• CloudStorm event in Paris, December 1
CloudStorm provides a showcase of cloud computing solutions covering a wide range of areas including application development and deployment, infrastructure, storage, video management and SAAS from leading European technology vendors. It is free for attendees to go to and it is paid for content – i.e. each sponsor/vendor pays for their 5 min presentation slot. These are not really startups paying to pitch, but it is actual larger CloudComputing vendors paying to promote themselves to an audience of probably startups and others. So from that point of view it could be useful. The presentations are followed by a panel discussion with visitors invited to a mini expo and networking party.

• Superfeedr have been selected as a startup to present at Le Web. And, like any startup, they got 2 tickets. But they had the idea to offer the other ticket to the developer who creates the best application out of their “Rivers” feature. The rivers, is an atom-stream (a comet-like HTTP connection that never ends) along which we stream new entries at a frequency of at most 1 every 3 seconds. More info here:

• Silicon Valley Comes to Cambridge this week and still has a free debate on Thursday night which you can register for featuring some awesome speakers.

• There is the free UKTI Pitch Workshop on 30th November, in association with TechCrunch Europe. Contact Petra Johansson on petra@twistedtree.co.uk for details

• There’s a Mozilla party on Thursday night in London but although it says tickets are £5, you can get in free with the code “mozillavip” or go here.

• Heroes of The Mobile Screen looks interesting.

That’s what’s happening on the comments on my post yesterday about the @Dinner_Guest Twitter user who is tweeting like he’s a murderer in Brighton. I figured it was interesting enough to do a quick post on it. Maybe I’ve been sucked into a dumb marketing campaign, maybe I haven’t – I’m not overly worried. I’d rather put something out there that I think is interesting than not, and I knew for sure that in this case the community out there would be great at looking into this.

Thus, one Commenter, Scott Gould has some great thinking about whether Dinner Guest is real or fake which deserves repeating below. It just goes to show that this kind of community-powered journalism has so much potential.

1. IP Address – hello???

2. Uses Web, then does Twittelator. Clearly follows ppl. Then asks “How do I follow?” after people had said that he seemed a bit too proficient in Twitter – of course the fact that he already followed people shows this is a setup.

3. He thanks @f0rged for saying how to follow people using the web method, even tho he is using Twitterlator.

4. Uses American Psycho allusions, including the name dinner_guest

5. Speaks using classic ego talk, as if he is Patrick Bateman or Hannibal Lecter or something, unlike actual Serial Killers.

UPDATE: The profile in question now reads: “A fictional character born out of an artists mind. A meme experiment & analysis”

Hamburg based business social network XING continued to grow revenue and EBIDTA in the first nine months of 2009 while profits were smaller than last year. Total revenues from January to September amounted to €33.2 million – or $49 million – up 32 percent from the same period last year (€25.1 million).

XING is floated on the German stock exchange and this new investment by Burda simply re-inforces XING’s profile as a German company. It’s tried to expand internationally, mainly in Asia, but it looks locked into its roots.

The question is, can it maintain its position in Germany forever? Asked recently if LinkedIn would buy XING to further it’s expansion in Europe co-founder Konstantin Guericke said “It’s just not necessary. LinkedIn grows “by the size of one XING every three months”.

@Dinner_Guest is tweeting some extremely dark stuff. Most if it is decidedly not suitable for work, and read like passages from the novel about a killer, American Psycho. Of course, this is no surprise – Twitter is big enough now to attract all sorts of crazy people.

And normally you could dismiss such stuff as a prank from some teenager with an over-active imagination. It could also be some ridiculous viral marketing campaign for some slasher movie about to come out. But what is disturbing is the whiff of authenticity about the tweets.

They start innocently enough: “i am new here i hope i fit in, not sure how much to say about who i am” (9:53 PM Nov 10th from web)

But gradually it becomes apparent that Dinner Guest is tweeting about the real (or imagined) event of kidnapping a man, imprisoning him, injured and bleeding, in a lock-up and then disposing of the body – all in gruesome detail.

What is at least as disturbing is that this macabre Tweeter mentions real places, such as Brighton Beach.

Now, clearly this could all be part of some sick fantasy. The trouble is, should we take that chance, or do the Police in Brighton need to know that they have a potential serial killer on their hands who has taken to Twittering his killing spree?

It’s clearly not possible to know either way, until real-world events start to match up with Dinner Guest’s Tweets.

Personally I really do hope it’s a sick joke. The alternative is disturbing to contemplate.
Whatever happens it’s probably fair to predict that once the mainstream media finds out about this – as they will – there will be yet more calls for “Policing Twitter”, and other social platforms more widely. As usual, the question I always ask is – so, you’d rather lock this stuff down to the point where it goes underground or just never appears? As hard as it is to read this kind of content, I know which I prefer.

But the conversation there is distinctly Silicon Valley oriented. So I am excited to learn of a new aggregator called Uni Startups. Clearly it’s aimed at people creating startups while they are at university, but being built on Slinkset, it’s already up and running and pulling in stories. It’s also got a widget you can embed, which I’ve done below.

I want to encourage everyone to share this site and get some of those students on the startup road.

Update: The site was put together by @Isaac_Lewis

This week is Global Entrepreneurship Week. This actually started out life as an initiative by the UK government, internally to the UK. But cleverly they have extended it globally and brought on partners. So all over the world there are events going on to promote the idea of entrepreneurship.

At the same time, governments all over the world are bailing out banks. Either that, or the banks are allowed to fail, taking startups and small businesses with them. It’s an impossible situation, but that’s what’s happening. Many say we are in for even more pain. Already millions are unemployed across the planet. None of this is going away anytime soon.

The answer lies, of course in giving people the ability to say, not “Gizza job“, but “I made a job for myself. I’m making a company, my own.” Setting alight in them the idea that they can creatively disrupt their circumstances to produce something new.

But, of course often startups require capital to just get going.

A couple of years ago the UK government disincentivised high net worth individuals from investing in startups, by removing a clause on rules governing capital gains tax. In the last year France has enacted a new law to incentivise wealthy people to invest in startups. The German government is known to be looking at copying the law, it has been so successful. In the UK? Not a whimper of such a law is being proposed. So far most of the talk has been about how wealthy people, potential Angel investors – who in the past were incentivised to stay in the UK and invest their money a great deal more flexibly than a bank ever could – are to be taxed even more.

There’s more. The government here used to have something known as the Small Firms Loan Guarantee – this used to allow banks to loan up to £250,000. The banks put in 30% and the Government underwrote the rest. It was simple to apply for, it just need sponsorship by a friendly bank.

The government converted into this into the The Enterprise Fund Guarantee. I’ve spoken to many entrepreneurs and they say things like “frankly, it’s impossible to get.“ These funds are meant to go up to £1 million – but you can imagine how few people are actually getting them in the current climate.

The irony is that the government-owned banks are now, anecdotally, the worse at funding startups.

We’re now back in an era which resembles the 1970s era of old, slow moving industries unable to come up with the answers for the population. We’re in a downturn era very similar to the same time when Punk Rock was born. Punk was creative disruption made very visible. And it gave rise literally to a New Wave of music.

How does all this relate to a calendar being sold for a technology charity which features semi-nude entrepreneurs from London? I’ll tell you how:

These people are the continuation of Punk Rock, because they represent creative disruption. Want me to spell it out? They don’t give a fuck. They think nothing of disrobing for a charity, whether other people think it’s shocking or not.

And that’s what startups are about: not caring that someone says you’re wrong and it’s not a good idea. Just getting on and doing something. And that’s what Punk was about. Picking up a guitar even though you couldn’t play.

These people are not saying – give us money for this charity. They are saying – we’re going to be creative about this. We’re going to do something which makes you look, and in doing so, see this charity. Check out how many pages there are on twitter for LDNnudetech.

Creative, disruption, startups. Just go and Google it. There’s even a blog and upcoming book about it.

I was reminded of this when attending a recent event by the British Computer Society, “The Chartered Institute for IT”. A, shall we say older, representative of theirs kept on going on about how people didn’t talk about “IT” enough and about how “IT” needed to be more recognised.

At the end I put my hand in the air and said, look, people are talking about TECH all the time, not “IT” – look at how much the media is obsessed with Facebook and Twitter. Look at how mainstream social media has become and how people now buy handsets based on Twitter and Facebook. That is ALL tech. The ‘problem’ for the BCS is that it’s not “traditional IT” and – unfortunately – it’s rarely coming from Britain.

“Tech” and tech startups are really the Punk response to the staid, corporate world of “IT”.

And guess where it’s coming from? It’s largely – at least in the last few years, and discounting Skype – coming from Silicon Valley, a place where they too don’t give a toss unless you are trying to change the world. The place where Hippies and Beatniks came from to shock America. Creative Disruption.

So tonight, those who want to go to the launch of this #LDnnudetech calendar, buy one and support their fellow techies in a less fortunate part of the world, will do so. Some of them even got a bit semi-naked for it. Ooooer. If you want to meet them then go to the Velvet Room at Sway in Covent Garden at 7pm. Here’s more:

Nude London Tech Calendar from Leapanywhere.com on Vimeo.

At the same time there will be a Black Tie awards dinner across town in the Science Museum to celebrate the iAwards. Astoundingly this is the first ever awards for startup innovation in technology and science in the UK. You know who started it? James Caan, an entrepreneur and now a famous member of the BBC’s Dragons Den show. Do you know where James came from? A very poor part of London. Do you think he cared what people thought of him when he started out as an entrepreneur? No. He just did it.

Creative disruption.

P.S. I think I might start a band called The Tech Pistols. Who’s in?

At the last minute we’ve secured three free tickets to the event (I’ll be there moderating a panel on venture capital and realtime), so we’re delighted to give these away to anyone commenting on this post saying they want to go, and why. These are normally £425. So get commenting. We’ll pick someone randomly.

