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Posts Tagged ‘VC’

Venture’s Mid-Life Crisis

Posted in Board Of Intellectual Capital, tagged , , on July 25, 2010| Leave a Comment »

Here is an article from WSJ`s venture blog.

“Venture capital is having a mid-life crisis, according to a post from the University Pennsylvania’s Wharton School. ”The venture community (in Silicon Valley) is showing signs of middle age — moving more slowly and cautiously than before, and hitting fewer home runs than it did in younger, leaner days,” the post says. Because venture’s performance is less robust, investors need to look at venture capital in a new way. The post has advice from David Wessels, an adjunct professor of finance at Wharton:  ”Go back to 1990s and venture capital was about starting a company, making it large enough to have an impact on its own and taking it public so it would be Wal-Mart or Procter & Gamble in 20 years,” he says. “Lately, it’s becoming a surrogate for internal R&D. Start-ups set out to build a product from scratch, prove it has legs with a small market and get swallowed by a larger company.” So why invest in these illiquid, high-risk funds? “For diversification,” he notes. “You’re betting on stable returns and the opportunity to already be in the game in case something develops that will be the next big thing.”

Middle age aside, VCs are optimistic about their business, according to a survey by executive search firm Polachi Inc. of Framingham, Mass. A year ago, respondents said the industry was broken, but this year finds them more upbeat. They’re still worrried about exits, though.

Venture capital term sheets continue to be a source of frustration for many entrepreneurs. Investor Mark Suster, a former entrepreneur, weighs in on the topic on his blog, Both Sides of the Table. While things have improved as more information about term sheets circulates, VCs and entrepreneurs continue to see company valuations differently, he says. “I don’t feel that as a VC sneaking in nefarious terms into a term sheet that the entrepreneur doesn’t understand is a good way to build a long-term relationship nor to build a long-term reputation but this does happen and more frequently than we all would like,” Suster writes.”

Read the full article here.

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VCs Opened Their Wallets Wider In 2Q, But It’s All Relative

Posted in Board Of Intellectual Capital, tagged , , , , on July 20, 2010| Leave a Comment »

Here is an atricle from WSJ´s VC blog.

“Riding solid gains in life sciences, venture investors opened their wallets a bit wider in the second quarter, increasing their investment pace after a dismal first quarter.

Overall, venture capitalists invested in 744 companies in the second quarter, up from 656 in the year-ago period and 602 deals in the first quarter of 2010. That amounted to $7.75 billion in the second quarter, up from $6.11 billion in the year-ago period and $4.66 billion in the first quarter of 2010. The new data come from VentureSource, which like VentureWire and The Wall Street Journal is owned by Dow Jones & Co., a division of News Corp.

But the improvement was mostly relative – the $12.41 billion raised altogether in the first half was an improvement on the $10.43 billion raised in the first half a year ago but still less than the first-half figures posted in the years 2006-2008.

At the same time, the macro-economic climate has improved, providing more confidence for investors who last year were more concerned about their existing companies than finding new ones. The economic improvement also gives confidence that exits will eventually materialize.

“Things have loosened up substantially,” said Dave Hills, general partner at KPG Ventures. “When nobody was sure what would happen, people were very concerned about follow-on investments they had to make with companies in their portfolios. Those have stabilized and now it makes sense to look for newer deals to put more money to work.”

Continuing a trend begun in 2009, when health care outpaced information technology for the first time in a decade, medical investment topped IT for the second quarter and for the half.

VCs pumped $2.72 billion into 201 health-care financings last quarter, a 14.7% leap from the $2.37 billion deployed in 189 rounds in the same time last year. The second-quarter total more than doubled the $1.23 billion invested in 151 rounds in this year’s first quarter, which had been the worst period for investment since the first quarter of 2003, when firms committed $1.14 billion to 118 financings.

Meanwhile, information technology was up to 231 deals in the second quarter, from 208 in the year-ago period and 186 in the first quarter of 2010. That represented $1.92 billion invested in the second quarter, up from $1.55 billion in the year-ago period and $1.48 billion in the first quarter of 2010.

While almost one-third of second quarter financings were seed or first rounds, there has still been caution in later stage deals, because of volatility in the public markets that has made both large IPOs and M&A deals hard to come by.”

Read the full article here.

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Venture Capital Clean Tech Love Affair Is Maturing

Posted in Board Of Intellectual Capital, tagged , , , , , , , on February 9, 2010| Leave a Comment »

Here is some interresting pointer around Cleantech and Investments from Techpulse 360.

“U.S. venture firms are taking a more circumspect view of clean-tech investing. Less flash, more focus on profits.

That could lead to more start-ups trying to build businesses with less money.

According to a recent survey, substantial sums of money continue to flow into the industry. Ernst & Young reported Monday that $2.6 billion went into clean-tech start-ups last year, a noticeably more optimistic assessment than last month’s MoneyTree survey, which posted a figure of $1.9 billion. The higher sum suggests VCs were significantly more active last year than may have been thought.

The E&Y work also uncovered a second detail that didn’t show up in the MoneyTree study – which was conducted by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters.  While investment dollars fell 45 percent in the fourth quarter, the number of deals were up – 21 percent to 62. More deals, smaller sums of money per company, more room for profits.

The MoneyTree work found that the number of deals in the quarter fell to 47 and that overall dollars declined 58 percent.

It is hard to know which of the surveys is more accurate. But the prospect of venture capitalists funding more companies at lower dollar values is interesting to contemplate. It suggests funds are seeing clean-tech investing more like they see information-technology investing: put a little money in, expect a lot back.  This prospect may encourage more VCs to take part.”

Read the full article here.

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Venture liquidity still a trickle

Posted in Board Of Intellectual Capital, boic, Business models, tagged , , , , , , , , , , on October 1, 2009| Leave a Comment »

Here is a story from VentureBeat.

“It has been a rough three months for startups hoping to get acquired. Well, it’s been more like a rough year, but there’s new data from Dow Jones VentureSource focusing on the third quarter of 2009.

Overall, venture-backed liquidity (the combination of mergers, acquisitions, and initial public offerings) added up to $2.7 billion, down 49 percent from the same period last year, VentureSource says. It’s even a drop from the $3 billion of venture liquidity earned in Q2.

Things were even worse for M&As, which fell 56 percent to $2.25 billion paid in 71 deals — though the number would have been higher if VentureSource had counted Amazon’s $807 million purchase of Zappos, which hasn’t closed yet. Instead, that should add a big boost to next quarter’s numbers.

Acquired companies also made less money (median acquisition price fell 52 percent to $22 million) and had been waiting for longer to sell (median age increased 23 percent to 6.13 years).

On the other hand, IPOs were actually up from last year, with a combined total $451.25 million, the highest since 2007. That’s less exciting than it sounds, since the vast majority of that money came from battery company’s A123’s spectacular IPO, and there were only two IPOs in all. So it’s hard to see the increase as indicative of any big trend, except the fact that big IPOs are still possible. But hey, after the yearlong period (which ended in Q2) of no IPOs , that’s something.”

Read the full story 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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