Venture Returns Blog

Home Health and Hospice Care Data

noreply@blogger.com (VentureReturns) — Sat, 18 Oct 2008 19:23:00 +0000

We at VR believe that home health care industry is amazing and has amazing potential. Please see below our M&A research and public comparables. A few things to note: EV/Revenue is about 0.8-1.2x in the industry, and EV/EBITDA is 6-9x. You can download the Excel file here.

Featured Research Lists

noreply@blogger.com (VentureReturns) — Sat, 18 Oct 2008 19:05:00 +0000

We have decided to create a set of interesting research lists that showcase some of our amazing valuation work, research, M&A data, etc. Please enjoy and check back often as we will add to the list regularly!

Testimonials

noreply@blogger.com (VentureReturns) — Fri, 17 Oct 2008 06:39:00 +0000

"Great stuff! – I really appreciate you working so hard on this!" --Principal at a Private Equity Fund

"Thank you for this...Sorry just getting back to you, I was finishing up the project, your site was very helpful. Now, I am digging into the other project so, finally getting to this work..." --Principal at a Private Equity Fund

"Great job! This was really very helpful and I must say that I am very pleased with the results. It does shed light on revenues that some of the smaller startups had when acquired and also acquisition multiples. I appreciate your efforts and have made sure our partners know about this!" --Associate at Top-Tier VC Fund

"I think the GUI is very user-friendly and I learned how to use your system and search in no-time. I believe your data is reliable and that makes a big difference as well." --Associate at a Top-Tier VC Fund

"The Valuation Tool is amazing." --Venture Returns Registered User

"Venture Returns a web site devoted to figuring out valuations. Not only do this have some nifty tools to help you do this, they also have a very nice listing of companies in every category. If you're still stuck, you can request comps in a very specific market and within a short period of time, they will give you a list. Highly recommended." --Fryer's Blog in the Mountains

How is the Financial Crisis Affecting the Values of Social Networking Companies

noreply@blogger.com (VentureReturns) — Fri, 17 Oct 2008 04:40:00 +0000

Social networking companies are probably among the most difficult companies in the economy to value. The primary reasons include:

There isn't much data about them
There haven't been that many exit transactions for these companies
While many financial analysts feel that their business model is suspect and that their valuation multiples are unjustified, acquisitions of these companies have demonstrated very, very high valuation multiples

Take, for example, the case of Facebook. Microsoft acquired a 1.6% stake in the company valuing it at $15B. This represented a 100x EV/Revenue ratio and an astounding estimated 429x EV/EBITDA ratio. When we went to come up with valuations of the world's top social networking sites we were seriously challenged because on the one hand we are equally doubtful that these companies underlying fundamentals are adequate to justify such high valuations but simultaneously we personally believe that Microsoft would probably be willing to buy all of facebook at $15B. This last point ended up trumping the first point--because valuation experts generally agree that "fair value" refers to "the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts." So we believe that Social Networks are generally worth what other companies are willing to pay for them--which despite the crazy financial crisis is still probably quite high. In any case, you can see how valuation ratios for social networks have been harmed by the financial markets here. Median EV/Revenue ratios have fallen from 10x to 3.5x and median EV/EBITDA ratios have fallen from 25x to 12.4x.

Here is our list of Social Network valuations--click on the hyperlink to see the valuations:

Facebook: 2008 Revenue--$325M
MySpace: 2008 Revenue--$755M
Classmates: 2008 Revenue--$91M
LinkedIn: 2008 Revenue--$65M
Reunion.com: 2008 Revenue--$60M
Bebo.com: 2008 Revenue--$32M
Tagged.com: 2008 Revenue--$16M
Friendster: 2008 Revenue--$10M

Let us know what you think or simply create your own valuation using your tool if you disagree with our high valuations!

New Features: Google Maps and Comparables List Search

noreply@blogger.com (VentureReturns) — Wed, 17 Sep 2008 14:00:00 +0000

Hey everybody! We are pleased to announce the release of several new features. First, we have completed the first phase of our integration with Google maps.

You can now see a picture of map of the location of individual funds and companies. Next up is the ability to see all of the funds, companies, and even deals in our database. You will be able to map these by sector, drill-down by region or state, and explore different relationships between companies. For example, you may want to see all of the companies, fund, and deals related to the conveyor belt industry. We can map all of these for you. You may want to see the geographic location of all of Google's acquisitions, we will soon be able to do that for you.

We have also released a great new feature for our Valuation Tool. You can now search for Comparables (or Industry Comps) Lists by simply typing in the name of a company, ticker or a keyword. So if you want to see all of the Comps or Industry Lists in which Microsoft is included, you can type in "Microsoft" or "MSFT" and you will be able to see all of the lists in which the company is included. This is very helpful if you know the name of a competitor company but you don't know the name of a particular industry or sector list.

Why Rules-of-Thumb Don't Work

noreply@blogger.com (VentureReturns) — Tue, 09 Sep 2008 19:46:00 +0000

We have noticed a bunch of new online valuation services cropping up. Some of them create valuations based on things like the number of years of management team experience, the board of directors of the company, or industry rules-of-thumb. While they may be interesting, most of these "black box" approaches to valuation would get you fired if you worked at any firm or company that takes valuation seriously. Valuations are almost always based on one of three methods:

The Asset approach. This basically views a company as a collection of assets. While this method can definitely work, it doesn't work especially well where the company is clearly worth more than the collection of its assets. Its the old "the whole is more than the sum of the parts" argument. Valuing certain entities can work well this way but it really doesn't work well at all in valuing high-growth companies--PE or VC backed companies.
The DCF or Income approach. This is where you forecast the company's financials and then apply a discount rate or "hurdle rate" to forecasted profits to come up with a valuation of the company. This is the most comprehensive and generally accepted method. However, it doesn't really work very well for early-stage or high-growth companies since getting the basic inputs to do the valuation involve too many assumptions.
The Multiples Method. This is where you take the company's existing financial results and apply an industry valuation multiple the the results. This is a very simple and effecitve approach. It works well when the company has steady and stable revenue or forecasts. However, using "rules of thumb" where you apply general multiples that are based on data that is static and doesn't update for changes in the economy or the industry will give you very inaccurate results. Valuation is particularly susceptible to the garbage in, garbage out problem. You should always use very specific industry multiples that are very specific to your particular industry. Second you shouldn't just use rules of thumb for "restaurant industry comparables" but you should use comps that are based on actual data from recent M&A transactions. Just like the valuation of public companies change based on macro-economic and industry-specific factors, the valuations of private companies change as well. Using canned multiples that don't change is not an accurate approach to valuation.
There is a hybrid method that combines 2 and 3 called The First Chicago or Venture Capital Method. See here for the wikipedia entry. This method combines the best of approaches 1 and 2 above and it is the preffered valuation method for most VCs. This method involves using a multiples based valuation applied to current financial results and to _future_ results which are then discounted back to the present. It works as well for companies that have little to no revenue currently or companies that have revenue and EBITDA but are growing rapidly. If you combine this method with a very good ability to find specific industry comparables, you can arrive at a defensible valuation.

Venture Returns primarily uses the second, third and fourth types of valuation. We don't do a good job yet of exposing a full DCF but we are working on that currently.

Post for Technorati

noreply@blogger.com (VentureReturns) — Sun, 07 Sep 2008 05:22:00 +0000

Hey everybody, I have to paste this link on my blog's home page to prove to Technorati that I am in fact the owner. Technorati Profile

New Premium Valuation Options

noreply@blogger.com (VentureReturns) — Wed, 27 Aug 2008 05:00:00 +0000

Hey All! We released earlier to our registered users some new options for valuation. You can see the new page here. You can see our pricing breakdown here. You will have to log-in first. Essentially, we now offer the following kinds of valuation services:

Basic valuation. Users can perform a "do-it-yourself" valuation of their company. Companies can be in any industry or at any stage and the valuation still works. The only limitation of this method is that it creates a valuation based solely on public comparables. To get M&A comparables added to your valuation (which will make the valuation more accurate, and generally higher), you need to subscribe or pay for a one-time "assisted valuation." All of the unique benefits of working with VR are included: valuation is updated daily forever, company value chart like a stock price chart is available to you, complete set of comparables is included, etc.

Assisted valuation / premium valuation. VR helps to make sure that the user gets it totally right. This is helpful for folks who don't have a lot of experience doing valuations. We also make sure that the user gets access to M&A data for their specific industry. We don't grant them complete access to M&A data for all industries, but for their specific valuation, we make sure they get everything they need.

Subscribers. Subscribers get access to all M&A data and therefore can do very accurate valuations themselves. They also get prioritized access for basically any requests from the VR Research team.

409a Valuations or Appraisal Valuations. For customers who need a totally complete, thorough, and legally defensible valuation, we recommend that they purchase a 409a valuation. We offer these valuations for between $1,999 and $3,999. We partner with top-tier appraisers to offer these to our customers. We guarantee you will not get a full appraisal or 409a valuation without sacrificing quality for less than we will offer it to you.

