KashFlow being bought by ex-Sage boss?

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Alpha

Alpha

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  • #2
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    garyk

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  • #3
    I didnt see any specific references in either document to a particular product or a company. Just that he (Michael Jackson) is looking to acquire 'an accounting software product' and whilst the article hints at an SaaS (online or remotely hosted) again it didnt explicitly state that it would be web based.
     
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    DuaneJackson

    DuaneJackson

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  • #4
    Hi All,

    Sorry to give you a pre-written PR response, but we've had a few enquiries about this in the past 24 hours. At the moment all we are saying / can say is:

    "As a fast growing company we are often linked with speculation about potential acquisitions and our company policy is to neither confirm nor deny that any discussion are taking place. Our stance has always been that we will consider any opportunity that enables KashFlow to both strengthen our market share and grow the business in a sustainable and sensible manner".
     
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    John Stokdyk

    John Stokdyk

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  • #12
    Pardon me for being a cynical old hack here, gents, but this is a classic silly season "let's report a rumour and turn it into news" stratagem. The Telegraph guy genuinely appears to have talked to Elderstreet's Michael Jackson, who has indicated an interest in "rolling up" an accounting SaaS portfolio. Given the take-up of the technology we've documented over the past year, any self respecting venture capitalist would say that. And while Duane's PR-drone response suggests that he has fielded an approach at some point, there are quite a lot of other alternatives around for Elderstreet to consider: Twinfield, WinWeb, e-conomic, Liberty Accounts etc etc.

    Our friend Dennis Howlett on AccMan used the story to indulge in some market analysing of his own - most of which focused on the apparent superiority of the accountancy SaaS providers who sponsor his site.

    Call me old fashioned, but this story only really gets interesting when Michael Jackson gets his AIM vehicle in place and gives some lucky developer his cheque - then what are they going to do?

    And even though internet accounting is a rising force, it will be a while yet before it topples Sage's dominance of the UK market.
     
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    Alpha

    Alpha

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  • #14
    And while Duane's PR-drone response suggests that he has fielded an approach at some point, there are quite a lot of other alternatives around for Elderstreet to consider: Twinfield, WinWeb, e-conomic, Liberty Accounts etc etc.
    Click to expand...
    Call me old fashioned, but this story only really gets interesting when Michael Jackson gets his AIM vehicle in place and gives some lucky developer his cheque - then what are they going to do?
    Click to expand...
    So John as Elderstreet also own Sift is there any 'inside information' being used here?:)
     
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    John Stokdyk

    John Stokdyk

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  • #18
    Two clarifications:
    1. To Alpha: Michael Jackson and Elderstreet were indeed early VC investors in Sift, which owns UKBF and Sift Media. I don't know exactly what size holding they now have, but since other investors have come in, it would be inaccurate to say Elderstreet "owned" Sift. Much as I would love Michael to spill the beans to me about who he's going to buy, we have not talked and there's no inside information.

    2. To 10 Yetis: My comment about drone-like qualities referred to the text rather than the author... As you can see from the convoluted sentences above, I'm just as capable at prevaricating in print as any self-respecting PR. Ashley's comment was fun too, but what Duane released was a classic non-denial denial that didn't say anything.

    Since Kashflow is privately owned, he doesn't need to trot out boilerplate. He'd get more coverage and appear as a more interesting entreprenurial character if he just said, "Yeah, we've talked, but there's no serious offer on the table yet. I think Elderstreet are just dipping a toe in the water at the moment."
     
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    DuaneJackson

    DuaneJackson

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  • #19
    OK, finally I can talk openly!

    Those that have got to know me over the years on this forum (from way back when KashFlow was a brand new in-house project) know that I'm not usually so coy or elusive.

    We were in the middle of negotiations when this thread first came up and I didn't think it wise to say anything publicly that could jeopardize the talks that were then ongoing..

    Yes, I have been talking to Michael, and yes we were the company mentioned In the Telegraph article.

    My business was started with the help of the Princes Trust. As someone that has had a lot of benefit from the Trusts business start up program and as a business that's been relatively successful I'm often asked to attend informal lunches with high net-worth individuals to talk about how great the Trust is and to try to raise funds.

    I met Michael a few months ago at one of these lunches, we arranged to meet up again more privately at a later date. He very quickly and unexpectedly made a 7 figure offer to buy KashFlow. I turned it down and he doubled the offer.

    Obviously I had to give the offer due consideration. I felt it was way too early to sell the company (it's still growing very fast and I'm still really enjoying it). We worked out a deal that would mean that I'd still run the company but would sell a large stake to him (and Elderstreet) and have a lot more capital and resources at my disposal.

