Surprising Insights From HubSpot's $35M Mezzanine Round. The following is a post from my friend and co-founder/CEO of HubSpot, Brian Halligan.HubSpot just closed its mezzanine round, so I thought I’d share some surprising things I learned during the process.
I’m by no means an expert in this field, so these are just the observations of one entrepreneur. A Surprising Number Of Potential Investors With Widely Varying Value Propositions My impression is that times have changed in the growth equity game. It used to be that early stage venture folks just did early stage investing, late stage venture folks just did late stage investing, and public equity investors only invested in publicly traded stocks. What surprised me is that now, it seems like everybody invests in late stage private companies.
Hot startups valuations in M&A deals. Some hot startups series A & B valuations. Who Is In The New Billion Dollar Valuation Club? Recently I sat down with a well-connected Silicon Valley CEO who just raised a ton of money, and who knew of other startups raising even more.
There is a new startup club of younger companies raising money right now at $1 billion valuations. Disney Acquires Social Network For Kids Togetherville. Disney has just acquired Togetherville, a social network for kids 10 years of age or younger, we’ve confirmed with the company.
Terms of the acquisition are not being disclosed at the moment. Togetherville, which exited beta last year, mimics the experience of adult social networking sites, i.e. Facebook but in an age-appropriate and parent-monitored environment. Doubling Down On The Overpay. One thing I've seen many VCs do wiith their initial investment in a company is invest more when the valuation gets expensive.
They are ownership driven, not valuation driven. So if they originally wanted to invest $4mm at a $20mm post money valuation and buy 20% of the company, they talk themselves into investing $8mm at a $40mm post money valuation so they can still buy 20% of the company. I have never liked this approach. When the price of an initial investment goes up, I prefer to invest less, or nothing at all. Investing nothing at all is a fairly obvious approach when the price gets beyond your comfort zone. My rationale for investing less has to do with the fact that most venture investments involve multiple rounds. Bit.ly Raises $10 Million Series B, Still Growing Like Crazy. It looks like short links are here to stay, at least for a while longer.
Bit.ly, the largest independent link shortening service out there, closed a $9 million Series B financing. (Correction: An earlier version of this story had $10 Million as the amount raised. The actual amount was $8.9 million). The round was led by RRE Ventures, with AOL Ventures also becoming a new investor. Poland’s Facebook, Nasza Klasa, rumoured to be for sale for €130m. We’re hearing from two separate sources that Nasza Klasa, the largest Polish social networking platform, is on the block for €130 million.
Launched in November 2006, at its height the service had over 27 million registered users. Valuation Witchcraft - Where Do Seed Valuations Come From? - robgo.org. Valuation Witchcraft – Where Do Seed Valuations Come From?
September 29, 2010 Given all the talk recently about rising seed valuations and AngelGate, I wanted to do a sequel to my old post on how VC’s Value Early Stage Companies. The valuation dynamics are even more puzzling at the seed stage, where there is even less to value. Yammer, the Twitter for businesses, crosses 1 million users. Yammer, a status update tool for businesses, said it crossed 1 million users today and added that the number of paid users has grown by more than 57 percent from the first quarter of this year.
Sometimes called Twitter for business, Yammer is an internal social network that lets co-workers and teams share what they’re working on continuously. More than 70 percent of Fortune 500 companies are working with it now and overall, the company has about 80,000 companies and organizations using it. The company, founded by serial entrepreneur and former PayPal chief operating officer, David Sacks, launched two years ago. Skype Hits 521 Million Users And $185 Million In Quarterly Reven.
Even though it is embroiled in a nasty legal battle with its founders over its future, Skype continues to rack up impressive numbers.
In today’s third quarter earnings from eBay (which still owns Skype, but is preparing to unload it), the company breaks out Skype’s performance (see slide above). Skype’s registered users grew 41 percent to 521 million people. That’s a stunning 40 million new registered users in the past three months. One billion users, $1 billion: how did Twitter get the numbers? A company valued by its private investors at $1 billion, with nary any revenue in sight?
Color most traditional investors incredulous. Top Tech Acquisitions Of 2009. How Much is Twitter Worth? Less Than You Think. Twitter, the San Francisco-based micro-messaging startup, recently raised about $98 million dollars from T. Rowe Price, Insight Venture Partners, Spark Capital and Institutional Venture Partners, valuing the company at a whopping $1.1 billion. NeXt Up Research, the firm founded by veteran financial analyst Michael Moe, disagrees with that post-money valuation, and instead values Twitter at about $526-$674 million. NeXt Up’s research report is offered to users of SharesPost, a Santa Monica, Calif.
-based private online exchange that allows the sale of shares of private companies to willing buyers. Most of their concern is coming from the lack of revenues and worries that any diversification into money-making services could alienate the Twitter user base. The company‘s revenue model has yet to be tested. They are estimating that Twitter will make between $114 million and $134 million in 2013 and between $126 million and $148 million in 2014.
Valuation metrics: What's your company worth? Do you know why startups fail? Because they run out of money. Yes, there are lots of root causes: wrong market, timing, team, product, execution. But you can get past these sins and keep fighting as long as you have cash. Ironically, the reason why startups run out of money is because they raise capital too early.
And they raise the wrong kind of capital too early. As soon as you raise institutional capital of any kind you get on a treadmill where the VCs want you to run harder and burn faster. Continue reading. GoWalla Worth Nearly $30 Million After Financing. Time To Make Y. If you were gettin’ all antsy in the pantsies about yesterday’s launch of the LG Expo and it’s detachable projector accessory, you might be a bit bewildered right now. A full day later, AT&T’s still showing no sign of the handset. How to measure how well an online media company is scaling. « Li. Two years ago I posted about the three ways to grow an online media business to $50 million in revenue. In this article I focused on RPM (Revenue per thousand pageviews, = CPM x sell through rate x # of ad units per page) and drew the distinction between three strategies, and the traffic needed for each strategy to get to scale:
Demand Media Acquisition Rumors Heat Up Again. CEO Says No Way. Evernote Reaches Two Million Lifeloggers, Half Of Them Are On Th. The idea of a life recorder that captures every moments of your life on video is still a bit of a tech fantasy, but an early version of the life recorder already exists. It is called Evernote, the popular iPhone (and now Android) app which lets you record your memories by snapping geo-tagged photos, making voice notes, or just text notes and making it easy to search through them. Valuing early stage companies. You Don’t Mean Average, You Mean Median. Every quarter, without fail, a bunch of articles appear talking about the venture capital industries investment pace as a result of the PWC MoneyTree report. Top Ten Digital M&A Deals For 2010. The Dark Side of the Late 2009 M&A Surge. Polarized outcomes: Lessons from some recent exits.
Do you know why startups fail? Because they run out of money. Yes, there are lots of root causes: wrong market, timing, team, product, execution. Amended: Twitter has NOT raised more funding. KODA Secures Another $1.5 Million For Its Social Jobs Site. Looks Like Twitter Paid Mixer Labs $5.17M in Stock – GigaOM. FF - FB deal. Groupon Raises Huge New Round at $1.2 Billion Valuation (Updated. Fast growing Groupon, fresh off a $30 million round of financing that valued the company at around $250 million, is back raising new money.
They have closed or are in the process of closing new venture money at a $1.2 billion valuation, say multiple sources (one source says that’s not exactly correct, but close). Groupon offers a daily deal in several cities each day, offering steep discounts of 40 to 90% off a variety of services (i.e, spas, restaurants, etc.), if enough people buy the deal, everyone gets it, if it doesn’t reach a critical mass, no one gets the deal.