We’re (http://ideas.org/ are building – SeedFund (http://www.seedfund.co.uk/) as a platform to connect entrepreneurs and investors in the UK (a US version will follow too).

We’re filming (each company has a 3 min video pitch filmed in HD) on the 15th May – if you’re a startup raising an early stage round (£50k – £1m) and you think SeedFund may help feel free to register on the website and we’ll be in touch with more details.

Anyways, not pleased that UK taxpayers money is being used to develop start ups in the States.

It’s not hard to build a company that is potentially profitable to someone else. It’s hard getting them to buy it and it’s hard to run the loss until they buy it.

Regarding user traction, many companies have been bought for users alone and many companies sell their database of users after they have gone bankrupt. It happens every day so stating that it does not is incorrect. Many companies will buy another company to own the technology, just to take the technology off the market for competition on a product level, or for competition via a competitor level, to buy a key developer or team, to buy a route to market and many other reasons. Having a financially successful business is a very small part of the web industry.

My point stands, you do not have to create a profitable business to sell it to someone else. Many loss making companies have been bought and will continue to do so for many different reasons. Having a tech start up that makes profits and is self sustainable is a very rare concept.

Perceived value is not always ‘money’.

I know many companies in the first bubble and the recent past who have been bought and shelved, bought and written off and bought and stripped of assets and key staff.

Ryan Gallagher.

I’m sorry Ryan but what I said is true, and what you have said backs that up.

It is true because the company is “profitable” to someone else. And if you’re selling you still need to be able to demonstrate that or at the very least have someone be able to identify it in your company.

What ever you think, no one will buy a company unless it some value to them and will help their business by doing so. You are mistaken if you think people will buy just because of “user traction” – that’s only going to work if its a route to success in the overal aims of the buying business.

@John

Not true at all, having spent years in the valley and having had a start up there which was losing money very fast and had buy out offers you do not need to prove profitability. All you need to do is prove user traction and then get acquired by a company who have a way to monetize that, or who gain more in the stock market/PR game by buying you than they lose in throw away dollars, most of which were getting spent on tax anyway.

I have had startups in the UK and the US. Both scenes are very different and while I firmly believe that you should watch the whole globe to see what is happening, I do not believe you should take a Silicon valley ‘business model’ and try to run it over here. Anyone who has raised money on both sides and has done the walk down Sandhill road (I used to live on Sandhill) will tell you the vast difference in available money for the tech scene there compared to here.

Regarding the WebMission, it could be a good thing it could be a bad thing, it depends on how it is run. If it is to build bridges for two way communication and two way learning then it is great. If it is as Ryan Carson says to go hat in hand then it is not, but only time will tell which of the two it is being run as.

I know many companies here in the UK who are building businesses which are losing money hand over fist to try to get acquired. It is nothing short of gambling and some will win, most will lose. If you focus on making money and making profits (not revenue) then you will stand a higher chance of sticking around but more importantly you won’t have lost millions of dollars by proving that an idea just doesn’t work.

It’s very easy to get caught up in the hype and self generated PR that comes with a perceived success (my last start up won a Demo God award, we were in hundreds of articles and it was successfully funded) and you can learn a lot from it. I learned a tremendous amount. But a lot of what you learn is how not to run a business. Running a business means making more money than you spend. Gambling is a different thing and if you are gambling with someone else’s money then that’s even better, just don’t kid yourself you are doing anything else.

Ryan Gallagher.

http://www.37signals.com/svn/posts/987-are-you-sure-you-want-to-be-in-san-francisco

I’ve been helping out Web Mission and talking with the companies and don’t think it’s fair to assume that a organized trip to the Valley means that everyone involved is admitting that the Valley is the only place to start a successful company. Having worked with startups in San Francisco for five years before moving to London, I think one of the great things that this place has going for it is a broader view of the world. Companies based in London think about the world at large, they see potential customers everywhere, keep an eye on Asia, Europe and the US all at the same time, and hire global workforces. And they understand more innately what it means to create a global company from day one. Part of this is also realizing that there are very smart people in places other than your hometown who may at some point contribute to the success of your own venture. Wherever it may be located.

