Tag: capital

The Robolution federator

Tuesday, 2 August, 2016 0 Comments

The Fourth Industrial Revolution’s upgrading of English vocabulary is a regular theme here and the prospect of public presentations on the subject in October and November is concentrating the mind, to paraphrase Dr Johnson. We’ve had some gems recently and more are to come. Central to the revolutionary stuff going on right now is robotics.

Definition: “Robotics is the branch of mechanical engineering, electrical engineering and computer science that deals with the design, construction, operation and application of robots, as well as the computer systems for their control, feedback and data processing.”

If you create an €80 million private equity fund dedicated to robotics, you’re going to need a name for the venture; one that combines the essence of the business with its revolutionary role in 21st-century industry, ideally. Robolution The result is… Robolution. Or, more precisely, Robolution Capital. But there’s something slightly unmelodious about the word “Robolution,” with its hints of ablution and absolution. Sure, it’s an attempt to capture an element of “revolution,” but the “robo” bit at the front doesn’t quite make a harmonius unit, does it? Perhaps it sounds better in French because Robolution Capital is based in Paris.

Along with robotics, Robolution Capital is focussing on artificial intelligence (AI) and the Internet of Things (IoT), two very hot areas right now, and this is why it defines itself as a facilitator, an accelerator and “a federator at the heart of the ecosystem of entrepreneurs, corporates, public organizations, universities and research centers.” What’s a federator? The usually indefatigable Wiktionary does not have an entry for the word and Techopedia offers “Federation” from the world of enterprise architecture that allows interoperability. The word, however, is a version of fédérateur, the French noun that means “unifier.” And with its philosophy and its focus on robotics, AI and the IoT, Robolution is true federator.

News: 360 Capital Partners, an early-stage VC business based in Milan and Paris has just done a deal with Orkos Capital, also based in Paris, to manage Robolution Capital.


These eerily Madoffian times

Thursday, 21 April, 2016 0 Comments

To understand the magical world of the technology Unicorn (AirBNB, Slack, Snapchat, Uber), one has to speak the language of dizzying money. For example, Limited Partners (LPs) are large pools of capital, such as pension funds, endowments, foundations and high-net-worth individuals, that invest in Venture Capital (VC) firms, hedge funds and the like. And in these Unicorn times, LPs are increasingly being asked to participate in SPVs (Special Purpose Vehicles) especially created to feed the insatiable Unicorns. Well, that’s what Bill Gurley, a General Partner at Benchmark Capital, says.

Gurly has been keeping a close eye on the money flow and he’s noticed something disturbing: “investors have also broadened their SPV marketing to family offices and other pools of capital. The pitches typically involve phrases such as ‘you are invited to’ or ‘we will provide access to’ an opportunity to invest. This ‘you are so lucky to have this opportunity’ pitch is eerily Madoffian.”

That excellent coinage, Madoffian, is a play on the name of the fraudster Bernard Madoff, who scammed investors in a $65 billion Ponzi scheme that was exposed in 2008. The use of his name should alarm everyone and that’s what Bill Gurley seeks to do in a brilliant analysis titled Why The Unicorn Financing Market Became Dangerous… For All Involved. Snippet:

The main message for investors who are just now being approached is the following: it’s not the second inning or even the sixth, it’s the fourteenth inning in a five hour baseball game. You are not being invited to a special dance, you are being approached because you are the lender of last resort. And because of how we meandered to this place in time, parting with your dollars now would be an extremely risky move. Caveat emptor.

To avert disaster, Gurley is calling for “a dramatic increase in the real cost of capital and a return to an appreciation for sound business execution.” Note: What makes his analysis particularly valuable is that he singles out John Carreyrou’s October investigation of Theranos in the Wall Street Journal as “the seminal bubble-popping event.” A month prior to that, Fortune Magazine ran a fawning Theranos article titled “How Playing the Long Game Made Elizabeth Holmes a Billionaire.” That game is up.

The Unicorn