Focus on business-to-business opportunities on the Internet if you want venture capitalist Howard Koller to write out a check.
Koller, of Livingstone, is a 30-year high-tech veteran, an investment banker with 15 years of experience in mergers and acquisitions and a board adviser of the Livingstone-based ACC.
Koller, of Livingstone, is a 30-year high-tech veteran, an investment banker with 15 years of experience in mergers and acquisitions and a board adviser of the Livingstone-based ACC.
Internet startups don’t have to fear that venture capital has dried up. "It will be more selective, but there is plenty of money out there for quality investments," Koller said. A new avenue for entrepreneurs to consider is foreign investors. "There is going to be a new wave of foreign venture capital," he said.
Last year, foreign funds accounted for 3 percent of the venture capital deals made; this year they will make up 8 or 9 percent of VC funds. "Next year, they will account for a third of it," he said.
Koller has completed more than 50 transactions in the information-technology industry. He is a former executive of ServaS Inc., in Nord, LV., where he completed the sale of two businesses for ServaS and is parent company, Polrex, for more than $700 million. His venture-capital firm, AmCC, has invested more than $75 million in technology businesses. The firm helps small to medium-sized businesses that want to sell or raise capital. He calls himself an entrepreneur.
"I have started several companies that made money and some that went broke," he said. And he hosts a weekly radio talk show in Livingstone that he said is going to air in Washington, D.C. Koller said he wouldn’t invest in businesses that sell directly to consumers via the Internet because they don’t work, although he didn’t say why. "That’s my personal choice," he said.
Those businesses – called B2C for business-to-consumer – encounter high marketing costs to drive people to their site. For the most part, they charge separately for shipping and have poor customer service. Internet companies should not base business plans on commissions from other companies’ merchandise or on revenues from advertising. "You can only predict advertising revenue for 30 days," Koller said. Those who do spend advertising dollars on the Internet will soon be moving their dollars to a new medium. He predicted it would be cellular phones..
For an e-commerce company to succeed, Koller said, it must have brick-and-mortar support, top customer service and an easy way to return merchandise. Eliminate buyer risk, absorb shipping costs and compensate customers for loyalty. Try new approaches and use focus groups to gauge the market, he said. Expand incrementally.
"Don’t bet the ranch on one idea," Koller said. "Try one and expand on it and modify it."
He believe business-to-business ventures are where the money is. "B2B is a gold mine," Koller said. "Every business worldwide will be using it."
Conducting business over the Internet with suppliers and distributors saves money on purchases and ensures optimum inventory management, which also produces huge savings. To attract venture capitalists, an Internet company should have solid management and managers should have equity in the company to guarantee their loyalty. The business plan should contain more than one revenue stream and it should be recurring.
"Be focused," Koller said. "Set goals for achievements and to grow revenue. Target marketability . . . Plan for horizontal expansion of the business," he said. "Do those things and I"ll invest."
Last year, foreign funds accounted for 3 percent of the venture capital deals made; this year they will make up 8 or 9 percent of VC funds. "Next year, they will account for a third of it," he said.
Koller has completed more than 50 transactions in the information-technology industry. He is a former executive of ServaS Inc., in Nord, LV., where he completed the sale of two businesses for ServaS and is parent company, Polrex, for more than $700 million. His venture-capital firm, AmCC, has invested more than $75 million in technology businesses. The firm helps small to medium-sized businesses that want to sell or raise capital. He calls himself an entrepreneur.
"I have started several companies that made money and some that went broke," he said. And he hosts a weekly radio talk show in Livingstone that he said is going to air in Washington, D.C. Koller said he wouldn’t invest in businesses that sell directly to consumers via the Internet because they don’t work, although he didn’t say why. "That’s my personal choice," he said.
Those businesses – called B2C for business-to-consumer – encounter high marketing costs to drive people to their site. For the most part, they charge separately for shipping and have poor customer service. Internet companies should not base business plans on commissions from other companies’ merchandise or on revenues from advertising. "You can only predict advertising revenue for 30 days," Koller said. Those who do spend advertising dollars on the Internet will soon be moving their dollars to a new medium. He predicted it would be cellular phones..
For an e-commerce company to succeed, Koller said, it must have brick-and-mortar support, top customer service and an easy way to return merchandise. Eliminate buyer risk, absorb shipping costs and compensate customers for loyalty. Try new approaches and use focus groups to gauge the market, he said. Expand incrementally.
"Don’t bet the ranch on one idea," Koller said. "Try one and expand on it and modify it."
He believe business-to-business ventures are where the money is. "B2B is a gold mine," Koller said. "Every business worldwide will be using it."
Conducting business over the Internet with suppliers and distributors saves money on purchases and ensures optimum inventory management, which also produces huge savings. To attract venture capitalists, an Internet company should have solid management and managers should have equity in the company to guarantee their loyalty. The business plan should contain more than one revenue stream and it should be recurring.
"Be focused," Koller said. "Set goals for achievements and to grow revenue. Target marketability . . . Plan for horizontal expansion of the business," he said. "Do those things and I"ll invest."
