Investors are from Mars while tech and new media companies are from Venus. Lawyers are not so bad. Buyouts are like any other trading deals so it’s good to have an advisor who has more negotiating skill and experience then the buyer. We need The Founding Fathers of the Polish Internet not just because they were in the right place at the right time but because they had unique experiences of dynamic growth and solving complex interpersonal and business issues.

These are just a few of the conclusions drawn from the exciting TMT.Buyouts’09 Warsaw conference which was held on November 25th 2009 at the Warsaw Stock Exchange. This time the main theme of the event were buyouts after which previous owners get some capital to fulfill their goals and dreams – either disappear and live the good life or take on another business challenge.

More:

http://www.tmtevents.pl/conference-tmt_buyouts_2009_warsaw-12.html

Last Wednesday, March 5th I had the pleasure to mingle with a spectacular community of smart people attending TMT.Ventures’09 Warsaw: innovators, entrepreneurs, investors, advisors, bloggers and so on.

What else would you want? Oh, maybe a networking dinner the night before, celebrity arch-angel investor straight from Le Web video, 7 minutes contest during the event, great speakers, great lunch and last but not least… flute playing lesson broadcasted via video stream.

So many memories, new businessfriends, old acquaintances refreshed, things to think over. I’ll be relaying those over to you during the next few days on this blog. So stay tuned.

Yes, we are experiencing a downturn. Yes, in the macro-scale it will probably get worse before it gets better. But let’s not worry about the broken financial system or gloomy future of some financial institutions. Let’s not worry about the economy while there are fat juicy opportunities to be harvested out there.

The airheads and smart-asses are gone back to their safe and warm jobs - says celebrity investor Morten Lund. The supply of new and innovative projects is lower so it’s easier to achieve first mover advantage - says Holtzbrinck Ventures CEO Konstantin Urban. Easy UE money is out there for the taking - says serial entreprenuer turned investor Rafal Styczen. Grab whatever is left from your bankrupt competitors’ assets - says Piotr Czublun of CMS Cameron McKenna. Exciting stuff.

So what the heck are we having these conferences for?

Remember what Friedrich Nietzsche said about The Financial System being dead?

The Financial System is dead. The Financial System remains dead. And we have killed him. How shall we comfort ourselves, the murderers of all murderers? What was holiest and mightiest of all that the world has yet owned has bled to death under our knives: who will wipe this blood off us? What water is there for us to clean ourselves? What festivals of atonement, what sacred games shall we have to invent? Is not the greatness of this deed too great for us?

And then good ol’ Friedrich tells us to get together and have a conference before we get to work:

Companions, the creator seeks, not corpses, not herds and believers. Fellow creators, the creator seeks — those who write new values on new tablets. Companions, the creator seeks, and fellow harvesters; for everything about him is ripe for the harvest. … Fellow creators, The Entrepreneur seeks, fellow harvesters and fellow celebrants: what are herds and shepherds and corpses to him?

So let’s get to work and let’s not allow this crisis deter us from being creative and innovative. When the going gets tough only tough get going. And it takes one tough entrepreneur to build anything meaningful. Determination, hard work and lots of good luck - says Morten Lund. Also fellow harvesters and fellow celebrants - reminds Friedrich Nietzsche, famous management coach.

Stay tuned for another transmission from a memoir of TMT.Ventures’09 Warsaw participant.

PS. Here’s how we got into The Financial Crisis:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Guess what. Another New Europe’s most exciting conference for tech-entrepreneurs, new media and technology executives and investors - TMT.Ventures’09 Warsaw - is happening on March 5th at the Warsaw Stock Exchange, Poland.

And guess who’s coming…

Morten Lund is coming. If you don’t know who he is by now… you better don’t admit it. Better check out this post and videos.

Morten Lund, (born April 3, 1972) is an entrepreneur from Copenhagen, Denmark - according to Wikipedia.

At 36 years of age he is one of the most active seed investors in Europe, with an eye for turning existing business models and distribution methods on their head. His portfolio features over 80 companies spanning the Internet, telecoms, health and alternative energy.^[5] On January 13, 2009, Morten Lund was declared personally bankrupt by the Copenhagen Maritime and Commercial Court^[6].

Archangel investor, serial entrepreuneur, startup ideologist and visionary. He has founded and/or co-invested in more than 40 high-tech start ups including Skype, the Internet phone startup bought by eBay. At 36 years of age, his current portfolio includes over 80 companies, from internet technology, through telecommunications, to health and energy. Lund has additionally established a category of investments in his portfolio entitled WILD – Worldwide Investments/Involvement in Life Development which is currently investing in companies within the areas of water purification technology, water turbine energy, landmine detection and hunger/obesity.

