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An Interview with Entrepreneur Howard Lindzon

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Economy, Gerbsman Partners, Intellectual capital, Investments, Marketing, Strategy, Technology, Venture Capital on June 19, 2009| Leave a Comment »

Here is an excellent article from Seeking Alpha.

“In Willie Wonka & The Chocolate Factory, uber-creative yet pragmatic Willie Wonka manages the development and distribution of exciting new candies. Similarly, successful entrepreneur Howard Lindzon appears to be running a factory of cutting-edge candy for the emerging social web.

Howard’s best known for WallStrip: a witty and funny daily video about trending stocks (hosted by the attractive Lindsay Campbell). In 2007, Howard sold the venture to CBS for $5 million. Currently, Howard is working on what he considers “The Big One.” The white-hot web platform is called StockTwits. It is a Twitter-powered platform on which investors and traders can share information. While the foundational engine Twitter has yet to discover a viable business model, Howard has brought the technology to a niche where instantaneous information is profitable to users (and the well-heeled demographic is attractive to advertisers). Thus, a sound business model is at hand.

I got Howard out of bed early on Saturday morning to watch his life flash before his eyes — from his car wash during high school to his multi-million dollar companies. Lucky for me, Howard doesn’t need much sleep to run his Chocolate Factory …

Damien Hoffman: Howard, how did you initially get your entrepreneurial spirit out into the world?

Howard: I was definitely a late bloomer. I grew up kind of spoiled. My parents left me alone. But my first entrepreneurial experience was cleaning cars in high school. During the summer I charged $60 to $80 bucks to take someone’s car for the day and give it a wash, wax, and clean the interior. My operation wasn’t too sophisticated. I just did it to pay some bills so I could play golf and stay out of my parents’ hair.

That was my first entrepreneurial experience. Then I started selling some Native-American jewelry that became popular in the 70s. I went to Albuquerque, New Mexico, to buy the stuff. Then I’d sell the jewelry up in Toronto. It was like a license to print money. My dad, who is also an entrepreneur, would give me money to buy the jewelry. I would set up shop in my house and sell to all his friends and their kids. It was an insane mark up. [Laughing] Oh well. I had some advantages other kids didn’t have. I was a lucky kid in many ways.

Damien: Did you remain entrepreneurial through college?

Howard: I went to college and just partied. I didn’t do anything. I was just a rotten college student so I ended up going back later to do my grades. College was just my friends and me partying. I lived with my best friends and just did enough to get by.

Damien: So what was your path when you first got out of college?

Howard: The first job I took was in ’87 right before the stock market crash. I didn’t really know anything. My grades weren’t great. I needed to get a job if I wanted to graduate school. My friend’s dad owned a brokerage firm in Toronto. So we worked in the order room. You know, back then in the olden days.”

Read the full article here.

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Climate for tech mergers warms up

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Sun Microsystems, Technology, Venture Capital, tagged , , , , , , , , , , , , , , , , , , , , , on June 17, 2009| 1 Comment »

Here is article from USA Today. As the crisis starts to ebb out, the downsizing has produced piles of cash at some companies.

“SAN FRANCISCO — There could be a thaw in the months-long stagnant market for tech mergers and acquisition.

Data-storage companies EMC (EMC) and NetApp are dueling to buy Data Domain for at least $1.8 billion. Last week, chipmaker Intel (INTC) said it would buy testing and development software maker Wind River Systems for $884 million.

The quarter’s big catch was when Oracle (ORCL) snapped up Sun Microsystems for $7.4 billion.

While hardly a buying spree, the uptick could signal a break for what has been a sluggish tech M&A market since the third quarter of last year.

So far, $17.9 billion has been spent on tech mergers in the U.S. in the current quarter — more than the previous two quarters combined, according to market researcher Thomson Reuters.

The activity reflects one byproduct of a sour economy: Big tech companies sitting on piles of cash are willing to spend some of it to aggressively pick up innovative start-ups as well as rivals with customers and market share.

The deals come at a time when venture capital funding is scarce for start-ups and there are scant initial public offerings.

“People historically make their money when they invest consistently, even during downturns,” says Keith Larson, vice president of Intel Capital, the company’s venture-capital arm. The company has said that it will spend $7 billion over two years to build advanced manufacturing facilities in the U.S.

“Almost the worst thing you can do is pull back during a downturn and miss out on buying opportunities,” Larson says. “We have a multiyear road map on the technology side.”

Cisco Systems CEO John Chambers, who has navigated the venerable network-equipment maker through several downturns, has said companies willing to take calculated risks often emerge stronger from recessions.

