NanoString is a genomics company with special technology for helping cancer researchers that has just filed an S-1, declaring to the SEC (and the reading world) its intention to go public.

The company’s technology uses small amounts of tissue to find and use genetic information. Not content with the research side, NanoString places a lot of emphasis on its technology’s usefulness in clinical settings for present-day patient care.

Unfortunately, one of the biggest risk factors for this IPO is the company’s consistent losses. From the filing:

We have incurred losses since we were formed and expect to incur losses in the future. We incurred net losses of $12.8 million, $10.9 million, $17.7 million, $3.6 million, and $7.3 million in 2010, 2011 and 2012 and the three months ended March 31, 2012 and 2013, respectively. As of March 31, 2013, we had an accumulated deficit of $102.8 million. We expect that our losses will continue for at least the next several years as we will be required to invest significant additional funds toward development and commercialization of our technology. We also expect that our selling, general and administrative expenses will continue to increase due to the additional costs associated with establishing a dedicated oncology diagnostics sales force and the increased administrative costs associated with being a public company.

That alone makes this initial public offering a not-so-sure bet for Day One investors. Also, NanoString is playing in a field ridden with bureaucratic potholes, from government regulations to Big Pharma politicking.

The deal, which currently has no set range for stock price, has JP Morgan and Morgan Stanlet as its underwriters. The proposed maximum aggregate offering price is around $86 million.

Formed in 2003, NanoString is a spinout from the Institute of Systems Biology.

Image credit: Shutterstock

Today, not that much has changed.

After debuting close to $40 and cratering to just under $18 in August, the stock has somewhat stabilized in the $25 region, down 30 percent from its opening-day high. And along the way, the story emerged of how Facebook tried to hide some of the mobile risk inherent in its business and how the company panicked and botched its IPO by using vague positive language in its public prospectus and, apparently, specific negative information about slowing revenue growth to institutional investors privately.

Not to mention the $100 million paid to banks to stabilize the stock — on top of $176 million in IPO fees — for efforts that ultimately failed. And technical glitches that cost the NASDAQ $62 million in compensatory fees.

All of which negatively affected the overall IPO market.

That all said, however, Facebook has seemingly nicely recovered from the disaster — at least from a business fundamentals perspective. Revenue growth was strong in its latest quarterly earnings release, with the company booking $1.46 billion in revenue for Q1 2013, compared to about $1 billion a year ago. More importantly, mobile was significantly up, accounting for 30 percent of ad revenues, and Facebook singlehandedly accounted for 6.5 percent of all online ad dollars spent in the U.S.

Not exactly Google numbers, but pretty good nevertheless.

And the company has massively beefed up its advertising options. It’s now posting retargeted ads right in the news feed, once sacrosanct territory. And in a move aimed directly at advertising giant Google, Facebook has launched a self-serve tool that allows advertisers to target its users based on what they actually buy and want to buy offline … which is a significant move to targeting the intent graph that Google hits so well by virtue of being a search engine, but Facebook has often missed since its visitors are on the site to meet and greet people. In addition, as soon as July, Facebook will be rolling out 15-second video ads in the news feed, a product that it will be charging major brands millions of dollars for.

All of which is having an effect.

The consensus recommendation for Facebook is currently a buy, with a price target of $34. Most analysts are in the Strong Buy category, with few or none in the dreaded Underperform or Sell slots. And in the past four weeks, analysts have revised their earnings estimates upward by a factor of 6 to 1.

So there’s a lot of positive in Facebook’s future, and there’s a ton of potential. But it’s still challenging when analysts compare Facebook stock with other internet high-fliers like LinkedIn or Yelp, which rose 148 percent and 48 percent in their first years, respectively.

But at least it’s better than Groupon and Zynga, both down around 75-80 percent.

And, I would argue, while there are a ton of challenges and many very significant competitors — primarily Google — the future for Facebook is bright.

Even if the public start was a stubbed toe.

Marketing automation business Marketo made its debut on the Nasdaq stock exchange today, and early trading looks strong, with shares up 55 percent over initial pricing.

Last night, the company priced 6.1 million shares at $13 — the high end of its $11-to-$13 range — and ended up raising $79 million. As of this writing, the stock is trading at over $20 a share.

Marketo and competing marketing automation firms like Eloqua, Pardot, and Silverpop offer software and services focused on improving and managing sales lead generation. The company purchased social campaign service Crowd Factory a year ago to help with its mission and to reach more consumers.

Back in early April, Marketo filed for a $75 million IPO. Prior to the IPO, San Mateo, Calif.-based Marketo raised $108 million in VC funding from big players including Battery Ventures, Institutional Venture Partners, InterWest Partners, Mayfield Fund, and Storm Ventures.

Big data business Tableau Software also had its IPO today and shares popped 60 percent in early trading. Today is clearly a good day for enterprise tech IPOs.

Marketing concept via Shutterstock

Enterprise tech IPOs have seen big movement over the past few years. Now we can add big data and data visualization company Tableau Software to the list of successful enterprise IPOs, as its share price has popped as much as 60 percent in early trading today.

Last night, Tableau priced its IPO at $31 per share, raising $254 million with an offering of 8.2 million shares. Now that price has shot up to about $49 on the New York Stock Exchange, as of this writing.

Tableau offers products to help technical and nontechnical users create interactive charts and simulations based on raw data. Tableau generated $127.7 million in annual sales in 2012, more than double its 2011 revenue and more than quadruple its 2010 revenue. Back in November, we picked Tableau as one of 10 startups leading the way in big data.

“Our mission, to help people everywhere see and understand data, isn’t all that different from Google’s,” Tableau CEO and cofounder Christian Chabot told us in a recent interview.

Tableau originally filed for its IPO in early April. At that time, it was just looking to raise $150 million in its initial public offering.

Prior to the IPO, Seattle-based Tableau raised $15 million in funding over two rounds from New Enterprise Associates. NEA’s partners and investors have got to be pretty happy with this deal, as the fund was seeing a 20x return on its investment in Tableau, according to Fortune’s Dan Primack — and that was before today’s pop.

Screenshot via Tableau/YouTube

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Music and TV discovery/bookmarking service Shazam has hired former Yahoo executive Rich Riley as its new chief executive, the company announced today.

Shazam is best known for its mobile applications that allow people to identify music that’s playing in the background. The company is now offering its technology to identify television shows that are currently playing. Both the music and TV show ID tech comes with social tools that let you connect with friends and family. The service claims to have 300 million users (90 million in the U.S. alone) in over 200 countries. The company makes money through adverting and by driving affiliate sales to music stores like Apple’s iTunes and Amazon.

Riley, who was previously in charge of the Americas during his time at Yahoo, will replace outgoing CEO Andrew Fisher who will shift to Shazam’s executive chairman. Fisher said he plans to focus on Shazam going public in the near future while Riley strengthens the company’s advertising in second-screen TV advertising.

“With 300 million install base and 2 million new users per week, there’s a tremendous opportunity to bring new advertising opportunities into TV and letting consumers connect with those advertisements,” Riley said in an interview with VentureBeat.” Both he and Fisher reiterated that point specifically, noting that the TV ad industry was a $3 billion per year business. “We don’t want to go after the digital budgets of popular brands, we want a portion of the regular commercial TV budget.”

The company said it wants to sign on more brands and companies to help prolong that 30-second commercial into nearly three minutes of engagement. Riley used the example of playing a full trailer as opposed to a 30-second cut as one way to do this. I’m not sure that would make sense for every brand right out of the box, but I suppose it is possible. (For example, how many people would really be engaged for three minutes about laundry detergent?)

