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Archive for the ‘Venture Capital’ Category

IPO talk revs up for Tesla Motors

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, Investments, IPO news, Market research, Strategy, Technology, Venture Capital, Venturebeat, tagged , , , , , , , , , , , , , , on November 24, 2009| Leave a Comment »

Sounds to me like Tesla is going public. Here is some coverage on the topic from The GreenBeat blog at WSJ Online.

“Rumors are swirling today that Tesla Motors is seriously considering an initial public offering sometime soon. The talk has been tracked to two anonymous sources, who say the six-year-old company could cash in big on the battery-powered car trend before electric and hybrid models from companies like General Motors, Mitsubishi and Nissan make it to market.

Tesla has officially denied the prediction, calling the IPO chatter “rumor and speculation.” That said, going public in 2010 would give the San Carlos, Calif. company several distinct advantages. First, it would solidify its position as the electric car player to watch. It’s already been casually anointed as the leader by industry observers and the Department of Energy, which granted it $465 million in stimulus funds in its first round of low-interest loans for advanced transportation projects. Second, it could use the sale to raise money to get its hotly anticipated Model S sedan out the door by its 2011 due date.

Tesla is one of several cleantech companies anticipated to go public as soon as next year. When A123Systems shocked the market with its blockbuster IPO in late Sepember (its share price jumped 50 percent on opening day), many analysts, including the Cleantech Group, said that the biggest public offerings in 2010 will probably come out of the green sector. In addition to Tesla, solar system maker Solyndra — which received $535 million in loan guarantees from the DOE in March — and smart grid communications provider Silver Spring Networks have also been named as likely candidates.”

Read the full article here.

GigaOm also covers this topic saying:

“Last Friday, buzz about an imminent IPO for electric car startup Tesla Motors hit the Interwebs, courtesy of two anonymous sources familiar with the plans who spoke with Reuters. As in several previous stories about its possible plans for a public offering, the company has declined to comment.

But if and when Tesla goes through with its long-discussed goal of going public, it could be the biggest and possibly the first public offering for a U.S. car company since Ford Motor’s IPO more than 50 years ago. The event will also offer a glimpse at the role IPOs will play in the nascent green car market — is the classic venture capital model (invest early and find a big exit in the form of an acquisition or an IPO) viable for this sector, or will a green-car IPO be more about feeding big capital needs and branding?

Hopes for a Google-like moneymaker in cleantech (Google took only $25 million in venture capital to make millionaires of 1,000 employees and billionaires of its two co-founders in a wildly successful IPO) have already started to fade for some in the sector. Stephan Dolezalek, managing director of VantagePoint Venture Partners, which has invested in Tesla, told Reuters in September that public offerings now serve more as “financing events” for alternative energy and other cleantech startups rather than a way for investors and founders to cash in on equity.”

Read their version here.

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Cleaning House Before Its IPO Will Cost AOL $200 Million And Up To 1,000 Jobs

Posted in Board Of Intellectual Capital, boic, Economy, Gerbsman Partners, Intellectual capital, IPO news, Market research, Technology, Venture Capital, tagged , , , , , , , on November 13, 2009| Leave a Comment »

As AOL prepares to spin off from Time Warner in an IPO, it wants to gussy itself up so that it looks as appealing as possible tp ublic investors. Today, AOL disclosed that it plans yet another restructuring which could cost as much as $200 million. The biggest cost savings from any restructuring is usually through layoffs, and the latest round has already started at AOL, with 100 let go this week and as many as 1,000 of its 6,000 jobs at risk of being eliminated.

Despite new leadership under CEO Tim Armstrong, AOL has yet to turn around financially.  Last quarter, revenues sank 23 percent to $777 million.  The biggest drop came from subscription revenues to its legacy Internet access business, down 29 percent, but advertising revenues also took a hit, down 18 percent.  AOL depends on display advertising, which has not yet rebounded like search advertising appears to be doing.

By cleaning up house and removing as many costs as possible before the IPO, Armstrong is trying to make AOL as lean as possible. But eliminating salaries and benefits can only go so far. He has to show that his new content strategy can create actual growth as well.

Article @TechCrunch

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HP acquires 3Com

Posted in Board Of Intellectual Capital, Business models, BusinessWeek, Economy, Gerbsman Partners, Intellectual capital, Investments, Java, Market research, Strategy, Sun Microsystems, Technology, Venture Capital, tagged , , , , , , , , , , , , , , , , , , , , on November 12, 2009| Leave a Comment »

Oracle, Dell, Xerox and now HP – the high tech world as we knew it is changing fast. Companies that previously stood their ground and was seen as pillars of innovation are know swallowed into mega-companies that will challenge the marketplace with new services, products and offerings. Here is some selected tidbits from BusinessWeek in regards to the deal.

