Feeds:
Posts
Comments

Archive for the ‘Strategy’ Category

Institutional Venture Partners Raises $1 Billion Fund

Posted in Board Of Intellectual Capital, Economy, Entrepreneurship, FaceBook, Gerbsman Partners, Investments, IPO news, Market research, Silicon Valley, Social Networks, Startups, Strategy, tagged , , , , , , , on June 29, 2012| Leave a Comment »

Article from NYTimes.

 

Institutional Venture Partners has another billion to play with.

The venture capital firm, an investor in Twitter, Zynga and LivingSocial, has raised $1 billion for I.V.P. XIV, its 14th and largest fund to date.

According to a partner, Sandy Miller, the firm initially set a $750 million target but increased it on robust demand. The fund, which was raised over four months, relied mainly on capital from previous investors.

Unlike some of its peers, Institutional Venture Partners does not write a lot of checks, usually not more than a dozen a year. As a later-stage investment firm, it invests $10 million to $100 million in seasoned start-ups in three main buckets: Internet, enterprise technology and mobile.

“I hate to sound dull but we’re doing the same strategy,” Mr. Miller said.

Mr. Miller, a longtime technology investor and co-founder of Thomas Weisel Partners, is optimistic despite recent setbacks in the technology sector.

Skepticism in the public markets, most recently highlighted by Facebook‘s underwhelming initial public offering, has damped enthusiasm for some late-stage start-ups. Zynga, for instance, an Institutional Venture Partners portfolio company, has tumbled more than 44 percent since its debut last year. And plenty of experts question whether another start-up it has backed, LivingSocial, is worth such a high valuation after Groupon, its far bigger rival, has fallen about 50 percent since its I.P.O.

Mr. Miller acknowledges that some valuations may pull back, but he says he invests for the long term.

“I’ve watched the technology market over a 30-year period,” he said. “There’s more interesting, high quality companies today than there has ever been and by a very wide margin.”

He added, “In every market, most deals don’t make sense, and that’s true now, but that’s always been true.”

Read more here.

Read Full Post »

For $1.2B, Microsoft adds social to Office with Yammer

Posted in Board Of Intellectual Capital, Economy, FaceBook, Gerbsman Partners, Intellectual capital, Investments, Market research, Microsoft, Startups, Strategy, Technology, tagged , , , , , , , , on June 26, 2012| Leave a Comment »

Article from GigaOm.

Microsoft announced Monday that the company has officially acquired social software startup Yammer for $1.2 billion in cash. The purchase was widely reported more than a week ago, but Microsoft confirmed the deal Monday in a press release.

As we noted earlier this month, the purchase could give Microsoft a social dimension to its popular corporate software products. Yammer creates a Facebook-like experience for business clients.

Yammer will join the Microsoft Office division after the acquisition, but CEO David Sacks will continue to lead the group, Microsoft said in the release. Kurt DelBene, president of the Microsoft Office group, offered some thoughts on how Yammer might fit into the Microsoft world in a blog post that accompanied the formal press release:

The combination of Yammer, SharePoint and Office 365 will provide the most comprehensive and flexible solutions for enterprise social networking. Over time, I see opportunity for exciting new scenarios by adding Yammer’s stand-alone service alongside and integrated into our collaboration offerings with SharePoint, Office 365, Dynamics and Skype. I picture people being able to use Yammer to manage and expand their professional relationships, share and collaborate on Office documents, stay informed about content updates, and to seamlessly move from status updates and feeds into voice and video conversations.

Yammer most recently raised $85 million in a February funding round, which brought it to $142 million in total funding. The company currently has more than 5 million corporate users, including customers at 85 percent of Fortune 500 companies, Microsoft and Yammer announced along with the acquisition today.

“We think that Microsoft is a great partner for us,” Sacks said in a conference call Monday with DelBene and Microsoft CEO Steve Ballmer. “I think it’s really the best possible partner in terms of its reach and resources, and its ability to help us scale.”