Enterprise Subscribers. This option is ideal for our power users or for firms who want us to value all of their "portfolio" companies. We create detailed and highly accurate valuations for each company. We can even do 409a valuations as often as they would like. We provide them with daily valuation updates, charting, portfolio valuation (we value the entire portfolio), etc. They also get top priority access to our VR Research team, etc.

Anyway, we are extremely excited about this and want to thank Jon our lead developer for all of his hard, hard work in getting us here. Jon, you rock.

New Home Page!

noreply@blogger.com (VentureReturns) — Wed, 27 Aug 2008 04:55:00 +0000

We are so excited to announce that we have redone the home page. What's more, we are adding new features to the site nearly daily now. We are really excited about some of the features that are coming. The new home page has a Flash movie that shows you some of the major features of Venture Returns. It also has links to several new ways to search and sift through our databases. Most importantly, it links to a constantly improving version of our valuation tool. Give it a spin! http://www.venturereturns.com/.

VR Valuation Estimates: How They Work

noreply@blogger.com (VentureReturns) — Mon, 11 Aug 2008 12:57:00 +0000

While we don't want to give away our complete algorithm to aspiring competitors, we can understand why you would want to know how we come to our valuation estimates.

We use standard, multiples-based valuation procedures to get our estimate that are based on years of valuation experience and work in private equity and venture capital fields. Valuation is both art and science and our valuation estimate is not a complete, appraisal-type valuation. Rather it is a quick estimate that should be directionally correct. We also believe that the trending of the valuation should be very accurate.

The basics of multiples-based valuation involve multiplying two numbers:

A valuation ratio--this ratio tells you how valuable a given unit of something is. For example, the value of a dollar of revenue or the value of a dollar of EBITDA for a company in a given industry. In real estate, the common valuation ratio is value per square foot for a house in a given area.
The total number of "units" you are valuing. If you are using a value to revenue ratio, you would multiple that ratio by the total revenue for the company you are valuing. If you are valuing a house, you could multiply the price per square foot ratio by the total number of square feet in the house.

When you combine 1 and 2, you can estimate the value of a company. We generally use Enterprise Value (EV) / Revenue and Enterprise Value (EV) / EBITDA ratios, since these are the most accepted in the private equity business for most industries. However, our database has the ability to value companies using just about any ratio and we are adding new ratio information daily.

We use a few more tricks of the trade. For example, we mix the value of your company based on current financial results with an estimate of the value of your company based on projected financial results (in the future)--this is especially important for startups who may not have any Revenue or EBITDA in the present but expect to have significant revenue in the future. You can play with this assumption yourself by chaning the "Weighting on future projections" in our valuation tool. If you weight this at 0%, we will value your company only based on its current results.

It is important to note that valuations based on uncertain information--like future financial projections--should be taken with a big grain of salt. While all venture capitalists will project out the results of a company and make some valuation estimate based on this, they also use "gut" feel and other things based on the company's management team, etc., to get to a proper valuation. Often, they significantly discount the projections that the management team provides. Finally, ultimate a valuation in this context is really a two-party negotiation based on beliefs about highly uncertain future outcomes. So our tool will provide an estimate here but the results will only be as valid as the assumptions.

The valuation tool's accuracy will greatly improve the more that the company's current results are significant (e.g., significant levels of revenue and EBITDA) and when the projections are accurate.

Some final notes: we weight the multiples that we use based on our estimate of the likelihood of an M&A exit for the company or an IPO. Please feel free to change this number. The higher the percentage, the more likely it is that the company will exit via transaction rather than IPO.

We also use an illiquidity discount--this is a widely accepted valuation discount that should be applied to private companies since their equity is not liquid. 15-25% seems to be a relatively normal standard range for this.

Finally, as we compare our valuation estimates to actual outcomes, we reserve the right to tweak our regression analysis and our model. Please feel free to click "Include VR Proprietary Inputs" if you would like to take advantage of these findings in the future.

Enjoy! We had a lot of fun making this and we hope you will enjoy using it!

New Feature: Company Valuation

noreply@blogger.com (VentureReturns) — Thu, 07 Aug 2008 17:04:00 +0000

Hey everybody. This has been almost a year in coming! So we are really pleased to announce the ability to get data-driven company valuations on VR as a service. You can perform your own valuation using public comps only or you can subscribe where you get access to M&A comps as well and our research team will help you do the valuation! Once you create a valuation it is marked-to-market, meaning that it will updated daily based on how the markets change. We update your valuation daily based on stock market data as well as M&A data from our own proprietary M&A database.

Disclaimers!!!! Valuation is an art and a science, but arguably more art than science. The results are only ever as good as the data that goes in. We use a very, very simplified valuation algorithm right now (we will add complexity over time) that probably gets you to within 10-15% or so of a reasonable valuation estimate (assuming there are no signifcant balance sheet issues that our model doesn't handle). That said, you only know the value of a company when it is bought or sold in a transaction. So our models can be off significantly depending on the way that a deal is negotiated. Also, we largely ignore intagibles and many other balance sheet implications (we do look at cash and debt levels). Finally, the earlier-stage the company, the more difficult it is to value that company and the wider the margin of error. We have set up our system to value any stage of company by allowing the user to weight projected revenue and earnings more or less heavily than current results. Please note, it is up to you to assign the weightings on future results. Early-stage VCs have to do this all of the time, later-stage private equity pros shiver at the thought. Just remember that everybody, including early-stage investors, will take future projections with a grain of salt. The valuation tool works best with companies that already have results.

So, after all of these disclaimers, why should I use the valuation service? It is stinkin' amazing, that's why. Where else can you quickly estimate the value of private companies on the web for free? Even if it is directional, you can see how the company's value changes over time. I like to compare us to Zillow.com. Zillow is frequently wrong but I still check it all of the time because I want to know what is going on in the market. The same holds true for our valuations. Also, while we want to put heavy disclaimers behind our valuation tool, we don't disclaim our valuation ratio data. This data is rock-solid, heavily researched and accurate. We have paying subscribers who use this data all of the time as a basis for very big decisions. We are adding M&A deals all of the time. Those ratios are like a company version of the real-estate tool MLS (multiple listing service). We are constantly tracking the actual sales price and valuation ratios for deals that have actually happened. So, while our valuation estimates involve a lot of art and estimation, the valuation ratios that form the basis of our estimates are completely reliable. If you ever find errors or problems here, let us know and we will remedy it immediately.

I have attached above a screen shot of a company I valued. To access the valuation tool, log-in or register, then go here: http://www.venturereturns.com/valuation/valuationTool.php. You first need to find and save a set of comparables--these are companies (or deals involving companies) that are similar to your company. [Just like real estate appraisers use similar houses as the basis of their valuation estimates, we use similar companies]. Once you do this, click on the Valuation button, enter in some high-level financial information about your company and you are off to the races. The tool will create the chart I showed above for your company and it will also create a "stock price" chart that will show you the valuation of your company over time.

New Feature: Crazy Cool Graphs

noreply@blogger.com (VentureReturns) — Wed, 06 Aug 2008 05:04:00 +0000

One of my personal favorite features in the valuation tool is the EV/Revenue and EV/EBITDA graph. This graph shows exactly how these ratios have varied over time for that particular industry.

I have inserted a graph above that shows what valuation ratios are doing in the Interactive Television sector over the past 2.5 months. It is cool to see that after dropping for a while they seem to be strengthening again. As an investor, entrepreneur, potential acquirer, etc., this is great information to have! You can see not only what the multiples for a given sector are today but you can see what the trend is...so you can look for deals with a higher probability of multiple expansion in the future. Early-stage VCs tend not to care as much about this as later stage folks do because early-stage VCs don't rely as heavily on multiple expansion. Early-stage investors are looking to back companies whose revenues are going vertical. If a company's revenues are going vertical, it doesn't really matter what is happening to the sector multiple and the company will still be worth a lot of money. For later-stage investors, corporate acquirers, etc., multiple trends are much more important. Private equity investors generally make money in 3 ways in a leveraged acquisition: 1) paying down debt, 2) increasing the profitability or margin of the acquired company, and finally 3) multiple expansion. This last category is generally the least understood. Now Venture Returns can help you to understand it with crystal clarity! Because later-stage investors generally invest in highly stable companies--so that they know that they will be able to service a whole lotta debt--they almost don't want revenue growth. More accurately, they don't want to take the risks that are generally required to create revenue growth. So if revenue is going to stay flat over the life of an investment, multiple expansion is all that much more important. Anyway, sorry for the pontification...hope you enjoy the picture of the graphs! As always, please register at www.venturereturns.com and use the Valuation Tool for yourself!

New Feature: Research Request

noreply@blogger.com (VentureReturns) — Wed, 06 Aug 2008 05:01:00 +0000

We released a new feature over the weekend. For our paying subscribers, there is a button inside the valuation tool titled "Research Request." When you click on this you can fill in some information about what you are researching--particularly areas where the valuation tool is light on information or our existing comp lists aren't great--and our research team will send you a comp list within approximately 24 hours of the request. We feel like this is a great value add for our paying users!

