ChrisW
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| posted on 13/8/12 at 07:31 PM |
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Can LB help me raise £50k?
Well, I've asked some things on LB before, but this is perhaps my most audacious. Here goes...
I'm currently on the hunt for investment capital in my next business venture, having sold both my ISP (Netrino) and TVCatchup.com a few years
back. I've been an employee for a while which has been nice, but the time has come to move on to the next big thing and go back to being a
startup again.
Normally at this point I would be bashing my list of contacts, working the various investors clubs, and all those other things to get attention, but
then it struck me that I have a captive audience right here who all (hopefully) know who I am and (even more hopefully perhaps!) have at least a
little bit of trust in me. Some of you have even had the privilege of meeting me! OK, we might not be regular investors, but I'm not exactly
looking for 'regular investor' sums of money here.
I guess it's one of those 'no harm in trying' situations, so here goes!
The plan is to put together a new data centre aimed at the cheaper end of the market. For those that don't know what that is, try
http://en.wikipedia.org/wiki/Data_center. Now, a 'normal' facility would typically cost £1m upwards to build a fairly modestly sized site
but I've come up with a new concept that allows a facility suited to this market to be built at a fraction of the cost of traditional methods,
and due to another couple of coincidences I'm in a position to move forward with this with a huge saving on the two key and most expensive
elements of a build; the provision of power (and lots of it) and of ultra-high speed connectivity.
The reason for heading for the lower end of the market is that it was a product that I was asked for on a regular basis when I was running Netrino. I
won't give too much away here other than I'm convinced that not only is there a big gap in the market, but also that nobody else in the UK
and possibly even the world has thought of solving the problem in this way. I've certainly not been able to find anyone else offering a similar
service.
In order to do this I need to raise around £50k startup capital to buy equipment and fit out the building. For this investment I'm looking to
offer 25% equity of the company. Now I'm sure that not many of us have that kind of money going spare so I'm expecting to split the
opportunity, but in order to keep the numbers to a sane level I suggest the minimum investment is £4000 which would get you 2%.
I've got a business plan with a full set of numbers, but I'll keep it simple here. The headline figures are that you should make 150% of
your investment back by the end of year 3, and a further 50% every year thereafter. In other words, if you put £10k in you would expect to have taken
£15k out in dividends by the end of year 3 and a further £5k dividend each year following that.
Obviously there is a whole lot more but I won't go into too much detail here. If this is something you think you would be interested in I guess
the best thing to do would be to drop me an email (don't u2u in this case). Use the email button at the bottom of the post - it's the
@locostbuilders.co.uk one - and we can go into some more detail. I don't mind answering basic questions here but, being a new concept
that's not been done before I don't want to give too put too many details on a public website for obvious reasons.
Anyway, thanks for reading. Hopefully I'll hear from a couple of you, otherwise it's back to the shiney shoes and the investors
presentations for me!
Cheers, Chris
My gaff my rules
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TimC
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| posted on 13/8/12 at 08:02 PM |
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Wrong timing for me but I can put you in touch with someone if you wish?
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theconrodkid
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| posted on 13/8/12 at 08:20 PM |
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YHM and ill look down the back of the sofa 
who cares who wins
pass the pork pies
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ChrisW
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| posted on 13/8/12 at 08:22 PM |
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quote:
Originally posted by TimC
Wrong timing for me but I can put you in touch with someone if you wish?
By all means, Tim. As I mentioned, I'll be doing the investor clubs looking for introductions so if you can introduce someone I'd be more
than happy.
Chris
My gaff my rules
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Neville Jones
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| posted on 14/8/12 at 09:36 AM |
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If the idea is unique, get it protected by patent/registered design or whatever, before you go any further or utter another word.
The yanks and chinese,(and the english/europeans if it comes to it) will be using your IP before you know it, and not paying a penny for it.
Cheers,
Nev.
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ChrisW
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| posted on 14/8/12 at 09:58 AM |
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Hi Nev
Indeed, I've already thought about that and unfortunately I don't think it's significantly different enough to be able to get a
patent. I do know a patent lawyer and keep meaning to set up some time with him, but I'm pretty sure I know the answer already.
To be honest, I think it inevitable that the concept will be copied and my plan is simply to be first to market and create a buzz about being the
'inventors' of the concept - I'm sure there is plenty of marketing spin that could be based on that. The beauty of the idea is that
to go with my new design concept the rest of the building has to be designed around it in order to make the kind of savings required to hit the price
point I'm aiming for. Much as this may sound like a disadvantage it's actually the opposite, purely because any existing facility who
tries to copy me would either have to suck up a huge cost overhead or build/rebuild a new site just to offer this facility.