As for going public, the company isn’t setting any dates — meaning we won’t see Shazam make an initial public offering this year.

“There’s a lot of work to do at Shazam to get us ready for the public arena,” Fisher said. “We’re not in a rush to go public, but we are in a rush to build a successful business.” He noted that the company’s ambitions have changed drastically over the past two years, and the recent hires of Riley and former BBC staffer Daniel Danker as chief product officer are only the first steps.

Founded in 2002, the London-based startup has $32 million in funding from Kleiner Perkins Caufield Byers, Institutional Venture Partners, Acacia Capital, and DN Capital.

Photo via Shazam

ChannelAdvisor provides software-as-a-service solutions to help retailers and manufacturers integrate, manage, and optimize their merchandise sales across hundreds of online channels, including Amazon, Google, eBay, Bing, Groupon, and Facebook. Customers can build customized solutions or use the “managed services” for help implementing campaigns.

“The e-commerce market has grown significantly over the last several years, as consumers have increasingly shifted their retail purchases from traditional brick and mortar stores to online stores and marketplaces,” the company said in the filing. “This trend has created many opportunities for retailers and manufacturers, but at the same time has resulted in additional complexity and challenges. Retailers and manufacturers seeking new avenues to expand their online sales must manage product data and transactions across hundreds of highly fragmented online channels where data attributes vary, requirements change frequently, and the pace of innovation is rapid and increasing.

The filing also cited a Forrester report that found online consumer spending is expected to increase to $1.1 trillion in 2016, which will grow the need for tools that help merchants navigate the “complex and fragmented” market. ChannelAdvisor’s software supports the full spectrum of e-commerce vendors, including marketplaces, paid search providers, companion shoppers, flex feeds, and social shopping companies. Services like inventory management, reporting and analytics, and content optimization help vendors get the most of their online sales.

According to the S-1, ChannelAdvisor had over 1,900 customers worldwide as of December 31, 2012, and in 2012 alone its customers processed over $3.5 billion in gross merchandise value through the platform.

ChannelAdvisor was founded in 2001 and has raised $75 million to date. Investors include eBay, Advanced Technology Ventures, Kodiak Venture Partners, Southern Capital Ventures, and New Enterprise Associates. ChannelAdvisor is based in North Carolina.

ChannelAdvisor S-1

Photo Credit: ChannelAdvisor Facebook 

Now it’s leading the way in 2013 IPOs for startups, filing for up to a $150 million initial public offering.

“Our mission is to help people see and understand data,” Tableau’s prospectus says. The company offers products that nontechnical folk can use to create rich, interactive charts and simulations based on raw data. Besides a public version, Tableau offers a variety of corporate and premium products which it calls an “alternative to BI,” or business intelligence.

Source: Tableau

Tableau cofounder/chief executive Christian Chabot

After receiving venture capital twice in its nine-year history — both times from NEA — totalling $15 million, Tableau reached $127.7 million in annual sales in 2012, more than double 2011 revenues and more than quadruple 2010 revenues. That’s a compound annual growth rate of 93 percent.

Tableau is profitable as well, although just barely: It’s IPO says it generated income of $2.7 million, $3.4 million, and $1.6 million over the past three years. The last number, for 2012, shows that the company was pushing hard for revenue at the expense of profit — sales and marketing expenses jumped from $30 million in 2011 to $62 million in 2012, and total operating expenses ballooned from $55.5 million to $112.8 million in the same period. Head count quadrupled from 188 in 2010 to 749 in 2012.

Don’t expect that to change quickly. One of the risks cited in the IPO prospectus says the company is still expanding quickly:

We expect expenses to increase substantially in the near term, particularly as we make significant investments in our sales and marketing organization, expand our operations and infrastructure both domestically and internationally and develop new products and new features for and enhancements of our existing products.

However, if the company can secure significant market share and reduce SG&A expenses as a proportion of revenue, Tableau could be wildly profitable. Gross profit on sales of its products was $117.4 million on $127.7 million of revenue, revealing a prime benefit of delivering your product via the cloud.

No firm date has been set for the IPO, but the companies stock ticker symbol will be “DATA.”

Competitors include established business intelligence giants like IBM, Microsoft, Oracle, and SAP as well as startups such as Qlik Technologies, and Tibco Spotfire. And maybe even Google.

“Our mission, to help people everywhere see and understand data, isn’t all that different from Google’s,” Christian Chabot, the company’s cofounder and chief executive, told VentureBeat last year.

The Securities and Exchange Commission gave Nasdaq the green light to pay out up to $62 million to those who lost money after technical glitches held up Facebook’s initial public offering by a half hour.

Facebook went public in May 2012 to a number of mishaps. Before the IPO, the company was accused of a number of shady activities, including giving bankers private information about its revenue before the IPO. But when everything was said and done, and the company had made it to the trading floor, Nasdaq’s systems glitched and halted trading for a half hour. Then, would-be investors complained they couldn’t get confirmation of stock purchases or cancellations.

The ordeal cost investors money, and as a result, Nasdaq A few days later, the exchange admitted the failure. A couple weeks later, Nasdaq submitted its proposed compensation plan to the SEC, though it does disclaim that it is not responsible for losses incurred on the trading floor. In this case, it seems the exchange just wants to make good on a technical issue.

Those seeking compensation have a week from today to submit their requests in writing. The Financial Industry Regulatory Authority (FINRA) will be reviewing and approving each claim starting immediately. According to the SEC, Nasdaq should not issue any more cash than $62 million dollars, though losses at the time were estimated to be more thatn $100 million — and have grown to be hundreds of millions to date.

hat tip Wall Street Journal; IPO image via Facebook

Ad-tech startup Marin Software made its public debut this morning on the NYSE, netting a higher than expected price in early trading.

The company, which will trade under the symbol MRIN, sold 7.5 million shares at $14. It was initially expected to sell 7 million shares in the $11 -$13 price range but was revised at the last minute to reflect a growing demand. Thus far, trading has peaked at $19 per share (or 37 percent higher than its debut price) and is currently holding steady at around $17. At the opening price, Marin expects to raise $105 million, valuing the company at $475 million.

Marin helps advertisers and agencies manage and track paid search ad campaigns across Google, Bing, Yahoo, Baidu, and other search engines. It’s annual revenues have steadily risen, which contributed to the stock’s strong opening. Also, Marin’s earlier admission that it wouldn’t be profitable in the foreseeable future doesn’t appear to have held it back. In 2011, the company reported revenues of $36.1 million at a loss of $17.4 million, and it was not profitable in 2012.

Marin Software is the first big ad-tech company to make an IPO in 2013, and is one of 17 tech IPO candidates to watch this year, as VentureBeat’s Christina Farr previously pointed out.

Bay Area-based Marin Software is set to sell its initial shares late on Thursday. Analysts expect to see a strong debut from the digital ad management company.

Trading begins Friday when CEO Chris Lien will ring the opening bell on the New York Stock Exchange.

Fortune is reporting that Marin Software’s IPO is more than 2x oversubscribed, and that it is expected to price above its range. Marin is likely to perform on par with Model N and smart grid business Silver Spring Networks. Both newly-public companies saw their stock jump about 30 percent over the target IPO price.

This recent string of hot IPO’s is evidence of the public’s confidence in Bay Area tech.