Steve has some awesome credentials. Aside from starting up the well-regarded independent gadget blog last100 (formerly a part of the ReadWriteWeb Blog Network) which he’ll continue to write, he’s written for some of the best titles out there including The Guardian, Macworld UK, Mobile Industry Review, TES, ZDNet and of course ReadWriteWeb. In particular he wrote the excellent ZDNet blog ‘The Social Web’ from 2006 to 2008. And to top it all off he previously wrote and directed the documentary film ‘In Search of the Valley’, which interviewed many leading Web 2.0 people in Silicon Valley and was released in September 2006. It was highly recommended by Mike Arrington, FYI.

As usual I’ll remain the first port of call for TechCrunch Europe editorial, but feel free to pitch Steve stories as well. His contact details are on Crunchbase, below, but he is @sohear on Twitter and he can be reached on email here.

The meeting came literally days after Rupoert Murdoch said he was considering withdrawing his vast newspaper empire from Google’s index, despite the possibility of losing a lot of traffic.

What was discussed provides a glimpse of what newspaper publishers may do next, and how Bing will collude in this new war on Google.

We’ve confirmed with our sources that on Tuesday this week, Microsoft’s Peter Bale, Executive Producer of MSN UK, walked into the meeting flanked by two Microsoft lawyers. He made a presentation to representatives of newspaper publishers such as the Financial Times, News International, Associated Newspapers, Germany’s Axel Springer and publishers from Poland and Italy, among others. Bale is possibly the perfect man for the job – a respected, well liked former journalist who headed up the Times Online before jumping to MSN. As such he is Microsoft’s point man when it comes to talking to big publishers.

From what we understand from our sources, the pitch was clear. Microsoft plans to launch an assault on Google’s flank, by cosying up to major content providers, especially newspapers, that feel hard done by Google News. It plans to use Bing as a way to entice them out of the Google eco-system, into one where, increasingly, the content of major newspapers could well be found more often on Bing than on Google.

First off, Bing plans to put its money where it’s mouth is. Our sources say Microsoft has pledged to help fund research and engineering into ACAP to the tune of about will put £100,000. This is the more granular version of the robots.txt protocol which has been proposed by publishers to enable them to have a more sophisticated response to search engine crawlers. However, we understand that Microsoft won’t be involved in developing the protocol, just the financial funding.

For years, Google has characterised the debate about search engines as “you are either in our index or not in it, there is no half-way house.” But the Automated Content Access Protocol (”ACAP”) proposes a far more layered response, allowing full access or just access to some content of a site. Unsurprisingly, it’s been developed by a consortium of the World Association of Newspapers, European Publishers Council and International Publishers Association. Proposed in 2006, it has been criticised as being biased towards publishers rather than search engines, specifically Google, and few non-ACAP members have adopted the protocol. Some call it the “DRM of newspaper web sites”. That said some 1,600 traditional publishers have signed up to using ACAP.

But if Bing starts to play ball with ACAP, this could change the game. Suddenly newspapers will have a stick, and a heavyweight enforcer in the shape of Bing, with which to beat Google. Google would have a choice – either recognise the ACAP protocol in order to get some level of access to newspaper sites, or just ignore it.

Back to that meeting in London, and during the discussion our sources say Bale talked about the possibility of giving big print publishers ‘premium positions’ on the Bing search engine. However, there is little detail on how this would work in practice or what revenue share would apply.

A further point of potential conflict is how Bing dolls out the search sweets to publishers. Our sources tell us that Italian and Polish publishers were hopping mad that the Bing European rollout – which started with the UK this week – will likely concentrate on the big European markets like France and Germany while leaving smaller markets to a much later stage.

In addition, the rise of the ACAP protocol could well signal new battles. The question is, will ACAP – the development of which is so far being controlled by newspapers – be used by Microsoft Bing simply as an indicator of how to treat a publisher’s site? Or would Microsoft help the publishers engineer ACAP into a kind of a rights management engine – with Bing becoming the central clearing house for content from traditional publishers? That’s not the case at the present, of course, as Bing wants to be a trusted partner. But it’s worth asking if it could happen in the future.

And who gets to decide who is a favoured traditional publisher and who isn’t? Bing, or a newspaper-heavy body like the European Publishers Council? By the sounds of how discussions went this week, it’ll probably come down to a simple question: do you have a big printing press, or don’t you?
We contacted Microsoft for comment but a spokesperson said that they had “no comment” to make.

Mike Butcher: David McClure, you’re known as the man with 500 hats. Explain what you do.

David McClure: Founders Fund is my primary hat at the moment and I’ve been helping them run an early stage investment program called FF Angel, which is basically a $2 million portfolio that we’re investing in companies at around $100,000 average, between $50,000 to $250,000. We’ve done 12 investments out of that fund to date; we’ll probably get to about 18 to 20 by the end of the year.

Separately, I helped run the Facebook Incubator program this summer, fbFund REV where we were doing sort of a Y Combinator TechStars-style program and we had 25 companies in that program, 22 that we put money into at around an average of about $35,000 to $40,000. So kind of like an incubator model and a seed stage model prior to doing more traditional series A&B investments.

Mike Butcher: Is that a new model? A new kind of approach in the US?

David McClure: I think it’s an approach that’s been pioneered maybe three, four years back. Certainly Y Combinator started doing the incubator model, at least the more modern form of it now. There is also TechStars and Seedcamp in Europe, and a few other vehicles like that. Then from the more seed stage investment program, Ron Conway’s been doing a lot of that stuff, either as an Angel or as a small fund for quite awhile. First Round Capital has been doing more of that. Union Square and maybe First Round Capital are at the larger size of the seed funds and then other smaller vehicles and individuals, Mike Maples, Jeff Clavier, Aydin Senkut, a few others that are managing between $10 to $50 million funds.

Mike Butcher: So you organize the GeeksOnaPlane event.

David McClure: Yep.

Mike Butcher: First of all, you did GeeksOnaPlane to Asia early this year –

David McClure: GOAP Asia in the late Spring/early Summer, in June. I went to Tokyo, Beijing and Shanghai.

Mike Butcher: And then you did Europe. So just explain what GeeksOnaPlane was.

David McClure: Well, originally it was way for me to go see my wife’s family in Japan on a regular basis and have someone pick up the tab! But actually along the way it’s turned into a really great way to network and meet with other startups and entrepreneurs and really, even more than just meeting people abroad, it’s been a great way to take people from Silicon Valley and other parts of the US and have a really interesting and educational trip. So it’s basically cultural exchange around entrepreneurship with a core group of startups, technologists, investors, and bloggers.

Mike Butcher: And where did you go in Europe?

David McClure: In Europe we had a very ambitious schedule. It started with a kick-off event in Washington D.C. where we met up with some folks from the White House and State Department and Commerce Department. Then we did Seedcamp in London which is their annual event for their new incoming class of startups. From London we went to Amsterdam for a conference called Picnic and then Berlin briefly. Prague for a little bit, in the Czech Republic. Then Paris where you also joined us and we saw a bunch of companies at Sofinnova’s offices in Paris and also held an Ignite Event and finally returned to London for the Future of Web Apps conference and then came back home.

So a very ambitious schedule in Europe; six or seven locations in just a few weeks.

Mike Butcher: So it’s probably hard to summarize, but what was some of your abiding impressions?

David McClure: Well I think there is a pretty active market still in Europe. Although, I think the popular perception is Silicon Valley is the centre of all startups and venture capital, there actually are interesting startups on the continent and in London as well. I think there is more to be discovered there. Definitely when we were in Prague and also in Berlin, I think we encountered pretty active startup communities there, but maybe not as much investment happening at the early stage startup level as traditionally in the US. So I think there are opportunities for people to do more early stage investing in Europe.

There is certainly plenty of people at the venture stage in Europe who are identifying those opportunities but I think more is probably to be done at the seed stage and maybe even incubator level in Europe.

Mike Butcher: And there’s been some talk about big VC houses like Intel Capital doing less early stage. So do you think that some people are going to fill that gap? I mean, we’ve seen the launch of PROfounders is in London looking at trying to invest across Europe, as well and one or two others. What do you feel about the situation?

David McClure: Well, when larger funds like Intel Capital say early stage they really mean series A and B, not so much Angel or even smaller seed stage. I think those statements are possibly being made more because other folks have already jumped into those areas and Intel and others being relatively large strategic funds they probably want to find places to put more capital to work in ways that move the needle for them. And I think, at the very least in Internet businesses, the trend is towards more and smaller exits. It’s pretty challenging for large funds to spend the time and energy necessary to get a meaningful return when most of the wins coming out are perhaps below $100 million exits and the ones above are very few and far between.

So I think it is sort of a natural evolution of the space for larger VC funds to pick and choose where they tend to place capital and at least particularly in the Internet space there is more innovation happening with smaller funds and at least the prospects for positive returns are much better I think for small funds than for large funds.

Mike Butcher: And specifically more towards the startups in Europe that you saw, being honest, what were some of the good things that you saw about startups in Europe and what were some of the bad things?

David McClure: Well I think the good things are that Silicon Valley has no lock on talent. So I met some very bright and promising young entrepreneurs, some of out of Eastern Europe, some from Eastern Europe who had moved to London as well. But I think there is a ton of talent coming out of Ukraine, Romania, a lot of the eastern Republics and actually even in France I was relatively surprised based on some of the tax policies, I would have thought that that wasn’t necessarily a favorable climate for startups but we met some very interesting and pretty smart folks over there — well smart in terms of developing their startups and smart in terms of optimizing for the road after tax benefit. But definitely some companies doing cool stuff and even making significant amounts of money.

Mike Butcher: What were some of the things that you thought that could be improved about the entrepreneurs or startups in Europe?