Also consider that I'm aiming for the entry level user and I suspect that this will already exclude most of the big providers from trying to go
the same route purely because the margins are not high enough. If (or rather 'when' competition arrives I suspect it will be from
another startup company or possibly a small, already established company that has opened a new facility dedicated to this concept. In actual fact,
with anything new, a little competition is possibly an advantage as long as there is reasonable geographical separation. People don't like
change, and this is definitely a case of a departure from tradition. What could be more convincing than one company harping on about how much better
this new concept is but two?
Cheers, Chris
My gaff my rules
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SeanStone
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| posted on 14/8/12 at 01:59 PM |
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Are bank loans not an option for this sort of thing?
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MakeEverything
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| posted on 14/8/12 at 02:03 PM |
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Its not a unique idea.
Ive worked in and around Data Centres and critical environmens for the last 10 years. Lots of the big banks etc have their own data centres, BCP
sites and disaster recovery programmes, but they arent your target market anyway.
The other data centres that offer services such as those you describe are large affairs, but cater for the 'data suite' market as well as
the 'single 48u rack' market within co-located space.
Issues to consider (and im sure you already know this) is electrical power and cooling, as well as the obvious security, unpacking areas, waste
management, cabling / infrastructure etc etc. I held a senior position at a large docklands data centre once, and the physical infrastructure there
was immense, and was notably the largest data centre and private high voltage (11kV) network in europe at the time. With an industrial unit sized
co-locating space, you would need the same size unit for all of the plant and equipment to run it. That is of course, assuming you have a location
that is capable of supporting the electrical loads that youre looking at, and will permit you to have chillers, condensers or other heat rejection
plant retro-fitted as these are now subject to part L of the building regulations, let alone planning consent for noise / vibration issues.
Some examples of companies already offering that service to smaller clients;
Global Switch
Telecity RedBus
rackspace.co.uk
...to name just three major competitors.
Since i now work in the government sector (for a private sector firm), ive let my uptime institute and energy institute memberships lapse but we do
still work in a lot of 'critical environments' that demand the same resilience and protocol as your average hi-spec data centre.
Not wanting to wee on your chips, but ive looked at this already.
[Edited on 14-8-12 by MakeEverything]
Kindest Regards,
Richard.
...You can make it foolProof, but youll never make it Idiot Proof!...
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ChrisW
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| posted on 14/8/12 at 02:08 PM |
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quote:
Originally posted by SeanStone
Are bank loans not an option for this sort of thing?
They are indeed, but they're an expensive way to obtain money. Also investors at this level may be put off if part of the plan involves
borrowing money in case they could in some way be held liable. At the end of the day I have to weigh up the options of interest payments but owning
the whole company vs no interest payments but giving away some equity, and that will really come down to how much interest I get from investors.
My gaff my rules
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ChrisW
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| posted on 14/8/12 at 02:12 PM |
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quote:
Originally posted by MakeEverything
Its not a unique idea.....
Erm... I don't believe I've actually mentioned what the unique part of the idea is yet, so how do you know whether it's unique or
not?
Keep in mind I've spent the last 10 years buying up wholesale data centre space from at least two of the companies you mention and among plenty
of others. A big part of my business income came from subdividing and reselling this space to smaller users. After 10 years of doing it I'd
like to think I've got a pretty good idea of what people are looking for, what products are in the market already, and how best to fill the
gaps.
quote:
Originally posted by MakeEverything
Not wanting to wee on your chips, but ive looked at this already.
Looks like you're doing your best, regardless of whether you want to or not. If you're going to jump to conclusions please keep them to
yourself.
Chris
My gaff my rules
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Rod Ends
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 posted on 14/8/12 at 05:23 PM |
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Have you seen this? Lots of people investing smallish amounts of money in new projects.
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ChrisW
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| posted on 14/8/12 at 05:24 PM |
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Oh yes, kickstarter is great. Problem for this project is that I need to protect the idea as much as possible. The minute I put it on kickstarter
there will 100 copy-cat projects!
Chris
My gaff my rules
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Ninehigh
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| posted on 14/8/12 at 07:05 PM |
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I'd love to be in, but £4k is way over my budget. Come to think of it £400 would be a stretch!