Marin plans to sell 7 million shares at a price range of between $11 and $13, which would raise about $91 million. It will be the first ad-tech company to go public this year.

The company helps advertisers and agencies manage and track paid search ad campaigns across Google, Bing, Yahoo, Baidu (China’s search behemoth), and other search sites. Annual revenues have steadily risen, which is a strong sign for investors.

Unlike the tech giants of the dot-com era, these IPO candidates are drumming up interest without overstating their revenue potential. Marin Software admitted in the months prior to going public that it would be unlikely to reach profitability “in the foreseeable future.”

For the entirety of 2011, Marin had revenues of $36.1 million and a loss of $17.4 million, and the company failed to book an annual net profit in 2012.

“Once you go public, you want to make sure you can provide very predictable estimates to the street,” said Jim Moore, founder of mergers and acquisitions firm J Moore Partners, in a recent interview. “People won’t trust the story otherwise.”

Smart grid business Silver Spring Networks took a huge step today with its debut on the New York Stock Exchange — and its stock jumped 29 percent over its IPO price.

On Tuesday night, the company priced its IPO at $17 a share — the midway point of its $16-to-$18 range. Today, the stock opened at $22, a 29 percent bump, and it is now trading at about $21, which is still more than 23 percent over its IPO price.

The company sold 4.75 million shares, which is a million more than was originally allocated for the IPO. The move will raise the company $81 million in fresh capital.

Silver Spring Networks first filed for an IPO in July 2011, and at that time, the maximum it wanted to raise was $150 million. Things look a little different today, but the company at least went public. Silver Spring Networks CEO Scott Lang rang the opening bell of the NYSE this morning.

Redwood City-based Silver Spring Networks sells various hardware and software networking technologies that are meant to give utility companies more reliable and efficient results in energy usage. It also offers up hardware that can transmit consumption data between meters, consumers, and utilities.

The company previously raised $207 million from the likes of Google Ventures, Kleiner Perkins Caufield & Byers, Foundation Capital, and Northgate Capital.

Chicago at night via dibrova /Shutterstock

Agile software development company Rally has just filed an S-1 registration statement with the SEC, apparently preparing the shop for a $70 million IPO.

Deutsche Bank and Piper Jaffray will act as lead book-running managers for the offering, the company said today in a statement on the news. Needham & Company, JMP Securities, and William Blair & Company will act as co-managers.

We don’t have a ton of information yet on dates, prices, etc., but here’s the S-1 for your perusal:

The company makes Rally Enterprise and Rally Community; both products focus on agile application lifecycle management for software-building developers. In addition to selling these on a subscription basis, Rally also offers training; its customers include Sony and HP, among others.

Rally was founded in 2002; it has taken more than $70 million in venture capital over six rounds of institutional funding. Investors in the company include Greylock Partners, Mobius Venture Capital, Boulder Ventures, and Meritech Capital Partners.

Rally is headquartered in Boulder, Colo., and has offices in Seattle, London, Melbourne, Amsterdam, and Raleigh. Its total employee headcount is 368, and it claims around 154,000 customers

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CDW, hardware/software retailer to the Big Guys, is getting ready to go public in a $750 million offering.

Interestingly, the company, which was founded by businessman Michael Krasny in 1984, already had an IPO a decade ago.

Krasny led CDW to its first initial public offering in 1993. He then sold it to Madison Dearborn Partners and Providence Equity Partners in 2007; that particular deal netted him $7.3 billion and made the company privately held once more.

This year’s IPO will be led by JPMorgan Chase, Barclays, and Goldman Sachs, Reuters reports.

CDW is short for Computer Discount Warehouse. The company provides tech of all kinds — Chromebooks, tablets, copies of Microsoft Office, keyboards and mice, you name it — to large businesses and IT departments.

In addition to providing technology software and hardware to the enterprise, CDW also does a boatload of business with federal, state, and local governments and educational institutions (including schools and universities).

Altogether, this line of business added up to $10.1 billion in sales across a quarter of a million companies last year.

The company is based in Vernon Hills, Ill., and employs 6,800 people in 25 locations around the U.S. and Canada.

Image credit: CDW

Digital publishing startup Glam Media has reportedly filed documents for an initial public offering, according to a BusinessInsider article that cites anonymous sources familiar with the company.

But don’t bother trying to find any evidence from publicly filed documents with the SEC. The report indicates that Glam filed confidential documents as part of a new secret IPO process that was initially created under the 2012 Jumpstart Our Business Startups Act (JOBS Act). The act specifies that companies with under $1 billion in revenue can begin discussions with the SEC about an IPO before announcing such news publicly.

VentureBeat has reached out to its own sources for more information about Glam Media going public, and we will update this post accordingly if we find out any new information.

Glam is perhaps best known as an advertising/media company primarily focused on women’s interests, but it has since expanded into several other genres, including men’s lifestyle/interests, entertainment, and food. The site claims to bring in over 356 million unique visitors per month across all its properties (including those under the Ning umbrella), and it has a greater audience reach than aging web portal AOL, as VentureBeat reported back in July 2012.

News of Glam filing an IPO have been rumored several times over the last few year. Initially, it was planning to go public in 2012, but the new procedures created in the JOBS Act may have had something to do with the delay.

Founded in 2002, the Brisbane, Calif.-based startup has previously raised $155 million in funding to date from Aeris Capital, Hubert Burda Media, Accel Partners, DAG Ventures, and others.

A funny thing happened during Facebook’s IPO.

A company that looked like a model corporate citizen, paying high tax rates for its pre-IPO years of 2010 and 2011, suddenly turned into one of those giant corporations that pay no tax at all.

Writing about Facebook’s S-1 a year ago, Benchmark Capital’s Bill Gurley wrote, “Warren Buffet’s secretary would be happy. Facebook’s tax rate is already north of 40 percent. Other multinational companies typically have found a way to reduce this. Facebook is paying full-boat.”

There are some ambiguities to computing the effective tax rate for a corporation, so let’s put it in terms of actual dollars. In the S-1 filing, Facebook reported that it was setting aside $695 million for taxes in 2011 and $402 million for taxes in 2010.

How quickly things have changed. In Facebook’s most recent 10-K annual filing, the company revealed that it’s receiving tax refunds of $429 million for the 2012 fiscal year.

But it doesn’t stop there: The company is receiving an additional $451 million credit for “carrybacks” on the taxes it paid for 2010 and 2011, which means it’s getting a retroactive tax benefit against the taxes it paid in those years.

And Facebook will be carrying forward an additional $2.17 billion in tax credits for use in future years.

The upshot: Despite generating $1.1 billion in profits in 2012, the company is not paying any federal or state taxes this year, according to Citizens for Tax Justice, and it has cut its tax bill for the past two years by about 40 percent — retroactively.

“They probably won’t be paying taxes for several years to come,” Robert McIntyre, the director of CTJ, told me.

The CTJ is a nonprofit advocacy group, which clearly has an agenda in favor of tax fairness, by which it means getting corporations (and perhaps wealthy people) to pay more taxes.

Based on the experts I talked with, corporate tax is a complex issue, so this isn’t exactly a black-and-white issue. There are a lot of ways to slice up a financial report, and the categories used for a 10K don’t correspond with those used for federal taxes, so confusion abounds. CTJ is not alleging that Facebook is doing anything illegal — far from it.

“It’s legal as hell,” McIntyre said.

The question is whether this kind of tax dodge is fair, or ethical, especially in a country that’s struggling to come up with the money to pay for basic things like education.