He is one of the most active seed investors in Europe. Lund is a special member of Clinton’s Global Initiative (www.clintonglobalinitiative.org), he is a professor at Reykjavik University and frequent speaker at international conferences. His blog has more readers than a local newspaper, 40,000.

Lund’s investment model merges angel and venture capital with incubator support catapaulting start-ups into existence. He believes: “Startups need help from smart people – not takeovers from smart asses”. To Lund, being an investor is all about adding value. He doesn’t over-think and he doesn’t let himself get bogged down by institutional processes. He just does. Quickly. He falls in love with companies, and does what it takes to help them grow.

Tenacious, instinctive and viciously self-promoting, one of Morten’s secrets to success lies in his network activity which extends from honing the raw brilliance of young programmers to masterminding a sit-down with former President Clinton. He is not afraid to take risks and dedicates funds for high risk early stage investments. He is known for acting on the moment, focusing on people, timing, network and…luck hence the title of his blog: ‘Its all about Luck’.

SIME 08 - Morten Lund from SIME on Vimeo.

Recent activities include, co-founding Denmarks now largest newspaper, Nyhedsavisen, a free newspaper, where he intends to transform the nature of printed press today, merging this offline distribution with an attractive online presence. He also recently started 40+ companies under his boutique firm LundKenner and ignited international communications agency Hello Group founded 2006 and now employing 65 people, and currently the fastest growing add and media agency in Scandinavia. On top of all that Morten has started 3 funds – Chinese Property, Indian Tech Ventures and Middle East GreenTech Private Equity Fund.

Recent exits include:
VOIP star Skype (recently sold to eBay for $2.6 billion), Anti-virus consumer brand Bullguard,
Web Agency NeoIdeo (sold to Leo Burnett),
Chinese browser Maxthon with 72 million downloads,
Orolix the fastest growing on-line company in Brazil, Commisions free stocktrading Zecco.com (75.000+ clients in 12months)
PokerOffice the world leader in poker training.

Within his WILD investment portfolio, he is currently involved with WaterStillar, a company for water purification techniques; IJoule, a startup working to fight obesity and Aresa, a company that uses genetically modified plants to detect landmines.

At the heart of Morten Lund there’s something that drives him to go big. To Lund, big money means big power. It means Carl Icahn-style clout and activism. Something makes people listen to Lund, he has the clout, vision and disruptive ideas to fascinate and inspire. He will influence how we live, communicate, work and play tomorrow.

Gasp…

Any questions?

TMT.Ventures’09 Warsaw, March 5th - Warsaw, Poland

I had a pleasure to meet Alex Osadzinski at New Connect Club event organized by Ewa’s firm and moderated by Yours Truly. After the club meeting (catch a glimpse) we had a dinner and the next day we gave Alex and his lovely wife a tour around Warsaw. After hanging out for some time I can tell you that this guy rules!

(FYI New Connect is an AIM-like unregulated market run by WSE.)

So Alex is an experienced operational exec, very technical, now a VC with Trinity Ventures in Sillicon Valley. Before joining Trinity 7 years ago he’s created over 230 billion USD (!) of aggregate public market cap, or acquisition price, for the 6 startups that he’s been at.

But let’s allow Alex to introduce himself:

I’m a lifelong geek and lover of technology with a passion for building, growing and managing teams and companies. I’ve been fortunate to have been at five startups that created great products, employment and economic value. I was sobered by the sixth startup that taught me that everyone has limits to what they can achieve. Now I enjoy helping and nurturing early-stage technology startups as a VC.

Alex works in Sillicon Valley but has a broader and multicultural perspective compared to the California locals thanks to his British experiences. He was born in London and worked in the UK for a long time. Since we were looking for a rolemodel for young Polish entreprenuers he was the perfect guy for the job. That’s why we invited him for New Connect Club event where he presented his viewpoint on global expansion of European tech companies and differences between business cultures here and there. You can see Alex’s presentation on slideshare or below. It was featured on the SlideShare homepage by their editorial team.

| View | Upload your own

But that’s not all I have to say about Alex. With every passing minute I learned more about him and it’s quite a story, I tell ya…

While we were walking through the streets of Warsaw Alex made a point that some parts of the town look like in Half Life 2. That’s kinda true. And now you know that he’s also a gamer. How many VCs would admit something like that?

