Sergey Belousov about smart money
Money is different - “smart” and not so. At the stage of starting a business, it is very important to attract the “right” investors with “smart” money.
Once, an aristocrat wanted to invest in Parallels. He owned the UK's largest safari park. Our conversation somehow didn’t work right away. “Why can I buy a hotel for 5 EBITDA, and you for 20? How are you better? ”He asked me. The hotel has a low margin and stable costs. And Parallels business is software. Costs are growing disproportionately to scale. As a result, we could not agree - this person could bring only money to my business, but no benefit. Many people think that money is the most important thing. Not exactly: attracting investment, you get a stamp of quality. The correct stamp and small money is often more useful for your business than big money and a useless stamp.
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How it works? If you want to become a leader, and player number one earns 80% of profit in almost all segments of the IT market, then you need to attract the best employees, partners and investors. They don't have time to figure out who you are and what you do. But if they see that they have invested in you, for example, Sequoia Capital, they understand that you can be dealt with. This principle works especially well with hired top managers. These are money-hungry people, who can only be attracted by the prospect of future income. If a startup has managed to attract a serious investor, sooner or later he will sell his share. The manager will earn on options.
First, I ran for investors, then they upholstered my thresholds. To be honest, I was wrong many times. For example, Insight Venture Partners has invested in both my companies, Parallels and Acronis, although they are completely different. Acronis is a business that provides a steady stream of money. This is exactly what Insight understands. Parallels has lower profit margins, but capitalization can grow tenfold. In this case, the Insight stamp gave us nothing.
Together with the money you get a partner. He should help not only with finances, but also with expertise and connections. For example, with the help of Runa Capital, the creator of a platform for Java-based applications from Zhytomyr, Jelastic quickly went out to the largest hosters and attracted the first 10 thousand customers.
How much your company will cost in five years is more important than how much money you will give a share in your business now.
Once, an aristocrat wanted to invest in Parallels. He owned the UK's largest safari park. Our conversation somehow didn’t work right away. “Why can I buy a hotel for 5 EBITDA, and you for 20? How are you better? ”He asked me. The hotel has a low margin and stable costs. And Parallels business is software. Costs are growing disproportionately to scale. As a result, we could not agree - this person could bring only money to my business, but no benefit. Many people think that money is the most important thing. Not exactly: attracting investment, you get a stamp of quality. The correct stamp and small money is often more useful for your business than big money and a useless stamp.
')
How it works? If you want to become a leader, and player number one earns 80% of profit in almost all segments of the IT market, then you need to attract the best employees, partners and investors. They don't have time to figure out who you are and what you do. But if they see that they have invested in you, for example, Sequoia Capital, they understand that you can be dealt with. This principle works especially well with hired top managers. These are money-hungry people, who can only be attracted by the prospect of future income. If a startup has managed to attract a serious investor, sooner or later he will sell his share. The manager will earn on options.
First, I ran for investors, then they upholstered my thresholds. To be honest, I was wrong many times. For example, Insight Venture Partners has invested in both my companies, Parallels and Acronis, although they are completely different. Acronis is a business that provides a steady stream of money. This is exactly what Insight understands. Parallels has lower profit margins, but capitalization can grow tenfold. In this case, the Insight stamp gave us nothing.
Together with the money you get a partner. He should help not only with finances, but also with expertise and connections. For example, with the help of Runa Capital, the creator of a platform for Java-based applications from Zhytomyr, Jelastic quickly went out to the largest hosters and attracted the first 10 thousand customers.
How much your company will cost in five years is more important than how much money you will give a share in your business now.
Source: https://habr.com/ru/post/141310/
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