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Posts Tagged ‘Forbes’

IPO VIEW-Tech deals lead IPO recovery

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, Investments, IPO news, Market research, Strategy, Technology, Venture Capital, tagged , , , , , , , , , , , , , , , , on December 1, 2009| Leave a Comment »

Here are some interesting stats on IPO´s from Forbes.

“More technology companies went public this year despite a world economy still trying to find its footing, and that is a good sign the pace of tech initial public offerings might accelerate in 2010.

Ten tech companies have gone public so far this year, raising $3.8 billion. In 2008, there were three offerings that raised $749.2 million, according to Thomson Reuters data.

Tech deals account for the biggest number of IPOs so far this year and are second only to finance deals in value.

‘We’ve been expecting an uptick in technology because it has really been underrepresented in the market over the last few years,’ said Paul Bard, a research analyst at Connecticut-based Renaissance Capital.

There could be 40 to 50 tech IPOs next year, raising $4 or $5 billion, Bard said.

Tech IPOs did well in 2007, but nearly shut down when financial markets collapsed last year. Getting more small, high-growth tech companies into the IPO mix would be a major engine for jobs and a boon for investors, analysts said.

‘If they’re done right, tech IPOs historically have had the greatest increase in revenues and profits of all IPOs,’ said Scott Sweet, senior managing partner at IPO Boutique.

Three technology companies filed for IPOs this week.

Netherlands-based Sensata Technologies Holding B.V. on Wednesday filed an offering worth up to $500 million. The firm, whose customers include BMW, Huawei Technologies Co Ltd and Samsung, makes sensors and other industrial technology.

Chipmaker Telegent Systems Inc filed for a deal worth as much as $250 million, and software maker RedPrairie Holding Inc said it would try to raise $172.5 million in its IPO.

‘There is an enormous amount of capital on the sidelines right now, in mutual funds and hedge funds, looking to make high-return investments as they would find in technology IPOs,’ said America’s Growth Capital Chief Executive Ben Howe.

Howe warned that investors have become more cautious and companies without strong balance sheets could meet a lukewarm response. A good idea used to be enough for a tech company to go public, he said, but the financial crisis has changed that.

Sensata, which filed for the largest IPO this week, posted revenues of $796.9 million in the nine months ended Sept. 30, down 31 percent from $1.2 billion a year ago. In the same period it narrowed its net loss to $41.6 million from $82.3 million.”

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Zappo provide returns for Sequoia

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, google, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , , , , , , , , , , on July 27, 2009| Leave a Comment »

Here is a good VC article from Alibaba.

“BURLINGAME, Calif. — Marc Andreessen, in a recent Forbes interview, noted there are hundreds of venture-capital outfits slogging it out right now, trying desperately to squeeze profits out of a terrible investing environment–but only a handful worth their salt.

He’s right. And this week’s news that Amazon.com ( AMZN – news – people ) would buy online-shoe retailer Zappos for $807 million in Amazon stock, plus some cash, highlights the staying power of one of those perennial Sand Hill Road stars, Sequoia Capital.

Sequoia is the notoriously tough firm that backed winners like Google ( GOOG – news – people ), Apple ( AAPL – news – people ), Cisco ( CSCO – news – people ), YouTube and PayPal. (I could go on.) It also owned a big chunk of Zappos, a company with a somewhat unlikely business model that excelled by providing unparalleled customer service and shoe selection on the Web. Sequoia recently told its investors it put about $48 million into Zappos and will get just over $169 million from the Amazon transaction. That’s not a “home run” in VC parlance. But it’s a very respectable return of about three-and-a-half times Sequoia’s original investment, particularly in these depressed times.

In the first six months of this year, there were only four tech-related M&A deals of over $100 million involving companies that took venture capital, according to Thomson Reuters and the National Venture Capital Association. (There were a few VC-backed IPOs in the first half, too, but no blockbusters.) The biggest of the tech M&A deals, Cisco Systems‘ $590 million purchase of camcorder maker Pure Digital Technologies, also involved Sequoia, which owned a small stake.

Sequoia’s profits from that deal were very small, but it still made a nice return: Sequoia told its investors in March that it invested just over $1.4 million in Pure Digital and would receive $13 million in Cisco shares and $1 million in cash after the acquisition. (The biggest VC-related deal in the first half of this year was Medtronic’s ( MDT – news – people ) $700 million purchase of CoreValve, a company with a new catheter technology to improve heart-valve replacements. Sequoia doesn’t do health care investing.) Plenty of other VCs have sold companies in fire sales this year for less than what investors put into them.”

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