BPT Raises $12 Million

Pitango is a great VC firm

 

 

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BPT Raises $12 Million

via PE Hub News: All News by admin on 8/30/09

BPT, an Israeli developer of chemically-stable membrane-based separation solutions for critical industrial processes, has raised $12 million in Series B funding. U.S. Venture Partners and Pitango Venture Capital co-led the round, and were joined by return backers Aurum Ventures and Elron Electronic Industries.

PRESS RELEASE
BPT, the emerging leader in chemically-stable membrane-based separation solutions for critical industrial processes announced today that it has completed its Series B financing, raising U.S. $12 million. U.S. Venture Partners (USVP) and Pitango Venture Capital led the round with participation from existing investors Aurum Ventures and Elron Electronic Industries. Funds will be used for expanding the manufacturing facilities, for continuing R&D and to further develop the sales and marketing infrastructure to meet increased worldwide demand. In conjunction with this round Christopher J. Rust, USVP Partner and Jacques Benkoski, USVP Venture Partner will represent USVP on the BPT Board and Ittai Harel, Pitango Partner, will represent Pitango Venture Capital.

BPT is focused on developing and commercializing advanced membranes-based separation solutions to address the needs of the water and wastewater treatment industries. BPT's unique chemically-stable membrane technology and associated systems enable customers in the landfill, mining, chemical, biopharma and food industries to filter their aggressive waste water to be economically viable, re-use water and comply with environmental regulations. BPT provides solutions where other membrane-based technologies cannot withstand the aggressive waste characteristics and alternative technologies such as evaporators and incinerators are often not economically viable. BPT patent protected membranes and associated systems are field proven to enable lowest cost reclamation of some of the most aggressive and vexing industrial waste water streams.
"USVP and Pitango have deep experience in building great companies; we are proud to have them as lead investors, and to have their partners join our board," said BPT's CEO, Nir Kinory. "Together with our existing great investors, Aurum and Elron and our dedicated team, we are on a fast track to capture the market of next generation industrial waste water streams treatment brought about by water scarcity and increased environmental pressures."
"USVP has been investing in cleantech for over six years and this is our first cleantech investment in Israel. Water treatment and recycling are critical elements of adapting to climate change," said Jacques Benkoski, Venture Partner, who led USVP's efforts in the BPT investment, "BPT clearly stood out as a unique player with differentiated and leading technology to solve critical waste water recycling issues for key industrial processes
Ittai Harel, partner at Pitango Venture Capital, added: "Cleantech is an area of growing concern to the world market. BPT's technology and tremendously experienced R&D group are well positioned to play a significant role in the application of nanotechnology to water technology."
About BPT: www.bpt.co.il
BPT is developing and commercializing advanced membranes-based separation solutions addressing the unique needs of the water and wastewater treatment for key industrial processes. BPT patented chemically-stable membrane technology enable customers in the landfill, mining, chemical, biopharama and food industries to comply with the environmental regulations, reuse water and reduce production costs. BPT membranes are field proven to enable lowest cost reclamation of some of the most aggressive and vexing industrial waste water streams.

About Pitango Venture Capital www.pitango.com
Pitango Venture Capital, the leading venture capital firm in Israel, has been investing in technology entrepreneurs since 1993. With offices in Israel and Silicon Valley, California, Pitango currently manages several venture funds totalling over $1.3 billion in committed capital invested in more than 100 companies. Pitango invests in high-growth companies in various stages, from seed and early stages to growth and late-stage, and supports them as they grow. Pitango's investment focus includes: Communications; Networking & Storage; Wireless, Cellular and Mobile technologies; Enterprise Software, Internet and Media; Healthcare & Life Sciences, and Clean Technologies.
About USVP: www.usvp.com
U.S. Venture Partners (USVP) is a leading Silicon Valley-based venture capital firm, dedicated to
helping entrepreneurs build world-class companies that are leaders in their industry. USVP
focuses on early stage opportunities in sectors where the Partners have the domain expertise,
operating experience and network of relationships to provide meaningful contribution to the
success of the enterprise. These sectors include digital communications and networking systems,
internet and eCommerce structure, semiconductors and optical components, enterprise and technical software, and medical devices and biopharmaceuticals.

About Aurum Ventures:
Aurum Ventures MKI provides value added growth capital to exceptional entrepreneurs within the fields of life-sciences and clean-tech. Aurum invests in Clean tech companies and Technologies related to alternative and renewable energy and fuels, waste water treatment, and other Clean tech segments.

About Elron: www.elron.com
Elron Electronic Industries Ltd. (TASE & NASDAQ: ELRN), a member of the IDB Holding group, is a high-technology holding company traded in the Nasdaq and in the Tel-Aviv Stock Exchange. Elron's group companies currently comprise a diverse range of publicly-traded and privately held companies primarily in the fields of medical devices, information & communications technology, clean technology and semiconductors. Included in our group companies are well established companies who are leaders in their fields, such as Given Imaging and 013 NetVision, together with innovative start-up companies who possess growth potential in Israel and the rest of the world.

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Zhangjiang Innovation Centre

The Chinese government is not only giving free land, but also
subsidies for manpower e.t.c

Senodia Technologies

That small chip that we are is pivotal to the innovation in iphone and the wii

Restaurant Innovation

In a chinese restaurant selling dumplings, I was surprised to find
such a high-tech gadget. The order by the customer is keyed onto the
wireless device, which is displayed in a large LCD in the kitchen for
the cooks to start cooking.

