Man on a Mission – Nathan Buzza

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Nathan Buzza knows all about the frustration of having an excellent commercial Nathan Buzzaproposition, but no money  to fund its development.

In fact, when Buzza established his business he only had $5,200 in the bank – fast forward a few years and Nathan had developed a multinational business with offices in Australia, Hong Kong, Denmark, the US and the UK.

The technology that his company developed in Perth has now been installed in 7,500 locations in over 60 countries, earning Commtech Wireless a position in the BRW Fast 100 list for three consecutive years. Additionally, the company was the recipient of the Telstra Small Business of the Year award and numerous accolades from the WA IT&T Awards.

On the road to growing Commtech Wireless, the business he founded in 1992, Buzza was fortunate enough to receive an R&D Start grant from the Federal Government to develop a clinical middleware platform.

“What started off as a monitoring nurse call system, quickly turned into a whole myriad of inputs; from patient monitoring, fire alarms, security systems, infant abduction, stat blood results, building management systems – a whole middleware industry was born. What fuelled things even further, was the number of handheld wireless devices being deployed; it seemed overnight everybody had an iPhone or Blackberry or some other wireless device.”

In 2008 Buzza negotiated the trade sale of Commtech Wireless to Amcom Software (for an undisclosed eight digit sum) and continued as General Manager for eighteen months post acquisition.

Now Buzza, a recipient of the coveted Ernst & Young “Entrepreneur of the Year” has a mission of putting his 20 years’ experience in software, electronics and medical technology to work helping aspiring entrepreneurs on the path to revenue growth, increased market share, expansion into new markets and delivery of new products and services.

Unfortunately, he says, too many of the potential investments he is offered come from those with unrealistic expectations of their valuations.

A typical scenario is that after spending one or two years developing a technology to the point of commercialisation, a founder then goes in search of the funds needed to undertake the commercialisation. They will ask for between $2 million and $5 million for a 50% equity stake for the investment.

By asking for $2 million for 50% equity, they are effectively valuing the technology at $4 million. This is fine, so long as the investor believes that the return on investment will be sufficient to justify the inherent risks of getting in early. The problem is that many founders ascribe too much of their potential future value to their perception of value today. A more sophisticated understanding of the investor, their return expectations and their capacity to add value is required to negotiate a deal that satisfies both parties.

Buzza says entrepreneurs need at a minimum to have a handle on the basics of finance. When people presenting to him are unfamiliar with the standard terminology he is likely to have little confidence in their ability to manage the finances of the business.

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