David McClure: I think just getting familiar with the process. So there is definitely room to do more in refining the pitch process and getting that down better.

Mike Butcher: You mean getting better at pitching?

David McClure: Yeah, and some of that is relatively basic so I don’t think that’s a huge difference. A lot of times people come to Silicon Valley and have those same issues, so it’s not something that can’t be addressed quite quickly. The other one, more structurally though, I think is finding the infrastructure necessary to support startups via Angel investors – not just capital but also coaching.

Mike Butcher: So mentors?

David McClure: Right. So I think you mentioned Brent Hoberman’s initiative which I think is probably right on target. Folks like him and others can add a ton of value but that’s probably more concentrated in London than other parts of Europe. And I know then we went to Prague there is definitely not as many folks supporting a relatively large community of technologists and developers there than I would have expected. I don’t know whether that was based on just culturally being less focus on entrepreneurship based on the history of that region than others.

Mike Butcher: So less of a deep history. So less layers of experience.

David McClure: Right. Yeah. And I think there is a little bit more of that maybe happening in Germany and a few other places, although still I think it’s a smaller group of folks that provide that and without their involvement I think you’d see much less activity there than otherwise.

Mike Butcher: How do you think that one could create a kind of ‘great leap forward’ in terms of the numbers of mentors, the numbers of experienced people helping and advising startups?

David McClure: I think there is probably a couple steps to that: one would be to create regional incubator programs in each of those countries where there is some small amount of capital available for people who are doing Internet startups. But in addition to the capital, getting more mentors, either folks who are based in those areas, or mentors returning from Silicon Valley or London and then spending time in those geographies.

So for example ex-Googlers or Yahoo or Microsoft or other folks who have connections to the Czech Republic, to take one country, might decide that they want to spend some time there. Or entrepreneurs who have been successful in London deciding to maintain those connections and build them up in home countries.

I think if you create that as the initial phase then more seed investment programs would happen. f you look at incubator programs as being less than $100,000 less or the equivalent in local dollars and then seed being maybe $100,000 up to a million or slightly more than that, those are spaces that I think in the last five years have been filled in by new entrants in Silicon Valley – and they’re just starting to play out in other geographies but haven’t fully flushed themselves out as much as in the States.

There’s, again, two parts to that. One is the investment capital and the other one is the expertise. I think in Silicon Valley there is a ton of companies that are doing Internet businesses at scale now and people who have been second, third, and fourth level sort of at those companies have gone out and done other things.

Myself, I was in a relatively low level person at PayPal, but there were so many people that were jumping out and doing cool things that there is a just a great model of behavior to follow and there is some hands-on experience that people from those companies can take with them. Not to say that they aren’t people from other countries in the world who are also in those environments but they’re not physical proximate to where they came from.

So a lot of the world’s talent ends up being at these large platform companies in the States or in a small geographic area or in London, perhaps, in Europe, maybe Beijing and other places in Asia.

Mike Butcher: So where are you going next with GeeksOnaPlane and, lastly, what do you see as the most exciting trends like Realtime or social games?

David McClure: Okay. So we’ve done a trip to Asia and a trip to Europe and we’ll probably do those at least once a year. This was sort of a quick trip to Hawaii and we’ll probably do other quick trips to Paris for LeWeb in early December and then I’m also going to likely take some folks back to Japan again in later in December.

Next year, I think we’re looking at doing trips either to India or southeast Asia; probably Singapore and a few other places from there and maybe central and south America as well. So I think doing the core trips to Europe and Asia maybe with some variation. I’d like to do a little bit more maybe in eastern Europe or the northern countries or perhaps Spain and Europe.

Mike Butcher: And what are you excited in terms of trends?

David McClure: So I’m a little contrarian on this in that I think a lot of the venture capital communities swing for the fences and looks for entirely new sort of platforms in technologies and trends. I actually find it’s more interesting to play in the niches and find ways to apply technology to relatively straightforward problems. So the things that I’ve been investing in over the last three, four years have been around financial services and eCommerce. So Mint.com was a company I was an investor in. I actually did some work them for a short period of time.

Other ones that we’ve done with Founders Fund have been Credit Karma, Credit Cave Karma, which helps do credit score monitoring and education and a few others that we’re looking at as well. I think other services that are infrastructure related, so a company called Twilio that helps provide a way to add phone number and phone call services, interactive voice response to websites and applications like SlideShare that helps provide business productivity tools.

Then I think an emerging trend going forward will be family and education services. I don’t think there’s nearly enough interesting ways to do education online, particularly for younger children. I have a two year old and a four year old, so I’m doing that research anyway, I might as well be investing in it.

So there’s a lot more game and entertainment and sort of music services and not as much around things like business productivity and education.

I think the risks of building those models are the same but the monetization is much more straightforward. The monetization models are very clear in those cases. So most of the risk is really more in product and distribution and not on monetization. I think that’s a way to sort of reduce some potential business risk when you’re an investor.

So a lot of it I think is adapting the investment strategies to the way that Internet companies are now being built and exited and really being a lot more nimble and I think expecting, like I said, more and smaller exits. So I like to say playing small ball, money ball for startups, more hitting more like it’s Ichiro Suzuki and less like Albert Pujols. Hitting singles and doubles all day long and not swinging for the fences on home runs as much.

The significance for European venture is that IMImobile is the largest portfolio investment of SPARK Ventures, the UK-based early stage VC. SPARK did not participate in this round of financing but already holds a 28% stake in IMImobile, with a book value of £13 million. Sequoia already has interests in india including SKS Microfinance and Naukri.com.

IMImobile provides converged mobile and online value-added services for mobile operators, media companies and enterprises. The profitable company has 40 operator customers in 66 countries.

The companies selected are either existing companies launching new products or new startups entirely. As you can probably tell from the list, Le Web is very much going back to its roots. This is Le Web’s 6th edition and the startup competition has been going on since 2006 (the 4th edition is this year). So we’ll be using this platform to help some of the earliest stage companies get traction with their ideas. I think it’s going to be exciting to watch.

We’ll also be running a pretty interactive event with Q&A of each startup and the opportunity for the audience to ask questions as well.

Here is the list in alphabetical format, with just company name and URL. We’ll be fleshing this out on the day with some live blogging of the event on TechCrunch Europe & TechCrunch.

Le Web will also give a standing table spot for each startup to show their product (for free btw) during the two day event, so if you don’t catch their pitch you’ll be able to catch them on their booth.

• CloudSplit
• FitnessKeeper, Inc.
• FriendBinder
• Kukunu
• Mendeley
• Shutl
• Siteheart Inc
• Sokoz
• Sports Predictions
• Storific
• Stribe
• Superfeedr
• task.ly
• the hyper words company
• Wordy
• Yeasty Mobs

The judges for the startup competition this year will be:

Nelly Barbault, Paris Development
Matthieu Baret, Partner, AGF Private Equity
Roberto Bonanzinga, Partner, Balderton Capital
Laurent Chiozzotto, Sun Start-Up Essentials Program Manager, Sun
Microsystems
Jeff Clavier, Founder & Managing Partner, SoftTech VC
Julien Codorniou, Business Development Manager, Microsoft BizSpark
Jean-Louis Constanza, CEO, Orange Vallee
Saul Klein, Partner, Index Ventures
Guillaume Lautour, Partner, AGF Private Equity
Dave McClure, Startup Investor & Troublemaker
Thomas Serval, Developer and Platform Ecosystem Lead,
Microsoft France
Mike Sigal, President & Chief Development Officer, Guidewire Group
Bjorn Kvarby, Head of International Business, Shopping.com
Stephane Folliet, European Business Development, Shopping.com

In addition, TechCrunch has managed to secure a handy 250 euros discount on a Le Web ticket for anyone out there, with the code TechCrunch – the direct URL is here.

That is at once a great thing for Europe – afterall, there was nothing else like it before, and Europe really needed a pan-European Seed fund which could also educate young startups. It’s also a potential challenge both for Seedcamp to explain how it operates – afterall, despite its laudable openness to date, let’s not forget it’s a business – and for those that want to sit outside the burgeoning Seedcamp ecosystem. The below is a lightly edited transcript of our recorded conversations so is subject to the usual caveats, though I’ve tried to keep it as faithful to our actual words as possible.

Mike Butcher: How did Seedcamp start?

Saul Klein: The genesis of Seedcamp is I put a blog post up, I think probably in about February, 2007 saying, wouldn’t it be cool if we could have something in Europe that brought people together, helped invest in startups, whatever. The blog post is still there.

Mike Butcher: It’s interesting to get a history of it.

Saul Klein: This was just an idea. It was a blog post. The best way to make an idea happen is to put a date in the sand and then go out and tell people you’re going to do this. So, it was actually Future of Web Apps of that year where your good friend, Michael Arrington, introduced me to Reshma Sohoni, and said, “You’ve got to meet Reshma, she wants to meet you.” I had no idea why. I think initially she wanted to host an open coffee club. I got to talking to her about my idea for Seedcamp and I had registered the domain, I thought a bit about how we should do it, but I knew I needed someone to help me make this happen.

Then obviously, this wasn’t going to happen for free. But what we wanted to do was go out and have three Seedcamp weeks. So, the goal was, let’s go out raise enough money to make 15 investments of €50,000 each and to hold three Seedcamp weeks in London, 2007, 2008, 2009. That was it. And who we were going to raise this money from? We knew needed around €2 million to do this. We knew we wanted to have a very open tent. We’d seen the model that Paul Graham had used in the U.S. which was basically himself and a couple of colleagues. We thought the problem we’re solving in Europe isn’t just how do we help young startups get off the ground. Obviously that’s a problem. The other problem is we have no ecosystem in Europe. Like zip, zero.

