Europe has historically been a much smaller player in the world of high tech Unicorns (Companies with $1 Billion plus valuations) when compared with the US. Since the year 2000 Europe has averaged 3 new tech Unicorns a year while the US has experienced at least three times that number. However over the last 18 months Europe's numbers have improved dramatically with over 15 companies entering the ranks of tech Unicorn.





There are many reasons for Europe's historic slow start out of the gate when compared to its US and even Chinese competitors. First off Europe does not have a history of "American Dream" like, rags to riches bootstrapped startups; traditionally major corporate powers have evolved from previous State owned or semi state bodies. There has been a level of entrepreneurial immaturity and this has often led to European start ups making poor decisions when it came to raising seed capital, organizational structures and dealing with VCs.

However a very interesting trend is beginning to emerge which may indicate that the Europeans have not only gotten their act together but are now beating the Americans at their own game. Not only are European companies now raising money at record levels but newly listed European tech unicorns are experiencing a 20% share price rally in the month following their IPOs compared to 6.7% for their American counterparts. One of the big reasons for this may be that European IPO valuations are averaging half the initial valuations of their transatlantic cousins. European Unicorns seem set on building their values on post IPO results rather than pre IPO blue sky!

However it is likely that there is much more than German conservative opinion or French risk aversion to these results. It is now commonly accepted that the future of "the internet of everything" is going to be mobile platforms; Europe can boast 237K professional mobile developers compared to 186K stateside. But it's not just in numbers that Europe has a competitive edge, in terms of both founders and employees Europe has some strong fundamentals, which are key to helping Startups succeed.

In terms of quality of corporate Founders Europe is developing a robust community of "serial entrepreneurs" with over 62% of founders polled in a recent Slush & Atomico survey responding that their current venture was not the first company they have created and led. Another interesting fact is that it appears that European entrepreneurs are becoming more and more comfortable with risk and failure. Europe is importing US style Chapter 11 laws for the first time, forced debt restructuring on reluctant creditors and debt-to-equity, the demands for all of which indicate that Europe's entrepreneurs are becoming a lot more comfortable with the idea of taking a chance and if it fails, taking another!




Aside from a blossoming community of entrepreneurs Europe's ranks of tech employees have a major advantage over their American contemporaries; the youth of Europe are firmly committed internationalists. Thanks to the Schengen agreement and the emergence of budget airlines Europeans grow up traveling early and then continue to do so frequently. They experience different cultures, are exposed to new ways of thinking and learn to adapt to changing circumstances quickly. All of which makes this crop of European tech stars ideally suited to life working with and for a startup!

This newly found confidence is having a dramatic change in the demographics of the world's tech startup map; 62% of European tech founders now express confidence in setting up and maintaining their corporate residence in Europe with only 12% expressing a need or desire to up sticks and relocate to Silicon Valley. This figure was dramatically different even 12 years ago when European tech stars so little hope of finding funding let alone success anywhere outside of the Santa Clara valley. And this change of perspective is having a dramatic impact on the statistics; for example consider the fact that London alone now has over 71K developers and Silicon Valley is home to 10K more developers.

It's important to examine the trends in education in order to forecast how these numbers will change over the coming decades. Europe is producing TWICE the number of STEM graduates as the US (and have done so consistently over the last 10 years). There is no longer any need for European startups to source highly skilled and experienced managerial or front line resources outside of the continent and MOST importantly these people are graduating in most cases with a FRACTION of the student loan debt as their American counterparts.




All of this has not been lost on the institutional investment and venture capital groups. Deal volume in European startups has doubled over the last five years, with the more telling fact that Series B+ or later stage financing has also doubled in the last two years. The word is out; European Startups have the right resources, proven leadership and a now proven track record of delivering for shareholders! The last remaining barrier for these Euro Unicorns in the making is gaining access to early stage capital on competitive/fair terms. Tune in to my next article where I detail how in this area too Europe is leading the charge!



European Unicorns' time to shine!

At the beginning of October I was having a conversation with Max Keiser, well-known financial commentator and founder of Crowdfunding platform StartJoin, about the recent plateau in the price of Bitcoin. I was an early adopter of Bitcoin back in late 2009 and have experienced many new highs and lows along the way. Thus far 2015 was turning out to be a rather boring when it came to the price of Bitcoin, in the first week of January the price was in the $250 range and by October 15th it was trading around $250.

