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Posts Tagged ‘VC funding’

Cooley Report Highlights Full Year and Q4 2009 Venture Capital Financing Trends

Posted in Board Of Intellectual Capital, tagged , , on February 23, 2010| Leave a Comment »

Outlined below is an article from Cooley Godward Kronish LLP on Venture Capital  market indicators.

“Palo Alto, Calif. – Feb. 18, 2010 – Cooley Godward Kronish LLP today released its most recent report on venture capital financing market terms.  The report analyzes Cooley’s venture capital transactions nationwide that closed during the fourth quarter of 2009, with comparisons to the first three quarters of 2009 and prior years. The analysis is based on 376 completed deals across the United States totaling approximately $3.82 billion during 2009, including 98 completed deals totaling approximately $1.1 billion during the fourth quarter.

Highlights from the fourth quarter of 2009 include:

• The percentage of up rounds in the fourth quarter (45 percent) saw a considerable increase compared to the first three quarters (26 percent)
• The percentage of down or flat rounds continues to outpace the number of up rounds
• While still below recent historical annual averages, fourth quarter median pre-money valuations increased for all series as compared to the prior three quarters of 2009

“The increases in the number of deals, average pre-money valuations and aggregate dollars raised in the fourth quarter point to a potentially improving landscape for venture financing deals,” said Craig Jacoby, head of Cooley’s Emerging Companies practice.

Cooley’s Private Company Financings Report is published quarterly and is based on private company transactions in which Cooley served as counsel to either the issuing company or the investors. A complete version of the report is available here.”

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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.”

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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.”

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Venture Funding Up 17.5%, M&A Rebounds Even More

Posted in Board Of Intellectual Capital, Business models, Gerbsman Partners, Intellectual capital, Investments, Market research, Technology, Venture Capital, tagged , , , , , , , , on October 15, 2009| Leave a Comment »

Here is some good news from TechCrunch.

“Last quarter, based on funding and M&A data we collect in CrunchBase, we signaled that we were cautiously optimistic about the rebound of the tech sector. Q2 trends were no worse than Q1 09: venture financings were up 20% and mergers & acquisitions held steady (excluding Oracle’s acquisition of Sun Microsystems) in comparison to Q1.

With another quarter of data under our belts, we’re feeling even better about the health of technology startups. The number of new startups, venture fundings and M&A are all on the rise. In addition to decent stats, there are lots of new tech products launching across diverse categories, coming from companies both great and small. The Layoff Tracker and Deadpool have quieted down in our sector. In short, we’re feeling like there’s a more rational and focused market for startups and tech.

Strategic M&A Is Back: 3x Q2 Levels

One of the strongest signals of the quarter was the resumption of activity in mergers and acquisitions. The acquisition market really rebounded in Q3 09 to over $45 billion from 231 deals, 3x greater than Q2’s $15 billion. We haven’t seen M&A activity at this level since Q2 08, which recorded 275 deals totaling $59 billion.

…

Most encouraging, acquirers are adding strategically to their businesses (Amazon-Zappos, Facebook-Friendfeed, Google-On2, Yahoo!-Xoopit, VMWare-Springsource, RIM-Torch Mobile, Intuit-Mint, etc.) Some acquirers are returning to the market with multiple strategic deals (Adobe, EMC, IBM, Thomson Reuters, Yahoo!, Google, etc.) Deal making was well distributed across business segments (consumer web, retail, mobile, advertising, enterprise, biotech, cleantech)”

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Khosla’s Clean Tech VC Fund Beats the Odds, Raises $1bn

Posted in Board Of Intellectual Capital, boic, Business models, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , , , , , , , on July 24, 2009| Leave a Comment »

Here is a possitive article from Green Energy Reporter.

“A widely used catch phrase – or some variation of it – appearing in the media since the official start of the crisis this fall,  goes something like this: “the global economic crisis, has left the [add required sector, in our case clean tech] reeling, unable to tap crucial funding…. ” This generic phrase and its variations have been used over and over to describe a harsh reality, specifically  how the credit crunch has left industries across the board at a standstill, unable tap financing to support their growth.

Then there is Khosla Ventures, the Sand Hill Road clean tech-focused venture fund, which will be announcing sometime this week the closing of two funds totalling $1 billion, all dedicated to supporting early clean tech investments. This is impressive, considering that most don’t expect this sort of capital raising to happen until well into 2010.

But it seems that Khosla Ventures, founded by Silicon Valley veteran Vinod Khosla, can afford shortcuts.  For one,  Khosla is a co-founder of Sun Microsystems and a former partner at Kleiner, Perkins, Caufield & Byers, two leading Silicon Valley pioneers. Also, back in 2004, when clean tech was an afterthought and social media  à la MySpace was all the rage,  he launched Khosla Ventures, one of the sector’s first clean-tech focused VC fund.

Forbes.com reports Khosla is on the verge of announcing two new funds: a $250 million vehicle for seed-stage investments and a $750 million fund for larger deals dubbed “KVIII.” One fund has closed already, and the other could close soon, Forbes reports, citing people with knowledge of the funds. Khosla himself is expected to invest $150 million of his own money in the new funds. Other reported investors include CalPERS, the pension giant with $179.2 billion in assets.”

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