Online Course: Roadmap To Entrepreneurial Success

Online Course: Roadmap To Entrepreneurial Success
Creating Your Start-Up Strategy
The greatest challenge an entrepreneur faces is getting the right things done in the right order. Knowing what to do, and in what sequence, is critical, especially since the entrepreneur has very limited time and resources. Starting companies is much like launching a rocket: If at launch you're just a fraction of a degree off, you could end up a thousand miles off course downrange.

Course: Creating Your Start-Up Strategy
Start Date: September 01, 2009
End Date: September 07, 2009
Price: US$24.95
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yinglantan@stanfordalumni.org
yinglan_tan@hksphd.harvard.edu

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Where $25 Premature-Baby Incubators Are Conceptualized

When innovation can be cheap. I am proud of Stanford.

 

 

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Where $25 Premature-Baby Incubators Are Conceptualized

via WSJ.com: Venture Capital Dispatch on 8/28/09

During his multifarious career in the start-up world, George Kembel spent two years vetting early-stage companies for a venture capital firm with more than $2 billion under management.

The Embrace premature-baby incubator.

But the start-ups he helps conceptualize these days - outside the bounds of venture capital and inside the classroom at Stanford University - must be far more rewarding for him.

Kembel is the executive director of Stanford's Institute of Design, or "d.school," which brings together graduate students in various fields to design products that can solve "difficult, messy problems," like stopping drunk driving. The designers are encouraged to work in the field alongside prospective clients, empathize with their needs and build prototypes for potential products - a process called design thinking.

In one class, "Entrepreneurial Design for Extreme Affordability," students spend two quarters designing solutions that can improve the underdeveloped world. One of the more successful products developed from this class is a low-cost irrigation pump for farmers in poor countries.

Kembel, a former entrepreneur who worked at Mobius Venture Capital as an associate partner before co-founding the d.school in 2003, recently described one of the school's newest, fascinating ventures produced from that class (see video below). The students were asked to come up with a lower-cost incubator for premature newborn babies in Nepal. In order to understand the needs, the students spent time with families and doctors in the capital city of Kathmandu "to gain empathy of what they were going through," Kembel said.

The team asked to be taken outside the city to rural areas, and that's when they learned that the majority of premature Nepalese infants were born not in the cities, but far away from all the hospitals with incubators. "When they got that insight, they realized they didn't need to design a less expensive incubator" for a hospital, Kembel said. "They just needed to find a way to keep babies warm."

It would have to work without electricity, and be transportable, sanitizable, culturally acceptable and inexpensive. "And that small reframe of the problem statement opened up a wide-range of alternatives that they had othernwise not seen," Kembel said.

By the end of class, the team created a prototype of an incubator - what it calls a thermoregulator - that looks like a sleeping bag that wraps around the premature infant. It contains a pouch for "phase-change material" that maintains the baby's temperature for up to four hours. That pouch can then be recharged by submerging it in boiling water for a few minutes. Perhaps more importantly, the incubator is dirt cheap - $25 - compared to traditional hospital incubators that Kembel says cost about $20,000.

The students have since launched a company called Embrace that is offering the $25 alternative to the 20 million babies who are born prematurely in conditions like this. Embrace is incorporated as a non-profit and has raised seed financing from business-plan competitions. It's currently preparing for clinical trials in India and seeking more funding, at least $1 million over the next four years to take this product worldwide. You can donate to the effort here.

 

 

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Shoe Manufacturing

-A shoe manufacture company based on a Chinese domestic demand and brand story
-The company has been for 30 years
-Fastest growing segement
-Excellent management
-CFO with experience of taking a company to public
-quick liquidity, will have big markup and big gains
-If you understand the sector, understand comparable, you understand the potential
-Need private round to take the business to the next level
-Expect to list on NASDAQ, a quick turnaround 1-3 years.
-private round P/E approx mid single digits and public round P/E approx tens twenty.
-audit done up to 2007 with a big 4 firm
-major HK/US underwriter in 2007/2008 are bullish
-we are in the process finalizing the powerpoint
-FY2008 124MM USD revenue and 20MM USD net income
-private placement target is 10MM USD
-this opportunity won't last too long


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- Tan Yinglan
yinglantan@stanfordalumni.org
yinglan_tan@hksphd.harvard.edu

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Yuan Funds Aren’t For Everyone

China is still the way to go.

 

 

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Yuan Funds Aren’t For Everyone

via WSJ.com: Private Equity Beat on 8/24/09

Reuters

Private equity firms are going gangbusters raising Chinese yuan-denominated funds. According to the Wall Street Journal, Carlyle Group and Kohlberg Kravis Roberts & Co. are contemplating raising such funds, and Blackstone Group LP and Macquarie Group Ltd. also have set plans to do so.

However, not everybody is going down this road. Some firms that have done deals in China for years said they don't have immediate plans to pursue a similar path.

"We have talked about this possibility for years," said Thomas Quinn, managing principal of middle-market buyout firm The Jordan Co., which has been investing in China since 1994. "Obviously having a yuan fund helps to get deals done more quickly. But it can also present challenges."

