CMM July 6th, 2009
Here’s the podcast from the panel I moderated/assembled for codestock. Thanks to the facilitators for putting this up.
Picture of Knoxville area software entrepreneurs Curtis Jones with Voice’s Heard Media, Chris Van Beke with Voice’s Heard Media, and Patrick Hunt with Tingz. Big thanks to the three of them for doing this.
CMM July 2nd, 2009
The data for this analysis came from NVCA, who has a relationship with Thomson Reuters. You can find the NVCA press release here.
Basically, Q2 of 2009 showed some signs of life out of the IPO market with five offerings, four from into tech and one from non-high tech. While we’ll celebrate those as the first real high technology IPOs since Q1 2008, we can’t over do it. We’re still a long way from the IPO payday; for example, in 2007 there were 86 IPOs for the year. The IPO market imploded in January of 2008, which in hindsight was probably an early sign of the financial fiasco we’re still struggling with to this day. I still feel like lots of politicians were trying to talk us into a little recessionary dip with pre-election angst and finger pointing, but in retrospect I don’t think I paid enough attention to the stalling IPO market. But I digress…
The venture industry needs liquidity events. Right now, many funds have all capital tied up in portfolio companies that can’t exit even though they’ve reach profitability, or the fund is tied up pumping capital into companies unable to raise additional outside equity. Either way, funds are limited on their ability to engage in real value-add, early stage investing. In addition, some funds are taking huge cram-downs and dilution as portfolio companies go through recapitalization and down equity rounds (i.e. raising money at lower valuations than before). Now, I’m not waving a “poor pitiful VC” flag. I’m just saying we need a healthy, vibrant, and liquid venture industry to keep entrepreneurship going.
The thing about entrepreneurship and early-stage investing is that it’s an expertise lost to the general public and most public officials. Frankly, you don’t really hear major media reporting on innovation, new business creation, IPO registrations, and patent filings. It’s all too complicated for the average Joe or Mary, so real high-growth entrepreneurship seems reserved to those fringe elements of society. Lots of people want to claim some title in this arena (angel invstor, entrepreneur, etc), but few of them really have the somatch and even less ahve the know-how. In addition to the complexity and unknown of this space, the target is always moving as a result of disruption and hyper competition. In my experience, working in this industry requires a high level of commitment to learning and a deep humility/sensitivity to how much you need to learn and relearn each and every day.
In conclusion, we’ve seen some sign of life in the IPO market, but we’ve still got a lot of capital clogged up in venture-backed companies. Exits are approximately 60% of their high over the past five years, with IPOs still anemic.
Here are some graphs showing venture0-backed liquidity events in the US (sorry for the poor pic quality):
CMM May 19th, 2009
This morning, I saw this cartoon by Gaping Void artist Hugh MacLeod. I want to be honest, I’m a fan boy of Gaping Void. I have two of Hugh’s cartoons printed off in my office serving as cube grenades– Permanent State of Reinvention and The Hugh Train. Both serve as great talking points, tacked to my wall right beneath my “venture capital value chain” and NASA sticker. Hugh’s stuff really connects because: a. it speaks to something bigger than just the grind of labor, 2. it communicates the same frustrations and irritations that I feel about (insert topic).
When I saw this new cartoon, I was immediately swept back to a twitter comment yesterday. Casey Peters of Knoxify.com tweeted about whether digital/online/social media should be called social media or new media. His question being, is it really “new” media if there are so many opinions, experts, agendas, and conferences about it. My response was that the majority of those opinions, experts, agenda, and conferences were all self-serving and/or rubbish.
This cartoon really captures where I think we’ve come with much of social media– 97% are attention starved, self-indulgent wannabe’s, while 3% are really trying to properly utilize the power of the platform. I know this sounds harsh, but the amount of complete drivel that comes across my various communications is staggering. Add to that pool the ever-so-frequent poorly planned with no hope of generating revenue “social networking” business opportunity that lands in my inbox, and I feel like I’m struggling to keep my head above water!
So, I could expound upon the various elements of social media and why most of them are rubbish, but that would be a waste of time. At the end of the day, your platform/network/meme/etc must be life changing to justify its use existence. Society has quick and dirty flings with technology that makes the needle twitch. Sure its fun, but you don’t commit to something with negligible value-add. If you do, its a long, dark, and expensive road to nothing (dot.com bust). Society embraces/loves/worships technology that makes the needle spin like a clock!
On a positive note (finally!), there is a choice. I think it has a lot to do with ethics and responsibility. Wannabe’s sell out. They take the early easy wins to get cash, because in the end that’s all they care about… Real rock stars, the kind that leave you feeling light headed and giddy at the end of a show, are in it because they LOVE it! The money is awesome and keeps them focused when times get difficult, but they have passion and drive that transcends that. They want their music (aka product) to make a difference.
The world needs more rock stars.
PS: Hugh MacLeod is a rock star in my book.
CMM May 13th, 2009
I know, two posts in one day. Scary.
Hat tip to my friend Alex Lavidge with Knoxville Overground for sharing this with me. What an awesome and informative video; an interesting perspective on the history of entrepreneurship and Silicon Valley. Very interesting presentation showing the unintended consequences of government funding and leadership during Wolrd War II creating the flagship entrepreneurial community in the world.
CMM May 13th, 2009
Yesterday afternoon, I participated as a judge in the Fairview business plan competition sponsored by the Center for Entrepreneurial Growth at Tech2020. You can find out more at Carly Harrington‘s Knox News article. First, I want to say congratulations to all the applicants and a special congratulations to the 1st and 2nd place winners– Orion Laboratories and NewCo (Josh Medical Kit). It’s very good to see the entrepreneurial spirit alive and well. Also, big kudos to Carly coming out to Pellissippi to write that story.
All compliments aside, I wanted to share some thoughts on the presentations and competition:
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