New Feature: I-Banker Style Excel Comp Sheets

noreply@blogger.com (VentureReturns) — Wed, 30 Jul 2008 13:36:00 +0000

Hey everybody:

We released a really cool new feature a few days ago: investment banking-style excel comps lists. Registered users can download these type of comp sheets from any of our 700+ (and growing daily!) pre-made lists or, as always, they can create their own customized lists and download them. Remember M&A data is only available to our premium users--at the bank breaking price of $20 / month. In all seriousness, we will probably raise our prices for new users at some point, so join now while the beta pricing lasts!

Here is a list of "comps" for Solar Power Generation using our latest feature that we thought you might like.

SolarCompList.xls

Sector Tree

noreply@blogger.com (VentureReturns) — Fri, 27 Jun 2008 05:55:00 +0000

A few customers have asked for an easy to read list of all of the VR sectors that we track. Here is the list, though it is so long that I am not sure that it is easy to read. One additional thing to note, VR is constantly adding to this list, so this could become outdated pretty quickly. Also, the VR valuation tool is designed to make it easy for users to create, save, download and share their own lists. Check it out for yourself here.

Anyway, as promised here is the list!

Venture Returns Sector Breakdown
· Aerospace and Defense
o Major Defense Contractors
o Specialized Government and Defense Companies
· Basic Materials
o Chemicals
§ Agricultural Chemicals
§ Diversified Chemicals
§ Specialty Chemicals
o Metals
§ Aluminum
§ Copper
§ Gold
§ Industrial Metals and Minerals
§ Silver
§ Steel and Iron
o Non-Metals
§ Non-metallic Mineral Mining
§ Oil and Gas
§ Independent Oil and Gas
§ Integrated Oil and Gas
§ Oil and Gas Drilling and Exploration
§ Oil and Gas Equipment and Services
§ Oil and Gas Exploration
§ Oil and Gas Pipelines
§ Oil and Gas Refining and Marketing
§ Synthetics
· Construction and Real Estate (Under Development)
o Building Materials
§ Cement
§ General Building Materials
§ Metal Fabrication
o Construction
§ General Contractors
§ Heavy Construction
§ Manufactured Housing
§ Residential Construction
o Real Estate
§ Property Management
§ Real Estate Development
§ REITs
§ REIT--Diversified
§ REIT--Healthcare Facilities
§ REIT--Hotels and Motels
§ REIT--Industrial
§ REIT--Office
§ REIT--Residential
§ REIT--Retail
· Finance and Insurance (Under Development)
o Asset Management and Brokerage
§ Asset Management
§ Closed End Debt Funds
§ Closed End Domestic Equity Funds (Private Equity / VC)
§ Closed End Foreign Equity Funds
§ General Asset Management
§ Hedge Funds and Diversified Investments
§ Private Equity
§ Venture Capital
§ Brokerage
§ National Investment Brokerage
§ Regional Investment Brokerage
o Banking
§ Foreign Money Center Banks
§ Foreign Regional Banks
§ Money Center Banks
§ Regional Banks
§ Savings and Loan Institutions
o Credit Services
o Insurance
§ Health and Accident Insurance
§ Insurance Brokers
§ Life Insurance
§ Property and Casualty Insurance
§ Surety and Title Insurance
· Food and Agriculture
o Cigarettes and Tobacco
§ Cigarettes
§ Tobacco
o Food and Beverages
§ Beverages
§ Brewers
§ Soft Drinks
§ Wineries and Distillers
§ Food
§ Confectioners
§ Dairy Products
§ Farm Products
§ General Food Manufacturers
§ Meat Products
§ Packaging and Containers
§ Processed and Packaged Goods
· Healthcare
o Payers
§ Health Care Plans
o Providers
§ Biotechnology
§ Diagnostic Substances
§ Diversified Biotechnology
§ Healthcare Services
§ Home Health and Hospice Care
§ Hospitals
§ Long-Term Care Facilities
§ Medical Laboratories and Research
§ Medical Practitioners
§ Specialized Health Services
§ Medical Devices, Systems, Instruments, and Supplies
§ Drug Delivery
§ Medical Devices and Equipment
§ Medical Instruments and Supplies
§ Pharmaceuticals
§ Drug Manufacturers
§ Drug Related Products
§ Generic Drugs
· Manufacturing
o Business and Office Goods
§ Business Equipment
§ Office Supplies
o Cleaning Products
o Clothing and Textiles
§ Apparel Clothing
§ Apparel Footwear and Accessories
o Electronic Equipment
o Home Goods
§ Appliances
§ Home Furnishings and Fixtures
§ Houseware and Accessories
o Industrial Equipment
§ Industrial Electrical Equipment
§ Industrial Equipment and Components
§ Machinery
§ Diversified Machinery
§ Small Tools and Accessories
§ Farm and Construction Machinery
§ Machine Tools and Accessories
o Paper and Paper Products
o Personal Products
o Photographic Equipment and Supplies
o Pollution and Treatment Controls
o Recreational Goods
§ Sporting Goods
§ Toys and Games
o Rubber and Plastics
o Textile Industrial Goods and Services
o Vehicles and Vehicle Parts
§ Auto Manufacturers
§ Auto Parts
§ Recreational Vehicles
§ Trucks and Other Vehicles
o Waste Management
· Retail
o Apparel Stores
o Auto Dealerships
o Auto Parts Stores
o Catalog and Mail Order Houses
o Department Stores
o Discount and Variety Stores
o Drug Stores
o Electronics Stores
o Grocery Stores
o Home Furnishing Stores
o Home Improvement Stores
o Jewelry Stores
o Music and Video Stores
o Restaurants
o Specialty Eateries
o Specialty Retail
o Sporting Goods Stores
o Toy and Hobby Stores
· Services
o Broadcasting
§ Radio Broadcasting
§ TV Broadcasting
o Business Services
§ Advertising Agencies
§ Management Services and Consulting
§ Marketing Services
§ Research Services
§ Staffing and Outsourcing Services
§ Technical Services
o Consumer Services
§ Personal Services
o Education and Training Services
o Entertainment and Recreation
§ CATV Systems
§ Diversified Entertainment
§ Gaming Activities
§ General Entertainment
§ Movie Production and Theaters
§ Sporting Activities
o Hospitality and Lodging
§ Lodging
§ Resorts and Casinos
o Publishing
§ Book Publishing
§ Newspaper Publishing
§ Periodical or Magazine Publishing
o Rental and Leasing Services
o Security and Protection Services
o Transportation and Logistics
§ Air Delivery and Freight Services
§ Major Airlines
§ Other Air Services
§ Railroads
§ Regional Airlines
§ Shipping
§ Trucking
· Technology and Communications
o Clean Technology and Energy
§ Air and Environment
§ Cleanup / Emissions Control
§ Monitoring / Compliance
§ Trading and Offsets
§ Energy Efficiency
§ Energy Efficient Buildings
§ Energy Efficient Glass
§ Energy Efficient Lighting
§ Energy Generation
§ Biofuels
§ Geothermal
§ Hydro / Marine
§ Other Energy Generation
§ Solar
§ Wind
§ Energy Infrastructure
§ Management
§ Other Energy Infrastructure
§ Transmission
§ Energy Storage
§ Advanced Batteries
§ Fuel Cells
§ Hybrid Systems
§ Recycling and Waste
§ Recycling
§ Waste Treatment
§ Transportation
§ Vehicles
§ Water and Wastewater
§ Water Conservation
§ Water Treatment
o Hardware, Electronics, and Equipment
§ Computers, Servers and Peripherals
§ Grid Computers
§ Grid Computing Equipment
§ High Performance Computers
§ Cluster Computers
§ Mainframes
§ Supercomputers
§ Peripherals
§ Displays
§ TFT-LCD Displays
§ User Interface Equipment
§ Personal, Mobile, and Phone Computers
§ Handhelds and Smartphones
§ Personal Computers
§ Ultra-mobile Personal Computers
§ Servers
§ Servers
§ Consumer Electronics
§ Calculators
§ Cameras
§ Equipment
§ Aviation Information Equipment
§ Call Center Equipment
§ Electronic Office Equipment
§ Electronic Office Equipment Leasing
§ Electronic Office Equipment Supplies
§ Printers, Copiers, Multi-function Devices
§ 3D Printers
§ Electronic Payment Equipment
§ Automated Teller Equipment
§ Bar Code Equipment
§ Point-of-Sale (POS) Systems
§ Hardware Design Equipment
§ Healthcare and Life Sciences Equipment
§ Anasthesia Systems
§ Blood Pressure Monitoring Systems
§ Healthcare and Life Sciences Imaging Systems
§ Medical Imaging Systems
§ Ultrasound Systems
§ Lighting Equipment and Projectors
§ Projectors
§ Theatre Projectors
§ Lottery Games Equipment
§ Manufacturing Equipment
§ Semiconductor Manufacturing Equipment
§ Semiconductor Test Equipment
§ Optoelectronics
§ Power Management Systems
§ Scientific Equipment
§ RF Testing Equipment