So, we could do this on our own, or we could do this and try to include as many members of the ecosystem as possible. So, we went out to Index, Atlas, Balderton, Atomico and more, and started to talk about this concept and they said, “Yeah, great. We agree with you. It’s like Europe is totally fragmented, we need to support the ecosystem. This is an interesting new model. We don’t know if it will work, but, yeah, we’ll get behind it.” And slowly, but surely, key members of the European ecosystem, at least from an investment perspective said, “Yeah, we’ll put our names to this.” More than that, they said we’ll put pour money into this as well.

We very deliberately went on the road to start fund raising in June for that September event coming up, the goal being to raise €2 Million over the summer for a totally unproven idea where many of the major investors in Europe were going to participate at the same time. So, cooperate rather than compete, and we had no full-time CEO, because Reshma was being seconded to us by 3-i at the time. So, there was no team, no proven model, totally antithetical to the way that people think that people should behave.

Come that September we did the Seedcamp Week. We had something like 300 applications from 30-40 countries, and we had amazing participation, not just from the investors, but I think that first panel on the first Monday, which is probably still up on our website, was Nicholas Zennstrom, Brent Hoberman, Mark Sandbar, Charlie Muirhead, Richard Moross, and Danny from Index. We had not just great investors, but great advisors and mentors saying, “This is a great thing for the European ecosystem.”

Heather Harde, CEO of TechCurnch came over as well and we had great support from TechCrunch.

Mike Butcher: And we launch Tech Crunch UK then as well.

Saul Klein: Yeah, and from the FT. Because we felt like we wanted to offer not just the entrepreneurs, not just access to great advice and access to great capsule, but also access to exposure because all three of those things are sort of the early lifeblood of early companies.

So, that was the concept and we pulled that off over the course of that summer, basically bootstrapped, from scratch. I think the domain names and Imperial College, where we held that, were on my credit cards to start, because no one actually put any money in when we held that first event.

But obviously, this was [going to be] a fund, so the proposition to the LP’s so to speak, the investors in the fund, was it’s going to be a three-year fund. We said to people, we’re only going to raise money once a year because we don’t want to spend our time raising money and if you want to spend that time helping companies and investing in companies and that’s no different from any fund, you’re not continually raising money. Index raises a fund, Atlas raises a fund, Accel raises a fund, and they don’t raise another one for another two years, or three years, whatever. They get on with investing the money.

The people who showed early faith in Seedcamp when it was literally a blog post and a PowerPoint presentation, and some of my time and a part-timer from 3-i, they were the originally investors. Mark Esiri, Sean Park, TAG, Alex Hoye, so there were individuals as well as funds. Anyone who wants to see the list of the Seedcamp investors, they’re on our website and they always have been.

So, that’s how you get to be an investor in Seedcamp, the fund, is you were one of the people we pitched to in that first year, or in the case of some people who actually came in in the second year. They’re people who said, “I love what you’re doing. I didn’t have the chance to invest last year; I want to invest in Seedcamp.”

So, we’ve never said to people who’ve been interested in investing, “No, you can’t invest,” but we’ve never actively, other than when we originally raised money, sought to raise funds for Seedcamp.

So, I don’t know if that helps to clarify that at all. And we will be raising a new Seedcamp fund in the next six to 12 months and anyone who wants to invest in that fund is more than welcome to invest in that fund.

I mean, obviously, just for administrative purposes we can only manage a certain number of investors. And I don’t think we would be unlike any other company or fund, that is to say we’re not Sainsbury’s, we can’t manage like 100,000 investors, but anyone who is an accredited investor who put effort into what we’re doing and wants to support the Seedcamp mission is welcome to be an investor.

And the proposition we made to investors was, this is a fund, we are aiming to give investors an economic return, we’re trying to do something good as well, but we are aiming to give people an economic return. This is not an NGO, this is something that if we are trying to teach startups how to be successful we need to have an economic motivation as well. I think that’s totally rational.

Mike Butcher: What would you say the criteria to getting in and what benefits do you get as a startup out of Seedcamp?

Saul Klein: What? As an entrepreneur?

Mike Butcher: Yeah .

Saul Klein: Well, we’ve got an application on our website and there are a bunch of questions in there that people need to answer that is probably not all that dissimilar from the Y Combinator application form. We sort of trying to ascertain what kind of people are they. How strong is the idea? How much potential does it have? Will they be able to use and take advantage of the Seedcamp network? But fundamentally, I think we are just looking for great entrepreneurs who are trying to make stuff that people want and will use, and pay for, and have bit of ambition. We’re not really interested particularly in someone who is trying to build the Polish clone of Twitter, or someone who is trying to build a business that is a lifestyle business. We’re looking to find the very best early stage entrepreneurs.

And that’s not an easy task and I think we’ve got a long, long way to go in Europe, but I think if we want to have a successful startup community in Europe in 10-15 years time, we’ve got to start somewhere. But our job… I mean we’re not even through Chapter One at the moment.

In terms of criteria, I think one of the things we deliberately tried to do is to seek out a very, very international base of entrepreneurs. So, we’ve really made a big effort to reach out into Eastern Europe. We had a mini-Seedcamp in Ukraine in the second year, we had a Seedcamp in Slovenia; we had a Seedcamp in Warsaw. We’ve had multiple Seedcamps in Berlin and we’ve very, very actively gone out into regions that most European investors don’t care about and don’t cover because we’ve felt always that there have been fantastic entrepreneurs there. And I think if you see some of the people coming through Seedcamp, I think that’s been proven out to be the case.

Mike Butcher: What would you say would be the main benefits?

Saul Klein: Basically, we did a survey, which I would be happy to share the data with you on of teams that have come to mini-Seedcamps this year. I think we’ve run six mini-Seedcamps this year, which means there would have been 120 teams that answered this survey and I actually think some crazy number, like 80 out of 120 actually answered the survey. So, it’s pretty good data.

One of the questions we asked them is, why do you come to Seedcamp? The number 1 reason was, to get business advice. Number 2 reason was to build my network. Number 3 reason was to raise the profile of my business, and Number 4 reason was the access to capital. So, I think our entrepreneur proposition is really, really solid. That’s what a VC would love, right. They don’t want my cash, they want advice, they want network, they want validation, and lastly, they want cash as well.

So, I think that more and more we’re seeing people see that Seedcamp is more than money – it’s not about the €50,000. I mean there were great quotes that I had from people in, think the guys at Joobilee, the Hungarian travel company. Before they knew who the winner was they said to me, “You know what? If we don’t win the 50,000K, we have saved ourselves €50,000 from what we’ve learned. Not just this week, but throughout the Seedcamp process.” Teams say to us, “Just filling in the application form is a learning experience for us because it helps us to clarify what out business is about. It sets us a deadline we’ve got to hit.”

But the best people to give feedback on that is the teams, right? But we have done research from them.

Mike Butcher: Obviously some don’t like the Seedcamp model and have criticised it. Seedcamp takes a 5%-10% stake in a company. So, do you think there’s a sort of a weird incentive for an entrepreneur to bring an idea to Seedcamp, which is not their “A” game, so they don;t have to give away a lot of a great idea, but it kind of gets them into the “network”?

Saul Klein: Maybe. And quite frankly…

Mike Butcher: Not the “A” idea, but the “B” idea.

Saul Klein: Maybe. I mean I think if that’s was someone was doing, they would get flushed out fairly quickly. I think one of the most important assets any entrepreneur has is their reputation. Even though it’s a very fragmented community, it’s a very small community.

But I think, quite frankly, it doesn’t really matter to me whether, at the end of the day, Seedcamp becomes an investor in some of these companies, I mean, obviously if we are to create a sustainable model and people believe it’s worthwhile for us to have a sustainable model, then it’s in no one’s interest that people game the system.

But I can think of two examples, just off the top of my head, like Skimlinks came to mini-Seedcamp, London, didn’t win. You know what? They are now flying! Great! We consider them part of the Seedcamp family and we cheer them on. School of Everything, finalist in 2007: not a winner and has gone on to good things. TripWolf, a finalist in 2008; not a winner, gone on to great things. So, for me, if like every company that we touched through a mini-Seedcamp, or through a Seedcamp Week becomes a better company, we’re winning.

If the companies we invest in become better companies then we’re winning and we’re making money, which means we can sustain the model. But ultimately, if we are helping to create better entrepreneurs and better companies, we will retain support and enthusiasm from the ecosystem. If we dilute the quality, then we’ll produce an inferior product that no one wants to back and personally, I wouldn’t want to be involved with never mind the other people who turn up. I mean, remember, I’m doing this on my own time.

I’m the Chairman of Seedcamp. I’m a line item in the budget and we accrue a nominal salary, which I’ve never claimed.

Mike Butcher: But as regards Seedcamp, if a company say, wins TAG investment following the results of Seedcamp, is it worth explaining your interest in the sort of associations you have had with them?

Saul Klein: Yeah, so from that perspective: I’m an investor in Seedcamp through TAG.

Mike Butcher: You say you’re invested through TAG.

Saul Klein: Yeah, Index is an investor in Seedcamp, and I’m the Chairman and Founder of Seedcamp, so you couldn’t get more conflict if you liked, potentially. Every which way there’s potential conflict.

Mike Butcher: How do you resolve those, what have you… or at least how do you explain this to the market out there?

Saul Klein: I think most people understand the different roles that I play, most people who know me. And most people who have experience with working with me know that I’m always very, very clear about which hats I’m wearing at any particular time. But the reality is that anyone interested in a company in Seedcamp – never mind an investor in Seedcamp, anyone who reads TechCrunch – can email one of these companies and say – whether they’re an investor in Seedcamp or not, and say, “Hey, I saw you got through mini-Seedcamp, London, you look really interesting. Do you want to take a meeting?”

