Private Equity
For years, communications networking has been pretty much a one-way investment bet. That is, money went into startups, but very little came back out. In recent weeks though, that’s been changing. At least three companies in the sector have gone public in the past three weeks, and others are waiting in the wings. Overall, market reception has been warm. Shares in wireless network provider Meru Networks closed up 28% in first-day trading on March 31, with shares trading in a narrow range since. Sunnyvale, Calif.-based Meru which sells wireless LAN equipment, raised $66 million in a Nasdaq offering. Principle shareholders include Clearstone Venture Partners (21% stake), Vision Opportunity Master Fund (19%), NeoCarta Ventures (18%) Bluestream Ventures (16%) and D.E. Shaw (16%). Meru has raised $171 million in venture funding since 2002. Telecom equipment maker Calix Networks also posted double-digit gains in its debut a week earlier. Calix, a Petaluma, Calif.-based provider of communications access systems and software, priced its 6.3 million shares offering at $13 per share, the high end of its proposed range. The stock closed up 16% in first-day
2 min read · 08 April 2010
Apple Tree Partners has grown into its own after branching off from Oak Investment Partners
4 min read · 01 April 2010
Yes, your portfolio company can go public ... if it is willing to cut its offering price
4 min read · 01 April 2010
Godzilla isn’t the inspiration most angel investors point to when explaining their investment philosophy. But Mike Maples – whose portfolio of early stage investments includes such well-known names as Twitter and Digg – may be on to something. The Silicon Valley-based angel investor this week rolled out a newly named investment fund called Floodgate, which will make investments of $150,000 to $1 million, principally in Internet and technology companies. In building up the portfolio, Maples, says, Floodgate will focus on finding and funding a class of ultra-promising startup teams that he calls thunder lizards. “I thought it was a good metaphor for the disruptive startup,” says Maples, who defines a thunder lizard as one of the tiny minority of venture-funded companies each year that grows up to be worth north of $700 million.
2 min read · 25 March 2010
A decade ago, anyone with a bank account was investing in a venture capital fund. By now, a lot more bubble-era fund stakes have found their way to secondary investors. Hans Swilden, founder of venture capital secondary investor Industry Ventures, estimates that today about half of his firm’s venture capital stakes are for funds closed in 1999 and 2000. This year he expects to invest in another 20 – and is likely to add even more the following year. Currently, Swilden says there are six companies in which Industry Ventures has stakes that are in registration for IPOs, including some founded during the dot-com boom. The firm also made money last week with the IPO of QuinStreet, a provider of online marketing services that first raised venture funding in 1999.
2 min read · 17 March 2010
The traditional tenth year anniversary gift is supposed to be made of tin or aluminum. In modern times, we’ve switched to diamonds. But some occasions – like the peak of the Nasdaq bubble – seem better suited to tin. It was exactly ten years ago that the Nasdaq Composite Index hit its all-time record value of 5,132.52, after more than doubling from year-ago levels. The rise was fueled by an unprecedented wave of speculation in Internet and technology stocks, which subsequently crashed back to earth. Today at around 2,350, the Nasdaq is still far, far from regaining those highs. I looked at historical prices for a few then-and-now comparisons. On March 10, 2000, shares of JDS Uniphase were selling for $276 (it’s now $11.60). Yahoo was $178 (now around $16.50). And InfoSpace was going for $245 (now around $12). There were 287 venture-backed IPOs that year, which raised a total of $25.6 billion, according to Thomson Reuters.
2 min read · 10 March 2010
Now that private companies stay private longer, more and more of them have amassed large valuations. That, at least, is one takeaway from the index launched today by private stock-trading site SharesPost, which aims set approximate valuations for hot venture-backed companies. The SharesPost Venture-Backed Index, which crunches data from four sources to set values, currently covers seven companies, with valuations ranging from $227 million to $11.5 billion. They include Facebook (estimated value of $11.5 billion), Zynga ($2.6 billion), Twitter ($1.45 billion), LinkedIn ($1.3 billion), Tesla Motors ($1.28 billion), Linden Lab ($383 million), and Serious Materials ($227 million). SharesPost CEO Greg Brogger says the valuations are not intended as a hard-and-fast price point for setting sales prices. Rather, the idea is to give potential buyers and sellers of private company stock some easy-to-access data points to consider when setting up a transaction.
2 min read · 03 March 2010
Despite being frozen out in January, VCs believe the IPO market will heat up and have registered 11 more companies
4 min read · 01 March 2010
2 min read · 24 February 2010
One would think the people running SecondMarket already had enough on their plates. The New York-based company, which launched as an online marketplace for buying and selling illiquid alternative assets, now covers everything from mortgage-backed securities to bankruptcy claims. But on Tuesday SecondMarket announced it has a new item on its agenda: Expanding into Asia. To that end, it has raised $15 million in Series B financing from the Hong Kong-based Li Ka Shing Foundation (LKSF) and Dunearn Investments, a subsidiary of Singapore-based Temasek Holdings. The company is setting up an office in Hong Kong and plans to spend the bulk of the year researching its next move. I spoke earlier today to Jeremy Smith, SecondMarket’s chief strategy officer, about the company’s rationale for expanding overseas and what’s up in general in the world of illiquid assets – in particular the buying and selling of private company stock:
2 min read · 24 February 2010