First time I hear of us backing this… I don’t think we’re involved. Which is not to say it’s a good or a bad idea or anything. Will let the net fight that out. :)

Max @ Atlas

- We met a legal team in London capable of handling a funding round for us, who ‘got’ what we do, and who we are happy to work with
- I personally am short on time for things like networking as we’re at a delicate stage of product release which requires total focus
- I recently came to realise that the most important interactions we need to be having right now are with our beta community and development team

So while I’m never averse to having some fun and rubbing shoulders with industry-important people, we’ve found everything we need in the UK along with the extended communciation opportunity created by the web.

I think the primary benefit of packaging a group together to head to Silicon Valley is that it opens many doors for the UK startups. Yes, everything one needs to do a startup is here in London (i moved here for Startup #2), however having more connections only provides for a greater chance of success. How someone could really argue that it’s bad to reach out and make more connections is beyond me. If any of the folks on the trip had made a trip to SV alone, they wouldn’t have been able to put together such a fantastic agenda, however by putting a larger group together, not only has it endedup cheaper, but the list of connections they’ll make with investors and potential partners is much larger. It was a great idea and should be helpful both to the UK startup scene, and to the individuals on the trip.

However, I am also part of Web Mission. Is this a contradiction? Is it hypocritical? Absolutely not! In my journey to be the best start-up I can be, nay, to be the best profitable business I can be, you have to know your market, your contemporaries, what works, what doesn’t work, meet as many people as possible, and amalgamate all this knowledge with your own set of ethics and modus operandi, and do the best you can. Being a part of Web Mission, for me, is not only a fact building mission, but a PR exercise I am conducting for the UK… I want to show the world how great the UK is to build a business, and I do this by going to San Francisco, and being part of the best PR that British entrepreneurship has had for a while. And I say this as an Australian – I am that proud to be part of the UK scene.

I think the debate is worthwhile, but hope that people aren’t so closed minded to not only the benefits of exposure, but the fact that perhaps, we are showing off how great we are, rather than selling ourselves cheap.

Interesting post, I just wanted to add an Australian/US perspective, based on our experiences here at http://www.copperproject.com

The startup market in Australia is non-existent as far as we’re concerned. which is why we’ve been self-funded and profitable – by necessity – from day one. Copper Project is one of the web’s best Project Management Software apps, we’ve been around since 2001 (predating Basecamp), our customer base is almost entirely US-based, yet we’re still dwarfed by the traffic that our US-based competitors have.

We receive limited blog exposure, have yet to be techcrunched/gigaomed (while curiously another competitor with ties to Mr Arrington have) and it was only when we started to expose ourselves to the US market (poor phrase choice I know) with a local presence that we’ve been able to have our cake and eat it too.

Our operations are Melbourne/Perth/Singapore (5 staff) with a satellite office in San Francisco. So we’re able to take advantage of the better USD with development, claim GST expenses without incurring GST on sales (which occur predominantly overseas) and the Australian government is good enough to provide a 50% rebate on international marketing expenses.

There are more factors at play here though I think. The lure of the valley is a very real one when you consider the ease at which good ideas (or business plans) are funded, and the purchase-ready US consumer is a lot easier to deal with than their anglo counterparts in my experience. However while our model is profitable, there will always be that niggling “what if” factor of picking up and relocating stateside.

In its nature tech finance markets are fickle/short term players, so by extension it shouldn’t surprise you that the UK government et al ignore supporting local industry, it is a shame though.

I’ve freelanced for two UK based start-ups who are doing very nicely thank you and don’t care about registering on Google’s radar.

In many ways your article is about defining what success is and being comfortable with that definition. For the two companies I’ve worked for profit has equated to success and the purpose of the business in not to sell a loss making company for millions to a cash rich corporation.

Wow. That’s Spot on.

And Yep, I did take a look at the agenda, and it seems like a govt and corporate funded trip with more of a PR agenda than anything. I’d be surprised if anything comes out “sparing three hours” a day to meet up with people, crossing oceans to get there.