A major concern, Quinn said, is the difficulty of splitting deals between the yuan fund and existing global buyout funds. Splitting deals between yuan- and non-yuan-denominated funds is a prickly issue, as investors in both groups of funds want access to quality deals in China. Typically, the two investor groups don't overlap much, as yuan funds are set up particularly to attract Chinese investors. The funds may also carry different terms such as those determining the split of carry.

Quinn said there are ways to get around the problem, such as having the yuan fund and the global funds invest on a pro rata basis. In general, "We are very careful," Quinn said. "As the policy evolves, we would consider it."

According to Paul Edgerley, managing director of Bain Capital LLC, the key to get around the issue is to "have an agreement upfront about where you want the capital to come from." The pact can call for each fund to invest in a deal proportionally, but stipulate clearly the circumstances where only the yuan fund will be used.

Bain, which has been investing in China for about five years and recently made an investment in electronic goods retailer GOME Electrical Appliances Holdings Ltd., isn't in a hurry to raise a yuan fund, either.

"We are not actively pursuing that right now," Edgerley said. "We will let it play out a little bit and see how it evolves over time."

 

 

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Reader’s Digest Officially Files for Bankruptcy

One of my favourite publications is in deep trouble.

 

 

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Reader’s Digest Officially Files for Bankruptcy

via PE Hub News: All News by admin on 8/24/09

NEW YORK (Reuters ) - The U.S. units of media company Reader's Digest Association Inc filed for bankruptcy, marking a new chapter for the 87-year-old magazine as it carries out a plan to cut its debt and transfer ownership to a group of lenders.

The company, named for its general-interest magazine packed with family-friendly humor and inspirational stories, said earlier this month that it would file for bankruptcy to help cut a debt load of $2.2 billion by 75 percent.

Reader's Digest is the latest in a string of media companies hurt by an economic slowdown that has cut ad spending and hampered companies' abilities to repay debt.

"Advertising is down, circulation is down, there are alternatives like the Internet where people are getting their information," said Richard Mikels, a partner with law firm Mintz Levin. "It's a tougher industry than it used to be."

Reader's Digest, founded in 1922 and headquartered in Pleasantville, New York, does not plan to lay off any employees or sell any units in its restructuring.

The plan calls for Reader's Digest senior lenders to exchange a substantial portion of the company's $1.6 billion in senior secured debt for equity, transferring ownership to the lender group.

The restructuring plan must be approved by a bankruptcy judge.

"One way to deleverage is by turning debt into equity. That will happen more and more throughout the economy over the next several years," said Mikels.

RESTRUCTURING

Private equity firm Ripplewood bought Reader's Digest in 2007. It will relinquish ownership to a steering committee led by JPMorgan Chase & Co and including Ares Management LLC, Eaton Vance, Regiment Capital and GE Capital, among others.

Reader's Digest is seeking new board members to replace Ripplewood members who stepped down as part of the reorganization.

Current management, including President and Chief Executive Officer Mary Berner, remain at the helm.

"Over 80 percent of the senior lender group support this transaction and, with this support, the company intends to emerge expeditiously from Chapter 11," Chief Financial Officer Thomas Williams said in a court document.

Operations in Canada, Latin America, Europe, Africa, Asia and Australia-New Zealand are not part of the bankruptcy filing, the company said in a statement.

The company publishes 50 editions of Reader's Digest and 44 other magazines. Combined, its magazines reach more than 100 million readers worldwide, according to the company. (Reporting by Chelsea Emery; Additional reporting by Bijoy Koyitty in Bangalore; editing by John Wallace)

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Zumbox Raises $8 Million

The other day I read something on the UK matchmaking postal services to beer bars, meaning instead of lining up at postal stations, you pick them up at your pub and also pick up the a couple of beers.

Zumbox goes one step further

 

 

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Zumbox Raises $8 Million

via PE Hub News: All News by admin on 8/24/09

Zumbox, a Westlake Village, Calif.-based developer of a paperless postal system, has raised $8 million in Series A funding. Backers include Art Bilger (Shelter Capital Partners), Rick Braddock (Chairman and CEO of Fresh Direct and former chairman and CEO of Priceline.com), Michael Eisner (founder of The Tornante Co. and former CEO of The Walt Disney Company), Bill Guthy (founding principal of Guthy-Renker) and Donn Rappaport (CEO of Zumbox and founder and chairman of ALC).

PRESS RELEASE

Zumbox, the world's first and only paperless postal system, today announced the closing of its Series A funding with a total of $8 million raised. Investors include Art Bilger (Managing Member of Shelter Capital Partners, LLC) Rick Braddock (Chairman and CEO of Fresh Direct and former Chairman and CEO of Priceline.com), Michael Eisner (Founder of The Tornante Company and former CEO of The Walt Disney Company), Bill Guthy (founding principal of Guthy-Renker) and Donn Rappaport (CEO of Zumbox and Founder and Chairman of ALC).

Zumbox has created a web-based platform that powers the world's first paperless postal system. The company has created a digital mailbox – a Zumbox – for every street address in the country. Postal mail can now be sent as digital files and received online, with no paper, printing or postage, and no scanning.

Zumbox represents the first practical alternative to traditional postal systems. By using Zumbox, businesses and other organizations not only enjoy significant reductions in their mailing costs, but also substantially reduce their environmental impact. Consumers enjoy greater convenience as well as a richer mail experience by accessing their mail online, going paperless, and receiving multimedia content in an entirely new and innovative way. Zumbox also represents an important alternative to commercial e-mail. Zumbox is secure (it is a closed system with bank-level security); it is based on an individual's permanent street address as opposed to his or her e-mail address (providing greater accountability and reliability); it offers rich media capabilities; and Zumbox is spam-free.