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MakeEverything
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| posted on 14/8/12 at 10:28 PM |
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quote:
Originally posted by ChrisW
quote:
Originally posted by MakeEverything
Its not a unique idea.....
Erm... I don't believe I've actually mentioned what the unique part of the idea is yet, so how do you know whether it's unique or
not?
Keep in mind I've spent the last 10 years buying up wholesale data centre space from at least two of the companies you mention and among plenty
of others. A big part of my business income came from subdividing and reselling this space to smaller users. After 10 years of doing it I'd
like to think I've got a pretty good idea of what people are looking for, what products are in the market already, and how best to fill the
gaps.
quote:
Originally posted by MakeEverything
Not wanting to wee on your chips, but ive looked at this already.
Looks like you're doing your best, regardless of whether you want to or not. If you're going to jump to conclusions please keep them to
yourself.
Chris
Hang on a minute, i read your post as wanting to rent out co-located data space, and was offering some help and experience;
quote:
The plan is to put together a new data centre aimed at the cheaper end of the market
.
I wasnt jumping to conclusions at all, rather commenting from the information you had written. Nice attitude you have there Chris, and an insight to
any would be investor.
[Edited on 14-8-12 by MakeEverything]
Kindest Regards,
Richard.
...You can make it foolProof, but youll never make it Idiot Proof!...
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Mr C
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| posted on 15/8/12 at 12:11 PM |
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Another case of not knowing the full story and judging. Chris has the right attitude as far as investors are concerned, particularly protecting his
idea on an open forum. I wouldn't jump to any conclusions without knowing the full facts which are clearly not fully disclosed in this thread
for obvious reasons. I also have the intelligence not to ask sensitive questions about the proposal on an open forum also.
Lastly if I was criticised rightly or wrongly for a previous comment wouldn't respond in this way or indeed post up in another thread my
dissatisfaction in the way the forum has been used to tout for business. (quoted below)
"That said, i don't think (or expect) the LCB forum to support anyones business, as it is neutral ground for discussion, not a marketing
board for small businesses or IT ventures."
If you were that concerned about the use of the forum in this way then your comments would have been best placed in this thread, smells of sour grapes
me thinks.
Chris sounds an interesting proposition, the times not right for me at the moment, All the best with it I'm sure you'll do well.
Girl walks into a bar and asks for a double entendre, so the barman gave her one
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MakeEverything
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| posted on 15/8/12 at 02:22 PM |
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quote:
Originally posted by Mr C
Another case of not knowing the full story and judging. Chris has the right attitude as far as investors are concerned, particularly protecting his
idea on an open forum. I wouldn't jump to any conclusions without knowing the full facts which are clearly not fully disclosed in this thread
for obvious reasons. I also have the intelligence not to ask sensitive questions about the proposal on an open forum also.
Lastly if I was criticised rightly or wrongly for a previous comment wouldn't respond in this way or indeed post up in another thread my
dissatisfaction in the way the forum has been used to tout for business. (quoted below)
"That said, i don't think (or expect) the LCB forum to support anyones business, as it is neutral ground for discussion, not a marketing
board for small businesses or IT ventures."
If you were that concerned about the use of the forum in this way then your comments would have been best placed in this thread, smells of sour grapes
me thinks.
Chris sounds an interesting proposition, the times not right for me at the moment, All the best with it I'm sure you'll do well.
Nope, no sour grapes at all, and i dont have an axe to grind with anyone. My original post here was intended to offer some professional knowledge and
experience based on what was written - the line which i had quoted, and no 'conclusions', 'judgements' or assumptions were
made.
The other post you refer to, is defending the forum as a neutral ground for discussion but i see you've chosen to ignore the positives in that
one as well.
Kindest Regards,
Richard.
...You can make it foolProof, but youll never make it Idiot Proof!...
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OX
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| posted on 15/8/12 at 03:57 PM |
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Good luck with the venture Chris and i hope you pull it off as well as you have your other projects and thank you for giving us the chance to be part
of it ,but i have no money so for that reason i'm out :-)
OX' the unofficial dragon '
[Edited on 15/8/12 by OX]
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big-vee-twin
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| posted on 15/8/12 at 04:31 PM |
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Hi Chris,
I am an owner of a consulting engineers practice with lots of experience designing power, emergency power and cooling etc for data centres.
I haven't got any cash to offer but could maybe offer our design experience instead, if you need any assistance in that area.
