Accel Partners has launched a $100 million fund to target companies that focus on Big Data, according to the Digits blog of WSJ.com. According to the post, the fund will invest in companies that seek to build technologies to manage large volumes of data as well as construct new applications to make the best use of the data. The capital for the fund comes from Accel's existing funds. Here's the link: http://blogs.wsj.com/digits/2011/11/08/accel-launches-big-data-initiative/?mod=WSJBlog&mod=
There are a number of recent articles suggesting the IPO market is thawing.
The first is from CNBC, entitled "IPO Market Shows Signs of Life." The article quotes Renaissance Capital as saying that there are over 209 companies in the IPO pipeline looking to raise nearly $50 billion. Link is here: http://www.cnbc.com/id/45196527?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
The next article, from Seeking Alpha, is "The IPO Buzz: Stepping on the Accelerator." This article takes a look at the IPOs expected this week. Link: http://seekingalpha.com/article/305986-the-ipo-buzz-stepping-on-the-accelerator?source=yahoo
Finally, a Bloomberg article "Zynga Said to Plan IPO After Thanksgiving" basically says everything in the title. Link: http://www.bloomberg.com/news/2011-11-07/zynga-said-to-plan-ipo-after-thanksgiving.html
New Enterprise Associates is the subject of a good profile by Dan Primack of Fortune Term Sheet. Here's the link: http://finance.fortune.cnn.com/2011/11/07/nea-groupon-venture-capital/?iid=SF_F_Lead
I have had the pleasure of working with NEA for several years, and believe that they are a high quality organization and one of the most LP-friendly firms around. Disclosure: My company, Campton Private Equity Advisors, advises Private Equity Investor plc, which is an investor in several NEA funds.
Brad Feld, a Managing Director at Foundry Group in Boulder, Colorado, has an insightful posting on Patent Trolls on his blog FeldThoughts. Here's the link: http://www.feld.com/wp/archives/2011/11/another-day-another-patent-troll.html. Also, some of the comments posted to his blog present some interesting ideas for reform.
In a recent article in the San Francisco Chronicle "Google lawyer: Why the patent system is broken," Google's patent counsel discusses why he believes the system is broken. Here's the link: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/06/BUQP1LQN3V.DTL
In an article by Timothy B. Lee on ars technica, he expands on the San Francisco Chronicle and offers some poignant insights on the matter. Here's the link: http://arstechnica.com/tech-policy/news/2011/11/google-microsoft-uses-patents-when-products-stop-succeeding.ars
Here's a link to an article on the Groupon IPO and its implications for other venture-backed companies looking to go public: http://online.wsj.com/article/SB10001424052970203716204577017773545604142.html?mod=WSJ_Tech_LEADTop
The gist of the article is that the IPO will, unsurprisingly, be good for other IPO candidates. One such candidate is Angie's List, which is the subject of an article by Dan Primack of Fortune. Mr. Primack indicates that Angie's list could go public as early as the week of Nov. 14. Here's the link: http://finance.fortune.cnn.com/2011/11/04/internet-ipo-land-angies-list-is-next/
Two recent stories of Wi-Fi offerings of note:
United Airlines will offer in-flight Wi-Fi on selected aircraft in mid-2012, with the entire fleet covered by 2015. The offering will be via Panasonic's Ku-band satellite technology and will offer Wi-Fi worldwide, even on long-haul overseas flights. Here's the link to the story on Engadget: http://www.engadget.com/2011/11/04/in-flight-wifi-coming-to-300-united-and-continental-aircraft-beg/
San Francisco will roll out free public Wi-Fi along stretches of Market Street by early 2012, according the the San Francisco Chronicle. Here's the link: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/04/BU881LQ4PL.DTL&type=tech
In "How to do a successful IPO," Patricia Sellers interviews Lise Buyer (former CSFB technology analyst and Founding Principal of Class V Group) for tips on conducting a successful IPO. Here's the link: http://postcards.blogs.fortune.cnn.com/2011/11/03/how-to-successful-ipo/?iid=SF_F_River
Ms. Buyer outlines the following tips (I'm paraphrasing):
All in all, I feel this is a very helpful article for any company considering an IPO.
Groupon priced its IPO last night at $20 per share, above the indicated range of $16 to $18 per share. In addition, the company sold an extra five million shares for a total of 35 million shares for a total offering of $700 million. The fact that the IPO priced above the range and with additional shares indicates that there was significant demand for the IPO.
At the opening, Groupon shares sold at $28 per share, a 40% increase over the IPO price. The stock price peaked at $31.14 early, then dropped down to under $26 but is now trading at just under $29 (at 1:25 pm EDT).