"Despite a severely challenging economic climate, we were able to successfully complete this round of funding," said Zumbox CEO, Donn Rappaport. "New investors include some of the most well-known and widely-respected names in the technology, marketing and entertainment industries." Adding, "Zumbox is an idea whose time has come. We see their support as a testament to the fact that the world is ready for this new communications medium."

Following a successful pilot in New Lenox, IL, Zumbox has exited beta and will launch the first stage of its national rollout starting in Q4 of this year. The company will facilitate delivery of paperless mail to approximately one million households in select markets through partnerships with municipal governments and media companies as well as both national and local mail senders.

"Zumbox has truly created a new communications medium, one that's certain to be as valuable as it is disruptive," said Rick Braddock, Chairman and CEO of Fresh Direct. "By combining the unique address system of the USPS with the power of Web 2.0, the company is revolutionizing how content of all types can be distributed, accessed and consumed."

About Zumbox

Zumbox is the world's first and only paperless postal system. The company has created a web-based platform for the delivery of paperless mail. For every U.S. street address, there is a corresponding digital mailbox – a Zumbox – enabling mail and other content to be sent as digital files and received online with no paper, printing or postage, and no scanning. Zumbox represents a more cost-effective and environmentally responsible way to send postal mail. It also represents a secure, data-rich, and spam-free alternative to commercial e-mail. As a marketing channel, Zumbox offers precise geo-targeting and analytics capabilities, while empowering consumers with greater control and convenience. Zumbox is a closed system with bank-level security and complies with PCI, HIPAA and BITS security standards. Zumbox is privately held and based in Westlake Village, CA. For more information, visit http://www.zumbox.com.

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‘Low Points and Screw-Ups’: Start-Ups Crave Mentors’ Real Stories

We like to hear the low points of other tech heros.

 

 

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‘Low Points and Screw-Ups’: Start-Ups Crave Mentors’ Real Stories

via WSJ.com: Venture Capital Dispatch on 8/19/09

Twenty four companies put their best face forward for investors at Y Combinator's ninth Demo Day for start-ups completing its incubator program.

The program is known for launching Web start-ups on a shoestring; it takes place twice a year and provides companies with $10,000 to $20,000 in exchange for a small equity stake. Perhaps more important than the money, though, are the networking and learning opportunities - the program provides start-ups with advice, community with other founders and weekly dinners with prominent tech entrepreneurs and investors.

For young entrepreneurs, the experience of talking to those who have built companies is invaluable.

"Many share their stories of real struggles, low points and screw-ups and show they're real people. That makes building a company seem more accessible," said Jake Mintz, a co-founder of Y Combinator graduate Bump Technologies Inc. "The most common question to speakers is probably, 'Tell us your lowest point.'"

While Mintz didn't remember the lowest point for Digg founder Kevin Rose or investor Guy Kawasaki, seeing those tech luminaries as real people made a big impact.

"The dinners for me were cool to get to meet Kevin Rose and Guy Kawasaki," said Gee Chuang, co-founder of Listia Inc., another start-up. "You see them as celebrities in a way. One thing I noticed throughout the week is you have highs and lows but you come to these dinners and get a big motivation boost."

Investors from top firms in Silicon Valley - such as Venrock, First Round Capital, O'Reilly AlphaTech Ventures, Founders Fund, Trinity Ventures, Bessemer Venture Partners and US Venture Partners - showed up to see the pitches at demo day. Here are just a few of the companies that presented.

Bump Technologies provides an iPhone application for people to send their contact information to each other by bumping their phones together. Both people participating have to have the application for it to work. The company already has more than two million downloads and has been featured on Apple's television commercial.

FlightCaster Inc. is a service that predicts the probability of flight delays up to six hours before airlines notify passengers. The company, which has a Web site and mobile application, uses data from a flight's prior inbound airplane, weather data and other information to predict whether a flight will be late.

Another company, Listia, is essentially a marketplace for free junk. People can list items that they don't want that are not totally worthless but also aren't valuable enough to sell on eBay. The company plans to move beyond free items and allow actual selling of items.

 

 

Rosetta Stone does well

The IPO market continued its winning streak, with Rosetta Stone Inc.'s initial public offering of stock gaining nearly 40% in its first day of trading.

The language-software company was the fourth deal in 2009 to rise on the first day of trading and the best-performing IPO in the U.S. in a year.

More

• MarketBeat: Decoding the Secrets of a Strong IPO

The Arlington, Va., company's stock closed at $25.12 a share on the New York Stock Exchange, up from the IPO price of $18. A total of 6.25 million shares were sold for a dollar more per share than the expected range of $15 to $17, which was set by underwriters Morgan Stanley and William Blair & Co.

The IPO market had been nearly extinguished during the credit crisis. But Rosetta's deal brings April's U.S. IPO count to three, the busiest month since July 2008, when a trio of deals also came to market.

