Managing Your Cash Flow

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LIVE: London Funding Conference

7 Mins

Live from the British Library Business & IP Centre in London, we’ll be blogging the proceedings of the London Funding Conference.

Please keep refreshing the page for the latest updates.

Tonight’s sold-out event is the UK’s premiere event for businesses looking for growth capital. Later on this evening, we’ll be hearing from a great panel of speakers, including:

  • David Kaskel, founder of Languagelab
  • John Spindler, CEO of Capital Enterprise
  • Michael Blakey, angel investor extraordinaire
  • Luke Johnson, chairman of Risk Capital Partners

The evening will be compèred by Real Business‘s own Matthew Rock and will mix-up speakers with networking between investors and investees.

Check back from 6pm for regular updates on the evening.

17.50: We’re in the green room before the conference begins, and some of the speakers are here. Have just met David Kaskel, who founded Languagelab five years ago. He recently raised funds for his business, so has good experience to draw upon. Looking forward to hearing his story.

18.00: We’re expecting over 200 guests tonight, and the room is starting to fill up. It’s a sold-out event!

18:05: And we’re off. Real Business‘s Matthew Rock is on stage to get the event started. Caspian Media – Real Business’s owner – has had its own interesting funding journey: Caspian Media is backed by private equity. Matthew Rock thanks the evening’s supporters, including Natwest, the headline sponsor; and the other supporters: G2I, Keystone Law, the British Library Business & IP Centre, Business Link.

18.10: David Kaskel now on stage. Languagelab is an interesting business – it’s an online, virtual learning environment to learn English. Languagelabs’ primary customers are in the Far East, the Middle East and Brazil. 

18.15: (When) to fund or not to fund: the question, says Kaskel, is where do you get funds? He wanted to raise money in 2009, but “it clearly wasn’t the best year to try and raise funds”. The timing wasn’t right, so he pulled back, and kept thing small until it was the right time to raise money.

Last August, Kaskel created an investor proposal and started networking. Part of that was looking online, seeing who was investing, sending emails, etc. But a more effective way to network was to speak to people, asking for introductions. 

“It wasn’t about who could put in the most money, but who was the right partner.” — he explains why he considered VCs, but then turned them down.

18.20: Kaskel is taking us through Languagelab. It’s very cool: a virtual city. There are hotels, businesses, theatres, shops – anything – where you can virtually interact with people. There are teachers and students, and you learn how to speak English in this virtual environment, live. There are real teachers behind the virtual teachers, live on the website.

“What made us fundable? The education space is a hot market. Depends who you talk to, but at least half of the people I spoke to were interested in educational businesses.

“Scalability helped too – we’re a scaleable model, we can accomodate up to 10,000 students today and can grow it very quickly.

“We’re also a disruptive technology, we challenge the status-quo, but we’re also supportive of the industry. We’re working with language schools to work with them, to bring their schools into our city. 

“Presenting what really works and why we’re different was important too. Engagement was our answer: students spend more time in Language City learning than they do watching TV. 

“Finally, for some of our investors, the single most important thing was our traction at the point we went to them. I’d considered whether or not to raise money a few years ago, but one of the reasons I’d decided against it was because we didn’t have any revenues. We waited until we’d signed some deals before going to the investors: we could put our money where our mouth is. We had 1,000 paying students by the time we spoke to our first potential investor.

“A lot depends on where you are in the financing cycle. I raised money in 1999 from an investor – met him once, had a breakfast with him, and within an hour his firm agreed to put $17m behind us. This time I didn’t raise nearly as much: it all depends on the financing cycle.”

Kaskel closed his funding round for Languagelab a month ago.

Some more tips from David Kaskel:

Tip 1: Show monetization and/or huge traction – how are you going to make money from your great idea? Point this out explicitly.

Tip 2: Know who you’re pitching to – angels and VCs are different, and expectations are very different. VCs want bigger returns and will take more risk. You need to be aware that down the road, they’re looking for their 1/10 to do well, 1/100 to do exceptionally well. 

Tip 3: Network and then network more – you can go online and send business plans, etc; but the response rate wasn’t particularly good. Talk to people, network in person. Someone who knows someone who knows someone will find you your investor.

Tip 4: Know your market – educate yourself about your industry. If you’re going in front of a group of investors, you need to know the market a lot better than they do. Know what you’re talking about.

Tip 5: Believe in yourself and your product/service – this is the single, most important thing. This isn’t easy: you have to understand your initial customers, your industry. If you can still say that what you’re doing is incredible – that you can look at an investor in the eye and tell them this – then you’ll be successful.

Read more on page two, below.

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