Duratec Engine is fitted, MS2 Extra V3 is assembled and tested, engine running, car now built. IVA passed 26/02/2016
http://www.triangleltd.com
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TheGiantTribble
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| posted on 15/8/12 at 05:41 PM |
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Might I offer the opinion
min 4K might be a bit much considering a lot of people on this forum probably have any spare cash (and them some) invested in a
half/quarter/threequarter/barely started kit car
what about giving a chance to small/tiny/wife screaming HOW MUCH! invester types a chance?
After all 4k min you get a couple of investers thats 8k
a group of 40 £200 (easier amount to loose on a build with out her indoors knowing about it) same thing
ok so maybe offer a lower rate of return, since locosters will be doing it more to help a locoster than turning a profit , but possibly a more realist
chance of raising some loot.
Either way good luck with it
Ill shut up now
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MikeR
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| posted on 15/8/12 at 06:54 PM |
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hmm is that an opportunity for someone to 'buy' a share, split in and sell smaller shares?
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ChrisW
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| posted on 16/8/12 at 12:22 PM |
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The reason for the minimum investment figure is that I have to be realistic about how much time I spend dealing with investors both in getting them on
board and in keeping them up to date during the project. If I had 100's of people asking questions I would spend a long time just dealing with
those instead of getting on with the project. On the other hand of course the minimum investment level is a barrier for entry for some people.
I essentially have to pick a figure that keeps my options for investors as wide as possible but at the same time doesn't burden me with lots of
additional work.
I also have to consider the mix of investors, and whether they have any relevant skills or experience to add to the mix. Greatly simplifying for the
sake of an example, if I had two investors come to me with 50% each that were an electrician and an air-con engineer that would be a lot more
attractive than one person offering 100% that was a plumber, despite there being twice the work to manage the two investments over one.
(Nothing against plumbers of course, just that there's not much call for plumbing skills on this project and it was the first job example that
came into my head)
quote:
hmm is that an opportunity for someone to 'buy' a share, split in and sell smaller shares?
There is no reason why not. I'd suggest you would want to take some advice on how best to do it, however, both to protect the person organising
it and to make sure it was tax efficient for the investors. It's probably a good idea to wrap it up in a company of it's own, or a trust,
or something like that. I'm no expert in this field so I wouldn't want to give any specific advice.
Chris
My gaff my rules
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MikeR
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| posted on 16/8/12 at 01:41 PM |
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Chris, I need to email you privately as I have a number e questions but that's a bit difficult whilst doing the day job. your post above
implies your looking for more than just silent cash partners. which is it cash, cash and advice or a mixture? if I'm providing cash and advice
what would I get over silent investors just providing cash?
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ChrisW
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| posted on 16/8/12 at 02:08 PM |
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quote:
Originally posted by MikeR
Chris, I need to email you privately as I have a number e questions but that's a bit difficult whilst doing the day job. your post above
implies your looking for more than just silent cash partners. which is it cash, cash and advice or a mixture? if I'm providing cash and advice
what would I get over silent investors just providing cash?
Fair enough, Mike. I'm open to consider any kind of deal on skills on money. I can do it all myself if necessary, ie I don't necessarily
need additional skills on board, but if someone came along that was able to assist in a specific area and make my life easier I'd be silly not
to consider the value they would add to the company by doing so. That can be either in time on site or in providing advice by verifying that what
I've designed is sound. After all, it would be in the interests of an investor to give the business as much assistance as they reasonably
could.
I specifically mention electricians because I will need electrical work done. I can do the first fix myself, but I'm not 'part p'
or whatever it is I need so I will have to get a contractor on site at some point. It's a similar situation with an air con engineer in that
although I know how air con works I don't have any of the kit or tools to actually install it. If people with those skills came along and
wanted to invest skilled labour rather than (or in addition to) money then, as above, I'd be silly to not consider it.
As said, I'm flexible, so if you have something you think would be of value to the company then by all means drop me a line.
Chris
My gaff my rules
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ChrisW
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| posted on 22/11/12 at 09:21 AM |
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Just re-opening this thread for discussion. We've had an investor drop out at the last minute so an opportunity has arisen again for someone to
get involved. Annoyingly he was an electrician and was bringing with him a lot of advice and experience on that front!
So, if there is anyone else interested in this opportunity, or who chose not to get involved last time, now is your time to speak up! The project has
evolved and changed a little since the first offer so if you fall into the latter group by all means ask for an updated business plan.
Cheers, Chris
My gaff my rules
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