About Us




“Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much because they live in the gray twilight that knows neither victory nor defeat.”

      – Theodore Roosevelt

History

Each year, tens of thousands of new technologies and products emerge holding great promise for future success and riches.  They hold the potential to significantly outperform their larger competitors by responding more quickly to changing market conditions and by more rapidly deploying new technologies. Their relatively smaller size also allows them to grow faster on a percentage basis than larger organizations. This corresponds directly to higher investment returns.

Investing in start-ups and early stage companies involves great risk.  Most studies on start-ups, regardless of the specific technology or opportunity involved, reach similar conclusions:

  • The majority of new companies fail within the first three years. 
  • The majority of new companies still in business after three years fail to deliver projected returns. 
  • The mortality rate for first-time entrepreneurs dwarfs that of experienced entrepreneurs. 
  • Primary causes of failure: insufficient expertise and experience to build and execute a robust business plan and running out of funds as a result.

Given the high rate of failure, it is understandable why most angel investor groups install a rigorous qualification process with high hurdles and have a great reluctance to invest in companies without a complete and experienced management team and near-perfect business plan. The reality, however, is that great invention can and does come from diverse sources.

The start-up entrepreneur is therefore simultaneously faced with the often time consuming, challenging, and expensive tasks of: (1) trying to recruit a capable, experienced team; (2) giving birth to a new product and company; (3) raising capital on a regular basis to fund operations. Some intrepid entrepreneurs utilize support groups or consultants to assist in building business plans or fill roles only to find out later that most potential investors insist on key functions being staffed by people with "skin in the game". To use a breakfast of bacon and eggs as an analogy, a consultant can provide the eggs with limited impact to themself; investors prefer to do business with those who provided the bacon as they have skin in the game.

Xaphan Group was founded on a simple premise: great companies and superior returns can result from a variety of early-stage companies, including ones not currently ideal investment candidates.  In those situations, when investors with relevant business expertise and experience are willing to actively participate, success becomes more likely.