§ Security and Detection Equipment
§ Biometric Readers
§ Security Tokens
§ Smart Cards and Smart Card Chips
§ Weapons, Explosives, and Drugs Detection Equipment
§ Solar Energy Power Equipment
o IT Services
§ Business Process Outsourcing (BPO)
§ Call Center / Customer Relationship Management (CRM) Outsourcing
§ Claims Processing Outsourcing
§ Logistics Outsourcing
§ Payroll and Retirement Outsourcing
§ Procurement and Supply Chain Outsourcing
§ Government Contractor
§ HR and Staffing
§ Technical Staffing
§ IT Consulting
§ E-commerce Consulting
§ IT Strategy Consulting
§ IT Systems Design
§ Security Consulting
§ Supply Chain and Procurement Consulting
§ Systems Integration Services
§ IT Market Research
§ IT Outsourcing / Managed Services
§ Application Management Outsourcing
§ Datacenter Management Services
§ Engineering Outsourcing
§ Hosted Data and Server Centers
§ Messaging and Communications Outsourcing
§ Network Management and Testing
§ IT Product Development and Testing
§ Semiconductor Assembly, Manufacturing, and Test
§ Semiconductor Test and Packaging
§ Software Development Services
§ Software QA and Testing
§ Web Site Development Services
§ IT Resellers
§ Product-based Professional Services Organization
§ Value-Added Reseller (VAR)
o Materials Science
§ Bio Materials
§ Ceramics
§ Chemical Materials
§ Composites
§ Nano Materials
§ Other Materials
o Networking and Communications
§ Broadband Networking Equipment
§ Broadband Gateway Equipment
§ Digital Subscriber Line (DSL) Equipment
§ Optical Networking Equipment
§ Triple Play Networking Equipment (Voice, Video, Data)
§ Wireless / Cellular Broadbank Networking Equipment
§ Cable Technology
§ Cable Middleware
§ Video-On-Demand Technology
§ Computer, Server, and Storage Interconnects
§ Fibre Channel
§ Infiniband
§ PCI Express
§ SCSI
§ iSCSI
§ Serial ATA
§ Internet Networking Equipment
§ Internet Hubs and Switches
§ Internet Routers
§ Voice-over-IP (VOIP) Networking Equipment
§ Local Area Network (LAN) Technology
§ Ethernet Networking Equipment
§ Home Networking and Automation
§ Telephone Technology
§ Teleconferencing and Videoconferencing
§ Telephone Networking Equipment
§ Telephone Multiplexors and Concentrators
§ Telephones
§ Conferencing Phones
§ Mobile, Handheld, and Smart Phones
§ Telephone Peripherals and Headsets
§ VOIP Phones
§ Televisions and Related Equipment
§ Interactive Television
§ Interactive Television Games
§ Personal Video Recorders
§ Set-Top Boxes
§ Wireless Networking Equipment
§ Cellular Networking Equipment
§ Communication Tower Leasing
§ Global Positioning Satellite (GPS) Technology
§ Radio Frequency Identification (RFID) Technology
§ Satellite Equipment, Services, and Rentals
§ WiMAX
§ Wireless Local Area Networks (WLANs)
§ Wireless Routers and Hubs
§ Wireless Transmitters and Antennae
§ Wireless Wide Area Networks (WWANs)
o Semiconductors
§ Application Specific Integrated Circuits (ASICs) / Systems-on-a-Chip
§ Audio, Video, Graphics, and Display Chips
§ Audio Rendering and Surround Sound
§ Digital Subscriber Line (DSL) Chips
§ Flat Panel Display Chips
§ Image Sensor and Camera Chips
§ Noise Reduction
§ Video Decoder Chips
§ Voice-over-IP (VOIP) Chips
§ Life Sciences Systems-on-a-Chip
§ Mobile / Cell Phone Chips
§ Networking, Communications, RF and Wireless Chips
§ Bluetooth Chips
§ Global Positioning Satellite (GPS) Technology Chips
§ Wireless Networking Chips
§ PCI Chips
§ Portable Media Player Chips
§ USB Chips
§ Integrated Circuits
§ Active and Passive Components
§ Analog Chips
§ Digital Signal Processor (DSP) Chips
§ Linear Chips
§ Amplifier Chips
§ Attenuator Chips
§ Capacitor Chips
§ Data Converter Chips
§ Interface Chips
§ Multiplexer Chips
§ Phase Shifter Chips
§ Power Management Chips
§ Power Converter Chips
§ Security and Encryption Chips
§ Smart Cards and Smart Card Chips
§ Timing Chips
§ Logic Chips
§ Field Programmable Gate Arrays (FPGAs)
§ Programmable Logic Devices (PLDs)
§ Microelectromechanical Systems (MEMs)
§ Microprocessors, Microcontrollers, and DSP
§ Programmable Graphics Processors
§ Reduced Instruction Set Computer (RISC) Chips
§ Mixed Signal Chips
§ Nanotechnology Chips
§ Photovoltaic Chips
§ Sensor Chips
§ Image Sensor and Camera Chips
§ Semiconductor Design
§ Fabless Semiconductor (Research and Design) Companies
§ Semiconductor Parts and Materials
§ Diode Manufacturer
§ Light Emitting Diode Manufacturer
§ Wafers
§ Storage / Memory Chips
§ DRAM
§ Electronically Erasable Programabble Read Only Memory (EEPROM)
§ Electronically Programmable Read Only Memory (EPROM)
§ FLASH
§ NAND Flash
§ NOR Flash
§ RAID Chips
§ SD Chips
§ Specialized Memory Chips
§ FRAM
§ MRAM
§ NROM
§ SRAM
o Software and Internet Technology
§ Enterprise
§ Application Software
§ Business Intelligence Software
§ Information Discovery Software
§ Call Center Automation Software
§ Collaboration Software
§ Computer Aided Drafting Software (CAD)
§ Electronic Design Automation (EDA)
§ Customer Relationship Management (CRM) Software
§ Billing Software
§ Contract Management Software
§ Loyalty Software
§ Document and Content Management Software
§ Enterprise Resource Planning (ERP) Software
§ Non-profit Management Software
§ Travel and Expense Management Software
§ Enterprise Search Software
§ Human Resources (HR) Software
§ Compensation and Incentive Management Software
§ Recruiting Software
§ Mapping and GIS Software
§ Marketing and PR Software
§ Marketing Analytics
§ Public Relations (PR) Technology
§ Media, Graphics and Publishing Software
§ Audio, Video and Media Editing Software
§ Font Software
§ Media Player Software
§ Music Production and Editing Software
§ Printer Software
§ Publishing, Drawing and Graphics Software
§ Scanning and Image Capture Software
§ Web Development Software
§ Product Lifecycle Management (PLM) Software
§ Software Product Lifecycle Management Software
§ Productivity Software
§ Browser
§ E-mail Software
§ Fax Software
§ Office Productivity Software (Word Processing, Spreadsheets, Etc.)
§ Personal Financial Software
§ Speech and Voice Recognition
§ Interactive Voice Recognition (IVR)
§ Unified Messaging Software
§ Service Management and Helpdesk Software
§ Service Management Software
§ Supply Chain Management (SCM) and Procurement
§ Logistics Software
§ Fleet Management Software
§ Work Flow Software
§ Business Process Management Software
§ Service and Workforce Management Software
§ Infrastructure Software
§ Data and Information Management
§ Auditing and Change Management Software
§ Business Intelligence Software
§ Information Discovery Software
§ Data Synchronization Software
§ Database and Storage Software
§ Business Intelligence Software
§ Data Mining Software
§ Database Management
§ Extract, Transform, and Load (ETL) Software
§ Storage Management and Recovery
§ Continuous Data Protection (CDP) Software
§ Datacenter Management Software
§ Fraud Detection Software
§ Network Infrastructure Software
§ Bandwidth Shaping and Optimization
§ Grid Computing Software
§ Network Monitoring Software
§ Telecommunications, Wireless, Cellular Infrastructure Management Software
§ Wireless Network Infrastructure Software
§ Security Software
§ Anti-phishing
§ Anti-SPAM
§ Anti-Spy Ware
§ Anti-virus
§ Authentication and Identity Management Software
§ Digital Certificates
§ HID / Physical Proximity Software
§ Provisioning and Password Management
§ Security Token Software
§ Single Sign-On (SSO) Software
§ Smart Card Software
§ Web Access Management (WAM)
§ Biometrics software
§ Content Filtering
§ Digital Rights Management (DRM)
§ Directory Software
§ Encryption
§ End-point Security Software
§ Firewall
§ ID and Document Verification Software
§ Intrusion Detection and Prevention
§ Patching
§ Policy Compliance
§ Public Key Infrastructure (PKI)
§ Security Management Software
§ Virtual Private Network Software (VPN)
§ Systems and Asset Management Software
§ Application Discovery Software
§ Asset Management Software
§ Fleet Management Software
§ Mainframe Management Software
§ Systems Performance Optimization and Planning
