I had a busy but very stimulating three days in gloriously warm silicon valley last week.
A lot of that time was spent with various folks from Microsoft at the Microsoft VC Summit and I also managed to squeeze in an interesting panel discussion at TiE on “Meet the Acquirers“
The “wow” bit at Microsoft’s Summit was Peter Moore’s session during which he showcased two super-cool 60 second slots of forthcoming games on X-Box…Peter’s enthusiasm was infectious and after watching the ads, I realised why “Gears of War” made it all the way to No. 1 as “Game of the Year”.
Ed Sim has blogged about the summit in detail (and far more articulately) here as has Paul Jozefak (ex-SAP Ventures; now running his own fund) .
At the TiE Panel Discussion focused on M&A for software start-ups, there were some great comments from Mark Feldman.
Mark has spent almost 30 years in M&A in various capacities…He was also the Sr VP of Strategy at Virsa , a company acquired by SAP last year. Mark is also the author of “Five Frogs on a Log: A CEO’s Field Guide to Accelerating the Transition in Mergers, Acquisitions And Gut Wrenching Change”, that has been translated in 5 languages!
Some points from the discussion that I felt worth sharing:
- Ravi Mhatre shared his rule of thumb for valuing software companies: pre-revenue – $10m~$20m; small revenues – some multiple on the revenue; typical value being between $10m ~ $30m; fast growing, significant revenues (> $10m) – typically double-digit millions or more
- Compliance is probably the “hottest” area in terms of M&A activity by software acquirers
- “Security” is a close #2
- SalesForce is an oddity amongst software acquirers in the sense that it picks companies at a very early stage (ties in with their SaaS / AppXchange focus) and finally…
- …time-worn and blindingly obvious – but still worth repeating: The fastest way to an M&A transaction always goes through the field force and/or the product groups
March 20th, 2007
Posted by
Shantanu |
Venture Capital |
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I am not sure how many of you have read this piece before…I had (about three years ago and forgotten all about it) until I stumbled upon it again – completely by chance – in the middle of a hard-disk cleanup this weekend…
In 1999, in a background research that lasted over 10 months, San Francisco Chronicle staff writers Reynolds Holding and William Carlsen investigated allegations of widespread legal and ethical misconduct in Silicon Valley.
The result of their work was this “series about the dark side of the Silicon Valley miracle.”
Starting with “Phantom Riches – Beneath glitter of SilValley, corruption and deception”, it detailed, “some of the most egregious cases of securities fraud, trade-secret theft and abuse of small entrepreneurs…”
This extraordinary account from almost 8 years ago… “is a story about greed and hubris, about high-powered executives and boardroom dealmakers who operate with flagrant contempt for the rules of law and ethics.”
A long read…but truly engrossing…
Read on.
March 9th, 2007
Posted by
Shantanu |
Entrepreneurship, Venture Capital |
one comment
Or more accurately – how does it feel to be “A VC for a Day”?
I spent a good part of Friday and Saturday last weekend at LBS’ annual Venture Capital Invetsment Competition.
The VCIC is one of the most innovative opportunities for MBA students to get aquainted with Venture Capital that I know of…
It began in 1998 and has survived the tech bubble and the dot-com burst. This year, it is expected to include 40 events across the world.
So what makes it unique?
“At the core of the event is a creative turn of the tables. Unlike business plan competitions in which students pitch their own ideas to investors, at VCIC the students are the investors, and real entrepreneurs pitch to them. It is a very powerful learning experience for both parties. Add to the mix a dozen VC judges, and you have what the VCIC website describes as a “win-win-win.” Students learn (and win cash), entrepreneurs connect with investors and VCs get an early peek at some viable deals.”
Sounds too good to be true? well, last year, a third of the entrepreneurs participating in the programme went on to raise $30M in venture capital! The average hit rate is now close to 20% and on the way up.
Upside? Some interesting deals for participating VCs, networking – of course, and a few hours of interaction with some very smart people (on both sides of the table – entrepreneurs as well as students).
Not surprisingly, quite a few competitors (students) end up at VC firms…Six VCIC alumni have gone on to participate in the prestigious Kauffman Fellows Program and there are many others in various VC firms (including Bill Earner who joined us last year).
As before, I thoroughly enjoyed the sessions and heard some really interesting ideas…including one for aero sports and another for mobile ticketing…I would definitely encourage MBA students (both, current and prospective) to find out more here.
March 4th, 2007
Posted by
Shantanu |
Venture Capital, What VCs really do |
3 comments
Guy Kawasaki has a great post on his blog about the CommunityNext conference where according to him, “speakers defied many conventions of tech entrepreneurship—in particular the ones that venture capitalists believe are “proven.”.
Guy goes on to say, “If you’d like to learn how these companies became successful without “proven teams, proven technology, and proven business models,” you’ll love this video.”
P.S. From Guy’s post: “Here’s a little factoid that blew my mind: both Fark and PlentyofFish have only one employee!” – amazing! (and fark is funnY).
March 1st, 2007
Posted by
Shantanu |
Miscellaneous, Venture Capital |
3 comments
Ben Holmes of Index Ventures recently gave a presentation at the FOWA Conference in London which builds a neat story around “Everything you need to know about Venture Capital“…
The slides are up on slideshare - worth viewing.
Saul Klein and Fred Destin have also blogged about this.
February 26th, 2007
Posted by
Shantanu |
Entrepreneurship, FAQs for Entrepreneurs, Venture Capital, What VCs really do |
no comments
John Scholes of the Catalyst group sent me their latest newsletter (Jan ’07) which had this nugget of a chart…
The chart shows how there seems to be no correlation between per capital income and/or GDP and investment in technology ventures…Interesting…
The report says that “…neither Income per capita nor GDP are useful for determining the level of investment in technology in European countries. Notably absent are Italy and Spain, who rank fourth and fifth in Europe in terms of GDP…”
Has anyone come across a similar comparison for N America or Asia?
February 7th, 2007
Posted by
Shantanu |
Venture Capital |
no comments