Its gain follows three other debuts in 2009 that also rose on their first days of trading. Earlier this week, online college Bridgepoint Education Inc. priced below its expected range but gained 6% on its first day of trading. Earlier in the month, online videogames developer Changyou.com Ltd. priced at the high end of its range and rose 25% during its debut on the Nasdaq Stock Market. In February, Mead Johnson Nutrition Co. rose 10% in its debut.

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NYSE Euronext

Rosetta is the best-performing U.S. IPO since fertilizer company Intrepid Potash Inc. rose 58% on its debut in April 2008. It is also the first IPO to price above its range in nearly a year; the last was industrial pump and valve company Colfax Corp., which went public in May 2008.

Rosetta Stone warns that a weaker economy and slower airport and mall traffic could affect its results, but it still delivered a strong fourth quarter in 2008, generating a third of its annual revenue in the final months of the year.

Rosetta is more buffered from economic slumps than many other software firms, according to Morningstar equity analyst Brady Lemos. About 20% of its sales come from a stable base of institutional customers such as schools, corporations and government agencies, while its retail customers are likely to seek new language skills in a tough job market, he said.

In the longer term, Americans are beginning to see the need to speak more than one language, something that is the norm abroad, according to Carlos Lizarralde, co-founder of Fluenz, a competing brand of language software.

"The growth potential is enormous," said Mr. Lizarralde. "We see doctors in the U.S. who want to speak Spanish and executives who need to travel to China for work."

Rosetta is gearing up for more expansion both domestically and internationally; only 5% of its sales in 2008 were generated outside of the U.S.

"We have a real opportunity to grow globally," said Rosetta Chief Executive Tom P.H. Adams after the stock began trading.

Rosetta has gained brand visibility through an advertising blitz and its kiosks in airports and malls; its revenue rose by 52% and earnings increase fivefold in 2008 to $13.9 million.

Rosetta Stone Slashes Q3 Outlook, Pulls Stock Offering

 

 

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Rosetta Stone Slashes Q3 Outlook, Pulls Stock Offering

via PE Hub News: All News by admin on 8/17/09

(Reuters) - Language training software maker Rosetta Stone Inc (RST.N) cut its third-quarter earnings outlook and scrapped a proposed stock offering barely a week after announcing it, sending shares down as much as 29 percent.

The company, which went public in April in one of the most successful IPOs this year, cited higher-than-expected operating expenses as the reason for the cut in outlook.

The move took Wall Street by surprise as the company had raised its full-year estimates when reporting second-quarter results last month.

"To come in just two weeks later with different guidance raises questions over how much control management has over operations — shouldn't have management known?" said Linda Killian, principal with Greenwich, Connecticut-based Renaissance Capital.

On Aug 10, the Rosetta Stone had said certain stockholders, including ABS Capital and Northwest Equity, would be selling about 4 million shares in a public offering — representing a fifth of the company's public float, and comparable to the size of its IPO when it sold 6.25 million shares for $18 each.

Shares of the company fell as much as 29 percent Monday to their lowest since listing in April, making them the top loser on the New York Stock Exchange.

They pared some losses to trade down $7 at $21.35 in afternoon trade - still about 20 percent more than its IPO price of $18.

Following its IPO, shares jumped 39 percent. By late July, shares were up 82 percent over the IPO price, making a follow on inviting for ABS Capital and Northwest Equity seeking a profitable exit from their Rosetta Stone investment.

The company cancelled the follow on offering but did not provide any specific reason for the move. It was not immediately available for comments.

Rosetta Stone now expects third-quarter adjusted net income of 25 cents to 27 cents a share, compared with its previous forecast of 33 cents to 35 cents.

The company said it incurred high sales and marketing and product development expenses during the current quarter as it looks to launch advanced level packs for four languages before the holiday season.

The company, however, maintained its third-quarter revenue forecast of $64.5 million to $66.5 million, indicating that demand for its products would remain strong.

Analysts expect the company to earn 32 cents a share, before items, on revenue of $65.7 million, according to Reuters Estimates.

JUMPING SHIP?

Renaissance Capital's Killian said one of the issues with IPO stocks is the lack of commitment from investors when they have not been involved with a stock for a long period.

"When things go awry, IPO investors are more inclined to jump ship rather than ride out the storm," she said.

Rosetta Stone 's 6.25 million share IPO in April was one of the smallest floats of any IPO this year, making it more volatile.

But ultimately, Rosetta Stone's stock is getting hammered because of the uncertainty its outlook changes have caused.

"Certainly the small number of shares hurts, but investors don't like bad surprises," Killian said.

"They'll have to work hard to build investor confidence all over again; they'll have a big task of wooing an entire new group of investors."

Killian also wondered whether investors were getting nervous about the company's prospects given the downturn in overseas travel by U.S. consumers.

Rosetta Stone's main shareholders include ABS Capital Partners, whose shares prior to the IPO gave it 44 percent of votes, and Norwest Equity Partners with a stake of 29 percent of votes, according to a regulatory filing. Following the IPO, those stakes fell to 28 percent and 18 percent, respectively.

Brokerage Robert W. Baird cut its price target on the stock to $29 from $36, but maintained an "outperform" rating on the stock on expectations of continued growth both domestically and internationally.

The company, which provides instructional courses in 31 languages, more than doubled in size between 2006 and 2008, posting revenue of $209 million in 2008. It has grown nearly eightfold since 2004.

By Manasi Phadke and Phil Wahba
(Editing by Saumyadeb Chakrabarty)

Choosing Between Venture Capitalists or Angel Investors

Choose wisely or you are in deep trouble.

