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Archive for the ‘Venture Capital’ Category

How Facebook Can Beat Groupon: By Making Deals Social

Posted in Board Of Intellectual Capital, Investments, Market research, Social Networks, Strategy, Technology, Venture Capital, tagged , , , , , , , , , on April 17, 2011| Leave a Comment »

Article from GigaOm.

“Facebook is planning to roll out a new version of its Groupon-style Deals feature over the next few weeks, starting with a number of cities such as Atlanta, Dallas and San Diego, according to the company’s director of local. Not surprisingly, the new version of these digital coupons plays on the social nature of Facebook and its ability to influence a user’s social graph. While the social network may be late to this particular party, doing that is going to focus attention on one big hole in the Groupon model: namely, the fact that it isn’t really social.

Emily White, a former Google ad exec in charge of the effort, describes in an interview with Internet Retailer how the site will highlight in a user’s news feed if they have indicated interest in a particular deal, and also if they have actually purchased one. Presumably, users will also be able to opt out of this feature, given Facebook’s experiences in the past with ventures such as Beacon — which publicized purchases users made at other websites and was eventually shut down after a firestorm of criticism from privacy advocates. According to White:

The fact that every step of the process — from interacting with the deal, booking the deal and experiencing the deal — is tied to friends makes it more likely that you’ll have a positive experience.

Obviously, a lot of that is Facebook’s spin on why its new service is going to be competitive with Groupon, which has become the 800-pound gorilla of email marketing by expanding rapidly over the past two years into more than 500 markets. The company’s revenues are estimated to be in the $2-billion range on an annualized basis, and it’s said to be planning a public share offering that could value the company at more than $25 billion. What Facebook is to social networking, Groupon has become to email discounting.

That clearly poses some challenges for Facebook, as my colleague Ryan noted recently. But Facebook’s view of its strengths compared to Groupon isn’t just spin. It reinforces that deals from Groupon — and even from competitors such as LivingSocial, which is also valued in the billions of dollars on the private market — aren’t that social. I wrote about one of the drivers behind Google’s reported $6-billion offer for Groupon being the fact that advertising is becoming social, and that is true. And when it comes to being social, Facebook is light years ahead of Groupon or LivingSocial.

It’s true that you can see how many other people have signed up for a deal when you go to the website from the email Groupon sends you, and there are some standard web-sharing buttons that let you post to Twitter or say that you “liked” the deal on Facebook. But that’s still not terribly social. What if you could see these deals — and which of your friends signed up for them — right in your Facebook news feed? The immediacy of that, mixed in with the other social signals and activity you are already looking at, could make you more likely to click on a deal, or even to be aware that one is available. Add the ability to comment on a deal, and it becomes something much more social that anything Groupon offers.

The news feed — the same thing that made Beacon so appealing, but at the same time so disturbing to some — is Facebook’s not-so-secret weapon, and the new version of Deals is clearly going to take advantage of that in a way it hasn’t before. Competing with a $2-billion monster is not going to be easy, even for Facebook, and signing deals with retailers is one area where the size and scale of Groupon represents a fairly compelling competitive advantage. But Facebook has the news feed and the social graph, and if advertising really is becoming social, that is a very powerful force indeed.”

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Internet/Digital Media and Software Industries Silicon Valley and Seattle 2010

Posted in Board Of Intellectual Capital, Investments, Strategy, Technology, Venture Capital, tagged , , , , , , on April 8, 2011| Leave a Comment »

Article from Fenwick and West.

“In 2002, Fenwick & West began publishing its Silicon Valley Venture Capital Survey. The survey was published in response to dramatic changes in the venture capital financing environment resulting from the bursting of the “dot-com bubble”, and our belief that there was a need for an objective analysis of how the venture capital environment had changed. The survey was well received and we have continued to publish it – a copy of the most recent survey is available here.
We believe that in recent years there has been a significant change in the angel/seed financing environment primarily in the internet/digital media and software industries. We believe these changes are due to the following factors:

The nature of these industries is such that products can be developed and introduced to the market quicker and with less resources than other industries. The development of new technologies has further accelerated the speed, and reduced the resources needed, to introduce new products in these industries.

These industries have now been around for at least a decade, if not longer, and as such a generation of successful entrepreneurs having the expertise, financial resources and interest is now available to assist and finance the current generation of entrepreneurs.
Venture capital has become harder to obtain, with venture capital investment in the U.S. overall declining from $29.9 billion in 2007 to $26.2 billion in 2010, and with investment in venture funds by limited partners declining even more precipitously, with $11.6 billion invested in 2010, the lowest amount since 2003, according to Dow Jones VentureSource.

As a result of these factors we believe that there have been the following changes in the angel/seed financing environment:

  • There has been a shift in the composition of investors, from largely friends and family, wealthy individuals and a few organized groups, to a larger percentage of professional angels, seed funds and venture capital funds willing to invest smaller amounts of capital.
  • The amounts raised in angel/seed financings have increased, and can exceed $1 million. Investors in these financings also have deeper pockets with the ability to participate in later rounds.
  • The terms of these financings have become more sophisticated and arms length, as investors are more likely to be true third parties investing larger sums, with an interest in being more active in the oversight of their investment.

