The Next Wave of Investment in Startups

Money hates being idle.  And there's more around of it than ever before - as evidenced by soaring luxury goods sales and stratospheric stock markets, and the refusal of buyers in real-estate markets in already-hot locations like Singapore and Beijing to take a hint from governments bent on cooling them down.  

The fact is, fires built on excess fuel take a long time to put out.  Which brings me to the topic of today: the availability of capital and the the coming wave of investment into new startups.

Why startups?  Well, it's getting harder to see much more upside in the stock market... which is where you'd invest your money if you were looking for seasoned teams and predictable (and already-factored-in) growth - and the growth equity market has a ton of players all looking for action in the $10mm to $100mm and above range... governments will give you a few points to help them build a bridge or a new salt water refinery... 

Frankly, with the exception of real estate, artwork, and vintage watches, startups are one of the few places where you can find variety, equity, and the kind of growth you need to stay interested.  

But the big reason why startups are so attractive today is the pace at which startups start up, and start providing data on their scalability.  

It used to take startups a long time to get off the ground.  Systems had to be created from scratch, manual work completed, accountants called in to clean up the mess when things got too large, etc, etc...

Today, that's all changed.  You can create a company in a flash and start selling almost immediately.  Technology has become so cut and paste, in fact, that you can create a set of legal documents, accounts, and a highly-developed application server literally overnight.  

What does that mean for investors?  It means no more waiting around to see if an "idea" can be executed.  Today, you can very quickly test and tell whether or not the service offering has legs - using a fully-fleshed out prototype.  Everything is now available to turn an idea into actuality and start testing in blindingly fast fashion.  

And if it doesn't work?  You can probably figure out where the company is going from its live data and real-time accounting system within the same timeframe it used to take for the company to knock up a business plan and FedEx it to you.

Yes, the next phase of company-building and angel investment is going to be very different indeed.  Fast prototyping to production using templating.  Massive amounts of data coming back from every event, connected to real-time accounting systems and business models that are shared (also in real-time) with the guys with the money.  

Things are about to get interesting.

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John Sharp

John is a serial entrepreneur and investor, and the co-founding Partner of Hatcher+, a data-driven, globally-focused venture investment platform based in Singapore. In addition to leading capital raising and deal syndication, he is the visionary and architect behind the Hatcher Stack, the company's proprietary research and technology platform. Over the past five years, John has led numerous venture investments in early-stage companies, including ASYX, DocDoc, Dropsuite, Heardable, Invit, Inzen Studio, SocialCops, ThoughtRiver, and Telr - and syndicated over US$100Mn of additional debt and equity co-investment. IPOs and trade sales in which he was acted for the majority shareholder include Dropsuite (ASX:DSE) and Inzen Studio (ASX:ICI). His M&A work includes the merger of payment leader Telr with Dubai-based Innovate Payments, and the merger of Singapore-based companies DocDoc, and DoctorPage. Prior to co-founding Hatcher, John founded cybersecurity technology leader Authentium (acquired by CYREN in 2010), and acted as a director for global payments aggregator Mozido, and an advisor to Africa-based Gateway Communications, satellite technology developer MDS America, Kuwait-based Internet marketplace Sheeel.com, and Orion Partners, a $2B private equity fund manager based in Hong Kong.

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