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"I write to know what I think", Joan Didion

December 11, 2017

Investors urge Companies to achieve product/market fit to enable scaling. VC investors know they should do the same – ie. Build a system or competency that can easily be marketed that creates clear differentiation to attract the best (not most) deals. In the early days of building a VC’s visibility this can mean taking the risk of investing before there is either critical mass in terms of scale or very rapid growth. However as the investor develops their brand the incentive to take this early risk decreases.

Clearly the best indicator of future growth, which in technology terms is closely correlated with value, is current growth.

The thing is, entrepreneurial success is surely not always that predictable. Real disruptive potential combined with lasting differentiation can take time to create, at the...

November 27, 2017

The last few weeks have yielded more announcements of challenger brands receiving funding from strategic investors. Tracing the funding rounds of robo-advisors over the last 12 months reveals a distinct trend:

This isn’t really a great surprise – the so-called robo-advisor model is disruptive to the extent that it dramatically lowers the cost of servicing HNW (or indeed non-HNW) customers, but it is an area where the barriers to earning trust are significant and whilst challenger brands are busy earning that trust, its suffering from challenging unit economics. This is not a uniquely UK-centric or European problem.

It feels like a necessary component of this earned trust is thriving over a prolonged period of time – which is something that Zopa would seem to have benefitted from in the alternative l...

October 31, 2017

As a high growth challenger business it is sometimes hard to know how to balance the conflicting challenges of optimising for revenue, profitability or cash. This tension comes into play when planning a strategic path for your business. Operationally the need to avoid running out of cash will of course trump other prerogatives.

I have a simple rule of thumb for addressing this question and it’s determined by market opportunity.

If you compete in a very large market with relatively low barriers to global expansion; and gaining leadership in that market would be extremely valuable and has some probability of being achieved, this market is likely to become competitive and populated by well-funded businesses and you should consider optimising for growth. Only the highest growth Companies will attract eq...

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Kevin Douglas 
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" The thoughts on this blog are my own, not those of Princelet Partners or other firms I represent." 

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- Investor

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- Previous Founder of Meridian Venture           Partners (2007-2015)

 

- Co-founder alternative lender (2005-2006)

 

- Trader with Commerzbank (2001-2004)

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- Director

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// Tel: 07799626517 
// kevin@princeletpartners.com

© 2017 by Kevin Douglas.