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Archive for October, 2011

VC funding dips, and seed investments nosedive

Posted in Board Of Intellectual Capital, Business models, Distressed Intellectual Property, Economy, Gerbsman Partners, Intellectual capital, Investments, IPO news, Market research, National Venture Capital Association, NVCA, PricewaterhouseCoopers, PWC, Strategy, Technology, Venture Capital, tagged , , , , , , , , , , on October 20, 2011| Leave a Comment »

Article from GigaOm.

It’s no secret that the larger economy has hit a rough patch in recent months. Although Silicon Valley has — in general – fared better than many other parts of the world, the venture capital industry is not immune to the negative effects of the macro-economic slowdown.

In the third quarter of 2011, venture capital investment activity fell 12 percent in terms of dollars and 14 percent in terms of deals compared to the previous quarter, according to the latest edition of the MoneyTree Report assembled by accounting giant Pricewaterhouse Coopers (PwC) and the National Venture Capital Association (NVCA).VCs invested $6.9 billion in 876 deals during the July through September timeframe in 2011, the MoneyTree report says, a notable decline from the $7.9 billion invested in 1,015 deals during the second quarter of 2011.


To be fair, the industry is still up compared to last year. For the first three quarters of 2011, VCs invested $21.2 billion, which is 20 percent more than VCs invested in the first three quarters of 2010. And 2010 saw an even bigger drop between the second and third quarters of the year. But VC funding is not exactly predictable according to the time of year — in 2009, for instance, the third quarter of the year was stronger than the second.

The VC industry is not as predictably cyclical as others because it generally takes its cues from a fluctuating variety of places: the worldwide economy, the entrepreneurial environment, the stock market’s appetite for IPOs, and larger companies’ appetite for acquisitions. It’s a complicated mix, but at the moment, it seems venture capitalists may be nervous about the larger environment of financial unrest, and the IPO window that opened earlier this year seems to be closing.

Seed funding takes a hit

Seed funding — which has recently been the hotshot of the industry as more angel and individual investors have become active in funding the startup scene — took a major hit in the third quarter of 2011. Seed stage investments fell a whopping 56 percent in terms of dollars quarter-over-quarter, and 41 percent year-over-year, to $179 million. It’s not just the total amount of seed investment that’s fallen, it’s also the amount of money per deal: The average seed deal in the third quarter was worth $2 million, a 43 percent drop from the average seed deal in the second quarter of 2011, which was $3.3 million.

And late stage deals have started to see major declines as well. Later stage startup investments decreased 20 percent in dollars and 30 percent in deals in the third quarter compared to the second, MoneyTree reported. Middle, or expansion, stage deals were relatively robust: Expansion stage dollars increased two percent quarter-over-quarter and 43 percent year-over-year, with $2.5 billion going into 260 deals.

Software is still strong

It’s not all doom and gloom, though. The software space has held up fairly well, receiving the highest level of funding for all industries during the third quarter with $2 billion invested from venture capitalists. That’s a 23-percent increase in dollars from the second quarter, and according to MoneyTree, the highest quarterly investment in the sector in nearly a decade, since the fourth quarter of 2001.

The web industry had a relatively soft quarter, as investments in Internet-specific companies fell 33 percent quarter-over-quarter during the third quarter to $1.6 billion. But it’s not exactly time to cry for Internet startups; the third quarter had a very tough act to follow, because Internet-specific VC deals hit a 10-year high in the second quarter of 2011.

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Update to the Bidding Process – Procedures for the sale of certain assets of Alure Medical, Inc.

Posted in Board Of Intellectual Capital, boic, Business models, Distressed Intellectual Property, Distressed IP, Gerbsman Partners, Inetellectual Property, Intellectual capital, Investments, Life Science, Medical Device, Venture Capital, Venturebeat, Wilson Sonsini Goodrich & Rosati on October 17, 2011| Leave a Comment »

Update to the Bidding Process – Procedures for the sale of certain assets of Alure Medical, Inc.

Further to Gerbsman Partners e-mail of October 2, 2008 regarding the sale of certain assets of Alure Medical, Inc., I attach the draft legal documents that we will be requesting of bidders for certain assets of Alure Medical, Inc.  All parties bidding on the assets are encouraged, to the greatest extent possible, to conform the terms of their bids to the terms and form of the attached agreement.  Any and all of the assets of Alure Medical, Inc. will be sold on an “as is, where is” basis.  I would also encourage all interested parties to have their counsel speak with James Huie Esq., counsel to Alure Medical, Inc.