So, I think people get out of Seedcamp what they put into it. Not just money, but time. There are plenty of people, I think, who haven’t put money into Seedcamp who’ve put a lot of time into Seedcamp, who got a lot out of it. As advisors who’ve gone on to be advisors of, you know, Claude London, for example, who is an advisor to My Builder. He’s not an investor in Seedcamp. He saw what Ryan was doing very early on, liked it, became an advisor, is on the board of MyBuilder, and has done a fabulous job helping them.

So, I think our role is not just being investorcentric; it’s about making sure these companies can plug into the right people to help them grow their business. And that’s fundamentally what a good investor, or fund, should be doing. Not just saying, “Here’s a cheque,” but it’s like, “Here, meet so-and-so, they could really help you,” or “So-and-so could be a really great advisor for you.” There are a lot of bilateral benefits in that.

No one would be an advisor if they weren’t interested in one of a number of things: a) working with startups, b) meeting other interested and interesting advisors. So, a lot of mentors like Seedcamp not just because they get to meet great early stage companies, but because they get to meet other great mentors and expand their network. And a lot of people just think its fun. And if any of these guys get seriously involved with the companies, many of them become advisors, get options in the companies and have an economic interest in their success going forward as well.

It’s really hard to construct a model where everyone wins. All sides… like the mentors, the investors, the teams, and then their judges as well. It’s hard to do that at the best of times, but this is something we threw together in a few months and we’re kind of locked into the model that we started with.

Mike Butcher: So, what are the plans for the fund going forward?

Saul Klein: Yeah. When we do the next fund – and actually to be fair, we have adapted the model in really good and interesting ways, but I’m talking more about some of the structural issues you’re talking about. We’ve adapted the product in great ways, like mini-Seedcamps and doing more investments, like not just investing in the Seedcamp weeks and vetting out. So, we’ve made some tweaks to the product which I think have been great, but we haven’t made any structural tweaks to the way Seedcamp is operated and I think we’ve got the opportunity to do that for “Seedcamp II” and that’s why I’m very happy to have this discussion with you because this is all stuff Reshma and I are and have been thinking. Not just for the last few months, but for the last few years. But we’ll actually have a chance to implement some of this stuff in the next fund.

Mike Butcher: You also made a tweak from the first year , which was a very hard and fast 10% stake?

Saul Klein: Yeah, last year we went to 5% to 10%. But we haven’t tweaked to a substantial degree, the main thing we haven’t tweaked is where we source funding from. And obviously, the more diverse our funding base is, the more interesting Seedcamp gets on multiple levels.

Mike Butcher: Give me an example.

Saul Klein: For example, when we first raised funds for Seedcamp, other than North Zone, I don’t think we had very many sort of institutional investors who were outside of… who weren’t based in London. I mean, obviously you had Atlas, Index, Atomico, who, you know, take a Pan-European perspective. But when you’ve got a mini-Seedcamp in Paris, all the best French VC’s are there. Innovacom, Banexi. When you go to the mini-Seedcamp in Berlin, Early Bird is there, Wellington is there, Neuhaus is there.

So, all of the sort of regional investors that we didn’t know and hadn’t taken the proposition out to the first time around have not been able to be a part of “Seedcamp I”, and there are a lot more active angels and seed funds in the market. When we raised Seedcamp I, there was only TAG. Now there’s PROfounders, Stefan Glaenzer is getting very active, there is Lukasz Gadowski of Team Europe – there are four or five seed funds around.

And the other thing, which I mentioned to you is that you’ve seen the rise in the last two years for very good reasons of government backed funds – I mean NESTA was an investor in Fund I, but we didn’t know about the French equivalent of NESTA in Fund I, the German equivalent of NESTA in Fund 1, the Nordic equivalent of NESTA in Fund I. You know, all the people who are saying we want to, and we have money to encourage and invest in really early stage entrepreneurs. So, I think the diversity of funding that is available to Seedcamp now compared to where we started is vast.

And obviously, there are entrepreneurs like Phil Wilkinson [Crowdstorm] and others who might have felt like they didn’t have the opportunity to invest last time and maybe would like to invest this time. So, as I said, we’ve got an open door to people who are interested in investing within certain limits of our capacity to talk to people and manage a sort of diverse investor base.

Mike Butcher: OK, on another issue, what’s the incentive for a mentor to contribute to Seedcamp if they are not an investor or benefiting financially, because there’s n now several hundred isn’t there?

Saul Klein: About 500 plus mentors.

Mike Butcher: OK, so what is the incentive to you as a mentor to get involved because you’re not invested in the fund?

Saul Klein: Like I said, I think I enumerated some of the benefits before. I think benefit number 1 is that there are a lot of people who aren’t investors, or don’t have the ability to be investors, but are incredibly useful advisors on specific issues like product, marketing, business development, legal, who want to be advisors rather than investors. These are people who convert their intellectual capital into to options as opposed to checks.

So, for people who want to do that, and there are thousands of people who want to and can do that, we’re a great pool for you to meet awesome companies. So, Seedcamp is doing those people a service, obviously doing the companies a service and it’s doing Seedcamp a service, so as I said, try to construct models where everyone can win. So, that’s one reason.

A second reason is that a lot of the mentors actually like meeting one another. I don’t know if you’ve ever sat in on a Seedcamp mentoring session. It’s not very often someone from Google gets to sit across the table from an investor, or an angel, or someone who works at a design agency and hear their views on a subject. So, it’s the same thing where people ask “Why are Chatham House conversations interesting?” Because people actually give an unfettered opinion and you learn a lot. You learn from it and you meet some really interesting people.

So, 1) you meet interesting startups, 2) you meet interesting other people, 3) a lot of people just enjoy it. It’s fun. And they like giving, it’s not a lot – it’s like two hours, four hours of their year. We don’t ask people to come to every day, we don’t even ask them to come to the whole day, to help startups. I mean, you know, one of the earliest exec guys at Skype, still there, ran product early at Skype Now, he’s come for the last few years. Every year he says to me, “Oh my God, I just love doing this because like for one day a year, I get out of being in a big company, worrying about my day-to-day stuff, I hear these young guys would are really passionate about what they’re doing and I can actually help.” They enjoy it.

And we’re not forcing anyone to do it and one of the challenges we have now with advisors is that a lot of the feedback we get from the teams is like, “Whoa, too many advisors. Too much advice.” It’s like, “Give us fewer advisors, not more advisors.” We’re in the fortunate position where the teams need to really think about who the advisors are who can add the most value and have the right motivations. As opposed to like, “Oh my God, are we going to have enough advisors for the Seedcamp?”

Mike Butcher: Do you think that the ‘what do you get out of it’ is a kind of a question that perhaps some in Europe would ask, but someone in the US wouldn’t necessarily ask? People in the US probably wouldn’t say, “Why are you doing this? You’re not getting anything out of it?” We’ve heard time and time again about the culture of sharing in the Valley. Do you think we’ve actually an infection point where’s there’s a culture clash going on if Europe where people are going, “Oh my God, people are sharing ideas in Europe!”

Saul Klein: Maybe, but the only time I’ve ever seen any evidence of this was after Phil was asked to leave the room [Referring to an incident this year when there was a misunderstanding about whether mentors could attend during investor day]. That’s the only time I’ve heard this. I’m sure we’ve got over a thousand advisors in our network, I’m sure there are 10% or 15% who haven’t always had as good an experience at Seedcamp as we would have liked them to have. But we want to keep improving that.

Mike Butcher: It’s kind of rushed sometimes.

Saul Klein: Yeah, it’s like… we’re not even Tech Crunch 50, we don’t have massive budgets, we’re not an events company.

Saul Klein: We’re trying to be “seat of your pants,” “boot strapped,” were not trying to be “roll out the red carpet,” type of – and I think people like that about Seedcamp. It’s informal, it’s a bit raw, it’s got some rough edges. So, obviously, there are going to be some people who aren’t happy, but I think on balance people really see the benefits and not just like all airy fairy, it’s about sharing, but it’s about rational benefits. Like, I get to meet startups; I could advise and have an equity stake in as an advisor. I get to meet other really smart people in the industry in a setting that I would never normally meet them in. And I get to like spend three or four hours away from my day job with people who are trying to change the world. And that’s like an adrenaline shot.

Mike Butcher: So, to the issue of: Are Seedcamp companies required to take the investment??

Saul Klein: If the companies have come through to the final Seedcamp week, part of the discussion that we have with them when we’re taking the list down from 40 to 20 is to make sure that they understand the terms of a Seedcamp investment. Obviously it would be a colossal waste if everyone’s time during Seedcamp week where there are investors and advisors, etc., give a lot of their time and energy to work with these companies, and they get a lot of publicity – if at the end of that process the teams just turned around and said, “Thanks very much. We’re going to move on.”

So we actually, this year, had a session which Chris Grew from Orrick did with all of the 40 finalists to properly brief them and help them to understand what the Seedcamp terms were and, yes, if they do come along to the Seedcamp week, if Seedcamp decides to make an investment then they will have to accept an investment of €50,000 for between five and ten percent.

That’s clear on the website, it’s clear before people apply, it’s something that Reshma spends time educating people on as they come through the process. As I said, this year we actually added a workshop with Chris and the guys at Oracle to help people sort of understand the legal process as well.

Mike Butcher: What’s the difference between the presentations done on a Monday and the one’s done on a Thursday?

Saul Klein: On Monday it’s really a very sort of brief two, three minute pitch where the company more or less just sort of explains who they are and what they do. We don’t encourage people to go into the business model; it’s more just them introducing themselves to the people that they’re going to see and meet during the week. The pitch that they give on Thursday is a longer pitch. I think it’s a 15 minute pitch. We typically encourage people to spend seven minutes presenting and leave the rest of the time for questions and that is a pitch that is given in front of either Seedcamp investors or mentors who have been active and around during the course of the week and have actually spent time with the teams and who have got a perspective on the teams that they can give feedback to the teams on or feedback to the investors.