You can read the CTJ’s report on Facebook’s taxes here (PDF file).

So how did Facebook manage it? Simple: By issuing restricted stock units (RSU) instead of incentive stock options (ISOs).

With ISOs, which were more common in the past, employees don’t pay any taxes when they exercise the options (buying the stock at the option price). Instead, they pay long-term capital gains taxes when they finally sell the stock, assuming they’ve held it long enough. That’s nice for the employee, because the capital gains tax rate in the U.S. maxes out at 15 percent, compared with a top tax rate of 35 percent for normal income in 2012 and 36.9 percent in 2013.

RSUs and nonqualified stock options, which have been the predominant type of option for the past 10 or 15 years, put the tax burden on the employee receiving them. Any increase in value from the option price counts toward the employee’s income for that year — and will be taxed as income, not capital gains.

However, the nonqualified route enables the company granting the options to take a tax deduction equal to the amount of additional income that the employee must declare.

In other words, Facebook isn’t exactly cheating the government out of $429 million in taxes for 2012; it’s just transferring that tax burden to its employees (now presumably much wealthier thanks to all that Facebook stock they own).

A Facebook spokesperson made the same point in an email to me today: ”Billions of dollars went to the U.S. treasury and to the California state treasury, as well it should have. It’s fairly typical for a company in the period after an IPO to have most of its taxes collected this way, while not having a large corporate tax burden. … It’s a mistake to look only at the corporate tax revenue while ignoring the billions in taxes paid from the initial shareholders.”

This is one reason Facebook founder Mark Zuckerberg sold 30.2 billion shares on IPO day, netting him an estimated $1 billion. Most of that money, Facebook’s S-1 said, would be going to pay his tax bill — taxes Zuck would have incurred as he came into ownership of his Facebook stock.

On the other hand, Facebook got a huge deduction for granting those stock options — a deduction that cost them absolutely nothing. It’s a common move in the tech industry, but one that McIntyre, and others, feel is unfair.

Many Facebook employees are probably facing a similar situation as Zuck did, albeit on a smaller scale. If they want to exercise their options and turn them into Facebook stock, they’ll have to sell some of that stock in order to pay for the taxes they’re about to owe. (And by doing so, they’ll be helping contribute to the company’s tax deductions.)

I suspect, however, that plenty of tax lawyers out there could help them reduce their tax bill.

Perhaps Facebook’s corporate finance department could make an introduction, as they’ve clearly mastered the art.

Correction 3:30pm Pacific: Facebook issued its employees restricted stock units, not nonqualified stock options, as I wrote earlier. The tax implications are the same, however — both count towards the employees’ income, not capital gains, and are deductible by the corporation issuing them.

Top image via Francis Luu/Facebook

Search advertising technology company Marin Software has filed a registration statement for an IPO with the Securities and Exchanges commission.

This is the first ad-tech company to go public in 2013, a year that could be chock-full of IPOs.

The number of shares for sale and the price range for the proposed offering have not yet been determined. But we do know that the company plans to list its common stock on the New York Stock Exchange under the ticker symbol “MRIN.”

Marin helps advertisers and agencies manage and track paid search ad campaigns across Google, Bing, Yahoo, Baidu (China’s search behemoth), and other search sites. Traditionally focused on search, Marin has expanded into display advertising, social, and mobile, a strategic move given that according to a filing ”a substantial majority” of its customers use it to manage Google AdWords campaigns.

Marin Software founder and CEO Christopher Lien

A strong sign for investors is that annual revenues have steadily risen: Forbes reports that the company pulled in $42.5 million for the first nine months of 2012, up from $24.7 million in the comparable span of 2011. Marin may also benefit from the burgeoning interest in business-to-business startups.

“The chatter about enterprise startups is more a function of the fact that consumer startups look less appealing [to investors] more than anything else,” said CB Insights’ CEO Anand Sanwal in a recent interview. “Folk are saying now that enterprise is the place they should be playing.”

However, Marin has not yet reached profitability, which may knock investors’ confidence, particularly given Zynga’s and Groupon’s recent stock woes.

“We do not expect to be profitable in the foreseeable future, and we cannot be certain that we will be able to attain profitability on a quarterly or annual basis, or if we do, that we will sustain profitability,” Marin stated in a filing. 

For the entirety of 2011, Marin had revenues of $36.1 million and a loss of $17.4 million, and the company failed to book an annual net profit in 2012. In addition, the company admits in a filing that its usage-based pricing model “makes it difficult to accurately forecast revenues.”

VentureBeat predicted an IPO from the company in the first quarter of 2013; rumors have been circulating in the press for at least six months. In 2011, Marin brought on a CFO from Shutterfly, a sure sign that the company expected to go public in the near future.

Goldman Sachs and Deutsche Bank are acting as lead managers for the offering. UBS Securities and Stifel, Nicolaus & Company are acting as book-running managers, and Wells Fargo Securities is acting as a co-manager.

For technology founders, an IPO is like marriage: It takes years of preparation, and it’s a pain to have to report to someone, but it’s usually the ultimate goal.

Equidity‘s outspoken founder and CEO, Mona DeFrawi, sees some major structural problems with the IPO process. Namely, she said that markets have shifted from being investor-focused to trader-focused, and “no one has noticed.”

Mona DeFrawi believes the IPO process is broken.

This has resulted in tech companies failing to attract the “right buyers,” according to DeFrawi.  Traders will typically only hold on to stock for less than 24 hours so they can make money if the stock pops or drops. Meanwhile, long-term growth investors care about the “fundamentals,” meaning the company is less likely to crash.

To support private companies that are readying for an IPO, DeFrawi (a serial entrepreneur and former lecturer at Johns Hopkins University) is distributing invitations for 130 high-growth companies to participate in a beta service called “Equidity 360 degrees.”

Related: Read our IPO predictions for 2013.

The private companies that accept the invitation will be connected with long-term growth investors; they can securely share financials and key company information in advance of an IPO.

Equidity will make money through selling its advisory services. It’s a similar business model to DeFrawi’s previous company, InsideVentures, which was acquired by investment platform SecondMarket in 2009.

DeFrawi will help these pre-IPO companies line up investors that are in it for the long haul and not just for a few short hours.

“These companies wouldn’t put their software out without sales and marketing, but they do it with their stock all the time,” said DeFrawi. During her career, she has also worked in investor relations — a role which believes is undervalued, misunderstood, and that some consider as a “chick job.”

She said most investor relations professionals are adept at paperwork and scheduling conference calls with analysts but forget about the marketing and business development work that is needed to attract growth investors.

With companies like Dell going private, DeFrawi fears that tech startups will delay an IPO for as long as possible. She cites research that over 90 percent of job growth occurs post-IPO (although media reports suggest this may be overblown).

As part of the beta launch, DeFrawi compiled a list of tech companies that are in a strong position to IPO, which she shared with us. They include:

• Cloud storage and CRM: Dropbox, Sugar CRM, Box
• Consumer tech: Eventbrite, Gilt Groupe, Living Social
• Business software services: Docusign, SurveyMonkey, Marketo, and Evernote
• Next generation storage: Violin Memory and Nimble Storage
• Wearable computing and health: Jawbone and Zocdoc

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Energetic CEO Aaron Levie of Box today revealed that his company is prepping for an initial public offering in 2014.

In an interview with Bloomberg, Levie said a 2013 IPO would be a “long shot,” but he didn’t completely rule it out. The company had previously aimed to IPO in the coming months, and analysts predicted that it would be in a strong position to compete in the public markets.

