Reaching for the Skies!
26 May 2016
Two Offices – One Start-up: Challenges & Benefits
Nitzan Yudan – Founder@FlatClub
FlatClub is a marketplace for medium term rentals and currently we are helping leading companies provide moving support for their junior employees. On an average, we sign-up 1 corporate per week and some of the largest corporates in the world are our clients.
In March 2015, LCIF made its initial investment in FlatClub. At that time, we had 12 employees. We now have 60 employees in 2 offices – London and Yerevan, Armenia. We have created 40 new jobs in London.
With the new funding, we decided to significantly grow our development team and build a new product. As a London based company, it was a big challenge to do this in London because of the costs and the competition for talent acquisition. Our developers were getting offers every 5 minutes via recruiters on LinkedIn. So we decided to open a fully owned development centre outside London. We looked at a few locations, and after interviewing 30 developers in each location, we chose Armenia, for a number of reasons like access to talent, quality of the candidates, culture fit, and costs.
An important factor was an additional investment we received from Granatus Ventures, a leading VC in Armenia, which provided us with strong market knowledge and help in setting up the local operations. As we grew the team in 9 months from 1 to 20, we learnt a number of important lessons to make such a structure a success.
Communication – It is key to maintain live communication between the offices. We have an all hands meeting on video once a week, and we split the tech team into two divisions– product in London and development in Armenia to ensure clarity of roles.
Travel – It is important to budget and execute frequent travel between the offices to improve alignment and conduct training. In our case, we have an outstanding CTO, Dima Brodsky, who splits his time between the offices to ensure we maximize the efficiency.
Culture – It is critical to understand and respect the cultural differences of remote teams and work along them rather than trying to change. Sharing social events, pictures, group communications, and hoodies – are some of the ways in which the teams can gel together.
To summarize, at the right stage, and with the right team and local partners, this is a very good opportunity for a team which wants to grow fast but still keep the core in-house without outsourcing.
Download Nitzan’s presentation for some more bytes!
Using share options for talent acquisition
Mark Gearing – Equity Incentives@Fieldfisher
Offering share options is often critical for start-ups in attracting and retaining the best employees. Some of the key issues to consider when structuring an employee option plan, are:
Tax efficiency, flexibility, and ensuring the plan is communicated effectively so that employees appreciate the potential value of the award.
One of the most popular types of option plan available in the UK is the Enterprise Management Incentive or EMI plan. This provides for potentially very low rates of tax on exercise of the option and sale of the shares and allows maximum flexibility to tailor the plan to the needs of the business.
Download Mark’s presentation for a bit more information on this topic.
International expansion – How can UKTI help!
Jim James – International Business Lead@UKTI
Experian found that 3 of the top 10 areas where businesses have a high potential to export are in London. East Central, West Central and West London have a high percentage of companies that could export but currently don’t.
The UK Government’s ambition is to rapidly multiply its exports figures. To achieve this UKTI is on a mission to:
- Support UK companies to grow their business through international trade.
- Connect UK business to the world’s top commercial opportunities.
- Attract high quality inward investment to the UK.
UKTI has 40+ International Trade Advisers dedicated to helping London businesses export. London businesses receive support tailored to their sector via 7 specialist sector teams:
- Creative & Digital
- Business & Professional Services
- Global Sports/Infrastructure
- Manufacturing & Healthcare
UK Export Finance is the UK’s export credit agency. It can:
- Help UK exporters by providing insurance to exporters and guarantees to banks to share the risks of providing export finance.
- Make loans to overseas buyers of goods and services from the UK.
- Insure UK exporters against non-payment by their overseas buyers.
- Help overseas buyers to purchase goods and services from UK exporters by guaranteeing or funding bank loans to finance the purchases.
Download Jim’s presentation to get more information UKTI and its services.
Data Privacy and Security Law 2.0: What it means for you!
Antonis Patrikios – Partner, Fieldfisher
The new legal regime on data privacy and security has the following key characteristics:
- High expectations of compliance
- Very significant sanctions for compliance failures
- Rapidly evolving case law that interprets and applies the law, often with surprising outcomes
- Activist data subjects that challenge companies
- High profile cyber and data security breaches that put brands and good reputation at risk.
This means that moving forward companies are faced with a fluid, rapidly evolving and a fragmented legal regime, especially at the global level. This creates significant risks for those companies that get data privacy compliance wrong, but also significant opportunities for those that get it right.
Download Atonis’ presentation to know more on this.
Innovate to succeed
Adrian Allen – Innovation Advisor@GLE
Innovate to succeed is an initiative offered by Greater London Enterprise (GLE) to help businesses develop new products and services. It is a fully funded (read free!) programme for start-ups and established businesses to improve commercial potential through innovation.
GLE Innovation Advisers are engineers experienced at delivering innovative solutions in varied business functions like – IP management, product/service design, system’s analysis, process design etc.
Their services are applicable to businesses across all sectors. Think of them as an impartial, additional team member that can be utilised to provide innovation advantage to almost any area of your business.
Download Adrian’s presentation to know more about this offering.
Christine Phillips – Corporate Partner@Fieldfisher
Critical structural issues affect companies in a growth or expansion mode particularly with respect to structuring international group expansion.
It is important at this phase to consider whether it is best to establish permanent establishments in new territories or to operate with some limited marketing support (either with a local partner or with a company representative relocating).
The structural route that is taken will impact on the necessary intra-group agreements that should be put in place to document the arrangements from a tax, commercial and IP protection perspective.
Companies seeking to expand their teams or to enter new markets can often find themselves faced with a funding gap which necessitates a follow-on funding round or some bridge finance, the typical terms for such investment and likely control rights are also considered in the presentation.
Download Christine’s presentation to explore some key issues to consider for your start-up.