But it’s a longer presentation; it’s more detailed, it’s not in front of any of the other teams on Thursday so you can pitch without wondering or worrying what your peers think of you. You get much more of a time to engage with the audience because you actually have 50 percent of the time for Q&A. So hopefully you get some really good feedback in that session as well.

Monday is really just sort of “HI. Here we are. This is what we do.”

Mike Butcher: Do you plan to open source Seedcamp’s funding documents to help other startups around Europe?

Saul Klein: That’s the plan. We’ve actually been working on that with the guys at Orrick and it’s hopefully something we’ll do later on in the year. So it’s definitely something we’re planning to do; although, Y Combinator and Wilson Sonsini have done a great job sort of putting that stuff out there. So if we were to do something, which we are planning to, it’ll be more of a reflection, I think, not just what Wilson Sonsini and what Orrick thinks but also we’ll obviously get input from a number of Europe’s very active seed investors.

So it’s hopefully we want it to be useful and to do something that’s not just purely duplicative. We want to come out with a document or a set of documents that is actually relevant and accepted by the wide European seed community.

Mike Butcher: Could you clarify further how role role at Seedcamp fits with your role at Index Ventures?

Saul Klein: So basically I spend 60 percent plus of my time at Index, being a partner at Index, making venture investments for Index. I spend 40 percent of my time doing TAG, doing active seed investments with my dad and, thanks to TechCrunch and TechCrunch readers, TAG was the investor of the year in Europe last year at The Europas Awards where we beat out my other half, Index and Atlas and others.

I think with TAG we’ve done, since 2000…we’ve made around 75 seed investments, which probably I think along with Ron Conway and Josh Kopelman probably makes TAG one of the most active seed investors on the planet.

Seedcamp really was a separate initiative from both. TAG is an investor in Seedcamp. Index is an investor in Seedcamp, but there were 30 investors in Seedcamp and no one has more than single digit share in Seedcamp. So it was designed to be an open initiative; as wide-open as possible albeit, as I explained in my post, we only had two months to raise the capital. So we could only go to a limited group.

I’m the chairman of the Seedcamp board but Reshma runs Seedcamp on a day-to-day basis and has done throughout. I was probably most involved in the first year, helping her really sort of get the show on the road and now I probably meet with her once a week. I’m an active chairman but it’s really her baby and that’s the way I continue to be involved in Seedcamp. Obviously as the co-founder, the vision and the strategy and the direction is something that I still care a lot about; I like to spend time with the companies and go to as many, many Seedcamps as possible, but my day job’s Index and TAG.

Mike Butcher: What happens if your company wants to be involved in Seedcamp but doesn’t actively want to raise money?

Saul Klein: Boxed Ice is a great example. Here’s a company that’s bootstrapped, the founder is still finishing up his final year of his law degree at the University of Birmingham. This is his third start-up and he’s not actively looking to raise money, but he wanted to have Seedcamp as an investor because he recognises the value of having an active advisor who has great connections and can give someone, like him, who’s a young entrepreneur, some good business advice.

So he’s not looking to raise Angel or VC capital but he’s looking to have someone on board who can help out and he very much models his business on 37signals or Fog Creek software. 37signals are famous for bootstrapping, not taking any outside capital. But they do actually have one outside investor who presumably they took onboard not for his money but because he could give them great advice. It happens to be Jeff Bezos. I’m not claiming that Seedcamp is the equivalent of Jeff Bezos, but even the companies who are more stringent about bootstrapping often want someone else on board just to help guide and advise and open their network and their rolodex.

I think even in the case of Boxed Ice, which is a company that didn’t come to Seedcamp to access capital, they came because David wants a partner in building his business.

I mean, to that point, three out of the eight companies, that we funded in 2009, are profitable already. And not just ramen profitable, really profitable.

Mike Butcher: Is that a real phrase that goes around?

Saul Klein: Yeah, Paul Graham wrote it in a great essay. I actually linked to it in my blog post about ramen profitability and the notion is that you’re not paying payroll and you’re not paying rent, you’re basically you’re working at home, so what it’s what you would pay to feed yourself, ramen noodles and your broadband. So it’s companies that can break even on a couple of thousand dollars a month.

Mike Butcher: So, going back to how Seedcamp will operate with Fund II…?

Saul Klein: Yeah, you think of Seedcamp as a fund. So all of these guys are limited partners in the first Seedcamp fund as well as TAG, Alex Hoye, Sean Park, Oliver Beste, Oracle, Brown Rudnick, it’s all on our website. So basically the people who were initial investors are the people we had an opportunity to talk to or people who expressed interest. We actually… although this is not normal for a fund… we told our original investors that we would be open to having new investors in 2008 albeit at a premium to be fair to the people who came in 2007 and we had a couple of people come in 2008, including Doughty Hanson. That’s it. Obviously, anyone can invest in any Seedcamp company and many people outside of that group have invested in Seedcamp companies.

You’re more likely to earn the rights to invest in a company if you spend time with them because entrepreneurs like to have investors who understand who they are and have invested some time and energy in them. So to the extent that Seedcamp investors have a privileged position it’s because they’re very much in the inner circle of coming to Seedcamp events, going to mini-Seedcamps, obviously being part of the investment committee of Seedcamp that makes Seedcamp investment decisions, but any accredited investor who can invest in any other company can invest in Seedcamp companies.

Mike Butcher: But if Seedcamp takes Five to ten percent of a company, there’s enough equity left for another investor, say a follow-uo investor?

Saul Klein: Sure. If the investor adds value. It depends on the goals of the company. In the case of Boxed Ice, Boxed ice is bootstrapping, it’s profitable, decided that it doesn’t want to raise that much capital at the moment. In the case of BaseKit or MyBuilder, all of those guys decided what they want — remember €50,000 doesn’t go a long way for most companies.

Mike Butcher: That’s the thing, €50,000 can only really last about three months can’t it?

Saul Klein: Well it depends. It depends on how well the startup is heading towards revenue. I think in the case of HyperNumbers, I think €50,000 has lasted two years for those guys. So it depends on how you play it. Your equity runway is as long as you make it. Some people never need to raise money. I was reading recently that in the Inc. 500 [Inc. is a small business magazine in the US and the Inc. 500 is the top 500 small businesses in the US] well over 60 percent have never taken any outside financing. The myth that start-up are about raising money is absolutely bullshit. It’s like, you raise money because you need capital to grow and if you haven’t proven to yourself that you have a product for which there is a market then obviously you’re going to have to take on board more capital than it’s necessarily. But I think there is plenty of equity available for both founders and outside investors in the Seedcamp scenario.

We’re not taking 20 to 40 percent for €50,000. I think most entrepreneurs feel that’s a great deal and if they don’t then Seedcamp’s the wrong program for them.

But I think my experience of having made 75 plus seed investments, having been an entrepreneur myself on both this side of the pond and on the other side of the pond is that what people should focus on is the outcome: how big can the outcome be and what value do my fellow travellers bring along the way. And I think being generous with your co-founders and your earliest investors in effect makes them like co-founders because they are going to work really hard for you. The more equity, the more skin they have in the game, the more motivated they are going to be to support you. Their network is going to be invaluable to you in terms of your initial deals, your initial hires, etc. So it’s a trade-off every entrepreneur needs to make but I think every great company from Apple to Cisco to Google to Oracle has already taken outside capital, to a greater or a lesser extent.

But I do feel strongly that taking money is not an end in itself. It’s something that people should only do when they need it and when they know what they’re going to do with it and making sure that they’ve chosen the right partner.

Huddle will be in a suite of five trial applications included on every HP business computer, starting in the U.S. and extending to the rest of the world. That’s quite a big deal for a startup this size – and relatively unusual for one not even based in the U.S.

The deal is based on a revenue split with HP on new signups to the service, which effectively offers a discount for HP customers on Huddle’s tools. The other programs will include three HP- services and antivirus software from Symantec.

Huddle is a network of secure online workspaces where you can share files, collaborate on ideas, manage projects and organize virtual meetings. Currently 40% of its paying customers are in the U.S., according to Andy McLoughlin, co-founder and strategy director. The three-year-old company, which raised £2.3m from Eden Ventures in 2007, says it is close to break even and is looking for another round of financing to fund expansion.

The deal follows Huddle’s launch of web conferencing, integration with Microsoft Office, and an iPhone app last month.

I daresay Huddle’s integration with LinkedIn and Intercall may well have helped the HP deal.

Babbel won investment from Kizoo AG and VC Fonds Berlin in the summer of 2008 and then in 2009 secured 1 million Euros financing from the Berlin ProFIT program (which draws funds from the European Union’s EDRF). The Babbel team currently consists of thirty-five full-time and freelance employees.

That does of course mean the site will now be ad-free. “The users are our customers, not the ad providers,” says Witte. “We actually tried to launch Babbel 2.0 as a partly ad-sponsored service but it just doesn’t work.”

The company behind Babbel, Lesson Nine, has revamped the learning material and technology of the site to reflect this new model. As well as the Basic and Advanced Vocabulary courses, the new site has new courses and exercises. Much of the material is now licensed from well-known publishers or produced by teachers and language experts. Babbel hopes this increase in quality materials will mean its users stay on board, rather than skipping back to free language sites again.

Users can can continue using their vocab and the community features on Babbel as they did before, but this now becomes the demo version.

It’s interesting that Babbel has made this move to monetise. Assuming they end up with a possible 10 per cent subscribing at the base rate they’ll get $332,500 a month, which is not amazing for the size of team they have. We’ll be watching to see what happens next.

