Author Archive
The Brenner Group Celebrates 25 Years
As I reflect back on the past 25 years, the company and I have seen many changes in Silicon Valley. The types of industries that venture firms invest in has changed dramatically, and there have been a number of business cycles – both up and down. (more…)
What is the “Zone of Insolvency” We Keep Hearing About, and What Must an Officer or Director Do Once They Enter This Zone?
During the past few years, most small companies have heard someone refer to the Zone of Insolvency, and reference how dangerous this is to the Directors and Officers.
In this post, we will review what the definition of “zone of insolvency” is, and what Directors and Officers are supposed to do, and say, if they find themselves in or approaching this zone.
Where Are All the Tech IPOs in 2011? Part Two.
In my last post we examined the IPO history in Silicon Valley and wondered why we have not seen more IPO activity this year. There are some big, well known consumer internet companies poised for IPOs with ostensibly favorable market conditions, but none have gone out. How come? My take is there are three key several reasons:
1. Institutional buyers are very cautious, and their liquidity might still be an issue.
2. These are still young companies and need more time to cement their business and financial models and don’t need the distraction.
3. They don’t really need to go public. (more…)
Where Are All the Tech IPOs in 2011? Part One.
2011 started off as a year anxiously anticipated by investors and tech-watchers alike: the tech IPO market would return. Typical of the sentiment was the DealBook post on Dec 30, 2010: Is 2011 the Year of the Blockbuster Tech I.P.O.?
Several positive indicators underscored that sentiment: rebounding stock market, low interest rates and a poor real estate market suggesting that growth stocks could be attractive investments, several big name private companies were raising institutional funds at billion dollar valuations, and anecdotally the local law firms all spoke to the resurgence in their S-1 filing activity and often referred to a healthy “IPO pipeline”. So confidence in a tech IPO resurgence was high. But with a third of the year gone, there have been few notable IPOs and while activity is up over 2010, we’ re not seeing the kind of breakthrough IPO activity including the big name consumer internet players that most had expected. What happened? (more…)
There’s Often Drama in Changing CEOs in a Young Company
As I look back on issues involving changing a CEO, I always pause and sometimes even get a chuckle.
How many times does an entrepreneur with a great idea believe they are the only one suited to run their new venture? Usually, they believe they need to be the CEO. However, even if they are the well suited to lead a venture in the beginning, they are not the one to drive to higher levels beyond development. When this expansion phase occurs, the board usually has the difficult task of letting the entrepreneur/CEO know that it is time for him to take a new role in the company.
Often this communication does not go well, and the end result is that the entrepreneur cannot understand the message and leaves the company. (more…)
Only 3 Things Can Go Wrong in VC-backed Businesses
In my many years of working with companies and seeing what works and what doesn’t, I have come to realize that every challenge faced by a venture funded technology company falls into one of only three buckets: (more…)
Managing the Tough Choices Facing Tech Start-ups
In a world where securing follow-on venture capital financing has never been more challenging, executives and boards of venture capital backed companies face difficult choices as the cash dwindles. It is not uncommon, even in cases where fund-raising is ultimately successful, that developing companies at some point are faced with and must navigate insolvency and all that it entails. (more…)
Texas Hold ‘em, the New Social Gathering Place for Business
An interesting trend has been developing over the past few years. Where once, corporate golf outings were considered the best way to network and entertain clients, a new type of business event has emerged in the last year or two. Many corporations have found a new way to mix philanthropy, networking and fun all together — in a “Charity Poker Tournament”. So, what has really fueled all of this interest in poker? (more…)
Funding alternatives in the “Great Recession”
In the traditional Silicon Valley funding model that worked for many decades, entrepreneurs came up with new ideas, pitched them to Venture Capitalists, and prayed that their idea was unique and that the VC’s found credibility in the management team in order to get funding to build the enterprise.
In the post dot-bomb era, VC’s became increasingly risk adverse, and wanted to fund only those ventures with proven entrepreneurs and only ventures that had already been fleshed out to remove much of the technology risk, leaving only a market risk to conquer.
Now, since the Great Recession, VC’s have gotten even further risk adverse, although they claim otherwise. (more…)
Liquidity in an Illiquid Market
So, your venture investors have decided to stop funding your company, and you are about to run out of cash. What are your options? There are a number of alternatives, depending on whether your company has built significant value or not. (more…)