2012 was a hell of a year for companies that target their products at businesses, rather than consumers. And as we reported, about 80 percent of companies that will IPO next year will be business-to-business (B2B). Likely contenders include SurveyMonkey, which raised $800 million today, Zendesk, and Hubspot.

With software-as-a-service (“SaaS”) vendors Workday and Splunk surging more than 80 percent since 2012 public-market debuts, expectations are high.

The company’s ample shareholders expect to see a return on their investment. Venture capitalists have poured a massive $284 million into Box, which began in 2005 as a college business project. The rapidly growing cloud storage provider competes with larger players like Dropbox and Microsoft.

In recent interviews with VentureBeat, Levie said that the role of the chief information officer is changing, and startups have an opportunity to compete with legacy vendors like Microsoft and Oracle. In recent years, the venture capital community has caught up. “In 2007 when we looked more into the enterprise, even Silicon Valley didn’t think we could win,” he said.

Levie revealed today that his company would be using its ample resources to hire staff and open offices in countries like Germany and Japan. He expects to add about half a dozen executives in senior management roles, including an international chief. According to Bloomberg, it expects to bolster its staff to 1,000 employees in the next year, up from about 670.

The Los Altos-based startup recently celebrated the opening of its London and San Francisco office.

Facebook’s lackluster IPO didn’t just burn Facebook and its investors, it burned California as well.

California Governor Jerry Brown expected his state to pull in $1.9 billion from the Facebook IPO, but revised estimates cut that number by a third to $1.3 billion, reports The Wall Street Journal.

While Facebook launched at $48 a share, the stock dropped off a cliff almost immediately afterwards. That sluggish performance meant lower earnings for the company’s investors, including holders of restricted stock. This, in turn, meant less tax revenue for California.

As the Wall Street Journal points out, IPOs are a big, big deal for California, which gets a lot of its revenue from taxes on capital gains on assets like stocks.

Fortunately for the state, Facebook’s stock has recovered somewhat in recent weeks, which means that there’s not much preventing California from revising its revenue estimates once again to reflect the positive developments.

SurveyMonkey makes it simple to create web surveys. It offers tools to design surveys, collect responses, and analyze the data. The company has been around since 1999 and now has more than 14 million users, including huge Fortune 100 brands like Facebook, Audi, and Samsung. The business runs on a subscription model and generates significant profits.

Despite its solid numbers, SurveyMonkey does not have plans to go public. It initiated this “debt and equity recapitalization” to give employees and investors the opportunity to cash out.

“There are a lot of good reasons to go public, but we don’t have them,” said CEO Dave Goldberg in an interview with VentureBeat. “Liquidity is the only reason, and we were able to do this transaction and get people liquidity without going public. We felt if we could raise this money privately and stay private, that it was a better outcome for the company and still good for the shareholder.”

All of the $800 million will go to shareholders, as SurveyMonkey has enough cash to support its own growth and acquisition agenda. Goldberg led this round in conjunction with Tiger Global Management at a valuation of $1.35 billion. Google Inc (not Google Ventures) is also becoming a shareholder. Google is a strategic investor that will be instrumental in supporting SurveyMonkey’s plans for international expansion.

Goldberg said that this is a “pretty unusual” transaction for a Silicon Valley company and was complicated to orchestrate. While many companies are shying away from IPOs or seeking secondary financing, this type of deal on this scope is not feasible for a majority of Internet businesses.

SurveyMonkey, however, has enough consistent revenue that investors and shareholders are comfortable with debt financing because they know it will be paid back. SurveyMonkey raised $100 million in debt financing in 2010, led by Bank of America Merrill Lynch and SunTrust Robinson Humphrey. The debt portion of this $800 million round is anticipated to close in February. It will bring the total capital raised, across equity and debt financing, to $900 million.

Security firm FireEye hasn’t filed to go public just yet, despite reports to the contrary. Instead, CEO Dave DeWalt told us the company has raised $50 million to bring in some new executive talent and prepare for an IPO later in the year.

We asked FireEye chief executive Dave DeWalt if his company had taken advantage of the Jobs Act and secretly filed to go public, as was reported earlier in the week.

“Not true,” said DeWalt in an interview with VentureBeat, “We have not filed for public and we’re looking at this as an important time … to expand ourselves in a private company way that allows ourselves to do the things we need to do to sustain ourselves in a public company way.”

FireEye protects its customers against malware by setting up virtual machines that watch network behavior. Anything going in or out of a customer’s systems passes through these virtual machines, and if something looks malicious, it can be stopped before it ever enters the customer network.

The company’s new funding comes from existing investors Sequoia Capital, Norwest Venture Partners, Silicon Valley Bank, Juniper Networks, and “others.” That “others” may be a reference to In-Q-Tel, the investing arm of the CIA, which is said to have invested in the company in a previous round.

DeWalt told us he has seen plenty of companies go public before they are ready, only to have their values slashed when the markets realize their shortcomings. When DeWalt first came on as chief executive in November, he told me the company was not yet ready to IPO because the markets weren’t promising with the looming fiscal cliff. Now, he wants to use the funding to get ready.

“I’m going to do everything in my power to prepare ourselves for sustainability long term,” he said.

Now that the fiscal cliff talks have been, for the most part, resolved, DeWalt believes the markets are becoming more favorable again. He suggested that the second half of the year is “always a little bit better” than the first half of the year, which may indicate the company is looking at a third or fourth quarter IPO.

The funding is currently being used not only to expand the executive team — which includes veterans from EMC, Cisco, and McAfee, where DeWalt was once CEO — but also to build out teams globally. FireEye is bringing on more sales staff and building out infrastructure across the world, and it plans to release a number of new products in the coming year.

The company was founded in 2004 and is headquartered in Milpitas, Calif. Its funding to date totals $101 million.

Dave DeWalt image via FireEye

Updated at 7:43pm: Facebook closed the day at $30.59.

Facebook’s stock price finally surpassed the $30 a share mark, after a tumultuous ride since its May IPO when it closed at $38. The company hasn’t hit the thirties since July.

The news is exciting for investors who watched Facebook’s stock plummet in the months following its highly-anticipated initial public offering. Facebook’s IPO was botched for a number of reasons, beginning with a technology glitch in the Nasdaq’s servers that delayed trading by nearly a half hour. Scandal further erupted after Citigroup fired a top analyst and was fined $2 million for leaking information about Facebook’s risks and other confidential research during the social networks’ quiet period. The stock continued to drop after big-name investors let go of shares.

Facebook declined to comment on the stock price when VentureBeat reached out.

The high today may be attributable to an invitation Facebook sent out to media yesterday afternoon. The event invitation says, “Come and see what we’re building,” and will be held on Tuesday, January 15 at the company’s Menlo Park headquarters. The industry is now stirring about what Facebook could be up to, as there have been no recent leaks or build-up that could nod to a specific product.

The company has recently been keen on showing its users and investors that it’s still an innovator. In order to compete with SnapChat, an app that lets you send photos and videos that will self-destruct in 10 seconds after viewing, Facebook quickly hacked together “Poke,” to prove it can still innovate on the fly.

VentureBeat will be reporting live from Facebook’s event. Check back for details on what the company releases.

FB data by YCharts

Mark Zuckerberg image via deneyterrio/Flickr

While we’ve been off tweeting out 140-character nonsense for the past seven years, Twitter has been building its company up to a valuation of over $11 billion, according to analyst firm Greencrest Capital. The company, founded in 2006, may now go public in 2014.

