Agile VC

JUNE 5, 2011

3) Groupon’s Business is Like An ATM: Groupon is currently unprofitable on a GAAP basis thanks to acquisition related expenses in 2010 as well as ongoing marketing spend to acquire customers. Groupon’s 2010 net loss includes $203M expenses related to acquisitions of several deal businesses. . Author howerl.

North America 100

North America Chicago Boston Silicon Valley 100

Agile VC

APRIL 17, 2011

Now that Google’s acquisition of ITA is closed, following lenghty FTC review, it would appear Kayak is poised to proceed with their IPO in the coming months. =. paying for travel data from ITA or others (customers acquisition spend is not included in COGS). This was the large round to fund the acquisition of Sidestep.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Agile VC

MAY 26, 2011

Online social networking is a concept still being evangelized even in Silicon Valley… Friendster is in private beta (wasn’t until Oct 2003 they received Google acquisition offer which they turned down for Kleiner/Benchmark round). Btw, here’s our startup [link] We are bringing yield management to the restaurant industry.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Agile VC

MAY 21, 2012

On the consumer facing side, the number of companies doing multiple acquisitions of $100M+ was extremely short… Google, eBay/PayPal, Amazon, and Microsoft are at the top of the list. <$100M) acquisitions for several years now, but they’ve mainly been acquihires. IAC and Yahoo! Author howerl. Filed under Uncategorized.

Acquisition 162

Acquisition Silicon Valley B2B Seed Stage 162

Agile VC

FEBRUARY 20, 2014

With that said, Facebook’s acquisition price is <10x the conceivable revenue for WhatsApp. Viewed through this lens, Facebook’s acquisition price of $19 billion is something like 8x conceivable revenue. This works out to $5.25 in annual mobile ad revenue per MAU. billion in annualized revenue.

Valuation 159

Valuation Acquisition Mobile Revenue 159

Agile VC

NOVEMBER 9, 2015

It has grown remarkably, has favorable gross margins and customer acquisition payback, and a clear path to profitability. What are customer acquisition costs like? On a blended basis (paid + unpaid), Square’s payback period for new merchant acquisition is “four to five” quarters. Gross Margins / Net Revenue.

IPO 165

IPO .Net Revenue Acquisition 165

Agile VC

FEBRUARY 20, 2014

With that said, Facebook’s acquisition price is <10x the conceivable revenue for WhatsApp. Viewed through this lens, Facebook’s acquisition price of $19 billion is something like 8x conceivable revenue. This works out to $5.25 in annual mobile ad revenue per MAU. billion in annualized revenue.

Valuation 127

Valuation Acquisition Mobile Revenue 127

Agile VC

DECEMBER 6, 2012

Suppose Acme IV invests in the Series D and 6 months later there’s an acquisition offer for Startup X that’s 50% higher than the Series D post-money valuation.

LP 178

LP Balance Sheet Differentiation Limited Partner 178

Agile VC

FEBRUARY 28, 2013

I had read somewhere that Apple’s cash pile was equivalent to Hungary’s GDP so I tweeted out the suggestion that perhaps an activist shareholder should push an acquisition of Hungary rather than thinking small (e.g. increasing dividends or issuing preferred stock).

Hungary 168

Hungary Dividend Vertical Preferred Stock 168

Agile VC

SEPTEMBER 3, 2013

3) Triple down on cloud infrastructure & services with Azure and acquisitions. Microsoft already has a dominant position from server OS to private/public cloud services so they should build on that that organically and through acquisition. Want names?

Cloud 113

Cloud Azure Phoenix Non-Compete 113

Agile VC

MARCH 13, 2012

Patents and the threat of patent infringement lawsuits provide maximum leverage against a competitor when they’re in the middle of a strategic inflection point… a major financing, acquisition, or large product launch.

IP 100

IP IPO Social Network Silicon Valley 100

Agile VC

AUGUST 9, 2012

That being said, unlike a company that has essentially zero user acquisition costs (e.g. But even if you back out customer acquisition spend in addition to COGS, Zynga’s profit margins are still over 50%. 71% gross margins are not exceptional for a software/internet company, but they’re not terrible either.

Stock 160

Stock LBO .Net Valuation 160

Agile VC

APRIL 28, 2014

Today’s journey from startup to $19B acquisition by Facebook must seem comparable to turning base metals into a pile of gold for the average 13th century man on the street.

Silicon Valley 150

Silicon Valley Acquisition Software Restful 150

Agile VC

SEPTEMBER 30, 2014

So all in all, eBay’s acquisition of PayPal was good for PayPal and great for eBay and the two as a combined entity made a lot of sense for a long time. The payments landscape was different back then… Visa and MasterCard were not-for-profit consortiums owned and controlled by the largest banks.

