Wanted: tomorrow's online success stories
Sunday 07 November 1999
But while the impression that there is a "wall of money" chasing deals has only added to the excitement in the sector, there is a danger that many of these start-ups will fail to metamorphose into genuine businesses.
In an attempt to deal with this problem, a concept called Ideas Hub is being established by a group of successful internet entrepreneurs. According to Tim Hammond, who with his brother Jonathan founded the online shopping assistance service Taxi Interactive and is heading the venture, people in Europe setting out to create such companies are at a disadvantage compared with their US counterparts. This is because in Silicon Valley early-stage start-ups typically get more than just money. When entrepreneurs become business angels, they offer advice and expertise as well as a share of their life savings.
As its name suggests, Ideas Hub intends to act as a sort of network aiming to provide both the finance and the full range of human and technical resources required to take internet ideas from concept through to launch.
"Ideas Hub is literally a hub. It is plugged into a dynamic network of individuals, organisations and partners who have a vested interest in the success of each new business idea," says Mr Hammond.
At the centre of this hub will be Mr Hammond and his brother, who will act as marketing director, along with Mark Aldington, an experienced new media consultant, and Christopher Jones, a solicitor with extensive experience in corporate finance and media law. These executives will be responsible for assisting entrepreneurs with such matters as legal advice, technology expertise, business development and strategy and marketing.
But they will also have access to the Ideas Hub Panel, a 15-strong team of experienced online professionals and entrepreneurs that will meet every month.
Mr Hammond points out that venture capital funds typically put their money into the deals involving people with proven records in internet- related businesses. And this can leave many start-ups at a disadvantage. "Most ideas come not from the internet but from the industries that they are focusing on, such as health," he says. "What we want to do is help people with strong domain knowledge start up internet businesses."
Each of the panel members is a shareholder in the operation, and the funding provided by them and their colleagues in their respective fields will enable the panel to invest in the start-ups.
Its members, typically drawn from other internet start-ups or companies such as Sun with extensive knowledge of the area, will have personal commitments to the ventures because they will tend to discover the ideas by acting as "scouts" in their fields of operation.
Although Ideas Hub is not planning to acquire any majority stakes, it is planning to invest between pounds 250,000 and pounds 500,000 in each of two to three ventures a quarter.
With what he claims is a strong framework for implementing ideas at speed, Mr Hammond says that Ideas Hub is about "spotting potential winners at a very early stage".
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