“Through its acquisition of networking gear maker 3Com, Hewlett-Packard will accelerate competition with Cisco Systems (CSCO), especially in China, practically overnight. Then comes the hard part. To make the most of the $2.7 billion deal, HP also needs to revitalize 3Com’s faded brand and persuade Western companies to take a chance on its products, designed largely in Asia.

Analysts were quick to see the logic in the planned acquisition, announced on Nov. 11. HP (HPQ) is attacking Cisco’s dominance of the market for gear that connects computers just as Cisco moves more aggressively into the market for computer systems, where HP is strong. Cisco on Nov. 3 struck a partnership with storage company EMC (EMC) and software company VMware (VMW) aimed atsupplying bundles of computers, storage, networking, and software.”

The article continues…

“HP’s bigger challenge in making the deal a success will be removing the tarnish that remains on the 3Com ‘s brand in the U.S. and Europe as a result of years of mismanagement. While 3Com’s data-center networking gear has about 35% of the Chinese market, it’s practically absent from the largest companies in the U.S. and Europe, analysts say.”

Read the full article here.

Other good resources for this topic include: Barrons, WSJ, 24/7 Wall St., Mashable & Techcrunch.

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IT Services In Sweet Spot As M&A Gathers Steam

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , on October 30, 2009| Leave a Comment »

Here is some possitive news from VC Circle.

“The ongoing recovery in the economy and credit markets has made tech companies look for ways to come out on top.

The U.S. information technology services sector is likely to be a focus of merger and acquisition activity as its companies are among the most attractive in the technology space.

A rebound in tech spending has increased the appeal of IT services companies and put them in the crosshairs as deal momentum picks up in the industry.

The ongoing recovery in the economy and credit markets has made tech companies look for ways to come out on top, and they have shown a willingness to pay hefty premiums in a sector that has historically commanded high prices.

IT services firms have a recurring revenue stream, high margins, a strong growth outlook and impressive returns on investment, making tempting targets for buyers. They offer consulting, software services, business process outsourcing, systems integration and interactive marketing.

Cash-rich technology giants plan to strengthen their portfolios, and smaller firms want to stay in the game through acquisitions as their larger rivals become even more formidable.

Attractive acquisition candidates include Sapient, Computer Sciences, WNS, Amdocs, Cognizant Technology and ExlService, analysts said.

Consolidation is under way. In September, Xerox Corp said it would buy Affiliated Computer Services Inc in a deal valued at about $5.5 billion, and Dell Inc said it planned to buy Perot Systems Corp for about $3.9 billion.

“The pattern here is that you have commoditizing tech product companies looking for a strategy that’s better than doing nothing,” Sanford C. Bernstein analyst Rod Bourgeois said.

“They’re looking at the IT services industry to juice up their struggling tech product business.”

Possible acquirers could be tech giants such as IBM, Hewlett-Packard or Cisco, European players like BT or Deutsche Telekom and Asian companies like Hitachi, Fujitsu or NEC, analysts said.

“There’s definitely going to be some strategic acquisitions — there’s no doubt about that,” Goldman Sachs analyst Julio Quinteros said. “It’s just, how much are you willing to pay? And would you rather wait for the market to come back a little bit?”

The recurring revenue stream that IT services firms have gives them more visibility and stability.

“What’s driving a lot of this is the evolution of hardware companies looking for more stability and recurring revenues that are typically associated with services models and by the same token software companies potentially looking for the same thing,” Quinteros said.

Hardware and software companies want to diversify their portfolios by adding services, to help them survive and even prosper through tough times.

“What’s alluring about services for tech product companies is first the precedent of IBM and HP coupling products with services to be able weather the downturn well,” Bourgeois said.

In 2008, Hewlett-Packard acquired EDS for $13 billion in what is considered the biggest acquisition in the space ever. In 2002, IBM bought PwC Consulting from PricewaterhouseCoopers for about $3.5 billion.

“Vendors are trying, to some extent, to emulate the integrated model that IBM really pioneered when they got into the services business years ago,” UBS analyst Jason Kupferberg said. “HP followed suit buying EDS. Now you’re seeing a continuation of that theme.”

Read the full article here.

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This Year’s Top 10 Largest Venture Funding Deals

Posted in Board Of Intellectual Capital, Business models, Economy, FaceBook, Gerbsman Partners, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on October 22, 2009| Leave a Comment »

Here is a interesting article from WSJ Online.

“Twitter Inc.’s $100 million funding round drew considerable attention for its massive size, but it’s not the largest venture deal so far this year. That round actually tied for the fourth largest, according to data compiled from Dow Jones VentureSource.

Here’s a list of the Top 10 venture capital rounds through the third quarter. The deals are impressive considering the cloud hanging over the venture industry. Besides Twitter and another dot-commer, Facebook Inc., these companies range from massive clean-technology projects and health-care plays to wireless equipment makers and, in one case, a waste-collection service.