 

 

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Choosing Between Venture Capitalists or Angel Investors

via VentureDen Funding Tips by Daniel Cimera on 8/16/09

When an entrepreneur thinks of capital funding, the first thing that comes to mind is venture capital.  However, depending on the stage and growth plans of the new company, an entrepreneur may be better suited to pursue an angel investor. 

 

Many venture capitalists receive proposals for capital financing from companies that just do not meet their requirements for scaling, industry, or funding amounts.  This happens frequently when entrepreneurs fail to properly research the role or expectation of a VC firm in comparison to an angel investor.

 

An angel investor is an individual or private company that may wish to invest capital into new businesses that need help getting off the ground.  A previously successful entrepreneur may become an angel investor as a way to help new entrepreneurs get past the self-funded stage.  Typically, angel investors will fund companies that need financing in amounts anywhere between $150,000 and $1.5 million.  Though angel investors are easier to acquire than VC, they still require higher return amounts than traditional bank loans.

 

Venture Capitalist vs. Angel Investor

 

How can you, as an entrepreneur and business owner looking for capital growth, know which investor to approach?  Here are some guidelines:

 

Type of company

 

Venture capitalists have a preference for certain industries, particularly those with high growth, such as biotechnology or software with large expansion potential.  Though angel investors like high growth industries as well, they are more apt to be a capital source for other smaller growth industries. 

 

Size of company

 

The growth potential of the company is a tremendous factor in VC funding decisions.  They expect big returns when a startup company goes national or global, is acquired by a major corporation, or offers an IPO as a larger corporation.  Angel investors, however, will look at smaller companies that do not require as much capital for initial startup or capital growth.

 

Experience

 

VC firms are notorious for picking and choosing startup companies that are lead by experienced entrepreneurs.  Experience may be within the industry they are entering or through other successful entrepreneurial ventures.  Angel investors, on the other hand, will more likely help a first-time entrepreneur.

 

Amount of capital needed

 

Whether you need only one round of capital financing or a series of rounds, if you need more than $3 million for your capital needs, you should seek VC funding.  VC firms will usually not consider startup or small companies needing less than $1 million, unless the VC firm specializes in seed capital for startups. 

 

Generally, if the total capital required to create a positive cash flow in just a few years is less than $3 million, an angel investor is the way to go.

 

If you are an entrepreneur who wants to get an innovative business off the ground with a capital inflow, consider your options carefully.  Think of how big you want to take your business, your experience, and your ultimate capital financial needs.  You may find that a VC firm is not what you're looking for after all. 

 

 

 

 

 

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Billion Dollar IPOs Set To Return To U.S. Markets

 

 

Sent to you by Tan Yinglan via Google Reader:

 

 

Billion Dollar IPOs Set To Return To U.S. Markets

via PE Hub News: All News by admin on 8/16/09

NEW YORK (Reuters) - Investors lured by healthier stock markets and private equity firms eager to unload stakes in their portfolio companies are setting the stage for the return of billion-dollar-sized initial public offerings to the United States.

The size of several recent deals and new IPO applications has grown larger than what has been typical in the past year, illustrating how companies and their backers are vying to take advantage of the improved IPO market after one of its worst droughts in years. And bankers expect the trend to continue.

"We're going to see more than a handful of mega-IPOs file over the next month or two," said Lisa Carnoy, global head of equity capital markets at Bank of America Merrill Lynch (BAC.N).

In recent weeks, the U.S. unit of the world's largest meat processor, Brazil's JBS SA (JBSS3.SA), has filed to raise up to $2 billion in an IPO, while Hyatt Hotels Corp plans to raise as much as $1.15 billion.

This week saw an $810 million IPO by real estate investment trust Starwood Property Trust Inc (STWD.N), likely to become the year's largest should underwriters exercise their option to buy additional shares, while last week, chipmaker Avago Technologies Ltd (AVGO.O) launched a $648 million IPO.

IPOs will get bigger in part because of a rush by private equity firms, made hopeful by the successful IPO by Avago, owned partly by Kohlberg Kravis & Roberts & Co,[KKR.UL], to sell off large portfolio companies.

"Deal sizes are likely to get larger because of the huge supply from the financial sponsors — now you have dozens of companies that have equity values of $10 billion to $20 billion, so those IPOs by definition have to be large deals," Carnoy said.

Even after launching the second-largest corporate IPO of the year, Avago is still about 85 percent held by KKR and other private equity firms.

The strong performance of IPOs this year — 15 of the 17 corporate IPOs have jumped on their first day of trading — has brought back previously reticent investors, widening the pool of confident market participants and making it easier to absorb massive IPOs, the bankers said.

"When you get to these larger IPOs, you need a broad cross-section of institutional and retail ownership to make them work," said Mark Hantho, global head of equity capital markets at Deutsche Bank (DBKGn.DE).

"As confidence is returning to the markets, you will get a broader reception to IPOs, and can do a larger deal."

BIG DEAL

The last U.S.-based IPO to top the billion-dollar mark was a $1.36 billion deal by American Water Works Co Inc (AWK.N) in April 2008, according to Thomson Reuters data.

But if the recent spate of new IPO filings is any indication, that lull could end in the near future.

