December 09, 2008
Banking vs uranium mining
A long time ago, I used to work in financial IT - writing software for bankers, that kind of thing. Then, I had an idea that I could be a small businessman. I ended up with a small fortune. Unfortunately, I'd started off with a large one, so it was back to London for me. I liken working in IT for banks in London to working down a uranium mine:
1. you don't want to get too close to the stuff or think too much about what it'll be used for
2. it's smelly, dirty and you spend most of your life buried underground, away from the sun, and you really need a shower when you get home
3. you have to wear special clothes
4. the people you work for have some dodgy ideas
5. you only do it if you really, really have to
6. it will kill you, eventually
Of course, in reality, the pay and conditions are somewhat different ...
December 02, 2008
Wake up, Danish venture capitalists
The scandal surrounding the collapse of IT Factory, an IT company specialising in web portal solutions, has been all over the Danish news the last few days, in part because it leaves cycling team Team CSC-Saxo Bank without a sponsor when IT Factory were supposed to take over from 1st January (which I couldn't care less about, frankly ... if it inconveniences Saxo Bank then there is a silver lining to this).
The now-disappeared ex-CEO, the appropriately-named Stein Bagger, turns out to have been running a complete scam. 90% of the customer contracts were fake, and Bagger appears to have ... er ... bagged some 500 million Danish kroner before his impromptu vanishing act while on a business/pleasure trip in Dubai. The Danish newspaper, Politiken, has this article on Bagger, which includes the following (translated) quote from one of the major partners, Finn Nørbygaard, in the investment company, JMI Invest, who stands to personally lose around 240-something million Danish kroner:
"I don't know Stein Bagger particularly well", said Finn Nørbygaard to Politiken: "And the question is perhaps, who was the guy that really did this? I met him at a couple of arrangements and always believed him to be a high-performing director. In JMI we have ten portfolio companies, of which IT Factory is one, and now - seen with the benefit of hindsight - they maybe stuck out a lot due to their revenue generation", explains the comedian.
(Finn is a popular comedian/entertainer here in Denmark.)
"I didn't know Stein Bagger particularly well"? And yet, Finn, you ponied up 240-something million Danish kroner to invest in his company? Asger Jensby, the main partner of JMI Invest, has gone on record as saying that in order to pull off a stunt like this, you have to be especially charismatic. Well, duh. Apparently, a smiling face and patina of plausibility are all it takes to get 500 million DKK thrown in your direction from JMI Invest and their bankers. No background checks required - they didn't even check his education, which appears to be as forged as the customer list. I feel sorry for Bagger's family, who are going to be hounded by the press. I feel marginally sorry for Nørbygaard, who presumably was offered assurances regarding his investment, but who should have taken the time to get to know the people running the companies he was investing in better - 240 million DKK buys you that right, Finn. And I really don't feel sorry for Jensby, who ought to have known better, or Bagger, who is obviously some corporate psycho who doesn't care spit about his friends, family, investors, employees, colleagues or indeed anyone except himself.
What price trust, eh?