The social company has been growing and changing over 2012, giving hints that the initial public offering is on its executive’s minds, says Greencrest. As Forbes notes, these changes include shaking up the corporate level with a new chief financial officer, chief operating officer, and vice president of design.

Greencrest otherwise determined the new valuation of $11 billion by studying the secondary markets. Secondary markets are where outside investors can buy shares from existing private shareholders — for example founders, early employees — who are looking to unload their shares early. These markets are “a rumor rich and special share class soup,” said Max Wolff, an analyst at Greencrest, to Forbes. But with a little work, they otherwise can give a look into how much a company is worth. Most recently, Twitter had been valued at $9 billion, with this fluctuating after Facebook’s IPO.

It’s understandable, however, if Twitter wanted to hold off and see how the 2013 tech IPO market fares. In 2012, Facebook and Zynga both made it to Wall Street, but both floundered once there. Zynga dropped 5 percent on opening day due to concerns about the new market of “social gaming.” Facebook also declined in months following due to concerns about the way it handled its IPO.

Notetaking service Evernote’s chief executive Phil Libin is also holding back on an initial public offering. The company recently raised $85 million and plans to IPO, but “it’s not a pleasant experience right now to be a public company,” said Libin in an interview with VentureBeat at the time. He went on to say that there’s an “incompatibility between public markets now and tech.”

Twitter bird image via Shutterstock

Most entrepreneurs will tell you they’re going big and will accept nothing less than an IPO. But when the reality of running a business sets in, getting acquired is no small feat, itself.

“With the exception of about half a dozen companies, every tech startup is for sale,” said Jim Moore, founder and CEO of J Moore Partners, a firm that specializes in tech M&A.

In Silicon Valley, where startup activity is at an unparalleled high, mergers and acquisitions are the fastest-growing exit for venture-backed companies. According to a recent study by Ernst and Young, the volume of M&A in the technology space surged 41 percent in 2011, reaching levels not seen since the dot-com boom.

“When you think about your startup’s strategy, you’d be stupid not to leave the door open to M&A,” said Leonard Chung, CEO of Syncplicity, an online data-management provider acquired by EMC in May. Chung advises entrepreneurs to maintain a low profile when it comes to shopping for a potential buyer without denying their true goal altogether.

“In Silicon Valley, everyone knows what everyone else is doing,” he said in a phone interview with VentureBeat. “Secrets don’t stay secrets for long.”

M&A is an outcome every founder will need to consider. But entrepreneurs may encounter unexpected administrative costs, potential horror stories, and plenty of speed bumps in the process of getting acquired. All told, the process is about as glamorous as putting your house on the market: It involves a thorough spring clean, a litany of experts to appraise the property, and mountains of paperwork. It’s often a painful and emotional process, and negotiations falling through at the last minute is a very real risk.

Related: Even if you’re an expert, it can’t hurt to brush up on the basics. Read VentureBeat’s idiot’s guide to the venture capital game and angel investment ecosystem.

Jim Moore, founder of J Moore Partners

VentureBeat: What are the different flavors of M&A?

Jim Moore: There’s the asset purchase and the equity purchase. The former involves buying all the intellectual property but not the equity (you leave the liabilities and customers and everything else), and the latter means buyers will take company stock and the liabilities. In Silicon Valley, a good number of these are asset purchases. The IP is attractive so they just want to buy that. In terms of mergers, we often see some of these companies jammed together by the VCs. It’s a cosy relationship between portfolio companies; one is struggling and might need a little extra horsepower.

VB: Why do founders sell? Why not just raise another round?

JM: The startup doesn’t want to get to the next level. To get from A to B, they might need to hire a huge sales and marketing infrastructure, or a global distribution channel. At this point, they need to consider, “Do I want to raise more capital, or do I want a quick exit?”

VB: What are your thoughts on “acqui-hiring?”

JM: I like to call this “the M&A of last resort.” There’s a ton of it going on too, especially with the companies that don’t have strong IP. The acquirer will look at it and say, “We’ll cherry pick the employees and give you a fair price, a decent salary, and a little bit on exit.”

VB: People-focused acquisitions seem problematic. Do the founders typically stick around for long?

JM: Often, they get into these large companies and feel like caged animals. Sometimes, they are locked in for a year or so if there’s an earn-out. If there’s a wide gap between what the seller wants and what the buyer is willing to sell for, a deal is struck where the founder will get a percentage of the operating earnings once a certain threshold is hit, like $100 million in annual revenues.

Leonard Chung: After we got acquired, it was no exaggeration to say that we were sitting in front of CIOs at Fortune 500 companies. Literally, we were sent on a roadshow. I never could have done that as an independent entity. That is super exciting and a reason to stay. But at the end of the day, we worry about going into a large company and being swallowed up into the mother ship.

VB: With all these experts on board, M&A seems like an expensive process.

LC: Top-flight specialists are not cheap. They are typically looking for fractions of a deal size. It’s not uncommon that $50,000 or $100,000 will be spent on legal fees alone. Scale that up to an M&A transaction or an IPO, it could be millions of dollars in fees.

JM: Well, it depends. There’s sell-side M&A, which is paid for by the seller. About 90 percent of our work is sell-side, and we are compensated on a success-fee basis. We only ask for a small retainer to keep the lights on. On the buy side, we try to put together a disciplined competitive process where we position the company to be attractive to several different parties. The way we articulate that attractiveness will be different to Oracle than it would be to Microsoft.

VB: How does the process work once you’ve established interest from potential acquirers?

JM: It’s a closed bid. If there’s enough interest, we set milestones. You have to give us an indication of interest before we give you access. We set a value range so we can determine if we’re in the same ballpark. We give potential buyers about two weeks to submit a firm bid. Everyone knows they have to put their best foot forward. Unlike a private placement or an IPO, where we’d have a number printed on the cover of any report, we price according to demand. Let’s say there are one or two parties; we get them to put bids in. We select one of the bidders, and it triggers the “no shop,” meaning that the founders can’t have conversations with anyone else for two months.

VB: Once you’re in the “no shop” zone, what’s next?

JM: The buyer does due diligence. They confirm everything that they’ve been told is true. They will typically interview with key employees and ask what’s good and what’s bad? You can start to do a little trend analysis over time to figure out the company’s culture. If there’s something that isn’t totally kosher, you can still pull the plug.

VB: When it comes to tech startups, who are the potential buyers?

JM: There is more cash on the books for acquisitions in corporate America. Large companies are under pressure to deploy cash from Wall Street. The other party doing M&A is private equity. Ten years ago, they wouldn’t look twice at software companies. We convinced them to look at how predictable the cash-flow stream had become. Sybase and some of the more legacy players were quite sticky. Over time, they realized the ability to grow a software company could lead to tremendous leverage. If you can keep the operating expenses steady, you can drive profitability. What these private equity guys did [was] bring in some C-level talent and new strategies to drive the cash flow up.

VB: What drives up the value of a startup?

JM: You will get approached if you’re hot. Sometimes it’s about the people, especially if they have domain expertise. Salesforce bought Chicago-based Model Metrics because they needed a Midwest office. But if there’s a moat around the castle when it comes to IP, you can drive a much higher valuation. That happens a lot when it’s early stage and there’s a bunch of smart guys who don’t know how to sell. Cisco and some of the other large players will pay enormous amounts for companies that make little or no revenue. The final factor is market presence; if a company has thousands of customers, there might be an opportunity to cross-sell.