In light of the increasing importance of angel/seed financings, and a desire to make objective information about such financings available to the community at large, we undertook a survey of 52 internet/digital media and software industry companies that obtained angel/seed financing[1] in 2010 in the Silicon Valley and Seattle markets.”

Read more here.

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InnerPulse, Inc. – Update to the Bidding Process – Procedures for the sale of certain assets and Intellectual Property of InnerPulse, Inc.

Posted in boic, Distressed Intellectual Property, Distressed IP, Gerbsman Partners, Inetellectual Property, Investments, Life Science, Medical Device, National Venture Capital Association, NVCA, Venture Capital on March 7, 2011| Leave a Comment »

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

Further to Gerbsman Partners e-mail of February 23, 2011 and February 14, 2011 regarding the sale of certain assets of InnerPulse, Inc., I attach the legal documents and wire transfer information that we will be requesting of bidders for certain assets of InnerPulse, 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 agreements.  Any and all of the assets of InnerPulse, Inc. will be sold on an “as is, where is” basis.  I would also encourage all interested parties to have their counsel speak with Fred D. Hutchison, Esq., counsel to InnerPulse, Inc.

The refundable deposit/wire transfer, will be held in the trust account at Hutchison Law Group and will be refunded back to interested parties that are not chosen as the winning bidder.

For additional information please contact Fred D. Hutchison Esq., of Hutchison Law Group, counsel to InnerPulse, Inc.  He can be reached at 919 829 4300  and/or   fhutchison@hutchlaw.com

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the InnerPulse Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than March 18, 2011 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) at InnerPulse’s office, located at 4025 Stirrup Creek Drive, #200, Research Triangle Park, NC 27703.  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 nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”).  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 an opportunity to inspect and examine the InnerPulse 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 InnerPulse, Inc., 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 neither InnerPulse nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness 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 InnerPulse Assets.  Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than March 18, 2011 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) at InnerPulse’s office, located at 4025 Stirrup Creek Drive, #200, Research Triangle Park, NC 27703.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.  The attached InnerPulse fixed asset list may not be complete and Bidders interested in the InnerPulse Assets must submit a separate bid for such assets.  Be specific as to the assets desired.

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 where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to InnerPulse, Inc.).  The winning bidder will be notified within 3 business days after the Bid Deadline.  Non-successful bidders will have their deposit returned to them.

InnerPulse 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 bid will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

InnerPulse will require the successful bidder to close within 7 business days.  Any or all of the assets of InnerPulse 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 InnerPulse Assets shall be the sole responsibility of the successful bidder and shall be paid to InnerPulse at the closing of each transaction.

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

Fred D. Hutchison, Esq.
(919) 829-4300
fhutchison@hutchlaw.com

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

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

Jim Skelton
(949) 466-7303
jim@gerbsmanpartners.com

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Apple, Google’s mobile rivals must play catch-up

Posted in Board Of Intellectual Capital, Business models, FaceBook, google, internet, Investments, Java, Market research, Microsoft, Mobile, mobile 2.0, Mobile Phone Usage, Social Networks, Strategy, Technology, Venture Capital, Web 2.0, Wireless, tagged , , , , , , , , , , , , , , , , , , , , , , , , on February 27, 2011| Leave a Comment »

Article from SFGate.

“It’s been a big couple of weeks in mobile. Verizon Wireless finally got the iPhone. Hewlett-Packard unveiled the first fruits of its Palm purchase last year. Nokia, the world’s biggest maker of handsets, abandoned its once-dominant Symbian mobile software system and demoted itself to a kind of glorified contract manufacturer of Microsoft-powered devices.

The struggle for mobile dominance has entered a new phase. Why would Nokia throw out Symbian, with its 37 percent market share, in favor of software with less than one-seventh of that? Because recently hired Chief Executive Officer Stephen Elop is convinced that Microsoft has better odds of going up against the four other mobile powers – Apple, Google, Research In Motion, and HP – and making its new Windows Phone 7 software a center of gravity for the world’s programmers, manufacturers, and consumers.

“The game has changed from a battle of devices to a war of ecosystems,” Elop told investors at a recent London news conference.

Actually, it’s the same game that created the most valuable franchises in tech history, from IBM to Microsoft to Facebook. All successfully established themselves as “platforms,” in which countless entrepreneurs and programmers developed products and applications that gave value to customers and profitability to shareholders – sucking oxygen away from rivals all the while.

Platform leaders

In the 1960s, IBM trounced Sperry and other mainframe manufacturers by creating a soup-to-nuts stack of hardware, software and services.

In PCs, Microsoft erased Apple’s early lead by signing up hardwaremakers to create cheap machines, and software companies to develop Windows versions of everything from word processors to Tetris.