Ballmer said Yammer’s emphasis on cloud computing fits perfectly with Microsoft’s expansion into that area, and Yammer’s popularity with corporate clients makes it a natural partner:

“What we love about Yammer is that it was built on the notion that things can grow virally,” Ballmer said.

They noted that Yammer will remain in the San Francisco area even after the acquisition with Microsoft, which is headquartered near Seattle.

“When most people thought social networking was for kids, we had a vision for how it could change the way we work,” Sacks wrote in a blog post Monday. “Four years ago, we started paddling out to catch the wave that we’re riding today.”

Read more here.

Read Full Post »

Scoop: Meteor gets $9M in funding

Posted in Board Of Intellectual Capital, Investments, Java, Market research, Startups, Strategy, Technology, tagged , , , , , , , , , on June 1, 2012| Leave a Comment »

Article from GigaOm.

Meteor Development, the startup behind a hot, new real-time JavaScript framework, has scored $9 million in initial funding from Andreessen Horowitz, sources said. Company co-founder Matt DeBergalis had no comment on the funding news.

Meteor’s framework, as GigaOM reported in April, allows developers building web apps to work in “pure” JavaScript, and use the same APIs on both client- and server-side devices. The Meteor API works everywhere but development occurs on the local laptop with Meteor taking care of data updates and server synchronization. Developers commenting on Github and Hacker News really liked Meteor’s ability to perform “hot pushes,” which update code to users without interrupting their work.

Initial excitement about the framework was soon tempered by Meteor’s use of the General Public License (GPL) but in response to developer pushback on Github and StackOverflow, Meteor turned around and issued the code under the less restrictive MIT public license. That allows development of both open-source and commercial products.

Meteor, based in San Francisco, was co-founded by Geoff Schmidt, a co-author of the Miro web TV platform and co-founder of MixApp; DeBergalis, founder of the ActBlue fundraising platform; Nick Martin, another MixApp co-founder; and David Greenspan, author of Etherpad. The website features rave blurbs by luminaries including Posterous founder Gary Tan and Facebook co-founder Dustin Moskowitz.

Clearly, as evidenced by this funding, Meteor also has new fans among Silicon Valley investors as well.

Read more here.

Read Full Post »

Silicon Valley Venture Survey – First Quarter 2012

Posted in Board Of Intellectual Capital, boic, Economy, Entrepreneurship, Fenwick & West, Investments, Market research, Strategy, tagged , , , , , , , on May 28, 2012| Leave a Comment »

Article from Fenwick & West.

Background—We analyzed the terms of venture financings for 114 companies headquartered in Silicon Valley that reported raising money in the first quarter of 2012.

Overview of Fenwick & West Results

  • Up rounds exceeded down rounds in 1Q12, 65% to 22%, with 13% of rounds flat. This showed continued solid valuations in the venture environment, although a small drop off from 3Q11 and 4Q11, when 70% of rounds were up rounds. This was the eleventh quarter in a row in which up rounds exceeded down rounds.
  • The Fenwick & West Venture Capital Barometer™ showed an average price increase of 52% in 1Q12, a decline from the 85% reported in 4Q11, but still a solid showing.
  • We note some weakness in late stage financing (Series E and higher) valuations, where 37% of the financings were down rounds and the Barometer reported only a 12% increase. Series B financings were also not as frothy as they have been, with a Barometer reading of 58%, the lowest since 4Q09, but still very solid.

The results by industry are set forth below. In general software and digital media/internet companies continued to see the strongest valuation increases, with hardware and life sciences lagging.

Overview of Other Industry Data

  • Venture valuations were healthy, but investment was down.
  • M&A valuations were up, but the number of deals was down.
  • Venture fundraising was mixed, but corporate venture investing was up.
  • IPOs were up, and the passage of the JOBS Act is a further encouraging signal for the public market, but continuing global financial uncertainty, especially in Europe, is a concern.