LC: If there are multiple bidders, align with people that can provide you with brand name recognition, and an ability to scale.

See more on M&A, including the benefits of private equity and the most common horror stories, on the next page.

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Trading started at $9.25 and by midday surpassed $12 and expectations. Yesterday, SolarCity lowered the price of its IPO to $8, down from the $13-$15 range set in November, raising $92 million. Initially, it hoped to surpass $200 million in its IPO. 

The stock, however, took off. This is partly attributable to SolarCity chairman Elon Musk, along with fellow board member Draper Fisher Jurveston, indicating their intent to buy a significant portion of the shares.

Tech IPOs have had mixed results this year. Consumer tech companies like Facebook and Yelp saw their stock go down after their IPOs, while enterprise companies such as Palo Alto Networks and Workday fared well in the public market. But U.S. green tech companies have had a rough year in 2012. The Bloomberg Global Large Solar Index (BISOLAR) of 17 companies declined 36 percent in 2012 as a global oversupply pushed down prices for solar panels by 28 percent.

SolarCity, on the other hand, benefits from cheaper solar panels because it is a financier and leaser, rather than manufacturer. Current clients include Stanford University, Walmart, Ebay, the U.S. Armed Forces, the U.S. Department of Homeland Security, and Intel.

Shares debuted on the NASDAQ under the ticker symbol SCTY. Underwriters for the deal include Goldman Sachs, Credit Suisse, Bank of America, Merrill Lynch, Needham & Company, and Roth Capital Partners.

Prior to the IPO, SolarCity raised a whopping $455 million in venture capital.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

On Tuesday, Enish will make its debut on the Tokyo Stock Exchange. Enish is a mobile gaming startup; its largest customer is Gree. In U.S. markets, such an IPO would be laughable; mobile games are apps or even features here, not legitimate, sustainable businesses.

But, as one of the company’s earliest investors, Masanari Arai, pointed out in a visit to VentureBeat’s offices yesterday, the mobile-only IPO has been around in Japan since the dotcom days, when 20 or 30 startups went public based on HTML content for feature phones.

And even nowadays, a company can create a simple feature like emoji for SMS and turn it into a $15 million monthly revenue stream. In the U.S., such a business model would be laughable at best; no VC would take the company seriously.

So what’s the difference?

“People in Japan are waiting to pay. U.S. people are not,” said Arai. “That’s the big difference.”

A lot of the willingness to pay involves the delivery mechanism, says Arai, as well as expectations and habits developed over a decade or two of widespread network and Internet access.

“People in the U.S. started to receive Internet services on a PC browser, and they didn’t have to pay for anything,” said Arai, referencing the now-ubiquitous brand- or ad-supported web and mobile ecosystem in the States. “People just expect everything for free.”

But, he continued, “In Japan — and China is the same way — the Internet didn’t start from the PC. It started from the mobile phone. In 1999, email — people were not doing email. Normal people, housewives and teenagers, they didn’t do email. … Dokomo set it up where you had to pay 300 yen a month for email. It was common sense.”

Dokomo, Arai said, pioneered the charging mechanism that is the sole reason Enish’s IPO works: micro-payments billed to the carrier with a single button-push from the user, starting in 1999 with feature phones. These small transactions, usually less than 300 yen and usually recurring on a monthly basis, have to be insignificant enough that the user never thinks too hard about deciding to make the purchase and never questions the activity on his monthly statement.

In aggregate, the equivalent of $1 or $2 per user over ten or twenty or thirty million users — that’s the start of a real business.

“One dollar, people don’t care. Once they’re signed up, they’re happy and never think about if they’re overpaying,” said Arai. “One or two dollars is a very, very sweet spot. If you’re asking for $50 or $100, people start asking, ‘I’m paying this much money, for what?’”

But the scheme only starts with the price point; after that, you have to maintain a constant and creative cycle of new releases and fresh content to justify the monthly subscription.
“If you have a fixed function … it is very difficult to change your mind to paying every month; you’re not getting new stuff every month,” said Arai. “When we create mobile services, we always want to charge the user every month. It’s recurring revenue, you have a steady stream.”

And while in the U.S. we find it harder to get people to pay for mobile services than for computer software or even web services, Arai’s perspective from Japanese and other Asian economies and cultures is the reverse: “Monetization for PC services is pretty tough because therer’s no charging mechanism.”

When he puts it like that, it makes total sense.

“If you compare PCs and mobile devices … my strong philosophy is that mobile can replace your PC,” Arai continued. “Most of the tasks, you can do it. You can get a whole solution in your hand that you carry all the time. I grew up in that environment, starting in 1999.”

Arai’s career began and flourished in the heady era when the web was still finding its legs and laptops were still a novelty. He himself was a product manager for IBM’s first ThinkPad.

“ThinkPad started in 1988, the concept started,” he said. “The movement from the entire desktop to mobile devices: This was the start of mobile. It was a revolution, and [the devices] just started to shrink and shrink and shrink.”

But while being at the forefront of one revolution — personal computing hardware — was a thrill, Arai said he got his biggest kicks out of another revolution: the bubbling ecosystem of startups, investors, and entrepreneurs in Northern California.

“Silicon Valley was so exciting compared to IBM,” he said. “People just decided immiediately; at IBM, everything took six months. So I decided to quit IBM and join a small startup company.”

That company was Intellisync; it made an app for syning data between mobile devices and PCs — a feature now so commonplace thanks to companies like Google and Apple that we don’t even think about it. But in 1999, it was quite forward-thinking; at that point, the company had gone public and was named stock of the year.

The aftermath of that was a typically tragic dotcom fractured fairy tale. “Our stock started at $2 and went to $200,” Arai said. “In 2000, it started crashing, and in 2002 [the stock price] was 40 cents.” The company survived long enough to be acquired by Nokia in 2006, providing Arai with his next big career move.

But even Nokia, then a champion in the blossoming mobile world, couldn’t keep Arai content. “I don’t like large companies. I became a company manager for Nokia, but it was too big. I just wanted to start a new business — that was 2007.”

So Arai founded Kii Corporation, an investment firm and services company with deep roots in the mobile-first worlds of Asia and an unwavering emphasis on mobile companies. In recent conversations we’ve had with U.S. investors, over and over again they have refuted the idea that a mobile application can be turned into a large and legitimate business fit for anything but a quick sale. Kii Corp. offers the opposite thesis, and since it works in markets where that makes sense, it prospers.

Enish will be Kii Corp’s first initial public offering. Arai has known its founders since around 1998. The company’s CFO and CEO also have a history of mobile success; the duo did their own IPO in 1999 with a fortune-telling app for feature phones. “Their valuation was something like $100 million at that point,” Arai said.

Enish will make its debut on the TSE’s Mothers market, a special sub-section of the exchange for emerging and high-growth startup company stock. Mothers was established in 1999; at that time, it made sense to have a sandbox for the highly visible and volatile offspring of the web and mobile boom. The Mothers index has dropped significantly since its inception, but its roster of companies has grown to 178 as of October 2012. The number of Mothers IPOs per year has also risen steadily over the past few years from four in 2009 to 13 this year.

As our interview ended, I wished Arai luck on Tuesday’s offering, but something tells me that decades of experience in mobile revenue, hardware revolutions, dizzying IPOs, failures, acquisitions, and friendships have prepared Enish’s first investor for this deal far beyond any need for good fortune. Luck, if it favors Arai, will be mere icing on the cake.

