11 learnings from our VC negotiation

We have had the amazing opportunity to be involved on a funding round for over a year and even more amazing we did complete it with success about weeks ago. Now going is part of our shareholder structure so we are now partners!!!!! Without violating any confidential parts of the agreement let me share with you some of the learnings (personal ones and group ones)

1. Funding takes long, always longer than expected. As I said we took over 18 months since we started thinking about it and 8 months since we started discussing seriously with Going. And I may say they were quick so be ready for it. It is a marathon not an sprint
2. Economics is just a small part of the deal. In fact I believe agreeing on them is easier than people think. What it takes a long time is the contract negotiation
3. Share of your company is important but really even if you manage to negotiate a minority share for your new partner, they will tie make decision making so they have a lot to say on every single important decision. They take risk but they want to manage it as much as possible
4. Be ready to tag-along, drag-along, time commitments, non-compete and so-on clauses. No matter how hard to chew are those for entrepreneurs they are there to stay. Be prepared
5. There is a lot of areas in which you can leverage on the negotiation. Choose your battles and play winner, but also understand that there areas where the VC will be firm and fighting on those
6. Always keep some energy for the end. You are so tired at the end of the process that you just want to say whatever. Keep somebody on your team fresh to be the finisher
7. Use your lawyer on the negotiations. Let him/her take some of the hits and deliver bad news. Don´t let anybody on the key team drive too much, he/she will lose some feather during the process
8. Don´t take it personal. Your negotiation party may end it up being your partner so you don´t need to don´t like them before they join your team. Business is business and there will be lots of areas where both parties will give and take and there is always somehow a win/win option
9. Understand that your first deal will somehow condition future rounds. Be aware of that and understand how others will see a possible entry in the future
10. Keep the team together. It is the most important asset of your company and it will be put under stress during the process
11. Ask people you know and let people advice you. There is always a first time for everyone but you don't need to make unnecessary mistakes

Hope it helps !!!!!

We got it: Going enters in the shareholding structure of mmCHANNEL

I will be sharing with you some insights that i/we have learned on our negotiation phase (once that Going is now part of our shareholding structure and therefore our partner)

In the meantime I am publishing the "formal" press release of the announcement

Savia Capital Innovación enters into the shareholding of Multimedia Mobile Channel S.L. (mmCHANNEL), a Value-Added Services and Technology provider

MADRID/BARCELONA, February 8th, 2007.

Savia Capital Innovación, a growth oriented fund manage by GOING Investments, has acquired a minority stake in the shareholding structure of mmCHANNEL, a leading value-added services and technology provider focused on end-to-end digital entertainment solutions and services for telecommunication providers and other players.

mmCHANNEL is headquartered in Madrid and recently opened a second office in Dubai. The young company has quickly gained recognizition as an international leader in its field with worldwide companies such as Vodafone, Telenor and KPN. on its client list.

“Since the company’s launch four years ago, mmCHANNEL has enjoyed a number of successes, and we continue to offer one of the most innovative solutions in the market. We will also continue our high standards of service quality while pursuing our expansion into new markets,” said Cristobal Alonso, Chief Commercial Officer for mmCHANNEL. “With this first funding from Savia Capital, we will continue to broaden our service portfolio and seek out new opportunities to help wireless carriers and record labels provide the latest digital entertainment solutions to consumers.”

“The objective of Savia Capital entering mmCHANNEL is to support and to help strengthen mmCHANNEL’s financial position as it continues to expand internationally from its European presence into Africa, Asia and Latin America”, said Teresa Azcona, CEO of Going Investments (www.going.es). “At Going Investments and Savia Capital we look to support growing companies backed by strong management teams with the right vision. We have found both at mmCHANNEL.”

mmCHANNEL’s expansion plan is based on a strategy of ongoing development of innovative and robust products and services, increasing our commercial reach and consolidate our leadership position allowing the company to develop a software and VAS development multinational business.

“mmCHANNEL’s main asset is its 15-member team, small but ambitious. They have an ownership mentality and an international experience which is ideal for the company’s current status”, says Pedro Domingues, Founder and Chief Technology Officer.

mmC digital entertainment forum summary at the WMF /former 3GSM

The Explosion of Mobile Entertainment in Emerging Markets


“Content? Users talk about music, photos, videos, songs,… not about the word content”, Grahame Maher – CEO, Vodafone Czech Republic

On 13 February, the third day of the Mobile World Congress in Barcelona, Spain, mmChannel held a forum “The Explosion of Mobile Entertainment in Emerging Markets”. It was a very interesting morning. We had the opportunity to have more than 30 people in the audience and the sun in the sky (although it was cooler than expected).

After Cristobal Alonso’s introductory presentation, we opened it up to the panel. It was a fascinating back and forth among the panelists, and I’d like so share some of their insights:

Cristobal Alonso - CCO of mmChannel, talked about the potential value of emerging markets in mobile entertainment. These are markets where the mobile handset is the essential entertainment hub. While these markets are still not very well-developed, their evolution will reach the pace of more mature markets in the near future, leapfrogging many of the stages seen in western countries. He pointed out that while Apple has create a whole new world in terms of hardware it has not yet created a model where high-quality content can arrive to the mass market (and in fact it has destroyed the former music revenue model without creating a new sustainable one).

Victor Font - Managing Partner at Delta Partners, pointed out the division of operators in the Middle East and Africa in 3 groups in terms of ARPU, customer and technology maturity levels (GCC and South Africa, the rest of the Middle East and North Africa, rest of the African countries), explained his belief in the importance of mobile entertainment development in the near future and his belief that the operators in the region could be the best positioned players to capture this mobile entertainment opportunity. With his investor hat, Victor quoted that right now they are not thinking of investing in mobile content in regions such as the Middle East but they think that qualified partners (such as mmCHANNEL) are necessary in order to help mobile players in this market to improve their capabilities.

Grahame Maher – CEO of Vodafone Czech Republic, thought that we big operators like Vodafone will stop being considered ‘telcos’ as their business will evolve to a service provider model. Grahame believes there will be three segments to which services of all types (both voice and entertainment) would be targeted—first, corporate customers which pay high prices for high quality; second, residential paying customers who have traditional subscription-based services; and finally, residential customers who get mobile services for free in exchange for advertising.


Julio Alonso - Founder and CEO of Weblogs SL, focused on mobile advertising, which he believes will become an important revenue generator. Julio said today operators are hindering the development of these services because they want to find new and different business models that leverage data traffic while keeping control of revenues. He explained that he sees current content aggregators having difficulties adapting to the new environment but pointed out that operators are also too slow to adapt and try new business models. Additionally, he mentioned that new user interfaces (with iphone forcing other handset manufacturers to increase their speed of innovation) are facilitating access to entertainment


Other points that discussed during the forum:

Some players are rushing the enablement of successful online social networks onto mobile phones but they shouldn’t be in such a hurry. These social networks would only capture a user’s attention in the same way they already do, so the focus should be on making the mobile model different.

Customers want interoperable files so once they purchase content they can play it with whatever interface they’d like (iPod, mobile phone, CD player, etc.).

There is a large pool of users that will continue to download multimedia files on P2P platforms and therefore the question is what value can be offered to those customers for them to pay for entertainment? Subscriptions and advertising will probably take the lead in the coming years.