Samwer Brothers of Germany take 10% Stake in Anshe Chung Studios
by Alphaville Herald on 28/02/07 at 4:12 pm
The Samwer hotties brothers
The German newspaper Frankfurther Allgemeine is reporting that the Samwer brothers of Germany have acquired a 10% stake in the virtual real estate and metaverse development company Anshe Chung Studios. The Samwer brothers — Oliver, Alexander and Marc — gained their claim to fame when they started an online auction site alano.de in 1999, which they subsequently sold to eBay for the equivalent of $50 million US. In 2000 the brothers founded Jamba!, which they sold to Verisign for the equivalent of $270 million US in 2004. They subsequently started a venture capital fund called European Founders Fund.
Reached for comment by the Herald, Anshe Chung would not indicate the dollar value of the initial investment, but it has been reported that venture capital firms have previously valued Anshe Chung Studios at over $2 million dollars US. This would suggest a possible investment of $200,000 to $300,000 by the Samwer brothers. More important than the monetary infusion, which quite frankly ACS doesn’t really need given its cash flow, will be the possibility that the Samwer brothers can bring formal business and accounting methods to ACS — a development that will help to bring other investors on board in the future.
Of special interest in the Franfurter Allemeigne article is the claim that the investors plan on ACS expanding to 100 employees by July and opening offices in Frankfurt, Boston, and Tel Aviv. Ms. Chung would not confirm the opening of the new offices, but did confirm the expansion to 100 employees — mostly skilled programmers — and added that ACS would be moving to larger offices in Wuhan.
Inigo Chamerberlin
Feb 28th, 2007
Look at the leftmost one of the ‘brothers’.
Remind you of anyone?
urizenus
Feb 28th, 2007
Seinfeld?
Stacey Sugar
Feb 28th, 2007
Well done, escort turned property tycoon. However, do they really want to invest so much into a virtual world which is operated by one relatively small company, namely LindenLabs? Or is this the beginning of a take over or an investment into LindenLabs? Who are they gonna flog ACS to? Or is it the first steps to the development of their own virtual world with tie-in’s with LL?
Urizenus
Feb 28th, 2007
The newspaper story says that the Samwer brothers consider ACS (and presumably other metaverse development companies) to be better investments than platforms like second life because the development companies can move to other platforms, as ACS is already doing. They do a lot of work developing content for IMVU, for example.
Inigo Chamerberlin
Feb 28th, 2007
More important … will be the possibility that the Samwer brothers can bring formal business and accounting methods to ACS
Oh right! So what form of accounting methods has this multi-million US$ business been using up to this point? A cash book and a cardboard box of receipts and IOUs?
That seems a very odd thing for the Franfurter Allemeigne to say. You’d almost think there was a hint that ACS was having accounting problems wouldn’t you? Maybe the German tax authorities read all those stories about how much Anshe was worth and started checking their own records?
Urizenus
Feb 28th, 2007
The remark about bringing formal business and accounting methods was my addition, but it is generally considered one of the things that any vc will bring to a startup. That is what they contribute in addition to cash, which, like I say, ACS doesn’t really need.
Prokofy Neva
Feb 28th, 2007
Yeah, separated at birth:
http://en.wikipedia.org/wiki/Fonzie
I guess my question would be: did these brothers only now tune in and finance, or have they been silent partners for longer than this?
As for “formal accounting methods,” that doesn’t mean any slam against the ACS operation necessarily, it means the formal auditing methods for how firms value things, calculate depreciation, etc. and auditing to meet FASAB standards (http://www.fasab.gov/accepted.html) etc.
It’s very hard to maintain records in Second Life because the Lindens dump the data every 30 days, and it’s very inconvenient having to keep downloading a new Excel file with the exact same name every day, even being diligent, you inevitably wipe a day’s accounts out just because of that stupid feature. When they can learn to make the download generate the day’s full date as its name, or better yet, just end this idiocy and have memory longer than 30 days AND a searchable easily downloadable spreadsheet, that will be an improvement. But they won’t bother.
Inworld transactions really don’t matter to them. They are so far past that now.
Allana Dion
Mar 1st, 2007
“More important than the monetary infusion, which quite frankly ACS doesn’t really need given its cash flow…”
And you know this how? The “value” of a company’s holdings can often be high while it’s actual cash flow is fairly small and vice versa. As an outside reporter you can’t know how high their overhead is with tier payments, payroll, etc. It’s entirely possible that a monetary infusion was exactly what they needed.
Allana Dion
Mar 1st, 2007
And I’m with you Prok on the inconvenience of the transaction history. It really needs an overhaul.
urizenus sklar
Mar 1st, 2007
Allana, Herald reporters know things that mere mortal reporters couldn’t possibly know. (I briefly did some consulting work for them helping to establish strategic partnerships with other metaverse development companies).
It’s possible that there is a money crunch with the arrival of the new sims and the new tier payments, but at least up to that point the business was unleveraged and paying for everything with cash. That is to say, when they bought the 200 or so sims a few months ago that was with cash from operations.
You are right though, that if they are expanding to larger offices in Wuhan, and are establishing some sort of presence in Tel Aviv, Frankfurt, and Boston (which they haven’t confirmed)AND they are expanding their staff to 100 that would require extra capital, and maybe it is hard to borrow money from banks if you are in that business. So in that case a cash investment from a vc firm would be useful. But at this point we don’t even know if the Samwer’s put up a dime to get their 10% stake.
Khamon
Mar 1st, 2007
Grats to ACS. Diversification is important at the top and bottom of any financial empire.
Prok, Allana, should LL retain inworld transactions longer or simply make the daily downloads more convenient? Will it be sufficient to have an option to automatically recieve a properly named weekly, perhaps daily, excel file attached to an email?
Prokofy Neva
Mar 1st, 2007
>As an outside reporter you can’t know how high their overhead is with tier payments, payroll, etc.
You just look at the map and count the islands or count the number of people in Dreamland? Also see the land offerings for sale on their webpage. Not rocket science.
No inworld transactions MUST STAY. They don’t have to make up these idiotic totals that are useless and say things like “GIFT” (we should be able to tag transactions or something, and some people could just set up their own tagging). But they do need to keep the running record.
Getting a named weekly Excel file is fine, but you really need constant inworld updates. You shouldn’t have to tab out of SL to a webpage.
Panda
Mar 1st, 2007
Well Prok, you could just add the date to the name yourself before you save the file.
If you try downloading your account history now, you’ll find the file tagged with the date already. Quess that was a quick fix huh? ZOMG!! FIC!!
Stan
Mar 2nd, 2007
I think this development will not be good for second life. Too much money-obsessed people will destroy the community structure. Land will become unaffordable for most users. Everywhere will be ads and only stores with the goal to cash a lot of money in a short period of time. And if i think of the reputation of this three brothers in germany. Hmm. We will see.