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Archive for the ‘Investments’ Category

“Bailout” in need of more bailout!

Posted in Board Of Intellectual Capital, boic, Economy, Investments, Market research, Strategy, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , on May 7, 2009| Leave a Comment »

Putting cash into unhealthy business has long been understood as a bad deal. With the Bailout programs and the TARP initiative, some might have thought that the problem was solved – think again. Poor business remain poor business.

Here are some good quotes taken from NY Times.

“The results of the bank stress tests have been trickling out for days, from Washington and from Wall Street, and the leaks seem to confirm what many bankers feel in their bones: despite all those bailouts, some of the nation’s largest banks still need more money.

But that does not necessarily mean the banks will get that money from the government. The findings, to be released Thursday by the Obama administration, suggest that the rescue money that Congress has already approved will be enough to fill the gaps. If so, the big bailouts for the banks may be over.But hopes that the tests will be a turning point in this financial crisis electrified Wall Street on Wednesday and some overseas markets the next day. Financial shares soared, lifting the broader American stock market to its highest level in four months. The Dow Jones industrial average rose 101.63, or 1.2 percent, to close at 8,512.28 Wednesday, while Japan’s Nikkei index rose more than 4 percent by midday Thursday.”

Good news indeed, but…

“After news this week that Bank of America and Citigroup would be required to bolster their finances again, word came Wednesday that regulators had determined that Wells Fargo and GMAC, the deeply troubled financial arm of General Motors, would need to do so as well. But regulators decided that American Express, Capital One, Bank of New York Mellon, Goldman Sachs, JPMorgan Chase and MetLife would not need to take action. The official word is due at 5 p.m. Thursday.

The results so far seem to suggest that the 19 institutions that underwent these exams will need less than $100 billion in additional equity to cope with a deep recession, far less than some investors had feared. The question now is, where will banks get that capital?”

Read the full article here.

Other helpful sources on this issue can be found here: Huffington Post, Barrons Blogs, Wall Street Journal, Seeking Alpha, 24/7 WallStreet

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Few IPO candidates makes VC´s worried

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , , , , on May 6, 2009| Leave a Comment »

A giant investment dilemma is coming into play as of late – the market, Silicon Valley especially, is running short on IPO candidates. The jackpots including Intel, Apple, Netscape, eBay, Yahoo and Google are all history by now. With few candidates, the payoffs look smaller and the real problem shows – where will the money come from for new investments?

Here are a good analysis taken from Silicon Valley.com.

“So how might a Facebook or LinkedIn IPO perform when the time is right? Or what will Skype’s IPO look like, assuming eBay proceeds with plans to spin it out in 2010 as a separate company?

“We’re seeing a rebuilding and stabilization of the IPO market, so that Silicon Valley firms will be able to participate.” said Jeff Grabow of the accounting firm Ernst & Young’s San Jose office, which issued its quarterly U.S. IPO Pipeline report Tuesday.”

It continues…

“The IPO is vital to the valley’s economy, promising a potential jackpot for VCs that compensates for investments that don’t pan out. Not so long ago, the valley seemed to pop out an IPO every few weeks. But since early 2008, the pipeline has been more like a sieve. The venture industry is now pushing for tax breaks and regulatory relief from Washington to revive the market.

Ernst & Young’s report offers a snapshot of the situation. Privately held companies get in the IPO pipeline by filing S-1 forms with the Securities and Exchange Commission that signal their plans to sell stock on public markets. There were 57 companies in the pipeline Dec. 31, but only 44 on March 30.

In the first quarter, 16 companies exited the pipeline — only two made Wall Street debuts. Among the others, 10 registrations had surpassed the one-year expiration for inclusion in the study, which suggests they may just be biding their time in a chilly market. Three registrants withdrew their S-1s, and one postponed. Three companies filed S-1s, including San Francisco-based OpenTable, the online restaurant reservation service.

When OpenTable filed in January, it seemed like wishful thinking in such a dreadful economy. Because SEC rules require “a quiet period” for companies that file for IPO, I couldn’t ask CEO Jeff Jordan why OpenTable was making such a move. How good could the restaurant business be with credit crunched and people pinching pennies?”

Read the full article here.

Other covering the issue: Techmeme, TechSheep, Congoo

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M&A Strategies

Posted in Board Of Intellectual Capital, boic, Business models, Investments, Strategy, Venture Capital, tagged , , , , , , , , on May 5, 2009| Leave a Comment »

Here is some interesting viewpoints from Venture Capital Dispatch – a WSJ Online blog written by Scott Austin.

