Private Equity
Possibly over 50, according to the National Venture Capital Association -- and that doesn't include firms that have not renewed their memberships in the trade association for next year. The NVCA won't name names, but reports that its membership has fallen from 480 firms in 2007 (an all-time high) to 450 firms in 2008 to 425 firms in 2009 -- a decrease of 55 firms, over 11%. Most of the firms dropping out did so because they're not raising a new fund, said NVCA vice president Emily Mendell.
1 min read · 06 November 2009
This week I reported that Mohr Davidow had combined two of its cancer-fighting biotech startups -- CELLective Diagnostics and The DNA Repair Company -- into a third, new company called On-Q-ity. Last month I reported that Box.net, a Draper Fisher-funded service to share and store content online, had purchased another Draper, Fisher-backed company -- Increo. It turns out that this is a trend. Mohr Davidow's Sue Siegel said she knew of two other venture firms that are talking about ways to combine each other's portfolio companies, and a glance through the tech blogs of the last couple months shows that Softbank Capital and angel investor Ron Conway may be doing the same.
2 min read · 05 November 2009
ZeroIPO released a list of the 28 companies that went public last Friday on ChiNext, the new NASDAQ-style exchange in Shenzen. Intel Capital and a coalition of Chinese investors backed Silver River, an IT company in Zhejiang, and Warburg Pincus backed Lepu Medical, which makes syringes and other medical equipment in Beijing. Shares of both companies opened substantially higher than their listing prices -- Silver River's was up 55% and Lepu's 110% -- although trading had to be temporarily halted on Friday due to concerns about speculation. The shares of most companies fell this week, although they've now started to recover. See the report -- "A Touch of Warm Sunshine after the Cold Winter" -- after the jump.
1 min read · 05 November 2009
Even though eBay's $1.9 billion sale of Skype to Silver Lake and a coalition of other investors has been the subject of a bitterly fought lawsuit, Silver Lake wants more of these "carve-out" deals, managing director Alan Austin told the Limited Partners Summit in Silicon Valley this afternoon. (Today is conference day for me). "Right now we have tremendous numbers of big companies looking around and saying, 'Hey, here's a business that's not core to us, we're thinking about selling.' It creates opportunity," Austin said. (Skype allows people to make free phone calls over the Internet). "Also, it's a leveraged deal -- not a ton, but significant leverage. Not 70% to 80% of the purchase price, but more like the old days -- the traditional capital structure we used to have before 2006 or 2007." Deals like Skype are also the reason Silver Lake raises such big funds, Austin said --
2 min read · 04 November 2009
Can John Doerr -- Al Gore's business partner over at Kleiner Perkins -- really write a credible review of Gore's latest book? Doerr has weighed in at VentureBeat and on Amazon.com on "Our Choice: A Plan To Solve The Climate Crisis," which was released today and which Doerr calls "the perfect and powerful sequel to 'An Inconvenient Truth'." "When mankind confronts and conquers the climate crisis, it will be because one man made Our Choice clear," Doerr writes. No offense to these two guys, but what else would you expect Doerr to say?
2 min read · 03 November 2009
At this morning's Churchill Club breakfast in Silicon Valley, two private equity pros, a venture capitalist and an angel investor were asked to peer into the future. In addition to the usual observations -- the VC industry will shrink by half next year, capital is still tight, exits are still tough, portfolios are full of troubled companies -- they had some fresh takes. Panel members were Rich Garnick of the ConJoin Group, Rich Lawson of Huntsman Gay Global Capital, Rajiv Batra from Mayfield and Rich Brenner from the Brenner Group (he's the angel).
2 min read · 03 November 2009
On-Q-ity, which announced a $21 million Series A round today, is a combination of two other Mohr Davidow companies -- CELLective Diagnostics and The DNA Repair Company -- that would have languished and probably died had their investors and scientists not figured out a way to keep their technology alive, said Mohr Davidow's Sue Siegel. Both companies had the misfortune of looking for a Series B round in the summer of 2008 -- a slow season to begin with -- and then getting hit with the global financial collapse that followed. "They found themselves not able to raise a financing, not because of the merits of the technology, but because of the environment and the circumstances that existed," Siegel said. "Many companies didn't get financing, and you'll find a graveyard of companies where either the technology was shelved or it got delayed or they're subsisting on minimal dollars until they see another day."
2 min read · 03 November 2009
In May, Dan reported that Mohr Davidow Ventures had sold its small stake in personal genomics company 23andMe -- famous partly because of its co-founder, Anne Wojcicki, who's married to Google co-founder Sergey Brin -- and invested in rival Navigenics. Both companies analyze your DNA and report if you are predisposed to certain genetic diseases. Mohr Davidow's Sue Siegel said today that although her firm's parting with 23andMe was amicable, the two did not see eye-to-eye on what role venture capitalists should play. Mohr Davidow's limited partners require the firm to take board seats with companies they invest in, she said, and 23andMe didn't want venture capitalists on the board. "We have a fiduciary duty to watch our investments, and when we commit we need to take board seats," Siegel said. "I think that's more of a norm than an exception."
2 min read · 03 November 2009
In a comment on my post on Friday on why some entrepreneurs are wary of taking venture capital, Groundspeak added more reasons on why they haven't taken it so far. They point to a post on Seattle's TechFlash blog by another entrepreneur, Hillel Cooperman, on why he hasn't taken any venture money either. Cooperman co-founded Jackson Fish Market, a software company that creates "beautiful destinations on the Web." No one -- neither an entrepreneur nor an investor -- can reliably pick which companies and ideas are going to win, Cooperman argues, so entrepreneurs had better focus on the thing they can control: how many ideas they can get off the ground, or how many times they can be "at bat." Venture capitalists won't let you do this, Cooperman says, because they can't.
3 min read · 02 November 2009
Here's one metric from Peter Bell at Highland Capital, who says he's invested in 200 companies over the last 21 years. He specializes in technology. Founders should personally meet candidates for the first 200 positions. "I tell people who are looking at small companies, if you're not meeting the CEO don't go there," he says. "It's not like GE. For the first couple hundred people, you want to know what's important to the CEO" -- and the CEO has to put his or her touch on the company.
1 min read · 31 October 2009
