Comments on: An alternative to VC: “Selling In” http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/ News About Tech, Money and Innovation Mon, 23 Nov 2009 21:25:39 +0000 http://wordpress.org/?v=2.8.5 hourly 1 By: Michael Faught http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/comment-page-1/#comment-16948 Michael Faught Thu, 23 Nov 2006 19:16:07 +0000 http://www.venturebeat.com/contributors/2006/10/10/an-alternative-to-vc-selling-in/#comment-16948 Brian, Very interesting perspectives and somewhat related to an approach I espouse and have executed successfully in the past. I'll cut and past the body of an email I just sent Gerald Hwasta (Shah Capital Partners) in response to a posting of his on "Technology Buyouts Come of Age." I'd be very curious to hear your thoughts on this strategy and it relates, or represents an alternative to what you're describing. Best, Michael ************************************************** Gerald, you're certainly correct about PE firms and their growing focus on technology buyouts. In my opinion however there is another, at least as big, opportunity in the space between venture capital and technology buyouts....technology-driven growth acquisitions. This is a buyout, not venture model, focusing on acquiring cashflowing but mundane "me too" operating companies (at commodity multiples) and utilizing (pre-sourced and "turnkey") technological innovation to immediately decommoditize the target acquisition's product or service. In turn, this enables the capture of market share (driving up revenue) and premium pricing (driving up margins) which, obviously, drives cashflow improvement, profitable exits (at premium multiples) and outsized returns to investors. By virtue of the fact that we focus on acquiring these boring “going nowhere” commodity companies, we avoid auctions and buy right….ultimately, this is all about legitimately proprietary dealflow. Gerald, if you (or any other VentureBeat readers) are at all interested in this strategy, I'd love to discuss this with you in more detail. Feel free to contact me at MFFaught@aol.com. I'm in Los Angeles. ***************************************** What do you think Brian? care to discuss? Michael Brian,

Very interesting perspectives and somewhat related to an approach I espouse and have executed successfully in the past. I’ll cut and past the body of an email I just sent Gerald Hwasta (Shah Capital Partners) in response to a posting of his on “Technology Buyouts Come of Age.” I’d be very curious to hear your thoughts on this strategy and it relates, or represents an alternative to what you’re describing. Best, Michael
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Gerald, you’re certainly correct about PE firms and their growing focus on technology buyouts. In my opinion however there is another, at least as big, opportunity in the space between venture capital and technology buyouts….technology-driven growth acquisitions. This is a buyout, not venture model, focusing on acquiring cashflowing but mundane “me too” operating companies (at commodity multiples) and utilizing (pre-sourced and “turnkey”) technological innovation to immediately decommoditize the target acquisition’s product or service. In turn, this enables the capture of market share (driving up revenue) and premium pricing (driving up margins) which, obviously, drives cashflow improvement, profitable exits (at premium multiples) and outsized returns to investors. By virtue of the fact that we focus on acquiring these boring “going nowhere” commodity companies, we avoid auctions and buy right….ultimately, this is all about legitimately proprietary dealflow. Gerald, if you (or any other VentureBeat readers) are at all interested in this strategy, I’d love to discuss this with you in more detail. Feel free to contact me at MFFaught@aol.com. I’m in Los Angeles.
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What do you think Brian? care to discuss? Michael

]]> By: Ron Lissak http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/comment-page-1/#comment-16620 Ron Lissak Thu, 12 Oct 2006 21:24:46 +0000 http://www.venturebeat.com/contributors/2006/10/10/an-alternative-to-vc-selling-in/#comment-16620 While electronic business brokers are not new, VentureBoard sounds like an enhancement over prior models. A word to the wise from a professional software M&A practitioner: good exits require careful planning. Most entrepreneurs would benefit from the relationships and expertise of a professional advisor who knows your industry (e.g. we know software), and many new boutiques have sprung up who will work with smaller companies to maximize the value of the business, and take a proactive approach to marketing. --Ron Lissak Catapult Advisors LLC While electronic business brokers are not new, VentureBoard sounds like an enhancement over prior models. A word to the wise from a professional software M&A practitioner: good exits require careful planning. Most entrepreneurs would benefit from the relationships and expertise of a professional advisor who knows your industry (e.g. we know software), and many new boutiques have sprung up who will work with smaller companies to maximize the value of the business, and take a proactive approach to marketing.
–Ron Lissak
Catapult Advisors LLC

]]> By: Ventureboard, un marketplace para start-ups 2.0 « |-Multitag-| (beta) http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/comment-page-1/#comment-16618 Ventureboard, un marketplace para start-ups 2.0 « |-Multitag-| (beta) Wed, 11 Oct 2006 16:48:58 +0000 http://www.venturebeat.com/contributors/2006/10/10/an-alternative-to-vc-selling-in/#comment-16618 [...] Acá hay un post con publicity del sitio que esta interesante (habla de los problemas que tiene el entrepreneur hoy en negocios digitales) [...] [...] Acá hay un post con publicity del sitio que esta interesante (habla de los problemas que tiene el entrepreneur hoy en negocios digitales) [...]