So what is the take-away? Venture fundraising continues to be problematic, and likely contributed to the decreased venture investment the last two quarters. However with IPOs improving, and interest rates still extremely low, there is reason to believe that venture fundraising will improve, if the global economic environment doesn’t further increase risk averseness. The M&A market slowed a bit in 1Q12, possibly to give participants a chance to evaluate the improvement in IPOs, and its possible effect on valuations, but corporate America has plenty to spend, evidenced by their increasing participation in venture investment. And the areas of entrepreneurial focus and innovation are broad, with mobile, cloud, security, big data and of course social media all attracting substantial attention.

Venture Capital Investment.

  • Venture capital investment in the U.S. declined for the second quarter in a row, with the decline evident in most major industry segments, including internet/digital media.
  • Dow Jones VentureSource (“VentureSource”) reported $6.2 billion of venture investment in 717 deals in 1Q12, a 16% decline in dollars from the $7.4 billion invested in 803 deals in 4Q11 (as reported in January 2012).
  • The PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters (the “MoneyTree Report”) reported $5.8 billion of venture investment in 758 deals in 1Q12, a 12% decline from the $6.6 billion invested in 844 deals in 4Q11 (as reported in January 2012).

Merger and Acquisitions Activity.

  • M&A activity for venture-backed companies had mixed results in 1Q12, with deal volume declining for the second quarter in a row, to the lowest quarterly amount since 2009, but with Dow Jones reporting a significant increase in deal proceeds.
  • Dow Jones reported 94 acquisitions of venture-backed companies in 1Q12 for $18.1 billion, a 12% decline in transaction volume, but a 93% increase in dollars, from the 107 transactions for $9.4 billion in 4Q11 (as reported in January 2012).
  • Thomson Reuters and the NVCA (“Thomson/NVCA”) reported 86 transactions in 1Q12, a 7% decline from the 92 reported in 4Q11 (as reported in January 2012). Sixty-eight of the 86 deals were in the IT sector.
  • Dealogic reported that Google, Facebook, Groupon and Zynga purchased a combined 34 companies in 1Q12 (not necessarily all venture-backed).

IPO Activity.

  • IPO activity for venture-backed companies improved again in 1Q12, which was the best quarter for number of IPOs since 4Q07.
  • VentureSource reported 20 venture-backed IPOs raising $1.4 billion in 1Q12, compared to 10 IPOs raising $2.4 billion in 4Q11 (as reported in January 2012). There were 50 companies in registration at the end of the quarter.

We note that the new law that permits confidential IPO filings may delay future information on the number of companies in registration, as a substantial number of companies appear to be taking advantage of this alternative.

Thomson/NVCA reported 19 IPOs for $1.5 billion in 1Q12, compared to 12 IPOs raising $2.6 billion in 4Q11. Eleven of the IPOs were in IT and five in healthcare, and 95% were U.S.-based companies.

Venture Capital Fundraising.

  • Industry sources reported conflicting fundraising results for 1Q12, with Dow Jones reporting an increase in dollars raised and Thomson/NVCA reporting a decline. Taking an average of the two, venture capital fundraising and venture capital investing were approximately equal this quarter, but the number of funds raising money continues to be low.
  • Dow Jones reported that 47 U.S. venture funds raised $7 billion in 1Q12, a 35% increase in dollars over the $5.2 billion that was raised in 4Q11 (as reported in January 2012).

Thomson/NVCA reported that 42 U.S. venture capital funds raised $4.9 billion in 1Q12, a 13% decrease in dollars over the $5.6 billion raised by 38 U.S. funds in 4Q12 (as reported in January 2012). The top 5 fundraisers accounted for 75% of the total amount raised, with Andreessen Horowitz raising $1.5 billion and leading the way.

Secondary Markets.