For additional information please contact James Huie, Esq., of Wilson Sonsini Goodrich & Rosati counsel to Alure Medical, Inc.  He can be reached at 650 565 3981  and/or at    jhuie@wsgr.com

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Alure Medical Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Wednesday, November 2, 2011 at 2:00 p.m. Pacific Daylight Time (the “Bid Deadline”) at Alure Medical’s office, located at 3637 Westwind Boulevard, Suite B, Santa Rosa, California 95403.  Please also email – steve@gerbsmanpartners.com – with any bid.

For your convenience, I have restated the description of the Updated Bidding Process.

The key dates and terms include:

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix A) to have access to key members of management and intellectual capital teams and the due diligence “war room” documentation (“Due Diligence Access”), and the Alure Video. Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the Alure Medical Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective staff, agents, or attorneys) do not make any representations as to the accuracy orcompleteness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Alure Medical Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Wednesday, November 2, 2011 at 2:00pm Pacific Daylight Time (the “Bid Deadline”) at Alure Medical’s office, located at 3637 Westwind Boulevard, Suite B, Santa Rosa, California 95403. Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. In particular, please identify separately certain equipment or other fixed assets.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of$200,000 (payable to Alure Medical, Inc.).  The deposit should be wired to Alure Medical’s attorneys Wilson, Sonsini, Goodrich & Rosati.  The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by Alure Medical’s counsel.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder.

Alure Medical reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Alure Medical will require the successful bidder to close within a 7 day period. Any or all of the assets of Alure Medical will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Alure Medical Assets shall be the sole responsibility of the successful bidder and shall be paid to Alure Medical at the closing of each transaction.

For additional information, please see below and/or contact:

Steven R. Gerbsman
(415) 456-0628
steve@gerbsmanpartners.com

Kenneth Hardesty
(408) 591-7528
ken@gerbsmanpartners.com

James Skelton
(949) 466-7303
Jim@gerbsmanpartnes.com

James Huie, Esq.
(650) 565-3981
Jhuie@wsgr.com

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Power.com – Premium, Category Defining Domain Headlines T.R.A.F.F.I.C. Live Auction

Posted in Board Of Intellectual Capital, boic, tagged , , , , , on October 15, 2011| Leave a Comment »

Fort Lauderdale, FL and Six Nations of the Grand River, Canada – October 6, 2011. T.R.A.F.F.I.C., the domain industry’s signature domain conference is pleased to announce that Power.com has been added to the roster of domains slated for auction on Tuesday October 18, 2011 at The Ritz-Carlton Hotel in Fort Lauderdale, FL.

“We’re ecstatic to have the exclusive assignment to auction such a prominent domain. It demonstrates the level of trust and commitment that serious domain asset managers have for the T.R.A.F.F.I.C. franchise,” said Rick Schwartz, CEO of T.R.A.F.F.I.C.
This exceptional property is one of those unique domains that can define a broad range of products and services. Key industry sectors include power and energy generation and transmission – nuclear, wind, solar, thermal, hydroelectric, batteries, generators, oil and gas among others, but “Power.com is much more versatile,” noted Schwartz.

“Power.com could position a new product or service or re-define an existing product or service such as energy drinks, health foods, vitamins and supplements, sports and fitness, clothing, financial services, venture capital, insurance, online gambling, entertainment – the list is extensive.”
Descriptive, generic domains have historically increased in value. In tough economic times they have even increased in value.  Scott Smith, CEO of RokMe Inc., broker of Power.com commented that “Power.com is among the world’s elite domains, comparable to others that have sold for multi-millions of dollars including Sex.com – $13 million, Fund.com – $9.9 million, Business.com – $7.5 million and Beer.com – $7 million. These prices illustrate the significant value companies and individuals attribute to the web’s most desirable properties. In terms of ego, prestige and branding potential, Power.com is incomparable. ”

Bidders at the T.R.A.F.F.I.C. auction will either have to attend in person or bid by telephone. In order to bid by telephone bidders need to be pre-qualified before the start of the auction. Telephone bidders will be given call-in instructions 72 hours before the auction begins.
The T.R.A.F.F.I.C. conference runs from October 14-19, 2011 at The Ritz-Carlton hotel in Fort Lauderdale, FL.

For More Information:
T.R.A.F.F.I.C. – Rick Schwartz, mr800king@aol.com
RokMe Inc. – Scott Smith, scott@rokme.com, +1 416 543 2843

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Google sales beat estimates amid online ad growth

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, google, Intellectual capital, Market research, Microsoft, Strategy, Technology, Venture Capital, tagged , , , , , , on October 14, 2011| Leave a Comment »

Article from SFGate.

“Google reported sales that beat estimates Thursday as businesses spent more on advertising to online consumers.

