Tag Archives: Investment

Plant fewer seeds

The life-cycle of a startup has never been more complex. Where previously ambitious twenty-somethings would bootstrap their way to legitimacy, new businesses now have a fundraising maze to navigate, from angel investments and seed money, to rounds one through “n” to IPO.

The poster-child for this changing landscape is the seed round, which has grown significantly in size and popularity:

Peeling back Silicon Valley tech deal activity since 2009 reveals that seed investments have seen a massive increase over time. In fact, seed deal share in Silicon Valley has jumped from 7% in 2009 to 29% in 2013 year-to-date – CB Insights

Presented by this new and in-vogue opportunity to take on capital, it is hard for businesses to know quite what to do, and in particular when to say no. When would you ever turn down a big fat cheque?

The answer is clear, in the eyes of this seasoned venture capitalist – small businesses need to spend less money on seeds and focus more on their core business.

Since when did so many startups have a side-interest in horticulture? I am as green-fingered as the next man, but I don’t necessarily see the benefit of raising a fund to keep you well-stocked with sunflower seeds, however good they are for your cholesterol. And don’t even talk to me about your home grown kale, as I almost certainly don’t want to hear it.

Now that is not to say that your home-grown green beans aren’t delicious, and your pumpkins do look fantastic, just in time for Halloween. But as much as I appreciate the desire for vertical integration, there is no need to plant your own. Weed out the seed rounds, and watch your business grow.

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Investment Guru: Gold

We at Simeon Partners have recently happened upon an incredible commodity which we are piling into as fast as we can. It’s called gold, and we believe that it’s really worth its weight in gold.

In fact, we have tracked the data back as far as we can, and gold has never been worth less than the equivalent weight in gold. It’s unbelievable! We have never come across a commodity that holds its value so consistently relative to the gold standard.

At Simeon, we are dedicated to making investment decisions on the basis of archaic sayings. So get in touch with one of our client liaison officers, and we can get you some gold for your retirement.

 

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Googling for Bitcoin

Cryptocurrency is a hot topic right now. While still a relatively new idea, its legitimacy is such that the word has even been added to the Oxford English Dictionary. There are more than 275 different currencies as of May 2014, and Bitcoin first and foremost, with a market cap of more than $6.2B.

The fluctuating price of Bitcoin has made it a source of much speculation, with some advocates saying it is here to say, while others are more skeptical.

A major point of concern amongst the naysayers is that it’s a bubble, that the currently volatile price may one day fall to nothing.  Indeed that was our concern at Simeon Capital when we first considered Bitcoin.  However once we dug around, we found a way to guarantee that the price would keep going up and up: Google.

As part of our Bitcoin due diligence, we were trying to piece together the key drivers of Bitcoin price.  One of our favourite research tools is Google trends, and upon downloading the trend data for Bitcoin, we were astonished to learn that the weekly price of Bitcoin moves almost perfectly with the level of Google interest in Bitcoin.

Bitcoin testThe implications are clear – the more times people Google “Bitcoin”, the higher the price per Bitcoin. Indeed, according to our proprietary regression analysis, the level of Google interest in Bitcoin is able to explain more than 70% of the weekly price of Bitcoin!

Upon seeing this, we of course acted quickly, purchasing millions of dollars of Bitcoin, and walls and walls of computer servers. We are currently in the final stages before the search-launch, when we will effectively triple the number of “Bitcoin” Google searches, which according to our analysis should add an incremental $1000 to the price of Bitcoin in one fell swoop!

So buy yourself some Bitcoin, and fire up Firefox.  We are long in Bitcoin, and our wealth is only limited by our Googling capability.  I’m feeling lucky.

(Graph created with Tableau, Sources: Google Trends, Coinbase)

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