Suddenly in a very Max Keiser-esque way (If you watch ‘The Keiser Report’ you know what that means!), “Bitcoin’s gonna double!! Soon!” was blurted out.  After inquiring why he felt this was likely, we began discussing the collapse in Chinese equities--which was then in full swing (Shanghai’s Composite Index had dropped over 30% and massive government intervention had failed to generate any significant uptick). Max pointed out that as Chinese investors were fleeing equities and with new capital controls being rolled out by the Government on a daily basis AND considering China has a robust Bitcoin infrastructure already in place, it was likely that Bitcoin was going to provide a medium for significant capital flight.




I decided that the logic seemed sound so I made my first real Bitcoin purchase of 2015. Well the hypothesis proved to be sound and Bitcoin went from my purchase price of about $246 to over $500 in less than 30 days. Oh, yes, happy days were here again--as far as the Bitcoin faithful were concerned! After having suffered through 18 months of declining prices, media bashing and talk of “the end of Bitcoin” (again), the community was jubilant, many were sure that THIS TIME we were going to the moon!




That’s when I began to get my sell orders ready. If there’s one thing that discourages me from a bullish sentiment its absolute fervor in the face of conflicting facts. Often when it comes to investments it is an emotional tie into the asset class that gets people into trouble. When it comes to assets, being a fair weather friend is usually the best advice. I found myself looking at Bitcoin during this period,  and once a 50% profit had been achieved, I began to ask myself is it likely that this run will see the price double?

There were some important factors to take into consideration when it came to discovering the answer, the first revolved around the question of what these Chinese investors would do with their Bitcoin once it had arrived offshore. Was it likely that they would retain these holdings in Bitcoin or was it more likely that once Bitcoin had fulfilled its purpose in getting the money offshore that they would liquidate these holdings and invest into assets, which have traditionally attracted conservative Chinese investors (property, currencies, sovereign bonds and US treasuries in particular).

Another group to consider were those people who had purchased Bitcoin in the last Bull Run that saw the crypto currency head above $1,200 and had been left “upside down” as the price corrected down to the low $200s. It would seem likely that these folks would jump at the opportunity to offload their Bitcoin at or above their purchase price.

To be perfectly honest, there was one point that helped me make the decision to sell and that was simply that I did not believe the Bitcoin infrastructure had matured to a level yet which would justify a price point support level above $450 for very long.

Now, before the Bitcoin faithful get too upset, let me state that I am incredibly bullish in the long term about Bitcoin. I believe that Blockchain technology will be the largest technology disruptor the world has seen since the emergence of the Internet. There are many signals that indicate that the future of Bitcoin is going to involve increased adoption worldwide and therefore a higher price (when priced in Fiat currency) in the future. One of the strongest of these indicators is the dramatic increase in daily transaction volumes.




As I write this, the Bitcoin’s dollar price has again been rising and is now above $370, I believe that the upcoming Federal Reserve December FOMC meeting is playing a role here (as it is with most other asset classes in the world!) and it wouldn’t surprise me to see the price drop once more if the FED opts to continue with its disastrous policy of zero interest rates.

However, regardless of continued fluctuations in the price of Bitcoin through the end of 2015 and on into 2016, there are a few things that are certain: Bitcoin adoption is going to continue to grow at a rapid pace, the volume of daily Bitcoin transactions will continue to grow, main stream financial entities will continue to recognize the power of Bitcoin and Blockchain technology and drive initiatives in that space. One factor that I believe will drive Bitcoin in the main stream will be the continued growth of Crowdfunding and the rapid adoption of the crypto community of this exciting FinTech innovation. This, along with the other reasons outlined above, form the bedrock for the reason why I am, despite the volatility in price and a continuous onslaught of negative media from the main stream media, more bullish on Bitcoin than ever!




I sold Bitcoin cos I'm so bullish on it!

Strolling around downtown Sydney these days it's practically impossible to walk too many steps without spotting the tell tale signs of a recently relocated Irish immigrant; a pasty whiteness on the upper arms and legs coupled with a sunburnt face, forearms and shins (or as we call it in Ireland "A grand tan!"). Yes Australia has been the recipient of a large chunk of Ireland's latest diaspora since the Celtic Tiger collapsed in 2010 and despite thinking they had found paradise down under, these unfortunates are about to experience their second major economic collapse in the space of seven years!

The story is well told by this stage, Ireland's Celtic Tiger economy which had begun in a very healthy, export driven way, soon gave way to excesses which could no longer be supported by natural, organic growth and therefore the need for a bubble emerged and in Ireland's case it was in property. At the height of the bubble conservative estimates put over 17% of the entire Irish workforce being employed in the construction industry! It was clear as a bell that this was not going to end well for the country in general and those construction workers in particular; sadly this is exactly what ended up happening. Of the nearly 10% of Ireland's young people who emigrated after the collapse, a disproportionate number were people who had worked in the construction industry. 

