Posted on November 6, 2009 by Michael DiSanto

Friday Five: IPOs, Venture Capital Funds, Exits and More

We are adding a new feature to the blog.  Each Friday, we will link to the top five headlines for global entrepreneurs.  Of course, the bulk of those will often involve Silicon Valley, since that tech-concentrated center remains the global front line of technology and venture capital.  Enough intro banter.  Let's jump right into it.

  • Talk about a long time in the making.  On Wednesday, Ancestry.com, a website that allows people to trace their roots by searching online documents, priced its IPO of 7.4 million shares at $13.50.  By my math, that will bring in approximately $100 million in aggregate gross proceeds, assuming that the round is fully subscribed.  It took Ancestry.com a scant 26 years from the time it was founded until it priced its IPO, making it the oldest venture-backed IPO of 2009.  Talk about patience and perseverance!  Read more.
  • Who said that it was next to impossible for venture capitalists to raise additional funds in this economy?  Greylock Partners obviously missed that memo, as the Silicon Valley stalwart recently announced the closing of Greylock XIII, a $575 million fund.  They also announced the addition of Reid Hoffman, co-founder and current Executive Chairman of LinkedIn, as a new investing partner.  Read more.
  • I wonder what ridiculously expensive champagne former British investment bankers Eldar and Roy Tuvey will be drinking in celebration this weekend after selling their company, ScanSafe, to Cisco for up to $183 million earlier this week?  The founders are set to spit up to a cool $60 million between them.  With an exit like that, they can afford to take a bath--literally--in 1990 Louis Roederer Cristal Brut, which is priced around $2,500 per bottle.  The exit was also a good win for London-based venture capital fund Balderton Capital.  Yahoo Finance estimates that Balderton enjoyed a four times return on its four rounds of investment in ScanSafe.  Not bad, indeed.  Read more.
  • The government of the People's Republic of China doesn't seem squeamish about the future of its venture capital market.  China's key economic planning body recently launched 20 venture capital funds to develop China's growing technology sector.  Read more.  That news certainly seems to support estimates that China's private equity industry will grow by ten-fold over the next five years.  Read more.  Yes, I know that is two headlines combined into one, but who is truly counting anyway?
  • When Google head honcho Eric Schmidt talks, people tend to listen.  When he talks about his view of the employment trends in Silicon Valley's technology sector, even more people turn an inquisitive ear or two.  Read more.

Enjoy your weekend!

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Posted on November 4, 2009 by Michael DiSanto

China Updates

Our colleagues in China recently launched the China Media & Entertainment Blog.  We will, of course, keep everyone up to date on any developments, news or issues that pertain to the world of startups by linking to the blog entries here.  No better time to start that exercise than the present, so without further adieu, here are three recent blog posts for your reading pleasure:

  • World of Warcraft Controversy leads to War of Words between Government Regulators.  The latest move in the continuing saga betewen the Ministry of Culture in China and the General Administration of Press and Publication over popular online game World of Warcraft has led ot the Ministry of Culture reiterating its sole responsibility for the administration of China's online games market.  Read more.
  • Trading Culture in Shanghai. China has established an exchange devoted entirely to trading in companies that own or deal with culture. The Shanghai Cultural Equity Exchange, whose investors include the Shanghai United Assets and Equity Exchange, Jiefang Daily Group and Shanghai Jingwen Investment Co., Ltd., was established with the approval of Shanghai Municipal Government in June.  The newly established exchange is expected to be a platform for the trading of property rights, creditors’ rights, equities, and intellectual property associated with cultural assets. Trading will cover a wide range of cultural products, services, and companies operating in the press, publishing, film, television and Internet sectors, among others.  Read more.
     
  • Ministry of Culture Outlaws Online Mafia Games.   On July 27, 2009, the Ministry of Culture issued the “Circular on Investigation into ‘Gangs’ and Other Illegal Online Games.”  The Circular notes that some popular online games based on the themes of gangs, the mafia, or “godfather” concepts advocate obscenity, gambling, or violence and undermine morality and traditional Chinese culture. It goes on to note that these games encourage people to deceive, loot, kill, and glorify the lives of gangsters, providing a negative influence on youngsters. The Ministry of Culture has prohibited websites from running, publicizing, or offering such online games, and has also ordered its law enforcement bodies to step up oversight and harshly punish any sites that continue to offer such games.
  • Foreigners and Internet Games in China: "Unfair" Play Results in New Rules.  Foreign companies and their Chinese partners have always been major players in the Chinese online gaming market. The partnership normally is has the foreign company licensing rights to a Chinese partner. The Chinese partner is then responsible for developing the local market. The Chinese partner is required to apply to the Ministry of Culture’s Content Censorship Commission and the China’s General Administration of Press and Publication for pre-approvals to distribute the game. The Commision censors game content and reviews the license agreement, which becomes effective upon the Commission's approval. Chinas General Administration of Press and Publication examines the qualification of the Chinese partner to provide foreign online game services and decides whether to issue a License for Internet Publishing Service to the Chinese partner.  Read more.

 

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Posted on July 1, 2009 by Zack Dong

Welcome From Beijing

Here I am, sitting in Reed Smith’s Beijing office and writing my first entry to the blogosphere. It was no small step to move from Chicago to Beijing several months ago, and I am still trying hard to adapt to the life in one of China’s most important political and economic centers. Reed Smith runs an office in a particularly vibrant part of the city. 

It feels great to be able to report business and legal trends here to colleagues around the globe from one of the most dynamic cities in Asia. It is a city that boasts of the highest concentration of colleges and universities in China, and a highly educated population. The potential is not lost on the city’s promoters, who have over many years of painstaking efforts established technology development zones and science parks to attract investors and seed money to fund start-ups. Zhongguanchun, an area in northwest Beijing, is where numerous domestic and Western technology players, not necessarily Fortune 500 companies, set up shop, taking advantage of the numerous investment incentives available there. I myself have recently accompanied a client in negotiating a lease for its lab there. 

The city is not immune to the global financial crisis that began last year. But relative to the export-dependent southern and coastal China, the city seems to have weathered the storm fairly well. Real property prices and sales in the city that dropped last year lasted until this spring. More recently, prices are trending upward again. The entire economy seems to be benefiting from a massive stimulus plan announced late last year. There seems to be a lot of confidence that the economic trouble is a Western problem.

On the regulatory front, the recent buzzwords have been “Green Dam Youth Escort,” a software program that purportedly would filter out pornography, violence, and “harmful” sites and addresses on the Internet. A few weeks ago, China’s Ministry of Industry and Information Technology announced that effective July 1, 2009, all new PCs sold in China are required to have the “Green Dam Youth Escort” program. The aim was to protect young people from “harmful” influence. However, industry sources and Internet users fear that personal information may be compromised, and that the software could cause PCs in China to malfunction and make them more vulnerable to hacking. The rules would put HP, Dell and other Western PC-makers in a difficult situation. If they fail to comply, they would be prevented from selling PCs in China, a huge and growing market. Yesterday (June 30), China’s state media reported that the government has decided to postpone the enforcement of the new rules, but it did not say why. Industry watchers are following the events closely.

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