A few established companies with ample cash reserves this year have bolstered their war chests with the intention of snapping up companies.

Cisco (CSCO), which sold $4 billion in bonds in February, has about $33.5 billion in cash reserves. It acquired Pure Digital Technologies, maker of the popular Flip video camera, for $590 million.

“If you have cash, it is a good time to fortify product lines and fuel growth,” says Cynthia Ringo, managing partner for VC firm DBL Investors.

So far this quarter, there have been 239 deals in the U.S., including the Oracle-Sun blockbuster. In the first three months of this year, there were 313 deals.”

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Billions of dollars to be invested in cleantech R&D

Posted in Board Of Intellectual Capital, boic, Business models, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Technology, Venture Capital, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on June 16, 2009| 1 Comment »

Here is an excellent blog entry from Mind The Bridge.

“The American Recovery and Reinvestment Act, passed last February 2009, pours over $65 billion into renewable energy, energy efficiency and greentech financing of which 6.5 billion for R&D. It is a real “Green New Deal”: The most significant effort in public spending in science and technology after the launch of the Apollo Program. And «it only costs the equivalent of a couple of months in Irak» as a blogger commented on the New York Times website. A big part of these dollars is already profiting Silicon Valley start-ups and research centers, which are leading the way through future technological development.”

It continues…

“The most important incentives deployed by the Stimulus Package are the following:

  • A large sum for energy efficiency, including $5 billion for low-income weatherization programs; over $6 billion in grants for state and local governments; and several billion to modernize federal buildings, with a particular emphasis on energy efficiency.
  • $11 billion for “smart grid” investments.
  • $3.4 billion for carbon capture and sequestration demonstration projects (also known as “clean coal”).
  • $2 billion for research into batteries for electric cars.
  • $500 million to help workers train for “green jobs.”
  • A three-year extension of the “production tax credit” for wind energy (as well as a tax credit extension for biomass, geothermal, landfill gas and some hydropower projects).
  • The option, available to many developers, of turning their tax credits into direct cash, with the government underwriting 30 percent of a project’s cost.

For more details, I found the DSIRE database very useful to navigate the complex space of federal and state incentives for renewables and efficiency.”

In Silicon Valley, the following companies are eyeing these funds.

“Renewable Power Generation : Thin Film Solar photovoltaic
Solyndra is the first company to receive an offer for a U.S. Department of Energy (DOE) loan guarantee within the Stimulus Package. Solyndra, a Fremont, California-based manufacturer of innovative cylindrical photovoltaic systems using thin film technology, will use the proceeds of a $535 million loan from the U.S. Treasury’s Federal Financing Bank to expand its solar panel manufacturing capacity in California. Also in the thin-film sector, Heliovolt is looking into the Stimulus Package for the development of its technology and production capacity. It is a CIGS thin-film PV panel manufacturer that uses a fraction of semiconductor material used in traditional silicon cells, significantly slicing costs while at the same time achieving performances comparable to traditional silicon cells.

Transportation: Electric Cars and Biofuels
Tesla Motors, Inc. is awaiting word on a $350 million loan application to the Department of Energy that would allow the electric carmaker to build the Model S sedan, which is expected to cost $57,400. Tesla is a Silicon Valley automobile startup company focusing on the production of high performance, consumer-oriented battery electric vehicles. In the biodiesel space, Aurora Biofuels uses proprietary technology developed at the University of California at Berkeley, to produce biodiesel feedstock from microalgae. Based in Alameda, California, Aurora’s technology achieves yields that are 100 times higher and at significant lower costs than traditional bioethanol production methods.

Energy Efficiency:
Serious Materials, a leading sustainable building materials company based in Sunnyvale, CA, announced that it fully supports the American Recovery and Reinvestment Act energy efficiency provisions. “We are already opening plants to meet the Recovery Act demand and hiring what may be hundreds of workers this year.” The company’s products such as SeriousWindows and SeriousGlass can reduce heating and cooling energy costs by up to 50%. Under the Recovery Act, homeowners can receive federal tax credits for “qualified energy-efficient improvements,” which include windows, doors and skylights. The new tax credits are for 30% of the cost of eligible products up to a limit of $1,500.

Efficiency of Infrastructures: Smart Grid Management Systems
Lumenergi, Inc., a Newark, CA based start-up is emerging rapidly in a space populated by large corporations. Lumenergi manufactures advanced and price-competitive dimming electronic ballast for fluorescent lighting that, combined with a proprietary lighting control system, is able to achieve energy savings in the order of 70%. In addition, Lumenergi’s system is Demend Response ready, allowing utilities to save energy at peak loads. This provides a huge opportunity as lighting accounts for 23 percent of all electricity consumption in the U.S. and 50 percent of electricity used in high-rise buildings. Coupled with rebates and grants that are increasingly being offered by utilities or state energy offices, Lumenergi estimates that a customer could get a return on their investment in only two years.

