René Seifert – Entrepreneur & Global Citizen

A 3-day conference is over and it was an absolutely fantastic and worthwhile experience. I have never seen such a density of smart and successful people. And not to forget: such a density of millionaires and billionaires at one spot, who are absolutely easy to talk to. There is no doubt that this climate of unpretentious openness towards each other is culturewise an essential propellant of Silicon Valley’s leading role in the IT-world.

Also I feel that I would ideally have to sleep through 48 hours at one time to digest this impact of new information before I can write properly about it, not to mention make it actionable for my own businesses. Unfortunately awake since 2.30 am local time because of jetlag. As I did not really get adopted to Pacific Time, it’s now high time to get back to India today. (Will try to grab the new Sony eReader somewhere before leaving.)

On of the best session was with Ram Shriram, first investor in Google and CEO of Sharpalo (left on the sofa).

His key message was: Today in the “Web 2.0″ age you don’t need a lot of money to start a company. His investment-sweetspot lies hence between $100 k an 1 mn, clearly warning that too much money would not do a company any good. First, the founders tend to de-focus with too much capital to employ and second, the maths don’t work out with respect to an exit. If you overfund in the beginning, get subsequent rounds with ever higher valuations the return at exit would have to be extremely high to repay that money with the IRR VCs are looking at. Given the fact that the IPO-madness of the “New Economy” is rarely an option (also given the complex requirements of the Sarbanes Oxley-Act), a trade sale with usually way less than $ 1bn seems much more likely. If, however, intitially too much money had been pumped into a company, the founders would end up not really enjoying what they expect in the light of the preferential clauses given to investors.

Just on a sideline: The current Red Herring has a story (printed edition) on Westerners increasingsly going for work to India where I also get featured. And: The Spiegel-Article from recently is now available in the English-edition of the magazine.