Third-quarter sales, excluding revenue passed on to partner sites, rose to $7.51 billion, Google said on its website. That topped the $7.23 billion average of analysts’ estimates compiled by Bloomberg. Net income climbed 26 percent to $2.73 billion ($8.33 per share) from $2.17 billion ($6.72) a year earlier.

Google, despite concerns about the economy, is benefiting from growing demand for online advertising, including search-based marketing that makes up most of its sales. Search-based advertising should reach $37.7 billion this year globally, up 23 percent, while total Internet ad spending should climb 20 percent, according to media researcher MagnaGlobal.

“Search is good,” said Kerry Rice, an analyst at Needham & Co. in San Francisco who rates the stock a buy and doesn’t own shares. “Paid search is still the biggest component of online advertising, and Google’s obviously going to win the vast majority of that dollar.”

Google rose 1.9 percent to close at $558.99 on the Nasdaq Stock Market. The shares have dropped 5.9 percent this year.

Third-quarter profit, excluding some items, was $9.72 a share, exceeding the $8.76 average of analysts’ estimates.

Even with more competition from Microsoft, Google picked up market share in the United States, according to Efficient Frontier Inc., which helps companies promote products online. Google had 82 percent of spending on search advertising in the third quarter, up from 81 percent in the two previous quarters.

Microsoft, which provides search and ad services for Yahoo’s U.S. websites under a new agreement, had 18 percent, down from 19 percent in the previous two quarters, according to Efficient Frontier.”

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Solyndra CEO Brian Harrison steps down

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Intellectual capital, Investments, Market research, tagged , , , , on October 13, 2011| Leave a Comment »

Article from SFGate.

“Solyndra CEO Brian Harrison, who refused to answer questions from Congress about his solar startup’s high-profile bankruptcy, has left the company, according to a new court filing.

Harrison stepped down on Friday, Solyndra reported in a bankruptcy court document filed late Tuesday. The company said Harrison left “as scheduled,” but didn’t elaborate. A Solyndra spokesman could not be reached for an explanation.

To replace Harrison, Solyndra wants to hire R. Todd Neilson, who served as bankruptcy trustee for boxer Mike Tyson and rap impresario Marion “Suge” Knight. Neilson has a background in forensic accounting, including a stint with the FBI as a special agent on white-collar crime cases.

If approved by the court, Neilson would serve as Solyndra’s chief restructuring officer, shepherding the company through the Chapter 11 process. Solyndra would also hire Neilson’s company – Berkeley Research Group, based in Emeryville – to help restructure or liquidate the company.

Neilson did not return a call seeking comment Wednesday.

Harrison led Solyndra for little more than a year, joining the Fremont company in July 2010. At that point, Solyndra was struggling.

In 2009, the company won a federal loan guarantee worth up to $535 million to build a factory for its tube-shaped solar modules. But by the time Harrison arrived, replacing founder Chris Gronet, the company had canceled plans for an initial public stock offering. Auditors questioned Solyndra’s chances for long-term survival.

Harrison, a former Intel executive, was unable to stop the company’s slide, as low-priced solar panels pouring into the market from China undercut Solyndra’s sales.

The company finally filed for bankruptcy on Sept. 6 of this year, igniting a political firestorm. FBI agents interviewed Harrison two days later, as part of an investigation into the accuracy of Solyndra’s financial statements.

Harrison and the company’s chief financial officer agreed to appear before a congressional subcommittee investigating Solyndra’s loans. But acting on the advice of their attorneys, both men refused to answer the subcommittee’s questions.

In July, Harrison had told members of the same panel that the company’s finances were on firm footing.

It’s not unusual for a company to switch CEOs during Chapter 11 proceedings, bankruptcy experts say. Often, companies bring in reorganization specialists who understand the bankruptcy process far better than the people they replace.

“It does help to have familiarity with the process,” said John Hansen, a partner in the Nossaman LLP law firm. “I’ve seen a lot of regular business people who’ve been in Chapter 11, and they’ve been very frustrated. It’s very restrictive, and they can’t always do what they want to do, the way they want to do it.”

In addition, involvement in a government investigation can interfere with an executive’s ability to do the job.

“When a CEO gets into a position where the company may be facing criminal prosecution or a criminal investigation, the likelihood of the CEO leaving gets pretty high,” said Eric Talley, co-director of the UC Berkeley Center for Law, Business and the Economy.

Like all corporate bankruptcies, Solyndra’s will be complex. In a separate set of bankruptcy court filings on Wednesday, a German company that designed equipment for Solyndra accused its former client of stealing its intellectual property.

Von Ardenne claims that it supplied Solyndra with machinery to deposit solar-cell materials on glass tubes, only to see the Fremont company build its own versions based on Von Ardenne’s designs.”

Read more here.

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