Emergence Capital, a Silicon Valley-based venture capital firm focused on the software-as-a-service sector, is profiled on WSJ.com. Emergence has just closed its third fund at $250 million. Emergence was early to identify the era of cloud computing and the software-as-a-service model. Here's the link: http://blogs.wsj.com/venturecapital/2012/02/29/as-business-software-moves-to-cloud-emergence-capital-closes-third-fund-at-250m/
VentureBeat recently posted an excellent article "A Classic Startup Horror Story: the M&A Bait and Switch." The article outlines the dangers of the small start-up sales process where a potential buyer learns the technology secrets of the small start-up and then does not complete the deal. What happens if the potential buyer then uses the Even if there's a non-disclosure agreement in place, the small start-up may not have the resources (or time) to pursue expensive and lengthy litigation. The second part of the article is a letter from the CEO of a start-up outlining his nightmare experience. Well worth a read, especially if you are the CEO of a small start-up looking to sell the company. Here's the link: http://venturebeat.com/2012/02/27/a-classic-startup-horror-story-the-ma-bait-and-switch/
California's non-partisan Legislative Analyst's Office has released its 2012-13 budget update, which includes an estimate of the possible impact to the California budget by the initial public offering of Facebook. Facebook's IPO and subsequent stock sales by its employees are estimated to generate $2.45 billion in capital gains tax and other Personal Income Tax (PIT) revenue to California over a period of several years, and a whopping $1.5 billion in 2012-2013. Here's a chart showing the PIT revenue estimates to California from the Facebook IPO and subsequent stock sales:
Just another reason to look forward to the Facebook IPO.
Here's the link to the Legislative Analyst's Budget Update: http://www.lao.ca.gov/analysis/2012/update/economic-revenue-update-022712.aspx
Wilson Sonsini Goodrich & Rosati, a leading law firm in the venture capital industry, has published its report on venture capital deal terms for the fourth quarter of 2011. The key take-away is that the median valuation for early stage financings jumped up to $8 million in 4Q2011 from $5.6 million in 3Q2011. The report has a lot of other interesting information on trends for specific deal terms such as liquidation preferences, anti-dilution provisions, etc. Here's the link: http://www.wsgr.com/publications/PDFSearch/entreport/Q42011/private-company-financing-trends.htm
peHUB has a couple of recent posts discussing the returns obtained by San Francisco Employees' Retirement System (SFERS) from its portfolio of venture capital funds. The most recent post has a slideshow of SFERS' returns from late stage venture capital and secondary funds. The earlier post has a slideshow of SFERS' returns from early stage funds. Both posts have some very interesting (and in a couple of cases surprising) data.
Here's the link to the post on returns from late stage and secondary venture capital funds: http://www.pehub.com/137641/late-stage-secondary-funds-strong-suit-for-san-francisco-pension-funds-venture-portfolio/
Here's the link to the post on returns from early stage venture capital funds: http://www.pehub.com/136326/california-pension-funds-diversified-approach-to-venture-appears-to-benefit-performance-slideshow/
Atomico, the London-based technology venture capital firm founded by a co-founder of Skype, is making investments in Brazil and has opened an office there, according to a recent article in NY Times DealBook. The article "Venture Firm Seeks the Atypical, and Finds it in Brazil" discusses Atomico's strategy in Brazil and the types of tech companies in which it invests. Interesting reading. Here's the link: http://dealbook.nytimes.com/2012/02/23/venture-firm-seeks-the-atypical-and-finds-it-in-brazil/
Atomico recently issued a press release on its Brazil investments. Link: http://www.atomico.com/news/uncategorized/atomico-announces-first-investments-in-brazil/
Bazaarvoice, an Austin, Texas based social media company that enables companies to collect and analyze online reviews and other feedback about their brands, had its first day of trading yesterday. It priced its initial public offering at $12 per share (above the indicated range of $8 to $10 per share), began trading yesterday at $15.77 and closed yesterday at $16.51, up 38% from the IPO price and 5% from the initial trade. The IPO raised nearly $114 million, for an IPO valuation of $683 million. The company netted $100.4 million from the IPO, selling shareholders netted $5.4 million and the underwriters received $8 million in fees (7% commission). Morgan Stanley, Deutsche Bank and Credit Suisse were joint-bookrunning managers (with Morgan in the coveted "lead left" position) and Piper Jaffray, Pacific Crest and BMO acting as co-managers.
Venture capital investors in Bazaarvoice include Austin Ventures (25.5% post-IPO ownership), Battery Ventures (13.9%), Eastern Advisors (9.2%), Constantin Partners, European Founders Fund and First Round Capital.
Here's a link to the Bazaarvoice press release of the IPO: http://www.bazaarvoice.com/about/press-room/bazaarvoice-inc-prices-initial-public-offering
Link to the IPO prospectus: http://www.sec.gov/Archives/edgar/data/1330421/000119312512076769/d213580d424b4.htm
There's a good post on ReadWriteWeb called "Fast Times In East Berlin: Exploring Europe's New Startup Capital." The article discusses the development of East Berlin's start-up scene, and identifies some characteristics that make East Berlin attractive: inexpensive (compared to other cities), good infrastructure, and creative people from all over the world. The article also discusses some of the venture capital firms investing in tech start-ups there. Here's the link: http://www.readwriteweb.com/archives/berlin_europe_startup_capital.php
Ron Conway, uber-angel investor, was recently interviewed by CNET. In the interview, Ron discusses the health of the Silicon Valley economy, early-stage funding environment and new technologies and companies that interest him.
Here's the link: http://news.cnet.com/8301-13772_3-57383899-52/uber-angel-ron-conway-silicon-valley-is-stronger-than-ever/
Ron was recently profiled by Forbes, here's a link to my prior post with the story: http://www.allenlatta.com/1/post/2012/02/ron-conway-profile-forbes.html
Robert Peck, the President and Partner of CoRise Co., LLC has an interesting article on Business Insider called "To Justify A $100 Billion Valuation, Facebook Has To Generate $400 Of Revenue Per Member." In this article, he discusses the value of Facebook from the perspective of the network. They derive a value per user implied by a $100 billion valuation, and then making assumptions regarding cost of capital, margins, growth rates, etc. determines the net present value of the revenues that the $100 billion valuation assumes for a Facebook user over its lifetime. It's a different take on valuation. Here's the link: http://www.businessinsider.com/to-justify-a-100-billion-valuation-facebook-has-to-generate-400-of-revenue-per-member-2012-2