With billions of dollars from the Recovery Act flowing into smart grid investments, pushing utilities towards efficiency, and funding energy efficiency retrofits of commercial and governmental building, Lumenergi and other technology start-ups in Silicon Valley are getting organized to make the most out of federal and state funding.”

Click here to read the full article.

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The New, New Normal

Posted in Board Of Intellectual Capital, boic, Economy, Gerbsman Partners, Investments, Market research, tagged , , , , , , , , , , on June 15, 2009| Leave a Comment »

Here is some excellent reading from John Maludin from Investor Insight. Please see below for more information in regards and links to further materials.

John Mauldin is a multiple NYT Best Selling author and recognized financial expert. He has been heard on CNBC, Bloomberg and many radio shows across the country. He is the editor of the highly acclaimed, free weekly economic and investment e-letter that goes to over 1 million subscribers each week.

“Last week I outlined three possible paths for the economy based upon the political
choices we make about the budget deficits.

First, there is the benign path, where we more or less roll back the Bush tax cuts,
and do not increase spending for new programs. The fiscal deficit falls into a manageable
range. We repeat the Clinton years where spending is help below increase in revenue so
that over time the budget gets balanced. While a large tax increase would have negative
consequences for the overall economy, it is far better than the other two paths strictly
from the perspective of growing the economy as much as possible. This path also has a
very small probability.

The second path is that the Obama budget is passed, the Bush tax cuts go away
and we have a decade of projected trillion dollar deficits. By the way, those deficits
assume 3% growth rates, low unemployment, low interest rates and very large health care
savings, and a withdrawal from Iraq and Afghanistan. The deficits are likely to be MUCH
larger then the CBO forecasts. This on top of exploding entitlement expenditures in the
middle of the next decade, which are underscored in the opinion of more conservative
analysts (including me).

The third path is the same as above expect that large new taxes are passed in order
to bring the deficit to a manageable size relative to the growth of GDP. This means that a
tax increase over and above those projected by the Obama administration of around $700
billion a year (about 5% of GDP!). Deficits would still be in the $3-400 billion range, but
from a funding perspective, it could be done.

The second path is one that will end in heart ache. I do not think that the world or
even US investors can buy multiple trillions of dollars of debt for more than a few years
without rates rising significantly. That, as Gross points out, will affect both businesses
and mortgage borrowers. It is a disastrous train wreck.

The third path is the more likely. I think (hope?) there are enough economically
conservative Democratic that will realize the problems of trillion dollar deficits. But they
do want a fully nationalized health care, and thus they will pass enough in taxes to pay
for it. If they are going to do it, this is their one chance, as Republicans are likely to do
better in the 2010 elections and get enough votes to push back any real tax increases other
than letting the Bush tax cuts expire.”

John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore

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Get Ready for Inflation and Higher Interest Rates

Posted in Board Of Intellectual Capital, boic, Business models, Distressed IP, Economy, Gerbsman Partners, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on June 12, 2009| Leave a Comment »

Here is an interesting post by Arhtur Laffer at Wall Street Journal.

“The unprecedented expansion of the money supply could make the ’70s look benign.

Rahm Emanuel was only giving voice to widespread political wisdom when he said that a crisis should never be “wasted.” Crises enable vastly accelerated political agendas and initiatives scarcely conceivable under calmer circumstances. So it goes now.

Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That’s more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers’ expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.

With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.”

The story concludes…

“Alas, I doubt very much that the Fed will do what is necessary to guard against future inflation and higher interest rates. If the Fed were to reduce the monetary base by $1 trillion, it would need to sell a net $1 trillion in bonds. This would put the Fed in direct competition with Treasury’s planned issuance of about $2 trillion worth of bonds over the coming 12 months. Failed auctions would become the norm and bond prices would tumble, reflecting a massive oversupply of government bonds.

In addition, a rapid contraction of the monetary base as I propose would cause a contraction in bank lending, or at best limited expansion. This is exactly what happened in 2000 and 2001 when the Fed contracted the monetary base the last time. The economy quickly dipped into recession. While the short-term pain of a deepened recession is quite sharp, the long-term consequences of double-digit inflation are devastating. For Fed Chairman Ben Bernanke it’s a Hobson’s choice. For me the issue is how to protect assets for my grandchildren.”

Read the full article here.

Others covering this story include: NCPA, Market Guardian, Bully Pulpit.

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