Author Archive
M&A – What’s the Rush?
2010 so far has seen a formidable increase in merger and acquisition activity in general, and in the tech industry in particular: HP is on a veritable shopping spree, picking up Palm, 3Com, 3PAR, Fortify, Stratavia, and ArcSight. IBM picked up Sterling Commerce, Unica, and Netezza. Oracle bought Sun Microsystems. Intel pockets Infineon’s Wireless Solutions Business as well as McAfee. Google is continuing to show a ferocious appetite with 23 acquisitions through late September. Even long-time M&A spectator SAP has jumped into the fray with the purchase of Sybase. Beside these big deals, there is a host of smaller mergers and acquisitions across the technology spa
So what’s the rush?
Have We Hit Bottom? Reading Tea Leaves in Bankruptcy Statistics
Not quite the bottom, but getting closer.
Bankruptcy filings rose 20 percent in the 12-month period ending June 30, 2010, according to statistics released by the Administrative Office of the U.S. Courts.
This is generally hailed as bad news; at most the Economist is invoking Schumepeterian creative destruction as necessary evil before new growth can blossom. (more…)
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…)
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…)
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…)
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…)
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…)
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…)
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…)
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…)