Mobile 157

Mobile Acquisition Revenue Management 157

Agile VC

AUGUST 12, 2011

3) Repeatable, cost effective customer acquisition – Nothing whets a Series A investor’s appetite like a startup that’s shown $1 of incremental marketing spend will yield $2-3 of gross margin. 4) Metric momentum – Everybody likes those up and to the right graphs.

Seed Stage 113

Seed Stage Silicon Valley B2B Acquisition 113

Agile VC

JANUARY 21, 2015

And even acquisitions painted as successes may look very different below the (typically confidential) surface. But the reality of tech entrepreneurship is that not everyone is “killing it,” and certainly not all of the time. Not every startup is going to “crush” their original milestones and financial projections.

Cofounder 188

Cofounder Seed Stage Employee PR 188

Agile VC

JANUARY 3, 2013

Apple has taken the fully integrated OS/hardware approach and while Android is an open source OS adopted by Samsung, HTC, and other device makers Google’s becoming more integrated via it’s Nexus devices (built by partners) and of course the Motorola acquisition.

Mobile 124

Mobile Software Open Source Search 124

Agile VC

AUGUST 22, 2011

Salesforce is trying to create a platform both through internal efforts on Force.com and acquisitions (e.g. Microsoft has two massive platforms in Windows and Xbox, and has been thrashing about for a decade trying to build one in mobile. Google of course has Android. Simply having an API doesn’t make your company a platform.

Silicon Valley 113

Silicon Valley Seed Stage Startup Syndicate 113

Agile VC

JUNE 24, 2013

I started jotting this down about a month ago but Google’s acquisition of Waze was a good prompt to finish off this post. A large part of this is just some idle thoughts, a small part is driven by my love of cars, and a small part is thinking about what potential opportunities for innovation & investment might stem from this.

Internet 153

Internet Caching Aggregator Audio 153

Agile VC

JANUARY 21, 2015

And even acquisitions painted as successes may look very different below the (typically confidential) surface. But the reality of tech entrepreneurship is that not everyone is “killing it,” and certainly not all of the time. Not every startup is going to “crush” their original milestones and financial projections.

Cofounder 100

Cofounder Seed Stage Employee PR 100

Agile VC

FEBRUARY 2, 2012

These companies report gross ad revenue but then subtract out “TAC” (Traffic Acquisition Costs) which is basically accounting-speak for the revenue share they pay to the partner sites where the ads actually appear. This is different from companies like Google and Yahoo! Ergo, Zynga spends more like $250 million on Facebook ads.

IPO 100

IPO South Korea Venezuela Revenue 100

Agile VC

JUNE 25, 2012

His co-founder/CMO Alex Cote has run customer acquisition programs that have attracted millions of users via a range of channels. Though he’s been both a CTO and a VP Product and managed large teams before, he built all of Cloze’s initial product himself from the back end through to the presentation layer.

Cofounder 140

Cofounder Stealth Silicon Valley Mobile 140

Agile VC

FEBRUARY 21, 2012

The first of these to exit was recently announced, with Groupon’s acquisition of Hyperpublic , though most of the portfolio will continue to build for a long time. Just under half our portfolio is B2B in nature, slightly more than half is consumer-facing in some way.

LP 100

LP Seed Stage Silicon Valley Limited Partner 100

Agile VC

MAY 16, 2012

Back in 2010 we were observing more and more new B2B startups emulating the product and customer acquisition strategies of existing consumer web companies which my partners & I have long been familiar with. A good example of that is our theme around the consumerization of business software.

Seed Stage 124

Seed Stage Silicon Valley B2B Syndicate 124

Agile VC

NOVEMBER 13, 2012

The IPO market remained closed to IT startups, but there were big acquisitions like Google buying YouTube for $1.65B (Fall 2006) and late stage financing rounds for companies like Facebook (Microsoft round at $15B valuation in Fall 2007). Kevin Rose was on the cover of BusinessWeek.

LP 154

LP Portfolio Venture Capital IRR 154

Agile VC

APRIL 13, 2012

Here in Boston both Microsoft and Google have made significant expansions in recent years in Cambridge, and PayPal/eBay is poised to do the same in downtown Boston through acquisition and organic growth.

Silicon Valley 185

Silicon Valley San Francisco San Jose Startup 185

Agile VC

MARCH 8, 2012

And finally margins matter… a $50-100M software company can go public given it’s 80-90% gross margins, an e-commerce company with 20-30% gross margins and high customer acquisition costs needs to be much bigger (probably 5-10x at least).

IPO 100

IPO Silicon Valley Revenue Seed Stage 100

Agile VC

JUNE 12, 2012

But while it was a little less understood outside the payments world, their acquisition of TxVia theoretically gives them some of the plumbing they’d need to create a store of value or couple a Google mobile payments product to existing financial accounts.

Mobile 250

Mobile Disintermediation SMS Government 250