Mark Evans posted recently about the downside of Canada’s recent startup buying binge. Year-to-date, we have had 22 exits in Canada. But save for outliers like Radian6 and Algorithmics, most have been relatively small. Mark correctly argues that there are long term negative implications to these early exits: losing talent to the US and not [...]
Jul
22
I had a great question from an entrepreneur this week who is deciding whether or not to take VC into his business. He heard that VCs want 10x returns and if you accept VC$ then you need to deliver that. He was worried that VCs block sales that don’t deliver the required returns. This question [...]
Apr
27
Tungle announced today that has been bought by RIM. As an investor in and CFO of this company, this is big news for me. Tungle had all the right stuff and as I look back over my few years with the company there are a number of elements behind Tungle’s success that we can all [...]
I was in Boston this week and popped into Momentum Summit, an annual event that looks at how small startups turn into big businesses. At the end of the conference I sat down with a small group of people led by Founder Collective‘s Eric Paley. The topic? When to sell your business.
Continuing my love-in with founders this week, I wanted to share some thoughts around founders and exits. When VCs invest, they do so through preferred shares. These vary in shape and size from straight “plain vanilla” prefs to very complex founder-unfriendly prefs. The main goal of holding prefs vs. common shares (the ones founders have) [...]
May
22
Google announced yet another acquisition yesterday buying travel startup Ruba. For those who’ve been following this represents Mike Cassidy‘s 4th time leading a VC-backed startup and 4th successful exit. I first encountered Mike when he was CEO of XFire. David Lawee, my 1st ever VC, was part of that company, which was sold to Viacom [...]
New York Times reported today that Disney will get a 50% discount on its purchase of Club Penguin because the company failed to meet the targets needed to earn the extra payment. Now, don’t feel bad for Club Penguin’s founders. They still made $ 350M (the company had no outside funding). Still, this story is [...]
Last month voice 2.0 player Jajah exited for $ 207M. This is a great outcome given the crowded, low margin nature of the industry and is a stark contrast to the modest exits seen by Jajah’s competitors including Jaxtr and Mobivox (where I was once CFO). The difference in exit values between Jajah and its competitors demonstrates some [...]
Here’s an interesting table on valuation metrics by industry from the good folks over at investment bank Morgan Joseph: Valuation Metrics Oct09
Oct
06
At the simplest level, investors get in (invest) in order to get out (exit). In this respect they are no different than you or me when we buy stocks and mutual funds. The big difference, however, between most investors and venture investors (and the source of the most conflict and disconnect) lies in the exit [...]
The big news (so far) this week was Mint‘s acquisition by Intuit for $ 170M. I love this deal. It shows that the VC model of rapid funding and growth can work. And it puts Internet M & A back on the map. Median exits in the sector have been sub $ 50M and most [...]
Sep
02
Let me be clear: Skype is an amazing business and one of the great startup success stories. Still, they have proven capable of getting some crazy valuations on more than one occassion. History has proven that EBay overpaid when it bought them for $ 3.1B ($2.6B in the end according to gigaom). Now they are being valued [...]
I was flipping through the 1st half M & A stats yesterday and came across a $ 391M exit for two local investors (CDP and FTQ) which could only have been the sale of Oz Communications to Nokia (UPDATE: Thanks to a reader who shall remain nameless, the exit in question turns out to be [...]
I have been following the iLike acquisition story with great interest. If you haven’t heard, MySpace is close to acquiring them for $ 20M. While the thought of Facebook’s archrival acquiring one the most popular most apps on Facebook is amusing, the real story for me is how this company got to raise so much [...]
Aug
07
Updata Advisors published their quarterly update on the tech M & A marketplace. Here are the highlights: – 3 deals > $ 1B (vs. 1 deal in Q1) – Fewer deals were completed in Q2 (427 compared with 448 in Q1)
