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Posts Tagged ‘VC investments’

Startup Software Spending Falls to 13-Year Low

Posted in Uncategorized, tagged , , , , , , , , , on November 6, 2009| Leave a Comment »

Sure the economy is coming back from the slump, but this article from InternetNews brings some hard reality checks.

“Total venture capital spending increased 17 percent in the third quarter to more than $4.8 billion, but investments in privately held software companies fell to its lowest level since 1996.

Thanks mainly to its relatively low initial startup costs and its home run potential in the equities market, the software sector for years has either ranked first or second in total VC spending.

But it fell to No. 3 among investment sectors last quarter, according to the latest MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association.”

Biotech firms, which checked in with the most total dollars garnered in the quarter at $905 million, closed 104 deals in the quarter. In the second quarter, biotech upstarts received a total of $947 million—a 4 percent decrease—but the total number of financing rounds closed surged up 16 percent from 90 deals.

Clean technology, which includes companies focused on alternative energy, pollution, recycling and power supplies and conservation was next with $898 million in VC investments, up an impressive 89 percent from the prior quarter.

Software firms did close the most deals in the quarter (128 rounds) but fell to third place in overall investments at $622 million, down 9 percent in both dollars and deal volume from the $680 million and 141 deals closed in the second quarter.

“The third quarter illustrates a gradual and deliberate industry shift towards a longer term venture capital investment strategy,” said Mark Heesen, president of the National Venture Capital Association. “Venture capitalists are becoming increasingly focused on industry sectors which require multiple rounds of financing for an extended time horizon.”

Software’s loss was a boon for the biotech, medical devices and clean technology sectors.”

Read the whole article here.

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Venture Capital Fund Raising Hits A Six Year Low

Posted in Board Of Intellectual Capital, Economy, Investments, National Venture Capital Association, Venture Capital, tagged , , , , , , , , , , , , on October 13, 2009| Leave a Comment »

Here is some not-so-exciting news from Businessinsider.

“The third quarter was rough for VCs, with 17 firms raising just $1.6 billion. That’s the fewest firms to raise money since 1994, and it’s the smallest amount of money raised since Q1 2003, says the NVCA and Thomson Reuters.

It’s an 81% drop from a year ago, and a second quarter of declines.

There were three big raises–Andreessen Horowitz with $58.5 million, Vinod Khosla’s fund raised $750 million, and Draper Fisher Jurvetson raised $196 million. Without those funds, it would be a nightmare.”

Read the full article here.

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Report: Record Labels Paid $12.4 Million for 18% Spotify Stake

Posted in Uncategorized, tagged , , , , , , , , , on August 12, 2009| Leave a Comment »

Here is some inside news from Digital Media Wire in regards to Spotify.

“Palo Alto, Calif. – Spotify, the European ad-supported streaming music service preparing for a U.S. launch, has sold a 17.3% stake in the company for about $12.4 million to the four major record labels and independent label aggregator Merlin, TechCrunch reported.

The report cites an “unverified capitalization table” obtained from a filing in Luxembourg, where Spotify is based.

The obtained document shows that Sony BMG owns 5.8% of Spotify, compared with 4.8% for Universal Music; 3.8% for Warner Music; 1.9% for EMI; and 1% for Merlin.”

Read the full article  here.

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V.C.’s Look for a Return to A B C’s

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Economy, Gerbsman Partners, Intellectual capital, Investments, Strategy, Venture Capital, tagged , , , , , , , , , on July 10, 2009| Leave a Comment »

Here is an excellent article I found at NY Times blog section.

“For a group accustomed to looking outward for the next big thing, Silicon Valley’s venture capitalists are getting very introspective these days, The New York Times’s Claire Cain Miller writes.

Much of the soul searching along Sand Hill Road in Menlo Park, where many of the venture capitalists have offices, is leading to the same conclusion: venture capital needs to go back to basics. The biggest names in the industry are concerned about low returns and are blaming several factors: funds that have grown too large, the M.B.A.’s that have invaded the industry and older partners who have lost touch with what is new in technology.

“I personally believe and I think the evidence proves that the venture industry has gotten too big, the funds have gotten too big,” said Alan Patricof, an investor for 40 years, who backed America Online and Apple, at a recent venture investing conference in San Francisco. “Our biggest challenge today for venture capital is to think smaller.”

Mr. Patricof is part of a growing chorus of voices calling for the amount of money in venture funds to shrink drastically to levels last seen two decades ago. His firm, Greycroft Partners, is taking a retro approach with a $75 million fund that makes smaller investments.

Many in the industry predict that a third to a half of the 882 active venture capital firms could disappear, if only because poor returns will force underperformers to shut down. It is already happening: Investment in venture capital funds shrank to $4.3 billion in the first quarter, from $7.1 billion in the same quarter a year ago.

There will be “a ton of venture capitalists who disappear over the next 18 to 20 months, and it’s going to be painful for a while,” Bryan Roberts, a partner at Venrock, told The Times. “But the best thing that could have happened to V.C. is this economic crisis, because it’s lowering the flow of capital into these funds.”

Read the full article here.

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Facebook Names Genentech Veteran as CFO – IPO plans may be looming

Posted in Board Of Intellectual Capital, Business models, FaceBook, Investments, Market research, Social Networks, Technology, Venture Capital, tagged , , , , , , , , , , , , , , , on June 30, 2009| Leave a Comment »

As Facebook secured some investments earlier this year, and invested it towards international growth, the latest news spark renewed IPO rumors.

Of course, no one knows, but the hiring of a CFO from a larger corporation is nothing you do unless you have greater plans. First and foremost, it costs you a bunch of money, secondly, the demands this person has on you by his experience will force the structure needed upon you.

The biggest challenge remains though – to create profitability.

Here is a quoted article from BusinessWeek.

“In April, when Facebook announced the departure of Chief Financial Officer Gideon Yu, the social network said it would look for a replacement “with public company experience.” Facebook found what it was seeking in David Ebersman, a 15-year veteran of biotech pioneer Genentech (DNA).

“David [Ebersman] worked at one of the most innovative and respected [companies] in the world, so he brings a lot to the table when it comes to our efforts to build a lasting, important company,” Facebook spokesman Larry Yu says of the appointment, announced on June 29.

Ebersman’s appointment keeps alive speculation over whether and how soon the world’s biggest social network is headed for an initial public share sale. “We have no plans to go public,” says spokesman Larry Yu. Facebook CEO Mark Zuckerberg was quoted in May saying an IPO remains “a few years out.”

Ebersman, 38, served as Genentech’s CFO for the four years leading up to its $46.8 billion sale to drug giant Roche Holding (ROG) in May. In Facebook’s press release, CEO Mark Zuckerberg noted that under Ebersman, Genentech’s revenue tripled. Zuckerberg envisions high growth for his company as well, saying sales will rise 70% this year. (eMarketer has projected that Facebook’s revenue will grow 20% this year, to $300 million.)”

Read the full article here.

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