Archive for April 2009
The SaaS model squeezes the SI ecosystem. The normal meat and potatoes business around just getting on-premises software installed is greatly reduced. The business of just keeping the lights on is almost non-existent for SaaS. Yet SI’s have a lot to bring to the table. A good SI often understands the Domain, its Best Practices, and the key Business Processes better even than the software vendor. Having access to a SaaS platform makes it possible for the SI to turn that valuable knowledge into product which can then be sold. That’s why having a platform on which to do that is so important to them.
- from the SmoothSpan blog post ‘A Vision for Oracle’s Cloud Platform‘
Better late than never, but L Capital is looking for a summer intern to assist us over the next couple of months with some portfolio corporate development projects.
This would be a great fit for a 1st year MBA who is still looking for a summer internship, or an i-banker who has some time on their hands before starting b-school in the fall.
Click this link, and if you meet the desired qualifications, follow the directions if you’d like to apply.
Thanks, and I hope to hear from you soon!
There is no doubt that we are in a tough market. Lots of people have lost their job and many others are facing the risk & reality of losing their job. That sucks on so many levels.
Like many VCs, I am getting a ton of resumes and inbound interest for a variety of our portfolio companies that are hiring right now. I am doing my best to read them all.
The best way to stand out is to be helpful.
As a junior staffer at a VC firm, I think its important to understand where and how you can be helpful to portfolio companies. The advice I received from my venture capital teachers Stuart Ellman and Will Porteous of RRE Ventures (blog) has stuck with me, and I’ve tried to operate using that advice since starting my VC career.
I’m paraphrasing here (it’s been about a year since the class where we discussed it) but in essence, the advice was to simply be helpful and humble.
Here are some examples of ways that a junior VC can add value:
- Business development: Introducing the company to potential customers and partners in their network.
- Fundraising: Introducing the company to other VCs during the fundraising process and helping the company develop their investor pitch materials.
- Recruiting: Portfolio company is looking for a couple of engineers? Get the job description, post it on some boards that might be relevant and forward it out to your LinkedIn network. Maybe make some phone calls to folks in your personal network to see if anyone would be interested in the roles.
- Strategy: If you have an interest in corporate strategy and/or a background in strategy consulting, and the company is looking to explore new markets or the competitive landscape, see if you can lend some of your experience by helping crunch numbers, helping to put together the board presentation, etc.
- Listening and learning: Learn as much as you can about the company and the industry in which it operates. Attend board meetings and listen! VC is an apprenticeship business, so in many cases, the best approach is to sit down, shut up, and open your ears!
Company management, the VC partners who have invested in the company, and the founders will be adding the most value and steering the ship. As a junior staffer at a VC firm, your job is to be ready to help out wherever they identify a need they’d like you to address OR to identify a need and then socialize it with your boss(es) at the firm to see if its something they’d like you to pursue.
You definitely don’t want to go off half-cocked, ginning up initiatives and projects without making sure that they are viewed as value-add by the partners and company management.
If there are any other junior VCs out there (I know some of you are lurking!), it would be great to hear some of your thoughts on what works and what doesn’t related to working with portfolio companies.
I just sent an email to someone who I just met and received the following (slightly edited) response:
Attention: Email policy update.
Partners, Colleagues, and Friends:
In an effort to increase productivity and efficiency in 2009 I am modifying my personal email policy. I’ve recently realized I have slipped back into spending more time shuffling through my inbox and less time focused on the task at hand for my partners. It has become an unnecessary distraction that ultimately creates longer lead times on my ever-growing ‘to do’ list.
Going forward I will be checking/responding to email at three times a day, 8:00 a.m., 11:00 a.m., and 4:00 p.m. on Monday – Friday. I will try and respond to email in a timely manner without neglecting the needs of our clients/partners and brand identity.
If this is an emergency, and you need an immediate time-sensitive response… please do not hesitate to call me on my mobile phone at <omitted>
This new approach to email management will result in shorter lead times with more focused & creative work on my part for you.
I like this idea. I’d want to have a mechanism to have VIP emails (my boss, my biggest customers, my wife) come to my attention immediately, but otherwise I think it would work great. Anyone else doing creative email time management? Tips appreciated.
I just read the Techcrunch report on Facebook‘s latest fundraising activities( Decision Time For Facebook: Term Sheets Received At $2 Billion Valuation). The report talks about the potential heavy dilution that common stockholders might suffer because of 1) a fairly significant down round (taking pre-money valuation down from $15B to $2B) and 2)anti-dilution protection clauses that would apply to the previous investors’ ownership stakes (which means common would bear the brunt of the dilution).
From the article:
The cost of taking money at such a low valuation is higher than it appears. In addition to the direct dilution to stockholders from the new money, old investors at the $15 billion valuation may need to be made whole. Venture rounds traditionally include anti-dilution provisions that give investors more stock if the company raises new money at a lower valuation. Those anti-dilution provisions are heavily negotiated and can end up anywhere from full protection (which is very rare) to no protection at all (which is also very rare). It’s likely that there will be some form of additional dilution, possibly a lot of it, from the $375 million Facebook has raised at that valuation.
Although the current investors will certainly want to preserve their ownership stake as much as possible in any new deal, new investors are not going to do a deal that they think will drive out key employees and founders in droves.
There are a couple of ways to get around this issue. The new investors could require the old investors to waive their anti-dilution protection as a condition of investment. Or, the new investors could require that more common stock options get issued prior to closing. These options could be use to refresh employees and founders who experienced heavy dilution due to the down round financing. My guess is that both of these mechanisms will be a part of any new Facebook deal.
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- Polaris Surveys Founders on Dilution (xconomy.com)
Lookery and hundreds of other companies, many cloud-hosted, are building new business processes that are optimized for MapReduce and similar architectures. In many — even most — cases, these business processes will be far more cost-effective than the ones they will replace. New incumbents will arise, new benchmarks written, and new statistics reported by analysts with new biases.
Companies invested in SQL apps that can be replaced, most often indirectly, by MapReduce-esque apps need to start self-cannibalizing.
We’ve seen this dynamic before in the SaaS market. SaaS products tend to be less customizable than their enterprise software counterparts, but SaaS customers are often willing to alter their business processes to take advantage of what can be major cost savings and cost avoidance (as compared to supporting or purchasing an enterprise software solution).
Maybe the dynamic will play out on the database side as well?
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- “Database analyst Curt Monash told Computerworld that the study just reinforced his belief that…” (rafer.tumblr.com)
- Lookery Secrets Exposed (davidcancel.com)
Mike D, one of the smartest guys I’ve ever worked with, has been blogging about cloud computing and has a very unique perspective as one of VMware‘s cloud architects (the cloud is kicking his butt!). I’m very happy to see he is blogging and I’m looking forward to some strong opinions and stories from the trenches.
Mike, good to ‘see’ you again!
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- VMWare’s Vcloud API still hazy, Ambitions are clear (elasticvapor.com)
- Cloud Computing Unification Getting Ugly (themindstorms.blogspot.com)