#1 Solyndra Inc., Fremont, Calif. – $286 million

The solar panel maker is on the federal government’s hot-list, receiving a $535 million loan guarantee in September to build a second manufacturing plant and create hundreds of jobs. That loan encouraged venture firms to invest at least another $198 million in Solyndra. (The company announced that amount in September though a spokesman told VentureWire the round’s total was even higher.) Argonaut Private Equity, an investment vehicle for Oklahoma billionaire George Kaiser, led the round. Others participating in the round weren’t disclosed, although Solyndra’s investors include CMEA Capital, Redpoint Ventures, RockPort Capital Partners, U.S. Venture Partners and Virgin Green Fund, which together have invested more than $600 million. Solyndra plans to finish building its plant in Fremont by the end of next year and ship its first product in early 2011.

#2 Clovis Oncology Inc., Boulder, Colo. – $146 million

In May, Domain Associates, New Enterprise Associates and others bet $146 million that former executives of cancer-drug company Pharmion Corp., which sold for $2.9 billion last year, will repeat that success with newly formed Clovis Oncology. Also participating were Pharmion investors Aberdare Ventures, Abingworth Management, ProQuest Investments and Versant Ventures, and newcomer Frazier Healthcare Ventures. Like Pharmion – which raised $145 million in venture capital and convertible debt before going public in 2003 – Clovis will acquire cancer therapies, develop them through to regulatory approval in the U.S. and Europe, and market them.

#3 Small Bone Innovations Inc., New York – $108 million

The orthopedic device company, founded in 2004, has developed a portfolio of products for thumb, hand, wrist, elbow, foot and ankle surgeries. The STAR Ankle total joint replacement system, one of Small Bone’s flagship products, received Food and Drug Administration clearance in May. The $108 million Series D round, which closed in April, included new investors The Family Office of Bahrain, Goldman Sachs & Co., Khazanah Nasional Brhd. and Malaysian Technology Development Corp. and existing investors 3i Group, Axiom Venture Partners, NGN Capital, TGap Ventures and Trevi Health Ventures. Executives told VentureWire they expect Small Bone to reach profitability in 12 months, and unlike many medical device companies which become acquisition targets, could grow into a full-fledged company in its own right.

#4 (Tied) A123 Systems Inc., Watertown, Mass. – $100 million

The electric-car battery maker’s initial public offering last month captured investors’ imagination – and wallets – with a vision of a future where power is stored intelligently and deployed efficiently in a world of lower carbon emission. Before the IPO, A123 Systems gathered $100 million in Series F funding in June from investors Gururaj Deshpande, General Electric Co., North Bridge Venture Partners and Qualcomm Inc. A123 also received a $249.1 million grant from the U.S. Department of Energy grant, the second-biggest awarded as part of a $2.4 billion program to start up a domestic battery industry. The company, which has a deal to supply Chrysler Group LLC with batteries for planned electric vehicles and hybrids, is said to be in the late stages of negotiations for another DOE loan worth as much as $235 million.

#4. (Tied) Facebook Inc., Palo Alto, Calif. – $100 million

Facebook recently reached an important milestone for an Internet company, becoming cash-flow positive as it also grabbed its 300 millionth member. Will an IPO be coming soon? Executives won’t say, but the company’s investors are counting on a spectacular exit at some point given how much money they’ve invested over the years. One of the newest investors is Digital Sky Technologies, a Russian Internet investor that put $100 million into Facebook in July while also paying another $100 million to buy out shares of any selling employees.

#4 (Tied) Open Range Communications Inc., Greenwood Village, Colo. – $100 million

One Equity Partners committed $100 million to Open Range at the start of the year to help it roll out wireless broadband and Internet services in rural America by the end of the year. The deal followed a $267 million loan from the U.S. Department of Agriculture’s Rural Development Utilities Program. Founded in 2004, Greenwood Village, Colo.-based Open Range hopes to reach more than six million Americans in 546 underserved and rural communities across the U.S. lacking access to traditional DSL or cable broadband service providers. Open Range plans to use WiMAX technology to enable access to its planned wireless service with a simple plug-in device.

#4 (Tied) Twitter Inc., San Francisco – $100 million

At a $1 billion valuation, Twitter’s $100 million fourth round proved the Web messaging company is here to stay, at least longer than some thought. The funding came from some unlikely sources, including T. Rowe Price Group, better known for its retirement funds than venture capital investing, Morgan Stanley, which invested from its asset management business, and Insight Venture Partners, a growth-equity investor that doesn’t typically put money in pre-revenue companies. Other investors in Twitter include Benchmark Capital, Institutional Venture Partners, Spark Capital and Union Square Ventures, which didn’t reinvest in the latest round reportedly because the deal priced the firm out. Now the pressure will be on for Twitter to live up to the hype.”

Read the full article here.

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