§ Systems Integration Software / Middleware
§ Application Virtualization Software
§ Electronic Data Interchange (EDI)
§ Mainframe Integration Software
§ Mobile Device Middleware
§ Service Oriented Architecture (SOA) Software
§ Terminal Server Software
§ XML Software
§ Virtual Machine / Virtualization Software
§ Wireless and Cellular Platform Software
§ Mobile Browser
§ Mobile E-mail Software
§ Short Message Service (SMS)
§ Wireless Network Infrastructure Software
§ Vertical Software
§ Education and Training Software
§ Campus Automation Software
§ Course Management Software
§ Educational Content and Training Software
§ Financial Services Software
§ Electronic Payment and Transaction Processing
§ Insurance Software
§ Electronic Claims Processing
§ Government Process Automation Software
§ Hospitality Software
§ Legal Software
§ Manufacturing Software
§ Medical and Life Sciences Software
§ Bioinformatics Software
§ Clinical Trials Software
§ Electronic Claims Processing
§ Electronic Health Record Management
§ Electronic Prescription Management
§ Healthcare Software
§ Medical Imaging Software
§ Telemedicine Software
§ Real Estate Software
§ Retail / Commerce Software
§ Scientific Software
§ Physics Simulation Software
§ Sensor Software
§ Statistical Software
§ Telecommunications Software
§ Transporation Software
§ Automobile Leasing and Financing Software
§ Automobile Retail Software
§ Travel Software
§ Utilities Software
§ Gaming Software
§ Action and Adventure Games
§ Action Sports Games
§ Console Gaming
§ First-Person Action Games
§ Internet Gaming
§ Massively Multiplayer Online Games (MMOGs)
§ Massively Multiplayer Online Role Playing Games (MMORPGs)
§ Online Gambling
§ Lottery Software
§ Mobile Gaming
§ PC Gaming
§ Racing Games
§ Role-Playing Games
§ Simulation Games
§ Strategy Games
§ Internet Access and Technology
§ Internet Access
§ Internet Service Providers / ISPs
§ Voice-over-IP / VOIP Service Providers
§ Wireless Internet Service Providers / WISPs
§ Satellite ISPs
§ Wi-Fi ISPs
§ Wi-Max ISPs
§ Internet Advertising Solutions
§ Affiliate Marketing
§ E-mail Marketing
§ Internet Search Advertising
§ Online Advertising Network
§ Qualified Lead Generation
§ Search Engine Optimization (SEO)
§ Internet Infrastructure Solutions
§ Bandwidth shaping and optimization
§ Domain Name Registrar
§ Electronic Data Transfer
§ Electronic Payment and Transaction Processing
§ Internet Platform Software
§ E-commerce Platform Software
§ Internet Protocol Television (IPTV)
§ Marketing Analytics
§ Mobile Commerce Platform Software
§ Search Engine Software
§ Video-over-IP
§ Voice-over-IP (VOIP) Software
§ Web Analytics
§ Web Content Management
§ Web Development Software
§ Web Integration Platform
§ Internet Search
§ Video Search
§ Internet Commerce and Content
§ E-commerce
§ Mobile Commerce
§ Online Classifieds / Listing Service
§ Online Payment Processing
§ Online Retailer
§ Online Wholesaler
§ Internet Networking and Community Sites
§ Internet Portals
§ Healthcare Portal
§ Job Search Portal
§ Photo Sharing Portal
§ Social Networking
§ Travel Portal
§ Video Sharing Portal
§ Media and Publishing
§ Audio and Video Content
§ Mobile Ringtones
§ Education and Training
§ Information Services
§ Credit Information
§ Educational Content and Training Software
§ Financial Information Service
§ Geographical / Mapping Content
§ Personal Information and Records
§ Market Research
§ Mobile Content
§ Open Source Software
§ Linux Software
§ Operating Systems and Low Level Software
§ Compression / Decompression Software (Codec)
§ Embedded Software (Firmware)
§ Operating Systems
§ Mobile Operating Systems
§ Software Drivers
§ Utility Software
§ Software as a Service (SaaS)
§ Software Development Software
§ Application Development Software
§ Console Gaming
§ Embedded Software (Firmware) Development Tools
§ Programming Language
§ Software Design and Data Modeling
§ Test and QA (Quality Assurance) Software
§ Web Development Software
o Storage Technology
§ Content Addressed Storage (CAS)
§ Continuous Data Protection (CDP)
§ Direct Attached Storage
§ Floppy Disks
§ Hard Drives
§ Network Attached Storage (NAS)
§ Optical Storage Systems
§ Redundant Array of Inexpensive Disks (RAID)
§ Storage Area Network (SAN)
§ Tape Backup Systems
§ Thumb Drives
o Technology Investment Companies
§ Life Sciences Investing
§ Nanotechnology Investing
§ Software and Internet Investing
· Utilities
o Diversified Utilities
o Electric Utilities
o Foreign Utilities
o Gas Utilities
o Water Utilities
· Wholesale
o Auto Parts Wholesale
o Basic Materials Wholesale
o Building Materials Wholesale
o Computer Wholesalers
o Drugs Wholesale
o Electronics Wholesale
o Food Wholesale
o Industrial Equipment Wholesale
o Medical Equipment Wholesale
o Other WholesaleVenture Returns Sector Breakdown
· Aerospace and Defense
o Major Defense Contractors
o Specialized Government and Defense Companies
· Basic Materials
o Chemicals
§ Agricultural Chemicals
§ Diversified Chemicals
§ Specialty Chemicals
o Metals
§ Aluminum
§ Copper
§ Gold
§ Industrial Metals and Minerals
§ Silver
§ Steel and Iron
o Non-Metals
§ Non-metallic Mineral Mining
§ Oil and Gas
§ Independent Oil and Gas
§ Integrated Oil and Gas
§ Oil and Gas Drilling and Exploration
§ Oil and Gas Equipment and Services
§ Oil and Gas Exploration
§ Oil and Gas Pipelines
§ Oil and Gas Refining and Marketing
§ Synthetics
· Construction and Real Estate (Under Development)
o Building Materials
§ Cement
§ General Building Materials
§ Metal Fabrication
o Construction
§ General Contractors
§ Heavy Construction
§ Manufactured Housing
§ Residential Construction
o Real Estate
§ Property Management
§ Real Estate Development
§ REITs
§ REIT--Diversified
§ REIT--Healthcare Facilities
§ REIT--Hotels and Motels
§ REIT--Industrial
§ REIT--Office
§ REIT--Residential
§ REIT--Retail
· Finance and Insurance (Under Development)
o Asset Management and Brokerage
§ Asset Management
§ Closed End Debt Funds
§ Closed End Domestic Equity Funds (Private Equity / VC)
§ Closed End Foreign Equity Funds
§ General Asset Management
§ Hedge Funds and Diversified Investments
§ Private Equity
§ Venture Capital
§ Brokerage
§ National Investment Brokerage
§ Regional Investment Brokerage
o Banking
§ Foreign Money Center Banks
§ Foreign Regional Banks
§ Money Center Banks
§ Regional Banks
§ Savings and Loan Institutions
o Credit Services
o Insurance
§ Health and Accident Insurance
§ Insurance Brokers
§ Life Insurance
§ Property and Casualty Insurance
§ Surety and Title Insurance
· Food and Agriculture
o Cigarettes and Tobacco
§ Cigarettes
§ Tobacco
o Food and Beverages
§ Beverages
§ Brewers
§ Soft Drinks
§ Wineries and Distillers
§ Food
§ Confectioners
§ Dairy Products
§ Farm Products
§ General Food Manufacturers
§ Meat Products
§ Packaging and Containers
§ Processed and Packaged Goods
· Healthcare
o Payers
§ Health Care Plans
o Providers
§ Biotechnology
§ Diagnostic Substances
§ Diversified Biotechnology
§ Healthcare Services
§ Home Health and Hospice Care
§ Hospitals
§ Long-Term Care Facilities
§ Medical Laboratories and Research
§ Medical Practitioners
§ Specialized Health Services
§ Medical Devices, Systems, Instruments, and Supplies
§ Drug Delivery
§ Medical Devices and Equipment
§ Medical Instruments and Supplies
§ Pharmaceuticals
§ Drug Manufacturers
§ Drug Related Products
§ Generic Drugs
· Manufacturing
o Business and Office Goods
§ Business Equipment
§ Office Supplies
o Cleaning Products
o Clothing and Textiles
§ Apparel Clothing
§ Apparel Footwear and Accessories
o Electronic Equipment
o Home Goods
§ Appliances
§ Home Furnishings and Fixtures
§ Houseware and Accessories
o Industrial Equipment
§ Industrial Electrical Equipment
§ Industrial Equipment and Components
§ Machinery
§ Diversified Machinery
§ Small Tools and Accessories
§ Farm and Construction Machinery
§ Machine Tools and Accessories
o Paper and Paper Products
o Personal Products
o Photographic Equipment and Supplies
o Pollution and Treatment Controls
o Recreational Goods
§ Sporting Goods
§ Toys and Games