Australia was an ideal relocation spot for these émigrés, a global commodities boom and a burgeoning property market meant that these architects, builders and surveyors would have ample work and they could leave behind them the negative equity and dole queues for a brighter future. For the past four or five years things have gone according to plan. In areas such as Sydney and Melbourne a shortage of supply and soaring property values meant that the demand for new homes was increasing year on year and Australia's status as a mining powerhouse would ensure a constant influx of new immigration to support the housing market. Four words were bandied around in Australian financial and political circles that should have sent chills down the spines of any Celtic Tiger survivor... "The fundamentals are sound".

In 2011 I began writing about how those leaving Ireland's shores for financial salvation down under might discover that Oz's wonderful wizard may turn out to be the same type of inept politicians behind the curtain that reigned over the Celtic Tiger. The fundamental strengths that underpinned the Australian economy were tied up in two symbiotic industries and a correction in one would not only topple the other but bring down the entire economy. It was a 50/50 bet whether it would be mining or housing that corrected first BUT there was probably no surer payoff in the global market for this decade. A review of how Australia ranks in terms of exposure to commodities as a percentage of GDP shows how dependent the country has been on mining to prop up the overall economy:




In the end it appears that as is usually the case with bubbles, Australia's boom will not come to an end thanks to a domestic event but thanks to outside forces. The global deflationary tsunami which has hammered commodity prices from Precious Metals to Crude Oil has popped Australia's mining boom and China's "Great Fall" has only exacerbated the problem. Australia's dependence of China to sustain its mining industry and therefore its housing bubble becomes evident from the two following charts:



As you can deduce from the chart above Australia is set to be THE country most negatively impacted by China's major correction, but even if China's correction were short lived Australia is now THE most exposed country in the world to the deflationary forces sweeping the world's commodities markets. While it trails behind Russia, Venezuela and Chile (all of whom have suffered major corrections over the last 18 months) Australia's exposure to non oil commodities (minerals such as Gold, Copper, Iron ore) is second only to Chile in the developed world. In other words not only is Australia heavily reliant upon an economy which has contracted more swiftly than any other major economy over the last 18 months (China), it is extremely over exposed to an industry that is now generally accepted world wide to be in the midst of a major correction.

So how is this impacting the domestic economy in Australia? Well for a start the collapse of the mining industry (http://www.bbc.co.uk/news/world-australia-30584123) has put a halt to the rapid growth in the size of the workforce and this is putting pressure on GDP growth forecasts. The collapse of Australia's healthy growth has introduced the temptation to rely on artificial growth in areas of consumption and debt (http://www.abc.net.au/news/2015-11-24/treasury-cuts-economic-growth-forecasts-decreasing-workforce/6970456). The Reserve Bank of Australia has already declared its intentions to keep inflating the housing market by maintaining a record low rate of 2% instead of letting the slow down in the economy cool the property market by allowing rates to rise to an appropriate level. Remember Ireland's shift from export growth to housing bubble?

The Australian Dollar has dropped over 36% since 2011 which would be good news if it spurred growth in the exports market but as outlined above Australia's exports (and the potential for future exports) are not looking very healthy. 

So where does this leave our sunburned paddy down under? Sadly in all too familiar circumstances. The decrease in Australia's labour force (especially in its high paid mining industry) combined with the imminent collapse of Australia's export market is sadly far too much downward pressure on the all too bubbly Australian housing market. Where as Ireland's Celtic Tiger housing boom came to a screeching halt due to the worldwide credit crunch post 2008 Australia's housing bubble will collapse due to a sudden shock drop off in demand. While this very weekend auctions of homes in Australia will hit a record high in both Sydney and Melbourne the key fundamentals indicate that what we're seeing is the peak of the market and we are on the verge of seeing a MASSIVE collapse in Australian real estate values! Australians are leveraged to the hilt and record low interest rates coupled with stagnating wages mean that while a temporary flight of Chinese investors into Australian property could prop up prices for a couple more years we're looking at a matter of time before demand for housing drops off a cliff. 

It appears for many of Ireland's Celtic Tiger victims, their escape from one nightmare of over priced housing, negative equity, consumer debt and unemployment could have landed them right smack dab in the middle of another! To my fellow Irish down under, you've been here before, you know the warning signs are staring you right in the face. Don't ignore your gut this time! It's time to liquidate your overpriced properties and wait for this storm to pass. Wait for the opportunity to buy low!