“Last August, Hewlett-Packard Co. signed a letter of intent to pay $360 million cash for LeftHand Networks Inc., a venture-backed provider of storage systems. A few weeks later, Wall Street’s collapse sent the economy in a tailspin and threatened to knock the screws out of the deal.

But after a two-week pause the two sides got back together and in November closed the acquisition on the same terms.”

The article continues…

“LeftHand was able to hold its ground because it had proven itself valuable well before Hewlett-Packard offered to buy it. H-P had been reselling LeftHand’s software on some of its servers for nearly three years, and realized it couldn’t do without it.

The deal signifies the importance of setting up strategic relationships with possible acquirers, especially in this environment, said the aforementioned investor, Matthew McCall, a managing director with Draper Fisher Jurvetson Portage Venture Partners.

“When your hair’s on fire as a corporation, you’ll try anything to make the pain go away,” he said. “Now’s a great opportunity [for start-ups] to enter partnerships, distribution agreements, and dialogues with larger corporations.”

Matthew McCall´s advice continues:

  • Form a strategic relationship with a potential buyer,
  • Look at it from the acquirer’s perspective,
  • Identify the alternatives,
  • Finally, make sure at least two mortal enemies are bidding on your start-up.

Read the full article here.

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Apple Hits 1 Billion App Store Downloads

Posted in Board Of Intellectual Capital, FaceBook, Gerbsman Partners, Investments, Mobile, tagged , , , , , , , , , on April 24, 2009| 4 Comments »

Since its inception in July last year, Appstore has become a steady and viable business model for Apple. With over 1 Billion downloads, its fair to say that the rest of the mobile industry needs to take a very close look at the model.

As a result, Apple can now show some very significant numbers towards the mobile content market.

“There are over 37 million devices running Apple’s mobile operating system: over 21 million iPhones and over 15 million iPod touches (with 35,000+ apps available in the store) according to the company. Besides driving the success of the App Store, these devices also helped Apple control 50 percent of the mobile ad market and drive the most mobile OS Internet traffic in the U.S., according to the latest market reports.”

In relation to mobile advertising, the PC World story continues;

“AdMob’s research shows that the iPhone and iPod touch serve around 50 percent of the mobile ad requests in the U.S., followed by Research In Motion with 22 percent and Windows Mobile with 11 percent. Worldwide, Apple’s handsets go neck-to-neck with Nokia‘s when it comes to traffic generated by smartphones. AdMob’s data shows that Apple’s devices drive the most traffic world wide, counting in at 38 percent.”

Mashable, which mainly covers Web 2.0 news, made an interesting comparrison.

“The milestones comes just over three months after the company surpassed 500 million downloads, and about nine months since launching.

While it’s certainly an enormous milestone, how does it compare to some other massive numbers that various Web companies have reached recently? Here’s a look at a few huge stats:

While impressive in its own, and somewhat unrelated to eachother – web.20 have proven to produce some gigantic numbers that are serving as benchmarks for success.

Comprehensive blog coverage can be found here:  IntoMobile, MediaMemo, TechCrunch, SciTechBlog

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VC deal down in the 1st quarter of 2009

Posted in Board Of Intellectual Capital, boic, Economy, Investments, Moneytree, MoneyTree report, National Venture Capital Association, PricewaterhouseCoopers, PWC, Venture Capital, tagged , , , , , , , , on April 21, 2009| 1 Comment »

To no ones surprise, the VC community pulled in its spending spree and held back in the wake of the financial crisis. The recent report release by NVCA (National Venture Capital Association) this last weekend. A funny detail in the mix is that they release the data on saturday afternoon, after all media stopped their coverage for the weekend!

“Venture capitalists invested just $3.0 billion in 549 deals in the first quarter of 2009, according to the MoneyTree™ Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters. Quarterly investment activity was down 47 percent in dollars and 37 percent in deals from the fourth quarter of 2008 when $5.7 billion was invested in 866 deals. The quarter, which saw double digit declines in every major industry sector, marks the lowest venture investment level since 1997”

Overall, its not good news. In specific areas, the analysis continues;

“The Software sector received the highest level of funding with $614 million going into 138 rounds, a drop of 42 percent in dollars and 34 percent in deals compared to the fourth quarter of 2008.”

“The Life Sciences sector (Biotechnology and Medical Devices combined) experienced a 40 percent decline in terms of dollars and a 31 percent drop in deals with $989 million going into 133 rounds. Investment in Biotechnology fell 46 percent to $577 million in the quarter, while Medical Device investments fell 27 percent to $412 million. Investments in Life Sciences companies represented 33 percent of all investment dollars and 24 percent of all deals in the first quarter, which is in line with historical norms.”

For the whole pressrelease, click here. For additional coverage on this story see; ABF Journal, The Batts report.

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