Half Life 2 scenery

Warsaw 2008 scenery

Unlike many future-oriented, technology-loving geek-VCs Alex is also very concious about his geopolitical surroundings, his Polish ancestry and Poland’s history. Since his parents had their share of the WWII effort we visited the Warsaw Uprising Museum (high-tech and industrial in its design - kind of like in Ravenholm basement, but as Alex noticed no headcrabs).

When we were passing the Wellington real-size model it turned out Alex is also a pilot. Turns out that many VCs (in California) are pilots. Alex also confessed that while he’s not burning fuel over the Pacific coastline he tries to save the environment by driving a hybrid car, recycling garbage and using solar-generated power from his roof. Only in California man… ;-)

Around that time we were passing the Warsaw University buildings and we bumped into Creative Commons guys. They had a conference and Alex confessed to be an acquaintance of Lawrence Lessig, Stanford professor and founder of Creative Commons. That’s all I needed to know so we crashed CC guys party. Alex gave a 3 minute speech on his point of view… and we left. So much to see, so little time… ;-) I just hope that Alek Tarkowski, the moderator of the CC event isn’t too mad at me.

CC conference in Warsaw - tourist VCs are always welcome

It was a lot of fun.

And if that wasn’t enough I found a couple of shared interests (besides Valve games) with Alex - namely pigs and one of my favorite movies (lately) entitled “Idiocracy” by Mike Judge.

Man, what a great guy!

One more memory from Kiev where I was for TMT.Ventures’08 Kiev conference. The next day we had a house party at Denis Dovgopoliy’s place. We were talking about VC business and what’s driving it. To make the long story short it’s the survival of the strongest. Meaning - who delivers the biggest growth - stays. Who fails to deliver - is out. The rule applies to both VC managers and entreprenuers. Up or out! That simple.

Because of the very unformal Ukrainian atmosphere we got creative and discussed a number of interesting, high-growth but rather controversial investment opportunities. Ideas that might work but not every VC would officially support it and some businesspeople would refuse to develop.

One of the ideas was taking advantage of our natural weaknesses - like envy or dislike for other people. Envy and dislike which we like to indulge in. There is a hater in every one of us. And that’s why anti-communities and anti-blogs have became so popular.

So we imagined an e-commerce service for people who want to send an unpleasant gift for other people whom they don’t like too much. For a fee. Anonymously. The recepient may of course return the package. For a double fee. For a premium fee the company would deliver a classic horse’s head to recepients bedroom - like in Godfather. It seemed to be a brilliant idea. And a great business.

Then I saw this a few days ago:

You can actually buy a horse’s head - a stuffed or unstuffed version. I don’t know what they stuff it with but it can’t be good. ;-)

Ok guys, who started this business without me? We were all at the party so I should get some equity, right? I could be up, but instead I’m out. ;-)

Very mobile, well educated and trained, often workaholics, somewhat greedy and therefore effective in whealth creation and trade. They already invested quite a lot of their time in Western Europe, conquered America and then they came to Kiev. Very keen on beautiful local women. Who am I talking about? No, I’m not talking about VCs coming for TMT.Ventures’08 Kiev conference. I’m talking about Wikings known also as Normans or Varangians who established Kievan Rus’ in the 9th century and started the Rurik dynasty which ruled Russia until 1598.

Medieval Scandinavians had many of today’s VCs qualities. They were undertaking very risky projects using their reputation which often preceded them. Their investment vehicles (boats) used for value creation were very mobile and used for doing business around the world. Depending on the situation they either made business deals or resolved business differences in a more brutal manner using mercenaries (lawyers) and swords (pens). They very much appreciated charismatic managers able to lead small teams throughout expansion into large organizations capturing large markets. They were all about business.

Their managerial skills were developed in the 9th century under competition and pressure from older Western business cultures like Celts and Picts. They got some nice ROI results and quickly dominated in the region. Danish VCs established kingdom of York in England, Norwegian VCs started kingdom of Dublin in Ireland. Norman VC known as William the Conqueror conquered the English market in 1066. About the same time Leif Eriksson discovered America.

Kiev from the hilltop

When I was walking in the streets of ancient Kiev with blogger Alex Riabtsev I wasn’t quite aware of all this but he told me that the city was built on hills overlooking the Dnieper river. It kind of reminded me of San Francisco which is also built on hills and has some famous brigdes. And we all know that VCs like everything which looks like the Bay Area.