The unfortunate 'Double Irish'

I remember the first time I can recall seeing Irish economist David McWilliams on TV.  It was the late 90s, I was half-way through my degree at college and things had never been better in Ireland. We were at the beginning of what would later be called “the Celtic Tiger.”  Ireland was winning its wealth from the rest of the world by having a low cost, agile workforce and a trade surplus and the Government’s disastrous policy of asset stripping the country via the property market to keep the good times rolling had not yet begun. When I heard McWilliams speak, I remember thinking, “This guy doesn’t sound much like an economist… sounds like an ordinary punter giving his opinions on complex economic issues in plain English.”

That is the brilliance of the man. McWilliams has an ability to highlight the fact that in economics “the important things aren’t that complex and the complicated things aren’t that important.” This is the vibe that comes across in each session at the annual Kilkenomics event that McWilliams co-founded. Hosted in the charming little city of Kilkenny, Ireland and billed as “Davos with laughs,” Kilkenomics aims to bring the often complicated, and lets be honest--rather boring topic of Economics, the science of how we are all affected financially, and breaks it down so that everyone from the broke student to the retiree concerned about their pension fund can understand.

During a session last night entitled “The Winner Takes It All: Why the rich are getting richer and you are left behind.” The panel included the FT’s Martin Wolf, Dutch Journalist Joris Luyendijk, Indian professor and businessman Vikas Nath and financial commentator Stacy Herbert. The discussion focused on the growing wealth and income inequality gap that is becoming more and more apparent in the western world.




While there was general consensus that inequality in wealth and income is a problem, there was less consensus about what could be done to ameliorate the situation until Herbert made the most important point of the evening. She began by pointing out that in the UK (as well as in most parts of the West) traditional banks tend to opt for investment in property rather than innovation and Startups. The reasons for this, Herbert pointed out, were simple. In cities like London, a house can provide up to a 40% return in the space of a year or two, where as, historically, investment in Startups and new business came with a high level of risk and failure. And in an era where those who are cash rich due to policies such as ZIRP and Quantitative Easing, the idea that risk taking is an integral part of speculation no longer holds true!

It’s a long established fact that will be familiar to any entrepreneur who has ever sat across the desk from the bank manager hoping to secure funding, that all too often the focus of such conversations centres around collateral and personal finances rather than the brilliance of the innovation or how quickly it will disrupt an existing growing market.

Indeed even in the US, where the entrepreneurial spirit is far more mature and developed than in Europe, it is not in the world of traditional banking where one will find the financial beating heart of Startup culture, but in the ring fenced, tight knit Venture Capital community. If one takes a quick look at the enormous successes which have sprung up in the US over the last two decades two facts will become obvious: 1) the vast majority of these successes have been in the Tech Space, and 2) the original funders for most of these ventures usually come form the same short list of tech VC superstars. Firms such as Benchmark Capital, Andreeson Horowitz and Sequoia Capital, as well as individuals like Peter Thiel or Sean Parker seem to always have the Midas touch when it comes to finding the most successful Startups. Is this a case of titanic brilliance and foresight or is there something more grounded in the reason behind the success? While there’s no doubting the brilliance of the minds behind many of these success stories there is a more geographical reasoning behind their continued success.




Any tech Startup in the second decade of the twenty-first century knows that in order to attract capital in a significant way, it’s going to have to go to Silicon Valley and network with the titans of the VC community and make its case. And that’s the secret sauce for those very same VCs. The reason they are able to pick winners so consistently is because ALL the firms that are likely to succeed SEEK THEM OUT.  It’s always going to be far easier to pick the winners from the losers if all the participants volunteer to let you look under the hood and compile a matrix of features, strengths and weaknesses from among all the participants.

This position of strength often enables the VCs of Santa Clara and San Mateo counties in California to gain a very favorable equity position in promising Startups for relatively little upfront outlay and ensures enormous RoI consistently.

So it would appear that between apathy from traditional banks who are focused on more brick and mortar investments and a limited, close knit community of Venture Capital firms, there are very few options for a burgeoning tech Startup… until now that is!

The emergence of mass high-speed internet access coupled with the power of blockchain technology has created a financial phenomenon which is quickly becoming what I believe will be the most disruptive and important financial innovation of the last 250 years. Rewards based and Equity crowdfunding platforms such as StartJoin and Bank to the Future are creating something which the market hasn’t seen before: a truly global marketplace where entrepreneurs and would be investors can connect and help bring their Startup and investment dreams to fruition.