New in Babbel 2.0:

Babbel 2.0 Screencast (Short Version) English from Babbel on Vimeo.

Here’s the official release:

Google to Acquire AdMob

MOUNTAIN VIEW, Calif. (November 9, 2009) – Google Inc. (NASDAQ: GOOG) today announced that it has signed a definitive agreement to acquire AdMob, a mobile display ad technology provider, for $750 million in stock. This acquisition will enhance Google’s existing expertise and technology in mobile advertising, while also giving advertisers and publishers more choice in this growing new area.

“Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time,” said Susan Wojcicki, Vice President of Product Management at Google. “AdMob is the quintessential Silicon Valley startup – generating impressive year on year revenue growth – and we’re excited to welcome this talented team to Google.”

“I think people underestimate how important ads have been to funding the development of innovative content on the Internet. Our goal all along at AdMob has been to make it possible for developers and publishers to bring their products and ideas to mobile with the same business model,” said Omar Hamoui, Founder and CEO of AdMob. “We’re proud of the progress we’ve made towards accomplishing this goal, and joining Google will only accelerate this process, ultimately leading to very real benefits for end users around the world. As publishers and developers generate more revenue from their mobile products, they will invest more, and their mobile offerings will become richer, more creative and more robust.”

The deal will help Google in its efforts to develop more effective tools for creating, serving and analyzing emerging mobile ads formats. As this ecosystem continues to grow, the company expects these new marketing media to offer significant benefits:

* Advertisers will be better able to engage mobile users with AdMob’s ad formats
* Publishers and developers will be able to monetize their content more effectively, which has benefits for the wider mobile ecosystem
* Users will see more relevant ads and ultimately get access to more ad-supported content and applications – improving their mobile experience

“Attracting the world’s top engineering talent and people with entrepreneurial vision to Google has always been crucial to our success. AdMob’s proven track record in innovating at speed will help maintain that culture – which is why we are so excited to be working with them,” added Vic Gundotra, Vice President of Engineering at Google.

Both companies have approved the transaction, which is subject to customary closing conditions.

About Google Inc.
Google’s innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top Web property in all major global markets. Google’s targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall Web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia. For more information, visit www.google.com.
Please see this mircosite for more info and an FAQ about the deal

At the Founder’s Forum at the Four Seasons Hampshire last year, Segerstrale stood up in front of the assembled crowd and, as part of his presentation, showed a slide with a picture of a dinosaur, referring explicitly to Electronic Arts. He’s also reputed to have said he was going to “kill EA”.

Some months later he was still taking the same line, presenting to the Develop conference in Brighton, comapring EA to a dinosaur again, according to Jenova Chen, a Chinese developer who captured the moment on Flickr (above).

But clearly actions spoke louder than words, and Playfish’s rise to the top three of the social gaming pile has resulted in an exit to EA worth $300 million, or $400m with an earnout period.

That meant that today Segerstrale is describing EA as “the ideal opportunity”. Indeed it is, now.

But we’re being perhaps too unkind on the affable Segerstrale, who’s impressed just about everyone he’s met in the tech and gaming industry, especially in London where Playfish is based.

And yes, half the point of being an entrepreneur is ‘creative disruption’ – calling out an existing company in the space and telling them you can do better. Oh, and by the way, after I’ve showed you how, perhaps you’d like to talk?

Well, we know where they live now, though entrepreneurs desperate to get funding would be advised not to stumble in with a business plan unannounced.

More interesting is their strategy. Here’s their take on things:

We are a venture capital fund for entrepreneurs powered by entrepreneurs. Our investors and principals number some of the best-known players within the digital media space — people who have built some of Europe’s most successful companies.

In addition, PROfounders has an extensive network of contacts from large corporate, new entrepreneurs and established founders and leverages this to be an interface between old and new media and to enhance the opportunities available to its investments.

Our aim is to invest in and support new businesses with capital plus proactive advice and expertise in order to create long-term value and promote entrepreneurism. We believe that the combination of dynamic new entrepreneurs and PROfounders Capital’s principals’ experience leads to mutual benefits, interesting long-term co-operation and a strong base for new ventures to flourish.

What We Invest In

Our focus is on capital efficient, early-stage companies operating in the digital media and technology space. We look for companies that have disciplined and innovative management and which address large potential markets, using technologies that are new or clearly differentiated from any incumbents to generate identifiable revenue streams that can be scaled.

Typically our initial investment will be between £0.5m – £2.5m with the scope and intention to support future financing rounds where necessary and appropriate. Our principal geographical focus is on European-based companies.

That’s fairly clear, but in case it’s not, here are the key words: capital efficient. In other words they are looking for startups which are running lean and keen.

Lastly, there is no blog on the site, only an aggregrated feed of key team members Tweet stream. Innovative I think.

It is time for the second annual TechCrunch Europe ChristmasCrunch! Yes folks it’s our annual TechCrunch Europe meetup and Festive Christmas party, in one handy package. This year we’re taking a different tack – basing it around one of the the hottest themes right now, namely the rise of realtime streams. We’ve seen the emergence of Twitter, Facebook, Friendfieed and Google Wave but it’s clear that this is only just the beginning of the world going realtime. TechCrunch is running the Realtime Crunchup of course, but this event in London will also feature some of the hottest realtime startups in the world today.

The event will start with registration from 14.00 on December 15 for the seminar programme consisting of keynote presentation, panel discussions and startup pitches followed by TechCrunch Pitch! Once the seminar programme has come to an end, it will turn into your very own startup Christmas party, with DJs and entertainment until late.

Get your tickets here

Schedule:

14.00 Registration

14.20 – Intro by Mike Butcher, Editor, TechCrunch Europe

14.30 – Keynote
Iain Dodsworth & James Whittaker, Tweedeck
“Where the biggest realtime desktop application goes next”

14.50 – Presentation
“The future of realtime sentiment tracking”
Jenni Lees, Festbuzz

15.10 – Presentation
“Blending cloud with desktop realtime”
Marco Kaiser, Seesmic

15.30 – Panel – Realtime Services
Mario Menti, Twitterfeed
Mark Rock, AudioBoo
Eileen Burbidge, Investment Director at Ambient Sound Investments
Roberto Bonanzinga, Balderton

16.10 – Coffee break

16.30 – Keynote
Nick Halstead, CEO Tweetmeme
“The future of Realtime Content and News”

16.50 – Presentation
David Maher Roberts, The Filter
“The realtime effect on entertainment content”

17.10 – Presentation
Daniel Tenner, Woobius
“How Google Wave affects the future of realtime collaboration”

17.30 – Panel 2
Panel – Content
Ian Hogarth, Songkick
Alberto Nardelli, Tweetminster
William Fischer, Twitter Jobsearch

18.10 – TechCrunch Pitch!!
8-10 startups to pitch.
To be considered for the pitch competition you need to email TechCrunch Europe Editor Mike Butcher, with a one side of A4 text-only pitch, and also include the URL of your company/project/startup etc on CrunchBase (you can add your company onto it if it is not already there). Include: The market “problem” you are solving with your startup, your solution, your competitors, your team, and what you’re looking for (Seed funding, Angel funding, Series A round, etc). There is no fee to pitch, as is our policy. Deadline for entry is Friday November 27.

19.00 – Drinks & Networking
(We will release party-only tickets subject to availability closer to the event)

01.00 Carriages

Venue:
Gilgamesh Restaurant Bar & Lounge
The Stables Market
Chalk Farm Road, London
NW1 8AH
Map

Tickets

To attend the event, tickets will be £45 – this will give you access to the afternoon seminar and the party. Party only tickets will be released closer to the event and is subject to availability. Attendee identification will be checked at the door. Due to strong demand for tickets, we regret tickets are not transferable and not refundable. If you use your name to purchase multiple tickets, your guests must arrive with you to check in at the door. If you show up at the event without a valid ticket, TechCrunch Europe reserves the right to charge the full ticket prive £45 plus £15 administration fee to allow access to the event subject to availability.

Sponsorship opportunities

Please contact Petra Johansson petra(at)twistedtree.co.uk for further details on sponsorship and ticket enquiries.

Press

If you are a member of the press wanting to cover the event, please contact Rassami Hok Ljungberg on rassami(at)rassami.com

Editorial / Event Content

Editorial queries related to the event, the agenda and the pitch competition should be directed to Mike Butcher. DO NOT ASK HIM ABOUT TICKETS.

TechCrunch Europe/UKTI Pitch workshop

On 30th November 2009, TechCrunch Europe will be hosting another Pitch! Workshop. It is only open to qualified startups to attend and if you are interested in finding out more information, please contact petra (at) twistedtree.co.uk.

SPONSORS

TECHCRUNCH PITCH! SPONSOR

UKTI

UK Trade & Investment is the government organisation that helps UK-based companies succeed in the global economy. We also help overseas companies bring their high quality investment to the UK’s dynamic economy – acknowledged as Europe’s best place from which to succeed in global business. UK Trade & Investment offers expertise and contacts through its extensive network of specialists in the UK, and in British embassies and other diplomatic offices around the world. We provide companies with the tools they require to be competitive on the world stage. For further information please visit www.uktradeinvest.gov.uk or telephone +44 (0)20 7215 8000.

CO-SPONSORS

Press Association

The Press Association is the UK’s trusted source of compelling multimedia content, placed at the hear of the media. Press Association delivers everything from breaking news and showbiz interviews to real-time sports results, TV listings and weather forecasts. Increasingly, content is delivered to clients digitally, and we are actively developing new digital products and services for media and online clients. For more information visit www.pressassociation.com

Sun Startup Essentials Programme

In a nut shell.. Sun’s fee-free, no obligation, Startup Essentials programme helps startups get off the ground running by listening to what they need, to innovate and get their business growing quickly. With help around Marketing, PR, Events, Discounted Scaling, Networking and Introductions to the right people, we can help you to grow your business quicker and smarter.
Sign up to our FREE Sun Startup Essentials newsletter at uk.sun.com/startups , which delivers a veritable buffet of information, training and support each month..