    It's incredibly flattering to be made an offer by someone who is undoubtedly the most successful individual in our industry, and he's certainly someone I feel I could work with.

    After lots of soul searching and speaking to my advisors, we this week decided not to do a deal and to carry on growing the business independently.


    The timing just isn't right. I think a large part of our success is the ability to move very quickly and make decisions in minutes without having to resort to decision by committee. I felt that being part of an AIM listed company would mean we lose that edge which would in turn mean our customers don't get the service they're used to in terms of new features being quickly added, etc.

    So there you have it, an exclusive to UK Business Forums! I thought it only fair to (finally) give an honest response to the question as so many of our customers have come from this forum and so many of you have been incredibly helpful over the years.

    Onwards and upwards!

    PS. Jon, I don't think Elderstreet or Michael are just dipping their toes in. I think they're diving in head first. Michael sees the potential of SaaS and really appreciates the benefits of the SaaS business model. Unlike the green FTSE behemoth of the software industry.

    Don't forget that Richard Holway, ex Ovum, is on the Elderstreet advisory board. Richard has been talking about the coming of SaaS for a number of years.

    The company that Michael is building will certainly become a major player across a number of SaaS verticals (not just accounting).
     
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    DuaneJackson

    DuaneJackson

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  • #21
    sm1 said:
    Bet that is a relief to get that out... well done :)
    Click to expand...

    Certainly is! I've always come to these forums for advice - it's great to get a wide range of opinions from different people. But I had to tread a bit more carefully with this one.

    It's also a relief that it's all decided and over with. It's been a real distraction from the main job of running and growing the business as I'm sure you can imagine.
     
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    sm1

  • #24
    Yes, as much as everyone relies on help from each other within the forums, certain things have to be kept private for reasons beyond your control - and for someone as strongly and passionately involved in the forums I can only imagine how hard that must be! :)

    Well done for everything you've achieved ;) - You're great inspiration
     
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    cjd

    cjd

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    • Nov 23, 2005
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  • #26
    Congrats - I would be loath to run a public company again; too many people on your back interfering and too many people to answer to. So long as you have cash and a profitable growing business you're on the winning side of the deal.

    You can always sell it when you're bored for 5 times the price :)
     
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    creacom

    creacom

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  • #28
    Well done Duane, a fantastic situation to have found yourself even though I am sure there was an immense amount of negotiating, discussion and soul searching involved!

    Having seen what you have done with KashFlow over the last few years I am sure that now it will continue to go from strength to strength. :)

    Jacqui
     
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    Paul Kelly ICHYB

    Paul Kelly ICHYB

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  • #29
    Duane,

    well done in not secumbing to the £'s flashing in front of your eyes. I bet it was a difficult decision and I am sure it will bring greater reward in the future!
     
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    K

    KM-Tiger

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  • #35
    That's a courageous decision, not sure if I would have had the cojones. And I'm impressed that one of your principal concerns was your users, that says more about Kashflow than a thousand press releases.

    Clearly you enjoy what you do, and I think you are better being master of your own fate, rather than beholden to others.
     
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    DuaneJackson

    DuaneJackson

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  • #36
    KM-Tiger said:
    And I'm impressed that one of your principal concerns was your users
    Click to expand...

    It may look noble, but it's a selfish concern really. A lot of our new business comes from customers recommending us (only people that use the software can relate to others commenting that they now "enjoy" doing their books - I'd never have believed people could be so passionate about a piece of accounting software!. And nor could Joe Public, hence we tend not to use this kind of stuff in marketing materials.).

    Because we have built the software based on customer suggestions, they feel a real ownership of it, and hence are more likley to recommend it.

    So if we keep improving it based on suggestions, customers keep recommending us and we make more money (All of which, btw is currently reinvested in the company. We've never yet declared a dividend).
     
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    DuaneJackson

    DuaneJackson

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  • #39
    sm1 said:
    So when someone suggests a new feature - how long does it generally take for you to implement it?

    Cheers
    Click to expand...

    It depends on a number of factors:

    Has it been suggested before?
    How complex is it?
    Would it beneft enough other users to make it worthwhile?
    Can we implement it without detracting from the simplicity of the system?

    Sometimes an hour, more often a couple of days, occasionaly a few weeks. And occasionally, never.

    The point is that a few years ago it was just a very, very basic invoicing system (Seriously, you wouldn't believe how basic it was). And it's only through years of customer feedback that we now have a very useful bit of kit with no useless bells and whistles.
     
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