The Internet has made it possible AND the blockchain has made it incredibly cost and resource efficient to create such a global marketplace. What we are seeing as a result is the democratization of finance and corporate funding. The democratization of finance and corporate funding.  No longer are we living in a world where a very small few control the purse strings to the early stage funding that companies require to morph a brilliant idea into an industry changing platform. Whereas in the 20th century entrepreneur’s had little option other than to approach a small group of individuals and firms in attempts to acquire a large amount of funding, in the 21st century, and thanks to the revolution of blockchain technology budding, would be entrepreneurs can now market their products and services to the masses with the aim of acquiring a small amount of funding from each one. After all it’s a lot easier to ask 1 million people for a dollar than asking one person for a million dollars!




Crowdfunding - An elite strategy for the masses

On a cold wintery evening, sixteen months ago, I found myself walking through the streets of Shoreditch. Max Keiser was leading me to the first offices of a fledgling crowdfunding company, ‘StartJoin,' (I have the honor of stating that I was the first non sweat equity investor in StartJoin). Max was very excited about a new project that was his team were working on which had its naissance in merging crowdfunding with the still green crypto-currency world.

When we arrived at the office, I was introduced to two bright young men: Jamie Scott and Simon Shaw. Along with Max, they formed the team behind this exiting new startup. Jamie and Simon began to explain to me about the new branch of the Start empire that was then in development. This was the first time, that I can recall, that I heard the phrase 'StartCoin.'  I will be the first to admit that at the time the thought, Here comes another alt-coin flashed through my mind. The pitch was in its early stages and I readily admit I was not smart enough or visionary enough to grasp the enormity of the big picture that was being painted for me. If I had, I would have slapped my check book down on the desk there and then and secured as big a stake as I could convince Max and the lads to sell! When I get around to writing my memoirs, that decision (or lack of) will get a mention under the title major mistakes!

Flash forward 12 months and the Start empire is far more developed and apparent.  Let me be CRYSTAL clear, what I believe were seeing here is the foundations of a mega fin-tech corporation!  There is no other alt-coin out there in the market today which has developed an economic system or infrastructure which is as developed or creates real world value as StartCoin. Take a look at the following image which details the emerging companies which are using the power of StartCoin to facilitate the funding of new and exciting startups; providing them with a way to connect in a secure, easy and nearly cost free way with their clients in order to send and receive payments.




My belief in the Start ecosystem is to a point that I am in the process of spear heading the launch of a new fund: StartFund,  its uniqueness in the world made possible thanks to StartCoin and the 'Start' family of companies. StartFund is going through the final stages of bureaucratic and administrative setup (sadly in this world we are still required to deal with 19th century technology and efficiency when dealing with Government entities).

StartFund is leveraging StartCoin to access all markets and all opportunities in the global market instantly. By using StartCoin as the underlying platform for remittances, purchases and payments, StartFund will be able to move more quickly and with a greater agility than any previous fund to date. There are effectively no markets we cannot access, no asset class that we cannot profit from. Our clients will be able to leverage the power of crypto graphical communication and security to access their accounts securely in real time, 24/7. Returns will be delivered to clients anywhere in the world instantly and they can then use all of the amazing tools that the Start Family affords in order to make purchases, pay bills, send money overseas or contribute to funding new and exciting startup projects through StartJoin.

The major benefit that StartFund has over a traditional fund is the access to opportunities that the Start platform provides. One of the powers of the Start platform is to help take a company from inception and seed capital (StartJoin) all the way to a public offering (Bitcoin Capital/Bank to the Future). Thanks to StartCoin, StartFund will be able to participate in these exciting opportunities, along with other traditional assets, whether they be in the FOREX, equities or commodities' markets.

Now that StartFund has wrapped up its administration setup we will be launching our full fledged site and introducing a crowdfunding campaign on StartJoin which will offer the public an opportunity to participate in the exciting journey that StartFund is about to embark on. In the near future, StartFund will also be offering an opportunity to benefit from this innovative fund as well as providing a return, which will be a minimum of 10x, the return of the S&P500 for 2015 to date.

Its important to note that StartFund, much like the entire Start platform itself, is not just about making money, its about giving back and helping to Start revolutions and Join revolutions. With that in mind StartFund will be using its profits to help make peoples dreams come through by backing the entire StartJoin leaderboard to funded!  Once a year, to celebrate the very first StartCoin transaction, StartFund will help celebrate Start Day by backing EVERY single project listed on StartJoin.

Those of you who follow me on social media know that I have made it clear that the price of StartCoin is not something that concerns me. I have examined the Start platform, investigated the opportunities that it creates, and quantified the market needs that it satisfies. I am buying StartCoin not because I believe I can flip it in a week, a month, or even a year, Im buying it because it's facilitating an entire fin-tech revolution, and I want to be right in the middle of that revolution! StartCoin is so much more than a cryptocurrency, its an entirely new financial ecosystem!


Why StartCoin? Why now?

 
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