For example..
• Technical & Marketing Resources for Members Only
• Access to MySQL University sessions – Online education webinars – Plus many more free web- based training course
• FREE/Discounted Tickets for all the major and not so well known Seminars/Workshops & Technical Briefings
• Technical support and advice directly from a Sun engineer (no need to buy anything!)
• Co-marketing opportunities (i.e. web and blog posts, joint PR, events, contests, etc.) Email stewart.townsend@sun.com
• Webinars and white papers.

Follow Stewart at Sun on Twitter

DRINKS SPONSOR

Bootlaw

Bootlaw is a free boot camp for emerging technology, internet and digital businesses and the professionals working in them who want to learn more about the legal issues they face. It is brought to you by Barry Vitou and Danvers Baillieu, the friendly lawyers at Winston & Strawn in London. For more information go to www.bootlaw.com

The Mobile Premier Awards recognize the year’s best in Mobile Startup Innovation and are the largest open, global startup competition in the mobile industry. The awards are the point of reference in startup premiers during the Mobile World Congress on February 15, 2010 in Barcelona and are organized in collaboration with some of the main networks in the industry.

The Mobile Premier Awards 2010 will include the following awards:

* MPA in Innovation – The best grassroots startup innovation chosen by their peers in partnership with MobileMonday

The MobileMonday chapters will vote for their local most innovative startup. An international jury of the most recognized mobile industry experts will select the 20 finalists from all the local chapter nominees to pitch at the event in Barcelona in front of investors, operators, media companies, peer entrepreneurs, and press and influential bloggers.

* MPA in Marketing – The best startup in Mobile Marketing

* MPA in Entertainment – The best startup in Mobile Entertainment in partnership with the Mobile Entertainment Forum

* MPA in User Experience – The best startup in Mobile User Experience in partnership with MEX.

* MPA in Social Change – The best startup using mobile for social change in partnership with MobileActive.org

* MPA in Female Entrepreneurship – The best woman-lead mobile startup in partnership with Women2.0 and the Women in Mobile Data Association

Participation to these awards is free and open to any startup with a mobile angle.

A couple of hours ago they launched a USA version with a script built to make the listings automatic. The plan is to do is to cover the USA in 72 hours.

Here’s how you get yourself into the list. The Irish one was built by hand, but the others are going to be built with a script but Twitter users tweeting “I want to get listed #TwitterCalifonia [or another state]” and Simplyzesty will collect all the tweets and add them to the lists for each State. In the UK Twitter users can tweet #TwitterEssex, replacing the county name with the county you live in.

Now clearly this might raise some issues for some (do you really want to be publicly listed as being in a certain country?) and potentially creates a list others might decide to abuse. We all know what happened to email eventually. It’s also clearly a useful marketing exercise for Simplyzesty.

But the lists could also show roughly where the Twitter populations are most active in the US (California is my fairly sure bet).

The full US Twitter lists are here, here and here because there are 50 states but Twitter only allows you 20 lists per profile.

UPDATE: As commenters helpfully correct me below, lists are limited to 500 users at a time. However, Simplyzesty says their contacts at Twitter indicate that the 500 limit is “not a technical issue” and may well be lifted. They’re also looking at other workarounds. Still, the project does still look, shall we say, a little ambitious…

The deal means O2 users there can now access to Yahoo!’s mobile-optimized search engine on O2s mobile portals. Users also will be able to sync their PC and mobile homepages. Yahoo! will also deliver sponsored search results for O2. It also includes links to and content from other Yahoo properties.

[Update] Yahoo tells me that it is not paying O2 through the nose for this deal and it’s not the continuation of a any kind of contractual arrangement. (In 2007 Yahoo made a deal with Telefonica, which owns O2, that put Yahoo search on Telefonica phones in Latin America and O2 in the UK. O2 Germany had at the time just signed a deal with Google). So O2 consciously chose Yahoo over Google as O2 Germany was not part of any over-arching Telefonica deal. It’s also fair to point out that T-Mobile has also more or less displaced Google’s search for its mobile services in Europe for Yahoo’s.

But the problem here for Yahoo! is that, in the main, Germans themselves probably don’t care. Despite what others think Yahoo is of little relevance in Germany and O2 is its smallest mobile operator in terms of user numbers.

As our guy on the ground in Germany, Markus Göbel, puts it: “The Yahoo-O2 deal is just about a Yahoo search box on the O2 mobile website which nobody uses anyway. People just go to Google or to their bookmarked websites.”

A comScore study from August this year shows that Google has a 70% share of the mobile search market in Germany, while Yahoo is on a distant 8.2%. Last year Google was on 85.1% market share. Yahoo! was on 9.4%.

We interrupt normal programming to bring you an issue that’s affecting our ability to create a better tech ecosystem in Europe. At TechCrunch Europe we’ve been trying to help really energize the startup tech community across Europe – which suffers from the difficulty of being disparate and spread out – with a series of organised meetups.

These are unlike casual networking events just in a bar. They feature speakers, lots of pitches from startups (no startups pay to pitch of course, ever) and live video streaming for those who either can’t make it or who want to tune in to get a glimpse of what the tech scene is like in that country. That live feed has gone onto TechCrunch.com and brought hundreds more to visit the place we’re in.

Now, we’ve done this so far in plenty of places, such as Helsinki, Paris, Stockholm, Barcelona and more recently Berlin and Munich. Frankly I didn’t think we’d be doing anything anyone on the local scene hadn’t already done at some stage. However, without exaggeration I’d have to say the reception in each place has been incredible. Clearly there is something about the the TechCrunch brand that brings all the right people together in the one place: entrepreneurs, startups, angels, VCs and other interested parties.

So we’d like to do more – visit more European cities, do more events. But – and here’s the point of this post – we are fighting against Europe’s high venue costs.

Wherever we’ve been we’ve attracted 150-200 attendees or more – that’s practically a full conference, even though we usually have just an afternoon of presentations and then an evening of networking. Every time we do this we need to find a venue that can hold that many people. Often even more want to come. This is our biggest cost. But European venues like hotels and conference centres still seem to operate on a tediously high cost basis, despite the economic environment.

There are two things that have made this easier. Firstly where a corporate partner steps in to help. In Munich we were lucky to be able to use the great facilities of a large Sun Microsystems office. Secondly, sometimes a startup has a great office which is just large enough to fit 150, maybe 200 people – as in Berlin with the office of Zanox. But these partners are rare. We may also explore more university venues.

So, one of the big obstacles standing in the way of our creating an event where we can showcase startups to the TechCrunch audience is venues. If we can find more affordable venues, or even free venues – combined with commercial sponsors – we can create more events and better coverage for the startups scene in Europe and everyone will benefit.

So take this as a blatant request: If you’re in Europe and have a space this kind of size and want to partner with TechCrunch Europe – especially if you are in the East, such as Ukraine, Russia, Poland and beyond – then please get in contact with our events team 2Pears.

Secondly, if you are a specialist in live streaming events (as in camera people, plus live web streaming etc), then get in touch. Around Europe we have worked with Bambuser, Sevenload, Newspepper, Stream5 and others. If a venue doesn’t have WiFi but we can find a partner who can provide WiFi, then that’s of interest too.

Lastly, obviously we need commercial partners, of course, so get in touch about that as well.

End of rant.

[Photo Credit: BitchBuzz]

While the Koodos operational team is staying on, CEO Miriam Lahage will be departing after a handover period.

E-Trader Group CEO Harvey Sinclair, a serial entrepreneur with exits, told me the sale came about because Atlas is “backing the E-Trader story. We’ve been talking to them at length and they buy into it heavily.”

However our sources say Koodos had run into severe trading difficulty recently, hence the sale. We put it to both Atlas and to E-trader Group that we understood Koodos had in fact had gone into administration. Atlas denied this. Sinclair told us Koodos had been “looking at a financing structure which allowed their business to work more efficiently.”

We understand the koodos customer database is in the region of 200k customers, though e-trader group is not releasing figures.

But with some back of the envelope calculations, let’s just say they sold for £250,000. With 200,000 customers that means they sold the database for less than £1 per user. This is not great.

It’s at this point that you just have to put this down to experience – startups not doing so well is all part of the guts and glory of the scene. No doubt the recession has affected sales, though it appears Koodos has failed to capitalise on the frenzy surrounding buying clubs.

Koodos sold leading fashion brands at prices of up to up to 70 per cent off. Customers could shop on the website for bargains and sign up for exclusive previews of sales of special collections. It also launched Bargainista.co.uk, an ‘independent’ blog promoting fashion offers. koodos ships to 17 countries, including the USA, France, Germany, Italy, Spain and Sweden.

koodos was started in June 2006 with backing from Atlas Venture. The company was headed up by Lahage, who previously oversaw ecommerce for the huge US discount fashion business T.J.Maxx and department store chain Marshalls. She relocated from Boston to London three years ago.

It’s been previously reported that Lahage was poached to work on the startup, which suggests it had reasonably significant backing from Atlas, such that it could pay a decent salary for such a high profile executive.

e-trader group has backing from Elderstreet and Sinclair sold his Hotgroup recruitment sites to the Trinity Mirror group in 2005 for £50m.

Whatever the back-story, E-Trader Group is looking at a pretty good position now.

Big fashion retailers have two problems: bulk overstock and end of line excess which is highly valuable.

E-Trader has a broad strategy to dominate the clearance overstock marketplace firstly with its B2B marketplace Stockshifters and now with a consumer brand like Koodos as well. It’s now able to offer a single marketplace for B2B and B2C.