o Rubber and Plastics
o Textile Industrial Goods and Services
o Vehicles and Vehicle Parts
§ Auto Manufacturers
§ Auto Parts
§ Recreational Vehicles
§ Trucks and Other Vehicles
o Waste Management
· Retail
o Apparel Stores
o Auto Dealerships
o Auto Parts Stores
o Catalog and Mail Order Houses
o Department Stores
o Discount and Variety Stores
o Drug Stores
o Electronics Stores
o Grocery Stores
o Home Furnishing Stores
o Home Improvement Stores
o Jewelry Stores
o Music and Video Stores
o Restaurants
o Specialty Eateries
o Specialty Retail
o Sporting Goods Stores
o Toy and Hobby Stores
· Services
o Broadcasting
§ Radio Broadcasting
§ TV Broadcasting
o Business Services
§ Advertising Agencies
§ Management Services and Consulting
§ Marketing Services
§ Research Services
§ Staffing and Outsourcing Services
§ Technical Services
o Consumer Services
§ Personal Services
o Education and Training Services
o Entertainment and Recreation
§ CATV Systems
§ Diversified Entertainment
§ Gaming Activities
§ General Entertainment
§ Movie Production and Theaters
§ Sporting Activities
o Hospitality and Lodging
§ Lodging
§ Resorts and Casinos
o Publishing
§ Book Publishing
§ Newspaper Publishing
§ Periodical or Magazine Publishing
o Rental and Leasing Services
o Security and Protection Services
o Transportation and Logistics
§ Air Delivery and Freight Services
§ Major Airlines
§ Other Air Services
§ Railroads
§ Regional Airlines
§ Shipping
§ Trucking
· Technology and Communications
o Clean Technology and Energy
§ Air and Environment
§ Cleanup / Emissions Control
§ Monitoring / Compliance
§ Trading and Offsets
§ Energy Efficiency
§ Energy Efficient Buildings
§ Energy Efficient Glass
§ Energy Efficient Lighting
§ Energy Generation
§ Biofuels
§ Geothermal
§ Hydro / Marine
§ Other Energy Generation
§ Solar
§ Wind
§ Energy Infrastructure
§ Management
§ Other Energy Infrastructure
§ Transmission
§ Energy Storage
§ Advanced Batteries
§ Fuel Cells
§ Hybrid Systems
§ Recycling and Waste
§ Recycling
§ Waste Treatment
§ Transportation
§ Vehicles
§ Water and Wastewater
§ Water Conservation
§ Water Treatment
o Hardware, Electronics, and Equipment
§ Computers, Servers and Peripherals
§ Grid Computers
§ Grid Computing Equipment
§ High Performance Computers
§ Cluster Computers
§ Mainframes
§ Supercomputers
§ Peripherals
§ Displays
§ TFT-LCD Displays
§ User Interface Equipment
§ Personal, Mobile, and Phone Computers
§ Handhelds and Smartphones
§ Personal Computers
§ Ultra-mobile Personal Computers
§ Servers
§ Servers
§ Consumer Electronics
§ Calculators
§ Cameras
§ Equipment
§ Aviation Information Equipment
§ Call Center Equipment
§ Electronic Office Equipment
§ Electronic Office Equipment Leasing
§ Electronic Office Equipment Supplies
§ Printers, Copiers, Multi-function Devices
§ 3D Printers
§ Electronic Payment Equipment
§ Automated Teller Equipment
§ Bar Code Equipment
§ Point-of-Sale (POS) Systems
§ Hardware Design Equipment
§ Healthcare and Life Sciences Equipment
§ Anasthesia Systems
§ Blood Pressure Monitoring Systems
§ Healthcare and Life Sciences Imaging Systems
§ Medical Imaging Systems
§ Ultrasound Systems
§ Lighting Equipment and Projectors
§ Projectors
§ Theatre Projectors
§ Lottery Games Equipment
§ Manufacturing Equipment
§ Semiconductor Manufacturing Equipment
§ Semiconductor Test Equipment
§ Optoelectronics
§ Power Management Systems
§ Scientific Equipment
§ RF Testing Equipment
§ Security and Detection Equipment
§ Biometric Readers
§ Security Tokens
§ Smart Cards and Smart Card Chips
§ Weapons, Explosives, and Drugs Detection Equipment
§ Solar Energy Power Equipment
o IT Services
§ Business Process Outsourcing (BPO)
§ Call Center / Customer Relationship Management (CRM) Outsourcing
§ Claims Processing Outsourcing
§ Logistics Outsourcing
§ Payroll and Retirement Outsourcing
§ Procurement and Supply Chain Outsourcing
§ Government Contractor
§ HR and Staffing
§ Technical Staffing
§ IT Consulting
§ E-commerce Consulting
§ IT Strategy Consulting
§ IT Systems Design
§ Security Consulting
§ Supply Chain and Procurement Consulting
§ Systems Integration Services
§ IT Market Research
§ IT Outsourcing / Managed Services
§ Application Management Outsourcing
§ Datacenter Management Services
§ Engineering Outsourcing
§ Hosted Data and Server Centers
§ Messaging and Communications Outsourcing
§ Network Management and Testing
§ IT Product Development and Testing
§ Semiconductor Assembly, Manufacturing, and Test
§ Semiconductor Test and Packaging
§ Software Development Services
§ Software QA and Testing
§ Web Site Development Services
§ IT Resellers
§ Product-based Professional Services Organization
§ Value-Added Reseller (VAR)
o Materials Science
§ Bio Materials
§ Ceramics
§ Chemical Materials
§ Composites
§ Nano Materials
§ Other Materials
o Networking and Communications
§ Broadband Networking Equipment
§ Broadband Gateway Equipment
§ Digital Subscriber Line (DSL) Equipment
§ Optical Networking Equipment
§ Triple Play Networking Equipment (Voice, Video, Data)
§ Wireless / Cellular Broadbank Networking Equipment
§ Cable Technology
§ Cable Middleware
§ Video-On-Demand Technology
§ Computer, Server, and Storage Interconnects
§ Fibre Channel
§ Infiniband
§ PCI Express
§ SCSI
§ iSCSI
§ Serial ATA
§ Internet Networking Equipment
§ Internet Hubs and Switches
§ Internet Routers
§ Voice-over-IP (VOIP) Networking Equipment
§ Local Area Network (LAN) Technology
§ Ethernet Networking Equipment
§ Home Networking and Automation
§ Telephone Technology
§ Teleconferencing and Videoconferencing
§ Telephone Networking Equipment
§ Telephone Multiplexors and Concentrators
§ Telephones
§ Conferencing Phones
§ Mobile, Handheld, and Smart Phones
§ Telephone Peripherals and Headsets
§ VOIP Phones
§ Televisions and Related Equipment
§ Interactive Television
§ Interactive Television Games
§ Personal Video Recorders
§ Set-Top Boxes
§ Wireless Networking Equipment
§ Cellular Networking Equipment
§ Communication Tower Leasing
§ Global Positioning Satellite (GPS) Technology
§ Radio Frequency Identification (RFID) Technology
§ Satellite Equipment, Services, and Rentals
§ WiMAX
§ Wireless Local Area Networks (WLANs)
§ Wireless Routers and Hubs
§ Wireless Transmitters and Antennae
§ Wireless Wide Area Networks (WWANs)
o Semiconductors
§ Application Specific Integrated Circuits (ASICs) / Systems-on-a-Chip
§ Audio, Video, Graphics, and Display Chips
§ Audio Rendering and Surround Sound
§ Digital Subscriber Line (DSL) Chips
§ Flat Panel Display Chips
§ Image Sensor and Camera Chips
§ Noise Reduction
§ Video Decoder Chips
§ Voice-over-IP (VOIP) Chips
§ Life Sciences Systems-on-a-Chip
§ Mobile / Cell Phone Chips
§ Networking, Communications, RF and Wireless Chips
§ Bluetooth Chips
§ Global Positioning Satellite (GPS) Technology Chips
§ Wireless Networking Chips
§ PCI Chips
§ Portable Media Player Chips
§ USB Chips
§ Integrated Circuits
§ Active and Passive Components
§ Analog Chips
§ Digital Signal Processor (DSP) Chips
§ Linear Chips
§ Amplifier Chips
§ Attenuator Chips
§ Capacitor Chips
§ Data Converter Chips
§ Interface Chips
§ Multiplexer Chips
§ Phase Shifter Chips
§ Power Management Chips
§ Power Converter Chips
§ Security and Encryption Chips
§ Smart Cards and Smart Card Chips
§ Timing Chips
§ Logic Chips
§ Field Programmable Gate Arrays (FPGAs)
§ Programmable Logic Devices (PLDs)
§ Microelectromechanical Systems (MEMs)
§ Microprocessors, Microcontrollers, and DSP
§ Programmable Graphics Processors
§ Reduced Instruction Set Computer (RISC) Chips
§ Mixed Signal Chips
§ Nanotechnology Chips
§ Photovoltaic Chips
§ Sensor Chips
§ Image Sensor and Camera Chips
§ Semiconductor Design
§ Fabless Semiconductor (Research and Design) Companies
§ Semiconductor Parts and Materials
§ Diode Manufacturer
§ Light Emitting Diode Manufacturer
§ Wafers
§ Storage / Memory Chips
§ DRAM
§ Electronically Erasable Programabble Read Only Memory (EEPROM)
§ Electronically Programmable Read Only Memory (EPROM)
§ FLASH
§ NAND Flash
§ NOR Flash
§ RAID Chips
§ SD Chips
§ Specialized Memory Chips