Facebook vanquished social networks such as MySpace by repositioning itself as a platform – a decision that led to the creation of gamemaker Zynga and other app companies that keep Facebook’s 500 million users hanging around.

What’s different this time is scale.

“Mobile is the biggest platform war ever,” said Bill Whyman, an analyst with International Strategy & Investment. More smart phones were sold than PCs in the fourth quarter, and sales should reach $120 billion this year. That doesn’t count billions more in mobile services, ads, and e-commerce.

This war will probably last for some time, too. Unlike with PCs, where the unquestioned victor – Microsoft – quickly emerged and enjoyed years of near monopoly, no one has a divine right to dominance in mobile. Microsoft crushed its competition by forcing people to make a choice. There were far more software applications for PCs, and most didn’t work on Macs. The more Microsoft-powered machines out there, the more people wrote software for them, the more people bought them, and the bigger the whole system became. Economists have a name for that phenomenon: “network effects.”

Appealing products

All cell phones can talk to each other and handle the same websites and e-mail systems, so winning means making products that function more effectively and appealingly. That sums up Apple’s success.

Steve Jobs figured out long ago that when people spend their own money, they’ll pay for something a lot nicer than the unsexy gear the cheapskates in corporate procurement choose. While others competed on price, Apple focused on making its products reliable and easy to use. Once customers buy an iPhone and start investing in iTunes songs and apps, they tend to stick with the system and keep buying – even though there’s no proprietary lock on the proverbial door.

Apple’s huge sales volume makes carriers and suppliers more likely to agree to its terms. The software that powers everything Apple makes – all variations of the Mac operating system OS X – is as intuitive to developers as Angry Birds is to app shoppers.

The result is economic leverage of staggering power. To create a blockbuster, Apple doesn’t need to spend billions on a start-from-scratch moon-shot of a development project. It just needs to tweak a previous hit.

Take the iPad, which is in many ways a large iPod touch. Apple won’t say how much the iPad cost to develop. Consider these numbers, though: In the year that ended Sept. 30, during which Apple introduced the iPad and the iPhone 4, the company spent $1.8 billion on research and development. Over the same period, Apple’s revenue increased by $22.3 billion. Nokia spent three times as much as Apple on R&D – $5.86 billion – and increased revenue by just $1.5 billion. No wonder that Apple, whose share of total global mobile-phone sales is only 4.2 percent, gets more than half the profit generated by the industry, according to research firm Asymco.

Fast-growing Android

Even Google, Apple’s mightiest rival, got only a $5 billion increase in sales on its $3.4 billion R&D budget. It does have plenty to show for its efforts, though: Its Android platform is growing at a blistering pace. In the fourth quarter, according to research firm Canalys, twice as many Android devices shipped as iPhones.

“Google is being far more aggressive in building its platform than Microsoft ever was,” says Bill Gurley, a partner at Benchmark Capital.

Barring big surprises, the other contenders – RIM, HP, and Microsoft – are in for a slog: too dependent on mobile devices to give up, yet lacking the tools to make much progress. All lost market share in 2010 and have far fewer apps available for their devices.”

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Successful “Date Certain M&A” of Medical Device companies, its Assets and Intellectual Property

Posted in Board Of Intellectual Capital, boic, Distressed Intellectual Property, Distressed IP, Gerbsman Partners, Inetellectual Property, Life Science, LinkedIn, Medical Device, National Venture Capital Association, Venture Capital, Venturebeat on February 22, 2011| Leave a Comment »

San Francisco, February, 2011

Successful “Date Certain M&A” of Medical Device companies, its Assets and Intellectual Property

Steven R. Gerbsman, Principal of Gerbsman Partners, Kenneth Hardesty, James Skelton, James McHugh and Dennis Sholl, members of Gerbsman Partners Board of Intellectual Capital, announced today their success in maximizing stakeholder value for two venture capital backed, medical device companies. These companies were in the obesity and cardiac mitral regurgitation spaces.

Gerbsman Partners provided Crisis Management and Investment Banking leadership, facilitated the sale of the business unit’s assets and its associated Intellectual Property. Due to market conditions, the board of directors made the strategic decision to maximize the value of the business unit and Intellectual Property. Gerbsman Partners provided leadership to the company with:

1,  Crisis Management and medical device domain expertise in developing the strategic action plans for maximizing value of the business unit, Intellectual Property and assets;
2.  Proven domain expertise in maximizing the value of the business unit and Intellectual Property through a Gerbsman Partners targeted and proprietary “Date Certain M&A Process”;
3.  The ability to “Manage the Process” among potential Acquirers, Lawyers, Creditors Management and Advisors;
4.  The proven ability to “Drive” toward successful closure for all parties at interest.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 67 Technology, Life Science and Medical Device companies and their Intellectual Property and has restructured/terminated over $795 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in San Francisco, Boston, New York, Washington, DC, Alexandria, VA, Europe and Israel.

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