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10 Lies Angel Investors Tell

I came across a fun blog post the other day – Frank Peter’s post on 10 Lies Angels Tell. Frank has been an angel investor for quite some time and an active member of Tech Coast Angels. I have taken the liberty to convert the post into a nice little slideshow. I hope you enjoy it.

10 Marketing Lessons From @shitmydadsays Tweets

They often say that wisdom comes from the mouths of babes. My friend, Ramon Chen, recently showed that there’s a ton of marketing and product management wisdom that can be divined from Justin Halpern’s Twitter account, @shitmydadsays. Justin regularly documents his Dad’s choice comments. Ramon took it one step further and paired the tweets with some key marketing and product management takeaways. Consider the following: Tweet: “Oh please, you’ve practically invented lazy. People should have to call and ask you for the rights before they use it.” Key takeaway: “Find your core competency, own and brand it. Sometimes it’s staring you right in the face.” Click through and read more of Ramon’s selections as well as a link to the full post.

Startup Riot 2010 – 50 Startups. 4 Slides & 3 Minutes. 400 Investors & Alliance Partners

A lot of people have remarked that in today’s tough economy there has never been a better time to launch a technology startup. A lot of highly talented people are un/underemployed, cloud infrastructures and open source tools make capital-light startups a reality. Sanjay Parekh’s Startup Riot 2010 was recently held in Atlanta. 50 startups got 3 minutes and 4 slides to pitch their company to over 400 venture capitalists, angel investors, and potential strategic alliance partners. Think of it as speed dating for technology startups. Click through to read the whole post where I review the event, why my firm chose to be a sponsor, and profiles of three cool startups I liked: LessAccounting.com, social media monitoring startup Looxii, and the next generation business expense reporting solution nexpense.

Do You Like Tech Private Equity News . . . There’s An App for That

After the App Store hit three billion downloads in January I decided it was time to jump on the iPhone App bandwagon before I am permanently labeled a Late Majority/Laggard Technologist. This post talks about why I built my first iPhone App and my feelings about the mobile Internet app marketplace. The post also includes a great presentation from Chi-Hau Chien, a partner in Kleiner Perkins Caufield & Byers $100 million iFund, gave at iPhoneDevCamp 3 last year.

[ More ] March 15th, 2010 | 1 Comment | Posted in Management, Product Management, Venture Capital |

How Much Equity Do VCs Really Get?

In challenging economic times like this many folk are tempted to break out of their personal economic straight jackets by launching a technology startup. ‘Capital-light’ startups are the rage today, thanks to the extremely low costs of hosted services and the plethora of open source infrastructure software solutions. Many newbie entrepreneurs look to venture capital as the best way to finance the launch and development of their business. A common question raised by many of these entrepreneurs is ‘how much equity do VCs typically get?” Thanks to the folks at OwnYourVenture.com, entrepreneurs can now use a web based tool to model the impact of multiple rounds of venture capital funding. This post explores not only the math behind how founders’ equity gets diluted by venture capital, but it also models what founders’ ultimate payoffs can be in various exit scenarios. One pof the key takeaways is that you should worry more about how much VCs will own at the end of the fund raising process and what your exit will look like versus how much equity you give away in your Seed or Series A round.

Why I’d Prefer 1,500 Mid-Market Customers over 25 Fortune 1000 Customers

As the reality of 2010 sales forecasts settle in, enterprise software firms are beginning their annual hunt for new revenues. Many of them are considering moving ‘down-market’ into the mid-market space. This is a re-post of a piece I did last summer that talks about why I’d rather have 1,500 mid-market versus 25 Fortune 1000 customers.

SaaS Valuation Update January 2010

Interest in public company SaaS valuation trends continue to grow. This post presents an update on key valuation metrics for public SaaS companies as of January 2010. Includes metrics on Enterprise Value, EV/Revenue, EV/EBITDA, Gross Margins, EBITDA MArgins, Revenue Growth Rates, and YoY Stock Market Returns.

A Tempest in a Chinese Teapot. The Non-Merger of CDC Software & Chordiant

It only took six days for CDC Software to launch and then exit an unsolicited offer for Chordiant Software. CDC’s offer was spurned by Chordiant since it “significantly undervalues Chordiant and is not in the best interests of Chordiant’s shareholders.” Yesterday CDC Software announced their intention to sell the 1.3% stake of Chordiant they owned. CDC Software’s offer may have been spurned, but a deeper look at the numbers show it was spot on for public companies in Chordiant’s space CDC Software’s prescription for Chordiant’s ailments is probably spot on. Click through to read more details about this saga as well as three other enterprise software firms that decided to accept low, but viable offers for their businesses in the past week.

[ More ] January 13th, 2010 | No Comments | Posted in Financial Literacy, Private Equity, Venture Capital |

What the Proposed Carried Interest Tax Means for Private Equity Portfolio Companies

Congress is looking to raise $24 billion over the next 10 years by changing how private equity firms are taxed on the profits of their investments. If you are a senior executive at a private equity backed portfolio company you need to understand how this tax change will impact your owners and their attitudes toward your business. As noted in a recent Wall Street Journal article there are very different opinions about the tax law change. “Private equity will endure, but the draconian tax hike, if enacted, will unquestionably slow the flow of capital to companies struggling to get back on their feet during this very fragile economic recovery,” said Doug Lowenstein, president of the Private Equity Council, a trade group. “It’s amazing to me that at the same time the U.K. is imposing a 50% excise tax on bankers’ bonuses, the private-equity guys aren’t even willing to pay the usual ordinary income rate,” Mr. Fleischer said. “You would think they would recognize a fair deal when it’s offered.”

Whether the tax is fair or not is not the major issue for portfolio company executives. The real issue is that private equity owners could push for the sale of your business in 2010, at significantly reduced prices, to maximize their yield on the investment in your firm. Click through to read the whole post and take a look at the math and its implications for your business.

Manufacturing Revenue 2010

If your company’s products/services are in the middle to latter parts of the life cycle, it is harder to sell new customers. In 2010 a lot more companies will be looking to acquire social media analysis/monitoring platforms, hardware/software virtualization, and cloud computing services than those looking for ERP solutions, mainframe job scheduling, or electronic data interchange. This does not mean that there are not significant revenue opportunities for older technologies – it just means that you have to work a lot harder since most buyers do not wake up in the morning and say “I really need to buy some middle-aged technology today!”

Manufacturing revenue is a harsh reality for most tech companies today. Over the next few days we are going to be exploring a few techniques you could leverage at the start of 2010 to get you closer to hitting your revenue numbers. The first approach is euphemistically entitled “The Bowling League Sales Program.” This program focuses on building awareness of your brand and customers’ successes via a geographically focused customer success blogging, social media broadcasting, and digital body language monitoring program. It’s a lot of work but it enables you to effectively leverage some of the most active and effective marketing technologies in today’s world to drive new revenues for your business.

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