Le Web08 - Day 1 - Getting financed in a recession

Tuesday, December 09, 2008

It is a great time to keep investing, says a first panelist.
Another VC says that VCs didn't fear for their own life in 2001/2. Easier to get capital funds. Today, firms are very afraid not to get enough return on their investment. They are more careful and minimize their risk in their portfolio.
You cannot deny a storm is coming up. And VCs need to be prepared with the reality of the market and are cautious with revenue coming from start up they invested in.
VCs come at a later stage in a start up after angel money. VCs can really make new ventures more succeful and Martin is asking (or begging) VCs to keep investing an supporting brillant ideas.
Is not easy to have a constructive relationship between VCs and Entrepreneurs. VCs need to allow Entrepreneurs to make some mistakes and learn from them. But the role of the VCs is to also guide start ups and warn them of serious threats or issues.
Good VCs help Entrepreneurs being better in what they do.
When VCs say "no" to invest in a venture, they should explain why. Ouriel is asking if VCs are going to say "NO" next year more often. The ratio is 10 investments out of 1000 presentations made at a particular. Is that ratio going to change next year? Probably not. So no real reasons why start ups will find more difficult to raise money next year.

Le Web08 - Day 1 - Wikio
Pierre Chappaz, CEO of Wikio (formerly founder and CEO of Kelkoo) is on stage now.
It is not the first time we are living in a Internet crash. We will survive this crisis. Web2.0 services are loosing money for most of them. But growth is still there. Speed of progress with NetVibes is quite impressive (revenue X by 4 in 4 quarters).
So what Wikio is about. A pan European News portal launched in 2005 with a team of 35 people in virtual offices in several countries. It allows users to browse information from traditional media, blogs, video sites. Has used some of the features of NetVibes to enhance the UI of Wikio.
Business model is on merchants links, adsense. sponsoring and advertising.
In November, Wikio has reached 12.4 million users (4M in France alone, less than 1M in the UK).540K€ revenue in Q4 2008 and Wikio is now breakeven.
Few learnings:
1/ Believe in what you do and fight2/ Manage expenses very carefully3/ Europe is their natural market and diversity is easier to deals with4/ Information generates traffic but not enough revenue (shopping is much better for that)