I have more or less documented the journey since the day the Financial System in Iceland collapsed in 2008. There has been a lot written about October 8th, 2008, the day when the Prime Minister of Iceland addressed the nation stating the challenges in front of Iceland and the collapse and ending the speech with the most famous last words for a politician whose career was pretty much over… oh, yes the famous words were “God Bless Iceland”! there was total disbelief within the Icelandic community. I don’t want to go into the details of what happened after that I think many people have done that. What I do want to do is describe what I did, I decided right then and there that there was only one way to rebuild the business community in Iceland and that was through re-inventing what really creates value in Iceland. I was very impressed with the Design, Software and Infrastructure talent in Iceland and so I decided that I would invest my time, effort and money in building that sector. We invested in a team of Entrepreneurs and they won for Iceland. After I have been working with the Entrepreneurs, it was obvious to me that Startups and Entrepreneurs in Iceland needed more than just Angel Capital (it was non-existent then). I actually built a presentation on Why we would invest in Iceland and what Icelandic startups needed. Here is the first iteration of the Investment Thesis and Strategy that I created. What is important are the above 2 questions, in terms of What Icelandic Startups needed then and what they still need now are 3 things:
- More Seed and Angel Capital
- Mentoring and advising on developing, marketing and selling products/services to the Global market
- Bridge to a bigger market
the reasons why I felt we should invest in Icelandic Entrepreneurs was based on again a bunch of things:
- Young demographic
- Well educated and technology savvy population
- Excellent infrastructure
- Cost effective (hiring/training a software engineer in Iceland is much cheaper than say New York or London)
- Entrepreneurial culture
- There was lot of emphasis on Design, Innovation and Creative industry
- Small market is great for customer validation and to find the Product to Market fit and easy to pivot a product or service strategy
I naively thought that I could present this to the investor community and create a Venture Capital firm, I went to every pension fund and Asset Management company. Presented the idea, just to be laughed out of the office. It was rather humiliating, when they asked why I thought I could do this better than anyone else? it was a very valid question and I asked myself that question. At that time it was not something that I could quantify as we had just done a couple of investments and jury was out on those investments. Fast forward to 2013, we have the track record, all the investments that we have done are alive and kicking and are doing very well. CLARA was sold to Jive Software and I can say without exaggerating that every single person who invested in CLARA got their money’s worth. Buuteeq is growing leaps and bounds and I am pretty sure they are going places. The funny thing about these investments is that we went in with no expectation on when the companies will win or when we will get our money back, we wanted to help the Entrepreneurs and did some common sense thinking on the deals and made sure it was a Win-Win deal for us and the Entrepreneurs and we spent considerable amount of time helping the Entrepreneur. It is not for everyone… but we just love it. I love helping Entrepreneurs, I meet every single one of them and give them my time, my connection and whatever else I possibly can. Founding Startup Iceland the Conference was based on that philosophy of doing something to help the Entrepreneurial community in Iceland and to build a really vibrant community of Startups and Entrepreneurs in Iceland. That vision has not changed and I am pretty sure that we will get there, but we will not get there if the community does not invest.
I understand that investing in Startups is risky, the results are not guaranteed and it is a lot of work but nothing worthwhile is easy. I am willing to work my fingers to the bone to get this community built in Iceland. The Angel syndicate is platform to crowd source capital. Everyone keeps talking about how Pension Funds should be investing in Startups etc I think that is baloney… Pension Fund Managers do not have the time to work with Startups what they need to be doing is investing in Platforms and People who are investing in Startups. Unfortunately in Iceland, this community has not developed because there is no history to really creating a huge win in a Startup until the last couple of years. Through the syndicate, we can really harness more than what everyone thinks is possible. Raising capital is hard anywhere but it is extremely hard in Iceland if you are not part of the inner circle. I want to disrupt this, I want everyone in Iceland to have an opportunity to participate in this journey.
- Iceland like you’ve never seen it before (Time-lapse video) (curationgalore.wordpress.com)
- Iceland rises from the ashes of banking collapse (theguardian.com)
- Investment Thesis and Strategy (startupiceland.com)
- Building Startup Communities (startupiceland.com)
- Icelanders Run Out of Cash to Repay Foreign Debts: Nordic Credit – Bloomberg (bloomberg.com)
- Iceland Stars In New Movie “The Anatomy Of A European Bank Run!” (zerohedge.com)
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