Posts filed under ‘Restructurings’
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…)
February 24, 2010 at 9:17 am Gunther Hofmann Leave a comment
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…)
December 23, 2009 at 10:07 am Gunther Hofmann Leave a comment
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…)
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…)
Bigger isn’t better Part 1: Size considerations for Venture Capital Funds
What is the right size for venture funds?
Veteran investor Alan Patrikof is musing in a recent piece in The New York Times about the “good old times” when venture funds were $100 million at most.
So why should VC-Firms be smaller? (more…)
So You Bought a Copy of QuickBooks, Now What?
It goes without saying now-a-days that emerging firms do everything they can to stretch their dollar. Just about every startup that I run into informs me that they have installed a copy of QuickBooks, so the finance part of their business is “covered.” When I ask who runs QuickBooks, the inevitable answer is the “receptionist/office manager” or “I do it myself so I know things are right.”
From a dozen years of financial consulting, I have seen far too many companies go far too long without paying management attention to finance, with often fatal results. While QuickBooks is a competent system, it is not a substitute for financial management in your firm and poor input to QuickBooks will inevitably result in inaccurate output and sub-optimal decision-making. (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…)
