example, Google or Facebook can (and has shown indication) that with a relatively small effort they can implement your entire startup as a feature of an existing product of theirs, it’s a good idea to address such a prospect. Either aim to become a good target of acquisition (and be able to support it) or have an other exit strategy if that occurs (e.g. have an alternative business model).

Finally, this is the section to show off your unfair advantage against your competitors. That can be the first mover status, but that’s not that important in online startups (which can be - and are - copied rapidly once a good idea is found). Experience in the industry by the team members is something significant and probably what you can count on the most. Tools an algorithms you have developed that work magic may also be important to differentiate yourselves. So-called killer domains are also something but again not anything to rely upon (as most unintuitive domains of successful businesses can prove).

A significant advantage is that of intellectual property. Although startups may find it hard to go through the process of protecting their IP, if they have something that can be protected, it’s a strong card in their hand - and support companies like the Openfund can help them make the most of it. In other words, it’s a separate asset from their product and their business as a whole: if the latter doesn’t do that well they still have leverage (and value) just by holding on to their IP. As such, if there is IP protection (or is required) that should be mentioned. On the other hand, if there are IP-related issues pending they should be disclosed as these are very sensitive and any reviewer will question them.

That’s about it regarding competition although at the end of the day that’s just another thing of the many that should be factored in your startup. Overall, it’s more important to focus on results achieved and work to be done in your turf instead of worrying too much about the neighbor.

The next post covers some aspects of the financials of your startup - i.e. how you plan to spend the support earned.

Tips to get seed funding and support 3/6 - Product

Fri, 29 Oct 2010 22:17:00 +0900

We talked about the idea and the team, now it’s time to discuss about how the idea will be shaped into a product and hopefully turn into a successful business. Roughly speaking, there are three aspects that you need to consider when applying for support from the Openfund and similar constructs: innovation, revenue and market.

Innovation

First of all, what you’re proposing has to have at least a small amount of innovation. It can be at its core concept, at its technical basis, at its design or just at a key business operation. And although there’s a school of thought saying that copycats can be profitable and perhaps better than the original, everyone wants their startups to be exceptionally successful - not just very profitable. And this can only happen if either something entirely new and disruptive is created or at least if a fresh perspective is implemented at an existing idea. So, yes, iterating on an old idea can mean success - but iteration works only if it achieves serious improvements, i.e. innovating.

Innovation can also mean applying ideas working well in one industry to another industry in need of something new. For example, suggesting relevant and customised content - if applied successfully - to the music business could mean something big. Mass deployment of e-commerce sites may not be innovative - but combining it with social shopping can make a difference. The point is really to try something novel - and that can include a new way to combine old ideas. Just make sure that this supposed new combination has indeed not really been tried before.

Revenue

When it comes to revenue, it’s only obvious that you have to have a clear, well-defined and well-thought out method of how you plan to generate some income, as soon as possible. It’s not necessary for it to have been tried before just to prove that it works, but it has to be based on sound assumptions. If you’re able to make valid quantitative estimates about your business model then you’re on the right track - and you should share those both to confirm them and to convince us. If you’re at a loss of how to do this, try coming up with sensible numbers for three scenarios - the best, the worst and a middle case. Just going through his exercise of setting upper and lower limits is eye-opening - for both you and us.

Needless to say, the more viable and well-thought-out revenue streams you include in your business model the better. Usually at least one will in practice turn out to be not viable or as feasible or scalable as expected so you will have to fall back on the others. You can check out here a quick list of the broad categories of revenue streams to get you started - although probably some apply less than others to startups. On the other hand, don’t include all the streams you can think of just to be sure something will work. More streams mean more features - you simply can’t implement them all! One way to balance these approaches is to create something simple that can be inherently used to generate profit by smartly and flexibly tapping on many revenue streams using the same limited feature set. Another is to plan to tap on different revenue streams depending on the stages of your startup - starting with the easier to implement and gain traction on. In any case, you should support your qualitative descriptions with estimates and ballpark figures. It’s essential you’ve done it for your own use - so why not share it?

No post on revenue streams would be complete if it didn’t include a special mention on ads. You should use this as a revenue stream only if a) you’ve already included a few other solid streams, so ads only have a complementary role and b) if you include an as complete as possible estimate of the revenues expected. Ads scale practically only for Google - the rest of us have to be really smart, specific or targeted to make them work.

