World Business and Economic Analysis
World Business and Economic Analysis
by Damien Lane
This blog by Henry Ward probably got a spike in traffic yesterday when Fred Wilson linked to it. It is a thoughtful and intelligent bit of writing, and lots of it made sense to me. The bits that particularly resonated were:
“Fundraising is a filtering exercise, not a popularity contest”. As an entrepreneur, you are not going to convince an investor who doesn’t like you or your idea that they are wrong. As a VC, I see one of my roles to be clear about whether I am interested or not. The whole Episode 1 ethos is built around Being Frank, but as Henry writes, as an entrepreneur, you should be starting to develop some EQ and sussing out whether this is an investor you should be devoting your precious fund-raising hours to.
“Ask for feedback other than the market isn’t big enough”. Guilty as charged. I confess to sometimes using that old chestnut to avoid being more critical. But as an entrepreneur, in the spirit of customer development, once you have worked out that this is going to be a “no”, use the time to get some useful feedback and maybe some intros, or suggestions how to improve the deck, the idea. Something. Anything.
But. One thing he wrote did cause me to raise my overly large and greying eyebrows. “Beware investors who ask for unit economics or a financial model.”
What?
OK, so I confess, I like to look at a financial model. Not because I am a spreadsheet jockey, well, not JUST because I am a spreadsheet jockey. Why else, other than a peverse affection for a Balance Sheet and working capital movements?
Err…Because I like to know how long my cash is going to last and whether the amount being raised is enough to achieve something meaningful to appeal to Series A investors, but not so much that it forces too much dilution of the entrepreneur.
I see lots of plans where the cash flows bear no resemblance to how funds will actually flow, where the assumption is that there will be no more hiring for 6 months after investment when the product plan is for loads of feature development or where entrepreneurs – particularly first timers – fail to differentiate between bookings / revenue and cashflow.
Maybe the team is trying to raise more money than they need because of unrealistic hiring plans (We’re going to hire 25 people in the first 3 months even though we are a founding team of 2). Why raise more than you need to and get diluted even more?
And at some point, this thing I’m investing in does need to pay attention to profitability, right? So I’m interested in how the entrepreneur thinks about her business from a financial perspective.
You’re going to raise some money to grow your business. Someone should be paying attention to cashflow – I want that someone to be the entrepreneur, and how am I meant to assess whether they are capable of doing that without looking at the plan?
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High-ranking officials from the private and public sectors of Iran and Italy signed 6 memorandums of understanding (MoUs) to boost cooperation in various economic, political and cultural fields.
The documents were signed in a ceremony in Tehran on Tuesday with Iranian President Hassan Rouhani and Italian Prime Minister Matteo Renzi in attendance.
The agreements cover a wide variety of fields ranging from cultural activities, tourism, and renewable energy resources and automotive industry to road and rail transport.
An MoU was also signed between the National Iranian Gas Export Company (NIGEC) and Eni, Italy’s largest oil and gas company to boost cooperation.
Heading a 250-strong business delegation, Renzi arrived in Tehran earlier on Tuesday to discuss ways to improve mutual economic cooperation between Tehran and Rome.
The agreements come against the backdrop of a new wave of interest in ties with Iran after Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) reached a nuclear agreement on July 14, 2015 and started implementing it on January 16.
The comprehensive nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions imposed on Iran.
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India is planning to invest as much as $20bn in oil, petrochemicals and fertiliser projects in Iran in order to import more crude to meet its demand.
Indian Oil Minister Dharmendra Pradhan made the investment offer to Iranian counterpart Bijan Namdar Zanganeh during a two-day visit in Tehran.
Pradhan said that the country is seeking to invest in oil and natural gas, build petrochemical plants and gas-processing facilities and expand ports, by developing new industrial hub of Chabahar, in Southeastern Iran.
The Indian Oil Ministry said in a statement: "Pradhan conveyed to the Iranian side that Indian companies could invest up to $20 billion and were interested in setting up petrochemical and fertilizer plants, including in the Chabahar SEZ, either through joint venture between Indian and Iranian public sector companies or with private sector partners."
Pradhan requested Iran to allocate appropriate and adequate land in the Chabahar SEZ as well as supply rich gas at a competitive price to India.
In particular, India plans to increase its oil imports from Iran from the current volume of 350,000 barrels per day (bpd).
Since international sanctions were lifted in January, Iran has been seeking potential foreign investment in a bid to revive its oil, gas and petrochemical industries.
Zangeneh was quoted by Press TV? as saying: "We hope that India's imports of oil from Iran will increase now that the sanctions have been removed."
Iran has also been requested for a long-term basis for planned joint venture projects.
Additionally, the Indian firms are planning to build a gas cracker unit and a liquefied petroleum gas (LPG) extraction unit in Chabahar.
The two countries also discussed ways of transporting gas through the proposed Iran-Pakistan-India pipeline to India.
India also discussed the award of rights to Indian firms for the development of Farzad-B gas block, which is estimated to have 21.68 trillion cubic feet of reserves in-place, reported The Hindu?.
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