Doing busines in the down turn
Recent econoimic events show that our analysis of the past is based on data that contains hidden, larger scale, forces. We have been measuring the waves, without noticing that the tide. The historic data does not include events of the magnitude of the recession we are about to enter.
Neither do the records of your competitors.
the profile of number of opportunities to value is indicative of the current economic state of the world.
The tender process is only of value within a small range, some jobs are so small that they can be signed off without tender, some are so big that other mechanisms such as M&A come into play.
It is believed that the frequency of opportunities of specific value is a bell curve with a peak around £5M.
The integral of this curve shows the expenditure. Points of inflection on the curve show changes in organisational changes in bidding behaviour and the legislation controls that exist around it.
Business angels and venture capitalists within many industries are actively looking for companies to invest in who have a direct revenue stream from the consumer especially where the product is very low cost and entertainment or savings related. However they are looking for a large number of small investments.
Governments are trying to create jobs and stay the economy by investment in big public projects and defence projects.
Companies that were planning medium scale changes are reconsidering.
They are asking themselves “whats the smallest change I can get away with?”
the profile of tenders will change.
2 Responses to “Doing busines in the down turn”
Angels Den
We’re certainly seeing people’s expectations changing. More entrepreneurs understand that they may need to accept angel investment over venture capital and certainly going public in the current economic climate.
Angels understand this also. They’re rarely seeking to be involved in a handful of deals, but by the same token they’re not rushing into investments left right and centre in the hope of taking value positions.
simon
Do you think that Angles are best placed to profit from the changing shape of the opportunity profile, as the VC’s will still be after the bigger oportunities? or do you feel that there will be competition at the smaller end of the market?
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