  • The secondary market for venture-backed company shares is in uncharted waters.
  • The recently passed JOBS Act made filing for an IPO more appealing to companies, which could decrease the number of late stage private companies whose shares would be available for secondary trading. However, the Act also increased the maximum number of shareholders that private companies could have before registering with the SEC, which allows private companies to stay private longer, which could increase the pool of late stage private companies whose shares would be available for secondary trading.
  • Additionally, Facebook, which accounted for a large percentage of the trading on secondary exchanges, and whose shares were also purchased by secondary funds, just went public, and secondary trading of their shares ended at the end of March 2012.
  • And the venture-backed IPO market seems to be improving in general, providing more opportunity for late stage private companies to go public.
  • Second Market reported that issuers were the buyer in 54% of second market transactions, but only accounted for 1.7% of transaction proceeds, suggesting that issuers are using Second Market to purchase small amounts of shares from numerous sellers, likely to limit their number of shareholders.

Corporate Venture Capital.

  • With a challenging venture fundraising environment, we thought it would be useful to provide some information on corporate venture capital (“CVC”).
  • In general, CVC declined precipitously in 2009 as a result of the stock market decline and global financial problems in 2008. Since then it has rebounded significantly with corporate venture investment increasing from $1.4 billion in 2009 to $2.0 billion in 2010 to $2.3 billion in 2011. Similarly, CVCs participated in 12.7% of all venture deals in 2009, 13.6% in 2010 and 14.9% in 2011. That said, these amounts significantly lag 2007, the best year for CVC in the past decade, when CVCs invested $2.6 billion and participated in 19% of deals (data from the MoneyTree Report).
  • While companies like Intel and Cisco have long been significant players in CVC investing, it will be interesting to see how heavily the current wave of major Silicon Valley companies participate in CVC. One indiciation is that Google started Google Ventures two years ago with the goal of investing $100 million a year, and has invested in 20 start-ups through March 2012. (Data from San Jose Mercury)
  • Another indication of CVC activity is that the number of CVCs who are members of the NVCA has grown from 50 to 62 members in the past year, and now comprises 7% of the total membership. (Data from Dow Jones VentureWire)
  • CVC investment seems more focused in industries with large capital requirements like cleantech and biotech, which accounted for 23% and 16% of CVC investment respectively in 2010/2011, than are independent venture capitalists. (Data from the MoneyTree Report)

Venture Capital Sentiment.

The Silicon Valley Venture Capitalist Confidence Index® produced by Professor Mark Cannice at the University of San Francisco reported that the confidence level of Silicon Valley venture capitalists was 3.79 on a 5 point sale in 1Q12, a significant increase from the 3.27 reported in 4Q11, and the first increase in four quarters.

Nasdaq.
Nasdaq increased 16% in 1Q12, but has declined 10% in 2Q12 through May 21.

Read more here.

Read Full Post »

Who is Ross Levinsohn?: Yahoo’s new salesman-in-chief

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Economy, Entrepreneurship, Gerbsman Partners, Intellectual capital, internet, Investments, Market research, Strategy, tagged , , , , , , , , , on May 14, 2012| Leave a Comment »

Article from GigaOm.

Ross Levinsohn, appointed Sundayas interim CEO, doesn’t have to learn Yahoo — he’s spent the last 18 months immersed in it.

And he doesn’t have to learn digital media — from helping to create online sports powerhouses at CBS Sportsline and Fox, to building a $1 billion-plus digital portfolio for Rupert Murdoch, to launching and investing companies through his own private equity fund, he’s covered the digital media waterfront and then some.

He’s Hollywood and Santa Monica but he speaks fluent Silicon Valley.

Most important, he knows Yahoo is a media company — and he knows how to sell it that way. Of all the things he found when he joined Yahoo in late 2010, the most disconcerting was how much the company was doing right and how very bad it was at making that count. Here’s how he put it during an interview with paidContent last year as he emerged from a quiet period:

“I spent six months digging into the company making sure I’m not crazy — and I’m not crazy.