In my view, the Groupon IPO is very welcomed. I'm hopeful that the stock price continues to perform well throughout the day and going forward, as it would be very good news for the IPO market overall, and especially for venture-backed companies waiting to go public. Venture Capital investors in Groupon include Accel Partners, Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Maveron, New Enterprise Associates, Silver Lake Partners and Technology Crossover Ventures (TCV).
Here are a couple links to stories about the Groupon IPO:
WSJ (subscription firewall): http://online.wsj.com/article/SB10001424052970203716204577017773545604142.html?mod=googlenews_wsj
Professor Mark Cannice of the University of San Francisco publishes a quarterly Venture Capital confidence index based upon the confidence of Silicon Valley venture capitalists for the future entrepreneurial environment. I find this to be an interesting index of a snapshot of what Silicon Valley VCs are thinking for the future.
The third quarter 2011 Silicon Valley Venture Capitalist Confidence Index® declined to 3.41 (on a 5 point scale) from 3.66 in the second quarter, which is a significant drop. Moreover, this is the second quarterly drop for the Index, down from 3.91 in the first quarter of 2001. The Index reached a peak or close to 4.5 in early 2007, and a low of under 3 in late 2008. Reasons for the decline include "troublesome macro conditions, an uncertain exit environment, high valuations, and regulatory burdens" according to the press release. Here's the link to the press release via The Sacramento Bee: http://www.sacbee.com/2011/11/03/4026832/confidence-declines-again-among.html
Jim Beyer of Accel Partners is bullish on investing in China, writes Kerry A. Dolan of Forbes. Here's the link: http://www.forbes.com/sites/kerryadolan/2011/11/03/superstar-venture-capitalist-jim-breyer-is-super-bullish-on-china/. In the article, Breyer says that Accel will invest more money in China than in the US this year, and believes that over the next decade at least half of the top 10 or 20 Internet companies will come from China.
I agree with Mr. Breyer's assessment of the Internet sector in China. However, I am less bullish on the overall opportunity in China from an LP perspective investing in Chinese venture funds. As I stated in an earlier post, while the local market opportunity is massive and rapidly growing, this opportunity is tempered by a number of risks that exist from an LPs perspective.
I have great respect for Accel Partners, and believe that they are one of the few firms that will likely do just fine in China.
Groupon Inc. is expected to price its highly-anticipated IPO today for trading tomorrow, according the The Wall Street Journal, Here's the link (subscription firewall): http://online.wsj.com/article/SB10001424052970203716204577016001857985424.html?mod=WSJ_hp_LEFTWhatsNewsCollection. According to the article, the company may price its IPO slightly higher than the indicated price range of $16 to $18 per share.
Bloomberg Businessweek had an interesting article on Groupon that suggests Groupon really needs to price its IPO given its current cash position, monies owed to merchants and current cash flow position. Here's the link: http://www.businessweek.com/news/2011-11-03/groupon-ipo-a-must-as-cash-needs-climb-with-investor-tally-tech.html
The US economy's growth will probably be "frustratingly slow", according to Fed Chairman Ben Bernanke, Fox News reports. The Fed now estimates that the US economy will grow from 1.6% to 1.7% for 2011 and 2.5% to 2.9% in 2012, which estimates are roughly a point below the Fed's estimates in June. Unemployment is expected by the Fed to be between 8.5% and 8.7% in 2012, down from the current rate of 9.1%. Here's a link to the Fox story: http://www.foxnews.com/politics/2011/11/02/bernanke-pace-economic-growth-to-be-frustratingly-slow/.
According to The Wall Street Journal, Bernanke also signaled that the Fed is ready to do more to help the economy, such as through the purchase of additional mortgage-backed securities to aid the weak housing market. Here's the link to the WSJ.com story (behind subscription firewall): http://online.wsj.com/article/SB10001424052970203804204577013900433130614.html?mod=WSJ_hp_LEFTWhatsNewsCollection
To me, this is all mixed news. Given the turbulence in Europe with the Greek sovereign crisis, Asia's slowing economy, and the lingering weakness in the US economy, it wouldn't take much to derail the slight US recovery. I'm hopeful that Europe is able to contain the Greek crisis, that Italy can address its economic issues, and that the US economy continues to grow. These would be nice holiday presents to us all.
A recent article by Jerry Weissman on Forbes.com entitled "Vinod Khosla's Five Second Rule" essentially told me that my presentations would never pass muster for Mr. Khosla. In the article, Mr. Weissman states:
"[Mr. Khosla] puts a slide on a screen, removes it after five seconds, and then asks the viewer to describe the slide. A dense slide fails the test -- and fails to provide the basic function of any visual: to aid the presentation."
Here's a link to the article: http://www.forbes.com/sites/jerryweissman/2011/10/26/vinod-khoslas-five-second-rule/
I'm going to have to apply this rule to my next presentation to see if my slides can be improved...
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