Market

Finally, your product should have certain characteristics when it comes to the market it aims at. A quick and dirty way of making sure that there is a market to begin with is to have a short and concise answer to the ‘What’s the problem my startup is solving?’ question. As already mentioned, if you can’t fit an answer for that in a sentence or two, your project probably needs some cohesion or even an overhaul. Other than that, you should be able to identify major groups of people that will be willing to use your business - and probably a few subgroups too. It’s easy to fall in the enticing trap of ‘the entire internet’ but this is usually an indication you haven’t thought things through: you can and you should try to aim for specific groups split by demographics, industry, location or other means. Once decided on that, you can make estimates on market size which can make the difference between an interesting and an insignificant investment.

Also make sure to factor in your approach not just the end user and your company but also any intermediaries, middle men, government bodies, legal requirements and other relevant considerations. Such issues could pose problems in entering the market (additional bureaucracy, less revenue, etc) but they also can be significant allies - for example tapping the developer community to your advantage, outsourcing tasks to specialised agencies, etc. Remember, your target market works as the amplifier or the sink hole of a start-up’s endeavors; make sure you have made a sustainable and wise pick.

Next week we talk competition!

Tips to get seed funding and support 2/6 - Team

Fri, 22 Oct 2010 00:15:00 +0900

In this post, we'll focus on what's the best way to structure and present your team when applying to the Openfund - or for that matter to any other seed funding vehicle.

When filling out our application you should always, include links to your previous work (and especially the achievements you're proud of), your portfolio, your blog, your Twitter and anything else you would consider representative of your accomplishments and your personality. That way we're only a click way from the parts of your resume that matter and essentially we have a quick way to understand what you're all about as individuals to begin with. Since we try to find as much as possible about the applicants, we'll be definitely looking for all this information ourselves, so saving us some clicks is a good idea. It's also important to provide an email you regularly check so that we can be able to contact you for clarifications on questions not covered by your profile links.

Of course, it's important to show what makes each member a great fit for the business being suggested, essentially what they can bring to the table. Usually this is about 'just' three things: product development, business development and knowledge of the industry. These can be achieved in a number of ways but usually for the sort of startup we're talking about you'll need a couple of technically exceptional people that will develop the product (for example a developer and a designer or two developers) and one or two more that will push on the business development front. All or most of them should also bring some expertise on the domain the startup operates in (e.g. sports, image processing, fashion) - although having one or two people with little experience and a fresh perspective instead, can also be an advantage.

If for some reason, an element is missing (i.e. you need an exceptional designer for a project that relies heavily on that aspect and don't have one) you need to address this, as it will stand out and you'll lose points. It's important to acknowledge the lack and perhaps address it by saying that you're looking for an extra member or external partner - and actually doing it of course (spending a few weeks on this should be enough). Outsourcing a major aspect of your project to a freelancer is a bad idea and should be reserved only for secondary functions.

Apart from that, it's very important to have an accurate picture of each member's availability. Working full time for the project is something we have found makes all the difference. It's best to be open about any future obligations early on rather than surprise everyone later. We're open and flexible to give applicants time to wrap up projects after they've been accepted but this should be done in advance knowledge. Minor distractions may also be acceptable, but they should be indeed minor and in any case addressed in your application. At the end of the day, be prepared that a start-up cannot but be a full time occupation, and if you’re not ready to take the risk and fully commit into that, then you’re probably not that convincing when asking for people to take the risk and partner with you.

Another parameter that is often neglected is how the team actually met and to what extent they have worked together. Obviously old friendships and tried and tested collaborations score the team points but that's not the only way. Putting together a team for a particular proposal may also be fine if it shows off determination and passion for the idea. In any case, a brief story (2-3 sentences at least) of how the team members decided to apply as a team and why they blend with one another is essential.

To wrap up, the team description is very important because at the end of the day, and contrary to popular belief, it's more about the team and less about the idea. This means that your team may realise that they should change significant parts of their concept (main offering, revenue streams, target demographic) and they should be comfortable and flexible in doing it if it means the project flourishes. Unfortunately, changing team composition isn't that easy so it's more important to have a talented and flexible make up that can pivot towards a killer idea - rather than believe you've found the next big thing.

The next post will be about the product itself - stay tuned and keep the applications coming!