]]> By: Standard Deviations » Startups For Sale: VentureBoard http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/comment-page-1/#comment-16617 Standard Deviations » Startups For Sale: VentureBoard Wed, 11 Oct 2006 05:15:03 +0000 http://www.venturebeat.com/contributors/2006/10/10/an-alternative-to-vc-selling-in/#comment-16617 [...] The basic premise is that most startups don’t have quite the exit that YouTube has had, and that a forum for finding acquirers and selling startups is needed. Brian McConnell describes it as MLS for startups. [...] [...] The basic premise is that most startups don’t have quite the exit that YouTube has had, and that a forum for finding acquirers and selling startups is needed. Brian McConnell describes it as MLS for startups. [...]

]]> By: RadioHandi: Up For Sale At VentureBoard -- Alec Saunders .LOG http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/comment-page-1/#comment-16616 RadioHandi: Up For Sale At VentureBoard -- Alec Saunders .LOG Wed, 11 Oct 2006 02:16:03 +0000 http://www.venturebeat.com/contributors/2006/10/10/an-alternative-to-vc-selling-in/#comment-16616 [...] I learned about VentureBoard from RadioHandi founder Brian McConnell.  He dropped me a piece of email last week to let me know that they were going to put RadioHandi’s assets up for sale, and would be conducting that sale with the help of VentureBoard. RadioHandi is at a stage where it can either take on venture capital, or look for an acquirer. Acquisition makes the most sense to the founders.  However, they’re still too small to attract the attention of the investment banking community, hence VentureBoard. Brian likens what they’re doing to putting a house up for sale.  They’re hoping to see a minimum of $5 million dollars, and will be taking offers until November 9th. You can see the RadioHandi listing here, and read Brian’s first hand account of why he’s taking the VentureBoard route, here. [...] [...] I learned about VentureBoard from RadioHandi founder Brian McConnell.  He dropped me a piece of email last week to let me know that they were going to put RadioHandi’s assets up for sale, and would be conducting that sale with the help of VentureBoard. RadioHandi is at a stage where it can either take on venture capital, or look for an acquirer. Acquisition makes the most sense to the founders.  However, they’re still too small to attract the attention of the investment banking community, hence VentureBoard. Brian likens what they’re doing to putting a house up for sale.  They’re hoping to see a minimum of $5 million dollars, and will be taking offers until November 9th. You can see the RadioHandi listing here, and read Brian’s first hand account of why he’s taking the VentureBoard route, here. [...]

]]> By: Digital Common Sense » Open Communication Systems up for sale http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/comment-page-1/#comment-16615 Digital Common Sense » Open Communication Systems up for sale Wed, 11 Oct 2006 00:07:23 +0000 http://www.venturebeat.com/contributors/2006/10/10/an-alternative-to-vc-selling-in/#comment-16615 [...] Beyond the sale announcement, Brian has a nice article online in the Venture Beat contributors section too. An alternative to VC: “Selling In”By Brian McConnell 10.10.06 [...] [...] Beyond the sale announcement, Brian has a nice article online in the Venture Beat contributors section too. An alternative to VC: “Selling In”By Brian McConnell 10.10.06 [...]

]]> By: VentureBeat » Introducing VentureBoard, a marketplace for start-ups http://venturebeat.com/2006/10/10/an-alternative-to-vc-selling-in/comment-page-1/#comment-16613 VentureBeat » Introducing VentureBoard, a marketplace for start-ups Tue, 10 Oct 2006 17:52:18 +0000 http://www.venturebeat.com/contributors/2006/10/10/an-alternative-to-vc-selling-in/#comment-16613 [...] Worth reading is Brian McConnell’s piece today at VentureBeat’s contributors area. He explains how the idea for VentureBoard came about, and why he wants an alternative to eBay. [...] [...] Worth reading is Brian McConnell’s piece today at VentureBeat’s contributors area. He explains how the idea for VentureBoard came about, and why he wants an alternative to eBay. [...]

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