Author Archive
Demystifying Valuations for Venture Backed Companies
There are many occasions for a valuation in the life of a start-up company: preparing for the sought-after financing from a premier VC, the highly anticipated sale to a strategic partner at a hefty premium, or even pricing the initial public offering. (more…)
Add comment July 23, 2010
Palm Reading: HP Extends the Life Line
On April 28, HP announced the $1.2 billion acquisition of Palm for $5.70 per share.
The acquisition will provide discussion fodder for months if not years to come, and we will see if HP can turn Palm into a serious competitor for the iPhones, Androids and Blackberries of the world.
In this post, I will stay clear of any strategic speculation, but rather focus on the process of the transaction. (more…)
2 comments May 26, 2010
The Purchaser Representative – the Shortcut to “Sophistication”
It is good to be sophisticated!
This is true in general, but can become a prerequisite in connection with securities laws[i].
Many of our clients are venture-backed technology companies. Most of the capital that they raise comes from accredited investors, if not institutional venture capital funds. Some of their money may come from unaccredited investors, and virtually all venture-backed companies issue stock options to employees that are sooner or later exercised. Most of the employees of course are not accredited investors. An annual income of at least $200 thousand or net worth of at least $1.0 million renders you an accredited investor[ii] . (more…)
Add comment May 24, 2010
Are You Obese Or Anorexic, And Does It Matter?
In his blog post The Case For The Fat Startup, Ben Horowitz of Andreessen Horowitz argues against the conventional, post-bubble wisdom that you have to be lean and mean to survive and prosper in the start-up race. Citing his credentials as CEO of Loudcloud/Opsware, he makes the case for outspending your competitors during the downturn.
My favorite quote: “But in a bust, having a lot of cash can be a huge competitive advantage because you can use that cash to put enormous pressure on your underfunded competitors.” Amen to that. (more…)
Add comment April 8, 2010
Selling Patents and Intellectual Property Part Two
In the last post, I discussed the different types of non-operating entities that may acquire intellectual property. In this post, I will talk more about the different strategies these entities pursue and what implications that may have for a technology start-up. (more…)
Add comment March 15, 2010
Selling Patents and Intellectual Property Part 1
In connection with our restructuring services, our firm recently sold certain assets of a fabless semiconductor company. The sale included physical assets as well as intellectual property (“IP”). As can be expected from technology companies with significant expenditures on research and development, the majority of the value was embedded in the intellectual property: the design database and the patents.
The project reminded me of how much the landscape of acquirers of IP has changed in recent years as the market for buying, selling, and licensing IP becomes more mature. There are a host of different players with very distinct interests and operating models. (more…)
Add comment February 24, 2010
Where have all the public companies gone?
It’s no big news that there weren’t a lot of IPOs in 2009, and hardly any in 2008. In general, IPOs were few and far between in the years after the dot-com bust. Most pundits make the passage of Sarbanes-Oxley in 2002 responsible for this dearth of new offerings. (more…)
Add comment January 17, 2010
How Long Does It Take to Sell a Company?
Depends. It can take a couple of weeks for a hot technology company, or many months, if the buyers aren’t lining up around the block, which is a rare occurrence these days. (more…)
Add comment December 23, 2009
Are VCs Bad at Math?
Pepperdine University recently published its first Private Capital Markets Report, and it is chock full of useful information for entrepreneurs and investors alike. (more…)
Add comment November 12, 2009
Bigger isn’t better Part 2: The right size for the Venture Capital Industry
In my last post, I discussed size considerations of individual venture capital firms.
If VC firms ought to be smaller, what does that say about the VC industry as a whole? (more…)
Add comment October 12, 2009