Two new filings this week — by fruit producer Dole Food Co Inc and Rio Tinto's (RIO.L) (RIO.AX) U.S. coal business, Cloud Peak Energy Inc, both seeking to raise up to $500 million — are more modest than the JBS and Hyatt proposals but would still rank among 2009's top deals.

Yet, despite the growing size of IPOs and new filings, U.S. deals are not likely to match the megadeals overseas soon.

Those deals include China State Construction Engineering Corp's (601668.SS) $7.3 billion IPO in July and VisaNet (VNET3.SA), the Brazilian affiliate of credit card network Visa Inc (V.N), which raised $4.3 billion in June.

For one thing, many of the top Chinese IPOs have been privatizations of state companies, the bankers said.

For another, U.S. firms don't necessarily go for the mega-IPOs, even if there is demand.

"In the United States, you have breadth; you can do small deals or mega-deals," Deutsche Bank's Hantho said.

Part of that may have to do with the fear of swamping the market and devaluing an offering.

"A lot of U.S. issuers would rather do a smaller IPO and then do follow-ons down the road," Bank of America's Carnoy added.

Still, the recovery of the IPO market is indisputable, meaning larger deals are inevitable, the bankers said.

"Investors have come back in force since March and they are being rewarded for participating in deals," Carnoy said.

(Reporting by Phil Wahba, editing by Gerald E. McCormick)

Re: Why Entrepreneurial Management is key to Innovation

Some thoughts from China
Innovation along 2 dimensions: technology and application. The latter
prevalent in china.

Vcs flock to liquidity and high PE ratios.
Entrepreneurs flock to where there is a large market and skilled engineers.

Talk to VCs first before investing.

The consumer business as a growth sector in china

Lastly, wealth cannot buy Health + How many people loves you

On 8/16/09, Yinglan Tan <yinglantan@stanfordalumni.org> wrote:
> *Senodia*
>
> - application of MEMs to iphone (gyroscope)
>
> SENODIA is a fabless MEMS based chip development company which targets on
> the over 3 billion US dollars MEMS gyroscope and IMU global market. Our
> market focus is the new generation of MEMS integrated gyroscope and IMU
> chip
> used for Consumer Electronics, GPS and Automobiles. Our products line
> includes Low-end and Mid-end MEMS gyroscope and IMU chips. Our projected
> Time-To-Market is In 2009, to produce the world thinnest and smallest
> Gyroscope chip (4x4x1 mm) and in 2012, to have over 150 million US dollars
> sales.
>
> *A tale of 2 car rental companies.*
>
> The company was founded in 1946 with three cars at Willow Run
> Airport<http://en.wikipedia.org/wiki/Willow_Run_Airport>
> [3]<http://en.wikipedia.org/wiki/Avis_Rent_a_Car_System#cite_note-Superbrands-2>,
> Detroit <http://en.wikipedia.org/wiki/Detroit> by Warren
> Avis<http://en.wikipedia.org/wiki/Warren_Avis>(August
> 4 <http://en.wikipedia.org/wiki/August_4>,
> 1915<http://en.wikipedia.org/wiki/1915>– April
> 24 <http://en.wikipedia.org/wiki/April_24>,
> 2007<http://en.wikipedia.org/wiki/2007>
> [2]<http://en.wikipedia.org/wiki/Avis_Rent_a_Car_System#cite_note-MorningEdition-1>).
> Avis has been owned by a number of other companies over the years, along
> with several periods of being a public company. These include:
>
> - 1962 - Investment group Lazard
> Freres<http://en.wikipedia.org/wiki/Lazard>
> - 1965 - ITT Corporation <http://en.wikipedia.org/wiki/ITT_Corporation>
> - 1977 - Norton Simon <http://en.wikipedia.org/wiki/Norton_Simon>
> - 1983 - Esmark
> - 1984 - Beatrice <http://en.wikipedia.org/wiki/Beatrice_Foods>
> - 1986 - Investment firm Wesray Capital
> Corporation<http://en.wikipedia.org/wiki/Wesray_Capital_Corporation>
> - 1996 - HFS Corporation <http://en.wikipedia.org/wiki/Cendant>
> - 2001 - Cendant <http://en.wikipedia.org/wiki/Cendant>
> - 2006 - Avis Budget
> Group<http://en.wikipedia.org/wiki/Avis_Budget_Group>
>
>
> The worst board meetings are when the company had been LBO and "how do we
> make our next payment to avoid being sent into receivership"
>
> Contrast with EHi of China.
> Young people doing products? How can I delight my customers?
>
> 3M vs large enterprises today.
>
> 3M - contrast that with the modern enterprise of today.
>
> Wu Jiang Guang - It is easy to find people who did things according to a
> template and what has been done in the past. The tougher is to find people
> who could innovate.
>
> - In a downturn, consolidate
> - franchise the easy shops, do the shops which were tougher to operate
> - took over other brands (in stronger geographies)
> - membership - the more you buy, the more discounts you get.
> - Internet
>
> Douglas Foo of Sakae Sushi
> - Vitamin E
> - lab-testing
> - conveyor belt to roll out watches / sushi belt in Zouk.
>
> Alex Ferguson
> - some people tell me he is a good coach
> - I say he is a good CEO, He has been with Manchester United since 1986,
> - been through different environment and adversity.
> - different players, teams 20 years ago all different.
> - So what is Cristino Ronaldo leaves, he picks the next batches
>

Why Entrepreneurial Management is key to Innovation

Senodia

- application of MEMs to iphone (gyroscope)

SENODIA is a fabless MEMS based chip development company which targets on the over 3 billion US dollars MEMS gyroscope and IMU global market. Our market focus is the new generation of MEMS integrated gyroscope and IMU chip used for Consumer Electronics, GPS and Automobiles.Our products line includes Low-end and Mid-end MEMS gyroscope and IMU chips. Our projected Time-To-Market is In 2009, to produce the world thinnest and smallest Gyroscope chip (4x4x1 mm) and in 2012, to have over 150 million US dollars sales.