The enterprise is red-hot now, but pragmatic investors have been quietly investing for decades.

According to technology research firm CB Insights, these investors will reap the rewards in the next few years. The firm’s Tech IPO Pipeline report found that 80 percent of the technology companies that will likely file for an initial public offering by the end of 2013 aim their products at businesses, rather than consumers.

Business-to-business (B2B) companies like Workday and Splunk experienced stellar IPOs this year, fueling interest in the space. When Facebook and Zynga’s IPOs failed to meet expectations, the enterprise was declared “sexy.”

“The chatter about enterprise startups is more a function of the fact that consumer startups look less appealing [to investors] more than anything else,” said CB Insights’ CEO Anand Sanwal. ”Folk are saying now that enterprise is the place they should be playing.”

Related: Read more about the 12 investors that are on the hunt for the next Microsoft or Oracle.

All eyes are on high-performing startups like Box, Github and Square, which are rumored to go public in the next few years. Ones to watch also include Stripe, Palantir and Hubspot. “These companies are all attacking different spaces from infrastructure to payments,” said Sanwal on a phone interview. “But they have one thing in common: they are all targeting businesses.”

The average amount raised to date by companies in CB Insights’ report is $84.7 million, which proves that it takes significant capital to build technology for businesses. Investors backing the companies include Intel Capital and Sequoia Capital, as well as Goldman Sachs. About a fifth of the companies were backed by private equity firms.

The 472 companies on CB Insights’ list are all currently valued at $100 million or above. When compiling the report, the firm also took into account hiring patterns, and the quantity of media articles.

According to Sanwal, venture firms that have recently began paying attention to B2B are a little late to the party. Many of the companies that he expects will IPO in the coming years were founded in the late 1990s and throughout the 2000s.

Overnight success isn’t the norm; many of the most successful B2B companies have been around for decades, and have experienced ups and downs. The most common year the startups on the list received financing is 2007, which is significant, as this marks the beginning of the global economic recession.

“It’s telling that these companies go through tough times and emerge stronger,” said Sanwal.

$100 bill image via Shutterstock

Updated at 3:02 with interview with Evernote CEO Phil Libin.

Note-taking service Evernote announced an $85 million round of funding from AGC Equity Partners and Valiant Capital today. Current investors T.Rowe Price Associates, Inc. also participated in the round.

Evernote explained in a blog post that 75 percent of the money comes in the form of secondary financing (pulled together through existing shareholders selling their stock) and the rest comes as primary funding.

“We want to give every investor, every employee multiple chances to sell and to buy. We don’t want there to be a single day exit event,” said Phil Libin, Evernote’s chief executive, in an interview with VentureBeat. “Why should there be an exit? … You can’t stay focused if you have an exit.”

Libin said that he’s bringing on investors he knows will be in it for the long haul, beyond an initial public offering, and says the decision to give his investors liquidity wasn’t because people were knocking down his door.

“We weren’t getting any pressure at all. This is more of a proactive move. No one came to me saying we want to sell,” said Libin.

The company also officially signaled its plans to hold an initial public offering, but said that this offering was structured to make that eventuality further away, rather than closer. But now is not the right time for Evernote, according to Libin, who says the market is too short-term focused for tech companies.

“It’s not a pleasant experience right now to be a public company,” said Libin, “There’s kind of an incompatibility between the public markets now and tech. Sometimes it feels like the public markets are thinking minutes ahead … I think that’s a problem.”

Evernote currently has 45 million users and is starting to focus more on mobile. AGC Equity Partners, which is branch of mobile-oriented m8 Capital, led the round.

Of course, the company is now turning back to product, which Libin says is the glue that holds everyone’s interest in keeping their shares together. He’s confident that his investors all love the product, and says he chose his investors similarly to how he chose his earlier investors like Sequoia Capital and DoCoMo: they all focus on the product.

“Most of the conversations I have with investors, they’re just telling me what they hate about the product,” said Libin, focusing on the fact that all of the investors actually use the product that much.

The company recently released a new version of Evernote for Mac, integrated Evernote with Livescribe smart pens, launched a partnership with notebook maker Moleskine, and launched a version of its Skitch image-annotation software for iOS. And it also introduced a new Evernote for businesses product, which includes the long desired sharing and collaboration tools.

Evernote image via Flickr

Green energy company SolarCity has just announced share prices for its upcoming IPO; at between $13 and $15 per share, the initial public offering should raise approximately $151 million for the company.

In an SEC filing, SolarCity said it would release 10 million shares in the offering, and shareholders would sell around 65,000 shares total.

Shares will debut on the NASDAQ under the ticker symbol SCTY. Underwriters for the deal include Goldman Sachs, Credit Suisse, Bank of America, Merrill Lynch, Needham & Company, and Roth Capital Partners.

Back in October, the company announced its IPO plans; at that time, SolarCity aimed to raise in excess of $200 million in the deal.

SolarCity is not a manufacturer of solar panels; rather, its business is based on financing and leasing rooftop solar panels for residential, government, and commercial use. Current clients include such entities as Stanford University, Walmart, Ebay, the U.S. Armed Forces, the Department of Homeland Security, and Intel.

Risks for the business include changing regulations and subsidies around utilities in general and green energy in particular, a beleaguered but important value of the current presidential administration’s platform. Also, the government has served SolarCity with a subpoena over some U.S. Treasury grants that were part of a solar panel program.

Prior to the IPO, SolarCity has raised a total of $455 million in venture capital from the likes of Draper Fisher Jurvetson, Pacific Gas & Electric (PG&E), and tech luminary Elon Musk.

Updated at 1:05 p.m. PT with price and info after the market closed.

On the heels of its $126 million IPO, Wi-Fi technology and solutions maker Ruckus Wireless’ stock price dropped about 18 percent in its first day of trading on the New York Stock Exchange.

Ruckus priced its IPO for the NYSE at $15 a share Thursday night, at the top of its estimated price range of $13 to $15. With 8.4 million shares sold at $15 a piece, it raised $126 million.

Ruckus may have made a mistake to have its IPO this week, with unfavorable stock market conditions. Investors have shown concern about the economy following the U.S. presidential election and the “fiscal cliff” crisis in Washington, D.C.

Tech IPOs have been mixed in 2012, with consumer technology companies such as Facebook and Yelp going down after their IPOs, while enterprise-tech players like Palo Alto Networks and Workday shot up following strong IPOs.

In that context, Ruckus belongs with other enterprise tech companies because it provides Wi-Fi antennas, LTE small cells for carriers, and all kinds of devices meant to improve the Wi-Fi capabilities of companies. It has 65 patents for its tech, including one for its “adaptive antenna arrays that focus and direct Wi-Fi transmissions over the best signal path, automatically avoiding sources of Wi-Fi interference.”

However, even with providing enterprise-focused tech, Ruckus couldn’t withstand a marketplace that’s pessimistic about the economy in 2013. Perhaps it will be able to convince people to invest if and when U.S. lawmakers solve the next financial crisis.

Sunnyvale, Calif.-based Ruckus debuted in 2004 thanks to founders CEO Selina Lo, CTO William Kish, and chief wireless architect Victor Shtrom (all pictured). Prior to the IPO, it raised $54.2 million in funds from various investors, including Sequoia Capital, Motorola Ventures, Investor Growth Capital, and Sutter Hill Ventures.

Photo credit: Ruckus Wireless