December 8, 2010
Excellent block of speakers this morning at the BIA/Kelsey ILM:10 conference with senior execs from both Google and Yahoo! speaking about their local strategy.
On the Google front, we first heard from Carter Maslan, Product Management Director, Local Search. He touched upon their mission (organize the world’s information geographically and make it universally accessible and useful), mentioned the new presentation of results in place pages released on October 15 and explained that local is not just one thing, it’s the various ways we lead our lives: critics, guides, tribes, events, news, products, offers, friends, credentials, and specialties.
The most insightful portion of the presentation was the Q&A session. There clearly seems to be pent up frustration between local resellers/local media publishers and Google and for the first time, we could hear very public grumbling. Probably caused by a series of Google moves including modifications to local search results pages, frustration with the AdWords reseller process and the tentative Groupon acquisition, I think the fragile coopetition equilibrium is threatened. “Elephant in the room” was mentioned by a few people. When Maslan was asked what was the role of directory publishers in the ecosystem, he said they could be the source of “credentialed businesses” as Google still has a lot of problems with listings spam. He mentioned that local ranking was based on three main dimensions: 1) the relevance of the place 2) the prominence of it 3) distance (depending on categories).
We then listened to Wesley Chan, Partner, Google Ventures. They are the investment arm for Google and are looking for great teams of entrepreneurs to back them financially and with intellectual capital. They are looking for financial returns, not for companies/projects that are strategic to Google. In fact, Chan clearly mentioned they are not grooming companies solely for Google acquisition and he hopes some of his investments will be acquired by Facebook and Microsoft! They love “local”, think it’s very early, that we will surprised many times in the next 10 years. They do all types of investments, from seed to mezzanine rounds. Chan spends 50%+ of his time on “local” opportunities. Again, more proof of the importance of local for Google.
December 10, 2009
Interesting VC/Angel roundtable this morning at LeWeb moderated by Dave McClure (who defined himself as Startup Investor & TroubleMaker!). Here’s what participants had to say about the VC/angel market in 2009 and what we can look for in the future.
Christopher Sacca, Founder, Lowercase Capital LLC
- His firm does early stage investment ($50K to 250K) and very large investment ($500M+)
- It is now cheap to start a company. Ten years ago, it would cost you $1M before your first line of code. Rent and Engineers are now the two biggest expense lines.
- Sacca revealed that they did 3 deals yesterday.
- The changes he saw recently: valuations are up again driven by larger funds probably because it was a year of low activity. Funds need to get the money out and VCs definitely have money.
Dan’l Lewin, Corporate Vice President, Strategic and Emerging Business Development, Microsoft Corporation
- Microsoft buys 10-20 small companies per year, about half of those are VC-backed.
- Those acquisitions are usually companies that are 2 to 5 year-old.
- 2009 was a good year relative for young companies.
- Microsoft buys many companies abroad, not just in the US.
- When asked if he thinks acquirers are competing with VCs, Lewin said he doesn’t think so given the scale of their business. They look at businesses that are close to the core, extending the business.
Dave McClure, Chris Sacca, Dan’l Lewin
David Hornik, Jeremy Wenokur, Eric Archambeau
David Hornik, August Capital
- 2009 was a great year for August Capital as they closed a new $650M fund.
- Hornik did 4 deals in the last 12 months (6 in the last 15 months).
- Size of those deals: between $1M to $35M. Usually, they are Series A rounds (approximately $4M)
- What’s a successful investment for Hornik: when he can say “that was great!”.
- In 2010, a lot of people are hoping is the year that VC are able to raise money. In the case of Gowalla, competition for the deal between funds drove the price up.
- Hornik mentioned that it’s cheap to start companies these days but, as it starts scaling, it’s not as cheap. It’s cheaper the ten years ago but it’s not cheap. The things that succeed require capital.
Jeremy Wenokur, Angel investor & Advisor to Apax Partner
- Wenokur says he took 9 months off and just restarted investing.
- The size of his deals: $25-50k investments.
- He’s seen the shift of money to smaller funds and that’s why you see a lot of deals being chased.
- For him, a good exit is $20M-30M exit and it happens one out of five times.
Eric Archambeau, General Partner, Wellington Partners
- They search Europe for investments
- They have 800M euros in management
- They do 50K to 25M euros investments
- in Web investment, they look for evidence of traction
- In reference to smaller exits in 2009, Archambeau says that maybe VCs were less patient this year and maybe exited too early.
“The mobile and wireless world is exploding,” said Chip Hazard, a general partner at Flybridge Capital Partners, an early-stage venture capital firm. Apple just soared past a billion downloads, handsets are becoming more powerful and cellular networks and bandwidth is steadily improving, he said.
But from a venture capitalist’s perspective, Mr. Hazard wondered, is there a $100 million mobile application company out there or just lots of hobbyists?
What it means: there’s no question that money can be made with mobile apps (especially with the iPhone store) but, given their expectations in terms of return on investment, are major VC investments in mobile still too early? Does mobile scale without an offline or online presence? All good questions with no clear answers.
May 31, 2007
(via MapleLeaf 2.0)
What it means: congrats to the StandoutJobs guys! There is a lot of start-up activity right now in Montreal, Canada (see this list) and I’m sure this is just the beginning of many small companies being funded here.