Watching Newsnight this evening it seems that Jim McCormick, the ‘inventor’ of the ADE 651 is finally being exposed in the mainstream press. (Private Eye have of course been on the case for a long time). The device is basically a divining rod dressed up with a whizzy name. Watch this to see the magic detection card being taken apart by an electronics expert to reveal that it is in fact a cheap anti-shop lifting device.

Jim McCormick, entrepreneur & fraudster

Jim is the sole shareholder of ATSC Exports Ltd and ATSC UK Ltd. They sell what they call an explosives detector that sells for about $40,000. Allegedly over £80 million of them have been sold in Iraq alone. Trouble is, they are absolutely and utterly useless. Jim claims that his magic machine can detect explosives in ideal conditions up to 1km away.

In a country like Iraq, desperate for anything that can help limit the bloodshed and bombings that are an everyday occurrence, it is not hard to see why people would be prepared to invest in anything that could help. The government has just banned the export of these devices to some countries on the grounds that they could put the lives of UK forces at risk, but they are still able to export to other countries.

It is impossible for me to understand how someone could sell such a device and profit from the misery of others, when by doing so he is almost certainly causing the deaths of people who are given a false sense of safety.

About as close to being downright evil as I think you could get.

You can follow me on Twitter if you like that sort of thing. @marklittlewood

Update: To download this data in a spreadsheet, go here: BLN Charts and CalibreOne Index numbers 2004-2009

The latest venture investment numbers from the Calibre One hit the wires and there is some GOOD NEWS!

• More deals were done across US and Europe in Q4 2009 than in any quarter since the index started in Q1 2004. A total of 560 deals.
• The US investment recovery continues and Q4 2009 ranked 7th out of 24 previous quarters in terms of dollars invested. ($3,396 million). The second chart here illustrates quite clearly how extraordinarily quickly the venture tap (that would be the venture faucet in the US) was turned off in 2008. It has already increased by about 300% on Q4 2008.

Elsewhere, the news is less good.

• Europe is seemingly struggling to join in with the US recovery. Investment into France and UK companies is still at  less than half the level it was at the beginning of 2008.
• Only Benelux bucked the trend with the best ever quarter’s investment. (But it is a small market so cannot be considered statistically significant.

I have take the CalibreOne data provided in this report and added it into their historical data to provide a view of longer term trends. The report lists all of the companies that have been counted in the data. Note that this records announced deals and is not intended to be an exhaustive analysis. It does not claim to be infallible and it does not correct previous quarters as more information comes to light. It does however provide a good bellweather for the industry overall.

Combined levels back to pre-bust levels.

VC Investment US & Europe Q4 2009

Those crazy Americans just couldn’t help overreacting to Sequoia’s RIP Good Times memo…

One of Europe’s original Transatlantic venture funds, Atlas Venture,  is consolidating in Boston. The redoubtable Fred Destin will relocate where he will focus on levering his European experience by building US companies. Christopher Spray, Managing Partner  of the European operation will remain in London to manage the European portfolio. Graham O’Keeffe and Regina Hodits will transition to Venture Partner roles.

Atlas Venture

We wish everyone the very best and I have no doubt that some of the key actors in the Atlas team will go on to greater things. Atlas Venture have been active investors in Europe for many years making some notable investments in pre-dot com days and many entrepreneurs have benefited from their money over this time.

Whatever the positive spin that might be put onto this, this is sad news for the European venture ecosystem. It is much harder to deals at arm’s length with investments and will almost certainly mean that less money is invested in European entrepreneurs.

The move is not really a surprise however. The team in Europe has (allegedly) struggled to raise a new fund and positive exits have been hard to come by – most recently Koodos was bought by before Christmas for pennies in the pound by e-Trader Group.

Ironically, it has proven hard for almost all venture firms to build scalable businesses. This news confirms that venture capital, for all its focus on entrepreneurs with global visions and relentlessly scalable value propositions, remains what is essentially a cottage industry. Accel have managed to operate successfully on a semi-global basis (US, China, Europe) but almost all others have failed to do so in a single firm. (Benchmark opened a European office for example which now operates independently as Balderton Capital in Europe).

Is venture capital by its very nature an unscalable proposition?