ONSET Ventures

American University in Cairo

MBA Program

Summer 2004

MGMT 519

ONSET VENTURES

Group:

    Ashraf Ayad

    Rasha Galal

    Maria Abouseif

    Mahmoud El Gallad

    Mohamed Khalil

 Onset Ventures

ONSET was founded in 1984 on a well- thought analysis of the VC industry. It was intrigued with the process of starting and growing new businesses. ONSET distinguished itself from its competitors by its investment focus. ONSET focused on initial and follow-on investments in seed stage projects because returns are more profitable at this stage. The main risks ONSET faced were technical and marketing risks.

ONSET had its own adopted model for assessing opportunities in venture capital market, this model included:-

  • ONSET won't lead a start-up in an industry where they don't have the ability to reinvent a business model.  Accordingly ONSET won't try to invest in a niche that is entirely new to it.

We agree with this point, as the risk will be minimised if ONSET has the expertise in that field of business before.

  • ONSET will only invest in deals where it has a local presence. As the more distant they are from the management team, the harder the value ONSET can add to the business.

We disagree with that trend, because many firms have its own qualified management team and their leaders and board have the necessary traits to lead the firm. So ONSET will lose this category of business if it insisted on that principle.

  • If the investment exceeds $30 million of private capital in a single company, then ONSET doesn't consider it as an investment for it. This will need extra effort for ONSET to make it worth the investment.
Join now!

We agree with that as ONSET funds seed capital to many start-up companies so there must be a certain limit to the investment cost. The larger the venture capital invested the greater the effort needed by ONSET with that company to strive in a way that will compensate ONSET for its extra seed capital.

  • Spotlight deals were out of scope for ONSET.   These segments were chased by many competitors who were ready to take irrational decisions and contribute extra funds above the value of these deals.

However, we think this is not the case as the ...

This is a preview of the whole essay