San Francisco from the hilltop

Present day VCs are re-discovering Ukraine which has been under Russian influence but now attempts to enter EU and utilize its intelectual potential using venture capital funds. There are some great startups over there and some of them are surfacing on the global market but the situation kind of reminds me of the 9th century. Back then local managers (Finnic and Slavic tribes) invited VCs (Varangians) to accelerate their companies’ growth and increase ROI. It proved to be the right decision and created (business) culture which lasts until now.

Are Western VCs going to make it big in Ukraine? Again? Sure unless…
Medieval VCs were so fond of the local ladies that the the Rurik dynasty after around 70 years turned completely Slavic. Since then there was nothing Norman about it. So VCs, watch out for those beauties. It is very easy to defocus. And I know what I’m talking about - I went out with Yegor to a club and didn’t want to leave. ;-)

So the future looks bright for the Ukrainian tech industry. I just hope that present day VCs don’t make a mistake of underestimating its potential. After all the Viking VCs made a quite spectacular error. Leif Eriksson discovered America around 1003 but he soon left. He had a Google or Skype of his times and decided to go back home. The rest is history.

Having a beer with a global VC sounds good but try to arrange it and you will learn it is not easy at all. ;-)

Here’s my HOW TO and case study from a night before TMT.Ventures’08 Kiev conference.

First - you have to understand that a VC may have plenty of money under management but has very little time for having beers with entreprenuers. Perhaps the easiest way to have a beer with a VC is to register at a conference s/he is speaking at. But if you think offering a beer before or after the presentation is a good idea - think again. You have to count on inconvenient flight connection which places an unsuspecting VC in a strange city the evening before or after the official event.

Second - you have to know the right people. Sometimes there’s an unofficial networking dinner before or after the conference. Sometimes there isn’t which doesn’t mean a VC will stay in his/hers hotel all night. Good intel is crucial at this point. You must know the organizer like Ewa Stepien of New Europe Events.

Third - you must understand that even if there’s no official networking party your chosen VC will not wonder around the city at random. S/he will choose a place in order to maximize ROI making the most of the limited time at hand. Most probably s/he will choose a hotel bar/restaurant or an irish pub where there’s a chance someone will speak english and signs on the toilet doors will be in English and not in some unrecognizable and strange language. And s/he will let the organizer of the event know where s/he is in order to make some people go there.

Then - you need one more person to accomplish your mission. A local guide with an intimate knowledge of the local night live, bars and restaurants. Not just any guide but a person doing business with VCs and having experience in dining with them. I was lucky to meet Denis Dovgopoliy of BayView Innovations who knew all Kiev irish pubs which allowed me to have a beer with a global VC.

The three of us - Ewa, Denis and myself - met Paul Fisher of Advent Venture Partners in Golden Gate Irish Pub which sounds like Sillicon Valley but is very European. In fact it’s named after the ancient gate to the city which it is situated next to. But VCs do not really care - they just maximize the ROI in clubbing and Golden Gate sounds familiar and promising.

We found a table, exchanged initial ‘who-does-what’ information and proceeded to exchanging contacts and coming up with business development ideas for each one of us. One meal and two beers later we started spilling more tasty bits and pieces of gossip and tips on how to handle a VC. Having a beer with one was high up in the top 10 ranking.

UPDATE - I recalled some more: We also discussed VC-psycho-analysis methods used by some VCs. Paul suggested that if someone talks a lot about some area of his/hers plan or operations at expense of other topics it means that this area might be his/hers weak point. Or s/he’s just excited about it. Anyhow be equally brief whatever you say when a VC is around. ;-)

We also discussed dynamics of “sexiness” of a project. Paul said that if a project is not initially sexy it will never be. However if it is at least sexy a bit it might get more sexy in time. At this point I didn’t know if we’re talking about investment projects, women or something else. Ewa said the rule applies to everything so I concluded we reached a Theory of Everything for which some scientists have been looking for decades.

Right before we left the place it turned out that Paul is a really talented actor. Ewa pointed out that he really resembles another talented actor Jason Statham. To prove his skills Paul provided us with some of his best faces like “I’m not satisfied with the results Mr.CEO”, “Where are the profits you promised” and “What do you mean by market is down right now”.

Mission accomplished: relationship established, contacts acquired, lessons learned.

What Paul didn’t confess to is blogging at www.thecoffeeshopsofmayfair.com