A tale of 2 car rental companies.

The company was founded in 1946 with three cars at Willow Run Airport^[3], Detroit by Warren Avis (August 4, 1915 – April 24, 2007^[2]). Avis has been owned by a number of other companies over the years, along with several periods of being a public company. These include:

• 1962 - Investment group Lazard Freres
• 1965 - ITT Corporation
• 1977 - Norton Simon
• 1983 - Esmark
• 1984 - Beatrice
• 1986 - Investment firm Wesray Capital Corporation
• 1996 - HFS Corporation
• 2001 - Cendant
• 2006 - Avis Budget Group

The worst board meetings are when the company had been LBO and "how do we make our next payment to avoid being sent into receivership"

Contrast with EHi of China.

Young people doing products? How can I delight my customers?

3M vs large enterprises today.

3M - contrast that with the modern enterprise of today.

Wu Jiang Guang - It is easy to find people who did things according to a template and what has been done in the past. The tougher is to find people who could innovate.

- In a downturn, consolidate
- franchise the easy shops, do the shops which were tougher to operate
- took over other brands (in stronger geographies)
- membership - the more you buy, the more discounts you get.
- Internet

Douglas Foo of Sakae Sushi
- Vitamin E
- lab-testing
- conveyor belt to roll out watches / sushi belt in Zouk.

Alex Ferguson
- some people tell me he is a good coach
- I say he is a good CEO, He has been with Manchester United since 1986,
- been through different environment and adversity.
- different players, teams 20 years ago all different.
- So what is Cristino Ronaldo leaves, he picks the next batches 

Richard Chang, CEO of SMIC

The antithesis of Chartered Semiconductor, TSMC and UMC.

Ray of EHi

This man's company will revolutionise how car rental operates.

Wu Jian Guang of Really Sports

One of the emerging sports tycoon in China. Ranked on Forbes China.

Ling Jian Ping

The elevator mastro. He epitmoizes what 厚道 is .

Richard Chang, CEO of SMIC

No track record

Depending on the sector, I would advise Andrew to start boot-strapping before looking for investors
-

Hi this is Andrew from Singapore. And currently in your facebook and mailing list.

Currently , I have just started my company in Malaysia aiming to do adv online. However,like many start-up capital is a problem and there is no track record on my company.

May I know how do I solve this problem or do you have investor on your side.

Andrew
+60172188297

Fwd: Xconomy's Guide to Venture Incubators

Useful guide to venture incubators

Dear Friend of Xconomy, Since most of our readers are keenly interested in the startup and entrepreneurial scene, I wanted to let you know about the one-of-a-kind, just-released Xconomy Guide to Venture Incubators. Compiled exclusively by the editors of Xconomy, the guide includes details about all the top startup incubator programs--19 in total--in the United States. Whether you are an experienced entrepreneur or just contemplating your first startup, you will find this exclusive guide essential to getting the lay of the land--what incubator programs are out there, what they specialize in, the mentoring and other services they provide, and what they ask in return. We have published two versions of the guide. One, available free of charge on our website, simply lists the programs. The other, available right now for a modest introductory fee of just $45, includes such vital details as: Application Deadlines and Procedures Stipends Paid Equity/First Rights of Refusal Policies Notable Graduates Number of Firms Incubated per Year You can find the free version here: http://tinyurl.com/incubator-guide A sample entry from the premium version is available here: http://tinyurl.com/incubator-sample And you can purchase the premium version using your credit card or PayPal by clicking the "Buy Now" button below. In creating this guide, we spent weeks scouring the country to identify all the top startup incubators--and to weed out the myriad programs that call themselves incubators but mainly provide rental space and infrastructure for startups. To qualify for the Xconomy Guide to Venture Incubators, programs have to go beyond basic services to provide such benefits as actively mentoring entrepreneurs, helping them craft business plans and presentations, and making the connections critical to putting money in a new company's coffers. I am sure you will find both versions of the guide valuable. But if your plans and interests require the more complete details about the programs that are really helping startups get off the ground, be sure to take advantage of our introductory price of just $45 now, as prices will increase effective September 1, 2009. And please let us know what you think. Best, Bob Buderi Editor in Chief Xconomy

This email was sent to yinglant@gmail.com by bbuderi@xconomy.com. Instant removal with SafeUnsubscribe™ | Privacy Policy. Email Marketing by Xconomy | 101 Rogers Street | Suite 402 | Cambridge | MA | 02142

Careme

The leading brand of bread in China.

Dianping

With Zhang Tao, CEO of Dianping.
Global vs Local
Dianping is an online forum were consumers share their experiences - users post opinions of restaurants, shops, and entertainment venues. The website publishes a Restaurant Guide (餐馆指南) that collects member-contributed restaurant reviews.