§ FRAM
§ MRAM
§ NROM
§ SRAM
o Software and Internet Technology
§ Enterprise
§ Application Software
§ Business Intelligence Software
§ Information Discovery Software
§ Call Center Automation Software
§ Collaboration Software
§ Computer Aided Drafting Software (CAD)
§ Electronic Design Automation (EDA)
§ Customer Relationship Management (CRM) Software
§ Billing Software
§ Contract Management Software
§ Loyalty Software
§ Document and Content Management Software
§ Enterprise Resource Planning (ERP) Software
§ Non-profit Management Software
§ Travel and Expense Management Software
§ Enterprise Search Software
§ Human Resources (HR) Software
§ Compensation and Incentive Management Software
§ Recruiting Software
§ Mapping and GIS Software
§ Marketing and PR Software
§ Marketing Analytics
§ Public Relations (PR) Technology
§ Media, Graphics and Publishing Software
§ Audio, Video and Media Editing Software
§ Font Software
§ Media Player Software
§ Music Production and Editing Software
§ Printer Software
§ Publishing, Drawing and Graphics Software
§ Scanning and Image Capture Software
§ Web Development Software
§ Product Lifecycle Management (PLM) Software
§ Software Product Lifecycle Management Software
§ Productivity Software
§ Browser
§ E-mail Software
§ Fax Software
§ Office Productivity Software (Word Processing, Spreadsheets, Etc.)
§ Personal Financial Software
§ Speech and Voice Recognition
§ Interactive Voice Recognition (IVR)
§ Unified Messaging Software
§ Service Management and Helpdesk Software
§ Service Management Software
§ Supply Chain Management (SCM) and Procurement
§ Logistics Software
§ Fleet Management Software
§ Work Flow Software
§ Business Process Management Software
§ Service and Workforce Management Software
§ Infrastructure Software
§ Data and Information Management
§ Auditing and Change Management Software
§ Business Intelligence Software
§ Information Discovery Software
§ Data Synchronization Software
§ Database and Storage Software
§ Business Intelligence Software
§ Data Mining Software
§ Database Management
§ Extract, Transform, and Load (ETL) Software
§ Storage Management and Recovery
§ Continuous Data Protection (CDP) Software
§ Datacenter Management Software
§ Fraud Detection Software
§ Network Infrastructure Software
§ Bandwidth Shaping and Optimization
§ Grid Computing Software
§ Network Monitoring Software
§ Telecommunications, Wireless, Cellular Infrastructure Management Software
§ Wireless Network Infrastructure Software
§ Security Software
§ Anti-phishing
§ Anti-SPAM
§ Anti-Spy Ware
§ Anti-virus
§ Authentication and Identity Management Software
§ Digital Certificates
§ HID / Physical Proximity Software
§ Provisioning and Password Management
§ Security Token Software
§ Single Sign-On (SSO) Software
§ Smart Card Software
§ Web Access Management (WAM)
§ Biometrics software
§ Content Filtering
§ Digital Rights Management (DRM)
§ Directory Software
§ Encryption
§ End-point Security Software
§ Firewall
§ ID and Document Verification Software
§ Intrusion Detection and Prevention
§ Patching
§ Policy Compliance
§ Public Key Infrastructure (PKI)
§ Security Management Software
§ Virtual Private Network Software (VPN)
§ Systems and Asset Management Software
§ Application Discovery Software
§ Asset Management Software
§ Fleet Management Software
§ Mainframe Management Software
§ Systems Performance Optimization and Planning
§ Systems Integration Software / Middleware
§ Application Virtualization Software
§ Electronic Data Interchange (EDI)
§ Mainframe Integration Software
§ Mobile Device Middleware
§ Service Oriented Architecture (SOA) Software
§ Terminal Server Software
§ XML Software
§ Virtual Machine / Virtualization Software
§ Wireless and Cellular Platform Software
§ Mobile Browser
§ Mobile E-mail Software
§ Short Message Service (SMS)
§ Wireless Network Infrastructure Software
§ Vertical Software
§ Education and Training Software
§ Campus Automation Software
§ Course Management Software
§ Educational Content and Training Software
§ Financial Services Software
§ Electronic Payment and Transaction Processing
§ Insurance Software
§ Electronic Claims Processing
§ Government Process Automation Software
§ Hospitality Software
§ Legal Software
§ Manufacturing Software
§ Medical and Life Sciences Software
§ Bioinformatics Software
§ Clinical Trials Software
§ Electronic Claims Processing
§ Electronic Health Record Management
§ Electronic Prescription Management
§ Healthcare Software
§ Medical Imaging Software
§ Telemedicine Software
§ Real Estate Software
§ Retail / Commerce Software
§ Scientific Software
§ Physics Simulation Software
§ Sensor Software
§ Statistical Software
§ Telecommunications Software
§ Transporation Software
§ Automobile Leasing and Financing Software
§ Automobile Retail Software
§ Travel Software
§ Utilities Software
§ Gaming Software
§ Action and Adventure Games
§ Action Sports Games
§ Console Gaming
§ First-Person Action Games
§ Internet Gaming
§ Massively Multiplayer Online Games (MMOGs)
§ Massively Multiplayer Online Role Playing Games (MMORPGs)
§ Online Gambling
§ Lottery Software
§ Mobile Gaming
§ PC Gaming
§ Racing Games
§ Role-Playing Games
§ Simulation Games
§ Strategy Games
§ Internet Access and Technology
§ Internet Access
§ Internet Service Providers / ISPs
§ Voice-over-IP / VOIP Service Providers
§ Wireless Internet Service Providers / WISPs
§ Satellite ISPs
§ Wi-Fi ISPs
§ Wi-Max ISPs
§ Internet Advertising Solutions
§ Affiliate Marketing
§ E-mail Marketing
§ Internet Search Advertising
§ Online Advertising Network
§ Qualified Lead Generation
§ Search Engine Optimization (SEO)
§ Internet Infrastructure Solutions
§ Bandwidth shaping and optimization
§ Domain Name Registrar
§ Electronic Data Transfer
§ Electronic Payment and Transaction Processing
§ Internet Platform Software
§ E-commerce Platform Software
§ Internet Protocol Television (IPTV)
§ Marketing Analytics
§ Mobile Commerce Platform Software
§ Search Engine Software
§ Video-over-IP
§ Voice-over-IP (VOIP) Software
§ Web Analytics
§ Web Content Management
§ Web Development Software
§ Web Integration Platform
§ Internet Search
§ Video Search
§ Internet Commerce and Content
§ E-commerce
§ Mobile Commerce
§ Online Classifieds / Listing Service
§ Online Payment Processing
§ Online Retailer
§ Online Wholesaler
§ Internet Networking and Community Sites
§ Internet Portals
§ Healthcare Portal
§ Job Search Portal
§ Photo Sharing Portal
§ Social Networking
§ Travel Portal
§ Video Sharing Portal
§ Media and Publishing
§ Audio and Video Content
§ Mobile Ringtones
§ Education and Training
§ Information Services
§ Credit Information
§ Educational Content and Training Software
§ Financial Information Service
§ Geographical / Mapping Content
§ Personal Information and Records
§ Market Research
§ Mobile Content
§ Open Source Software
§ Linux Software
§ Operating Systems and Low Level Software
§ Compression / Decompression Software (Codec)
§ Embedded Software (Firmware)
§ Operating Systems
§ Mobile Operating Systems
§ Software Drivers
§ Utility Software
§ Software as a Service (SaaS)
§ Software Development Software
§ Application Development Software
§ Console Gaming
§ Embedded Software (Firmware) Development Tools
§ Programming Language
§ Software Design and Data Modeling
§ Test and QA (Quality Assurance) Software
§ Web Development Software
o Storage Technology
§ Content Addressed Storage (CAS)
§ Continuous Data Protection (CDP)
§ Direct Attached Storage
§ Floppy Disks
§ Hard Drives
§ Network Attached Storage (NAS)
§ Optical Storage Systems
§ Redundant Array of Inexpensive Disks (RAID)
§ Storage Area Network (SAN)
§ Tape Backup Systems
§ Thumb Drives
o Technology Investment Companies
§ Life Sciences Investing
§ Nanotechnology Investing
§ Software and Internet Investing
· Utilities
o Diversified Utilities
o Electric Utilities
o Foreign Utilities
o Gas Utilities
o Water Utilities
· Wholesale
o Auto Parts Wholesale
o Basic Materials Wholesale
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FAQs