“Yahoo is the premier digital company in the world and embracing that isn’t a hard thing to do. That’s just fact-based. Tell me what other type of media can sit with you and say ‘I’ve got the top 19 #1 or #2 newspapers, I’ve got the top 20 shows, I’ve got the 19 of the top 20 radio stations, 19 of the top 20 magazines’?

“Duh. But you have to fully embrace that. You can’t half-ass that.”

Last fall, he took the stage at paidContent Advertising to pitch the company. The interview came just days after Carol Bartz, who hired him to head media and ad sales for The Americas, was fired. At the time, he was considered a leading internal candidate for CEO. He talked about Yahoo’s need for “a little bravado, a little swagger”:

“Yahoo is a huge, mature, gigantic business. Some of that is overlooked right now. Businesses grow at different rates. We’re 16 years old and we’ve been on top for 15 years. It’s hard to maintain that. When you think of entertainment and gossip, you think of TMZ, but OMG is twice as big with 30 million users a month and still growing. But no-one knows that.”

Levinsohn’s biggest coup at News Corp. was acquiring MySpace from under Viacom’s nose for $580 million in 2005. In hindsight, given how MySpace panned out, perhaps it was anything but a coup — but, at the time, it was transformative, and as big a statement as News Corp. could make about being in the digital game.

Here’s how Levinsohn described it when we talked about why MySpace wasn’t a fit for Yahoo in 2011:

“We bought a social networking site in 2005, before anyone knew what social networking was and now look at where social networking is — so if you look at the trendline we were way head of the game.

“When we bought it, it was doing about $1 million a month; 24 months later we were on a run rate to do $500 million a year. You’d have to say that was a pretty good trajectory.

“Users went from, when we bought it, to 70,000 signups a day (which I thought was astounding), to the month I left about 450,000 signups a day. So again, trajectory, unbelievable.”

Levinsohn was replaced at Fox Interactive when it switched from M&A to operating mode. He’s been battling against perceptions ever since that that he’s not an ops guy.

In addition to rebuilding the internal sales organization and partnering with AOL and Microsoft in a digital sales alliance, and with his top media exec Mickie Rosen setting up a series of high-profile original content deals, Levinsohn has been out telling that story. Not the one of the company that can’t shoot straight – the one about the media company at its core.

Since then, he’s interviewed Tom Hanks to promote a new Yahoo original, been on stage with Katie Couric at the Yahoo digital upfront last month and a few days later being photographed with Sophia Vergara during the White House Correspondents Dinner festivities. He upgraded and expanded an existing relationship with ABC News.

Levinsohn hasn’t left M&A behind but he insists Yahoo doesn’t need a big acquisition to fix its problems, although, if he could have found a way, Hulu would be a Yahoo property. Look at him to focus on making the pieces Yahoo already has fit better, pick up tuck-in acquisitions — and finally decide whether Yahoo should be in the ad tech business or sell it.

Until now, everything he’s done at Yahoo has been in the shadow of CEOs making the final decisions on resources and setting the overall tone. Now — at least for the interim — Yahoo is Levinsohn’s Pottery Barn. He told Yahoos in a lengthy internal e-mail Sunday:

“I know there is one thing we should definitely all be doing in light of this news, and that is to focus on the momentum we’ve created over the last few months.

“Many of you have heard me talk about the possibilities we have, and about the opportunities in front of us. In spite of the very bumpy road we’ve traveled, we are achieving genuine and meaningful successes in the marketplace every day and heading in the right direction.”

What he’ll have to decide now is whether to spend the next months acting as CEO or auditioning for it. Here’s Demand CEO Richard Rosenblatt’s advice, following a Forbes piece by outspoken Yahoo shareholder and tech writer Eric Jackson:

I agree Ross run it like you are the permanent CEO not interim. Own it forbes.com/sites/ericjack…

And, yes, that is the same Richard Rosenblatt who was the CEO that sold MySpace to News Corp., then bought back some of the pieces that helped build Demand Media.

Read more here.

Read Full Post »

« Newer Posts - Older Posts »