Thursday, March 01, 2007

Redknee: The Benefits of Avoiding Venture Capital (?)

The launch of Redknee into trading on London's AIM is an interesting chapter in the company's history. Redknee, a Toronto mobile applications service provider, has built what appears to be a nice business around some of the best talent out of Nortel and Rogers. For years, Redknee played coy with hedge funds and VCs alike (including me), ultimately deciding to grow organically.

The result? According to the numbers reported on the AIM's site, just before completion of its 17.5 million pound placement, founders and senior management had managed to hold onto 70% of the company's equity (the two founders held a total 42% , and the top three other members of management shared just over 30%). A private placement on London's AIM is a questionable liquidity event, but the numbers are an interesting data point.

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