HP buying of Autonomy sparks a public spat and raises questions

What a cocktail in the story about the acquisition of Autonomy by HP? The key questions seem to be:
About valuation
Is HP over paying for Autonomy? Since there is no science with respect to valuation then surely the value is in the eye of the beholder and whether or not the Board recommends and the shareholders accept. At approx $11bn – this certainly places Autonomy as a huge success in terms of how two graduates and a business plan can turn a College Start-Up into a multi-billion dollar exit. An amusing side story is the comment made by a senior Chinese banker visiting Cambridge who commented that success in China is not measured so much by the value of one exit, but more by the number of companies one can afford to buy!! This is like saying that wealth is measured by the number of cattle one owns and perhaps the aggregate total of alimony being paid out too!!
Is it good for Cambridge that a local company is being sold to a US firm?
This is harder to answer. One remains optimistic that the total of 9.1% owned by Mike Lynch and his team will convert to local wealth that gets recycled into new ventures through increased business angel type activity. (Mike owns 8.1%). We might look forward to this after the teams have bought their toys and secured their families I guess. The research component will remain in Cambridge, because the sale of a software company means that, in essence, HP has paid for the talent and this, in the main, is unlikely to move to Silicon Valley.
Mike Lynch will now head up the software division of HP, reporting directly to Meg Whitman the new CEO of H.P. This means for the first time we have a Cambridge CEO of a strategic Division of a multinational. It is great credit to the Board and advisers of Autonomy, for being able to groom a world class CEO. So far Cambridge has imported all its “big hitters”. For me the really big news is that Mike Lynch and his start-up co-founder Richard Gaunt have proved that founding teams can go all the way. Too often we hear from venture capitalists that there comes a time when a founding team has to be replaced by “grown-ups”. Well, at last we have an exception to provide role model effects to future generations of entrepreneurs.
The very public spat between Mike Lynch and Larry Ellison of Oracle seems to have got out of hand, so is the deal really good for Autonomy?
The risk to Autonomy does not come from the public entertainment resulting from Larry Ellison’s statements and allegations, but actually from a deeper concern about whether any of the Silicon Valley giants can be good homes for Autonomy? There are several good reasons for HP ownership: - access to global markets, need for high margin business and the change in strategic direction towards software – especially in intelligent search. However, HP has had as many CEOs as the average Premiership Football Club, governance problems, sackings, failed acquisitions, etc.,etc., So one wonders if this Silicon Valley Giant actually has competent management? And Oracle’s leadership is not much more inspired. Perhaps HP has outsmarted Oracle in its purchase of Autonomy because it gains fresh software, insights and capabilities while Oracle might find itself with ageing software that is built on past needs and not on future growth prospects. So – Autonomy is likely to be good for HP and may well shake up Oracle.
The track record of the big Silicon Valley companies has been quite awesome in terms of their size and reach, especially when they are led by entrepreneurial founders and leaders. But there seems to come a time when the behaviour of the CEOs of these giant companies is more Silicon Alley (cats) than Silicon Valley.
I remain and have to remain optimistic about the future of Autonomy. I am more optimistic that the smart people there will eventually recycle through into new companies and we may get a new generation of serial entrepreneurs, something that has not happened for a very long time in Cambridge. The last wave being when Acorn sold to Olivetti which then sold its research to AT+T who eventually shut down the R+D in Cambridge! Many of the highly successful firms in Cambridge today were the alumni of that set of events.
Good karma!

Bank of England at 0.5% but unauthorised OD at 29.5% - Entrepreneurs beware

As an educator and mentor to many small firms - I am regularly asked about the behaviour of banks towards entrepeneurs, small firms and those that are riding through tough times. Why do banks not lend, support, how come I get no assistance when I want to grow and so forth?

When I saw the news - that the Bank of England interest is at 0.5% and yet the unauthorised overdraft is at 29.5% - I did feel a sense of outrage. If you go over the limit you have to pay - and I suppose that is "fair enough" - except that the Bank's profit margin is huge. Then here is the rub - you can become "Unauthorised" at the discretion of the bank - it is further in - in the small print - so even if you cause no offence - if the local bank manager decides he no longer wants to support you he can pull the OD facility from you and stick you on the "unauthorised" schedule!! Haha!

Before we decide what to do next - look at the small print:

About 5 clicks in on a pdf document at Barclays is where I found the charges for those who go over drawn without prior authorisation. Here are some extracts. And the story is the same at a couple of other banks that I checked.

"..........to consider making our overdraft service
available to you before your account goes overdrawn or before
you exceed an agreed overdraft limit. Overdrafts provided in this
way are cheaper than unauthorised borrowing.
............The interest rate for unauthorised
borrowings, including those within the £30 buffer zone, is
charged at 29.5 per cent a year..........Additionally, if an item is returned unpaid due to there being
insufficient funds in your account, we will charge you an
Unpaid Fee of £35 for each such payment, which is our fee for
having considered whether to process such payment....."
So - there are some serious learning points:

Ensure you have a good financial director on your board, someone who knows the local networks of managers at local banks, good accountants etc., and can lobby on your behalf if needed. There are many other tips that migth be available and I am going to leave it to the wisdom of the crowds to populate the internet with ideas and suggestions...