noreply@blogger.com (VentureReturns) — Tue, 29 Apr 2008 16:01:00 +0000

I hope that this can become a place where we can answer some of the questions we get asked most frequently.

Valuation Service

How often are the comparables updated? We update the M&A comparables daily based on our own research and analysis. In general, we add over 60 deals / day and up to hundreds more historical deals. Public comparables are updated on a daily basis at approximately 2am in the morning PT. We may increase the frequency of updates and even add streaming updates at some point in the near future.
How reliable is your M&A data? We believe that our M&A data and research is _far_ better than any other service including some of our oldest competitors in this area--Thomson Financial, Bloomberg, CapitalIQ, Standard&Poors. While you will pay in excess of $10,000 / year for most of those services, you will pay a nominal monthly fee for ours. Our data is researched by highly skilled M&A analyst team and QAed by a Harvard MBA. Sometimes our data appears less reliable than other sources because we have invented the Internet's only system for harvesting "user generated content." We allow users to add to our M&A database. This allows us to harvest "whisper numbers" and other estimates for deals where otherwise there would be no information available. We are implementing a system of codes that will make it totally clear when you are looking at a "community" estimate versus an official VR estimate.
Can anybody enter deal data? Yes, this is one of the strongest advantages of our system. We are the first service to harvest whisper numbers for deals on the Internet. However, please be aware that we review all of these estimates and whenever reliable information is available, we also publish our own _official_ VR estimates.
Why is your M&A data stronger for technology companies? We originally built our database focused on technology companies (including clean tech). Subsequently, we have expanded to all sectors of the economy; however, we are still researching and adding historical deals in non-technology sectors. Our data in technology sectors goes back approximately 5 years.
Why do some of the folders in the Sector Tree say "Under Development"? See the answer to the question above. We are adding non-technology deals daily and building a very robust historical database. We have already added thousands of non-technology deals and we have built out the non-technology sector tree, though it lacks the level of granularity of the technology tree. We will get there, we just want to do it right, so until then, we want to signal to you that we are still developing that portion of our business.
Are there any demos to show me how to use the Valuation Service? Yes, we have built a series of Flash demos that show you how to use many aspects of the site, including the Valuation Service. You can find them here.
Does the system learn or make use of all comparables lists and valuations that users are creating? Absolutely. Again, this is one of the most unique features of our service. Every time a user creates a list of comparables, we share non-confidential aspects of that list with the entire community. Thus, if an investment banker in New York City has already created a comprehensive set of comparables for Wood Door Manufacturers, you can simply search for her list, find it, click on it, and use it. If a VC in Palo Alto has already created a list of comparables for social networking sites, you can find it, click it, and use it. If a hedge fund or private equity pro in London looked at oil refineries, you can benefit from that work. For full-blown company valuations, we do something a bit different. After multiple valuations of one company have been performed, we aggregate the information and make it available as an average. That way, we never share any sensitive information about the original valuation. In all cases, we would never share confidential information that could hurt a user. One more point here, within the valuation service, there is a link called "Recommend Companies." When you click on this link, they system will automatically recommend some comparables for you. For this to work, however, you have to have already added at least one comparable to your list.
How do I upgrade to Premium Membership? It is very simple to upgrade to premium membership. You will find a big link in the middle of the Valuation Service page where you can upgrade. You can also just click here. If you haven't registered or logged in, you will need to do that first.

Investor Directory, Fund Profiles, and Fund Reviews

How do I search for funds whose profiles I am interested in? There are many ways to search for funds. The simplest is to simply type in the name here. We use an AJAX search page that will automatically load potential hits as you type. You can also use a series of filters on this page to find funds in different states and to sort results by the fund rating or number of reviews, etc. We have an advanced search here. This allows you to find funds using much more sophisticated search strings.
I am an employee or partner at a fund and I want to add my fund to your database. How do I do that? You will need to register and log-in. You will need to register with an e-mail address that proves that you are indeed a member of the fund in question. E.g., if you work at Sequoia, your e-mail address root should be "sequoiacap.com". Once you have done that, simply click here and add your fund to our database. You will have the ability to "Edit" fund profile immediately.
What if I don't have an e-mail address for my fund but I still want to add / edit my fund profile? Venture Returns has an alternative authentication methodology. You can see it here. However, you should note that we don't promise rapid turnaround times in getting you authenticated if you use this alternative method. If you use the preferred method, you should be able to edit fund profiles immediately. If you use the alternative method, it could take several days for us to authenticate you.
What are fund reviews? Our fund reviews are ratings assigned to VC and Private Equity funds by entrepreneurs who have worked with them. Over 98% of the entrepreneurs who rate funds have received funding from the funds that they are reviewing.
How reliable are your fund reviews? We feel that our fund reviews are more reliable than any other fund reviews on the Internet. We began in 2004 with e-mail campaigns targeted at entrepreneurs that we knew had received funding from the fund we wanted to review. Even in the last few months our database has grown by over 50%. We feel that fund reviews are a critical and important aspect of getting feedback on a fund. That said, we believe that entrepreneurs should use many other sources of information. That is why we have performance and IRR information on hundreds of firms in our database. This is a metric of how successful the fund has been--in some ways this may be more important than the actual fund reviews. We also allow our users to see which funds are most popular in our system. This is another way to gauge the attractiveness of a fund.
How do you harvest your fund review data? We have to reserve some business secrets right (grin)? Suffice it to say that we use e-mail campaigns combined with a broad range of other efforts.

Company Directory, Company Directories and Company Reviews

How do I search for companies whose profiles I am interested in? Unfortunately our company search code isn't as sophisticated as our investor search code (see question #1 above). In its current implementation, you simply have to type in the name of the company you are interested in. We hope to remedy this soon. You can find the company search page here.

Venture Returns Demonstrations

noreply@blogger.com (VentureReturns) — Fri, 18 Apr 2008 00:18:00 +0000

Hello everybody. We have created some Adobe Flash demos for Venture Returns. These will help inexperienced users understand all of the features that are available and how to use them. Check back often as we will be adding more demos over time.

Valuation Service

The first set of demos will help you understand how to use the new valuation service.
How to value a company
How to search for public and M&A comparables
How to create and save a list of comparables
How to download to Excel, e-mail, and print a list of comparables
How to get VR to recommend additional comparables for your list

Add or Edit Company or Fund Profiles

These demos will help you to add or edit fund or company profiles. Here is an example of a fund profile for Google. Here is an example of a venture capital fund profile for Benchmark Capital. VR allows authorized representatives of these companies (and any other companies in our database) to edit their profiles. All you have to do is prove that you have a valid e-mail address at that company. By the same token, VR allows authorized representatives to add new profiles to our database of new companies. The following demos should help you through the process. Please note: before trying to add a company or fund profile, you should search to see if we have already loaded a profile for you. VR has over 12,000 profiles loaded. Companies should search here. Venture capital firms, private equity firms, and other investment firms should search here.
How to edit a company or fund profile
How to add a company or fund profile

Get Ready

noreply@blogger.com (VentureReturns) — Tue, 08 Jan 2008 07:20:00 +0000

I just wanted to say that I am massively excited about what we are working on right now at VR. Stay tuned because we are working on some really cool stuff that should be coming anytime now!

Prediction: The Decreasing Importance of Management Experience

noreply@blogger.com (VentureReturns) — Mon, 10 Dec 2007 04:16:00 +0000

I am sure that this will be a controversial post. VCs and private equity investors have long held that some variation of the following framework is the best to validate a potential investment:

Strength of the management team
Strength of the market dynamics (size, share, competition, etc.)
Strength of the product / service
Strength of the business model, financial results, balance sheet
Favorability of the deal terms

There is also widespread agreement (in my opinion) that of these criteria two are dramatically more important than the others (probably much more important than the others combined). These are management and market. This leads to one of the oldest questions in the industry: which is more imporant management or market. Put another way: should you bet on the jockey or the horse?

I think that the industry probably falls into two groups here: 75-80% of investors believe that management is the most important and 20-25% believe market is more important. I don't know if it is true but Sequoia capital has the reputation of falling into the latter category. It is a minority category but an important minority.

Generally speaking when VCs talk about the strength of the management team, they mean that the management team has certain credentials--directly relevant industry experience, previous startup experience. The CEO, who is equal in importance to probably the rest of the entire team combined, should probably be a serial, and serially successful, venture or private-equity backed entrepreneur.

I know that this is controversial but I think that for a broad range of startups the importance of management team experience is really starting to fade. I cite as examples basically every major Internet success story over the past 5 years from MySpace, to Mark Zuckerberg at Facebook, to Skype, to the Google guys, to Chad Hurley at YouTube, etc. It seems like the decreasing barriers to entrepreneurship, which, on the web, are falling faster that consumer confidence is right now, is creating a challenge to a centrally held tenet of the VC model for the past 50 years. But maybe youth or at least youthfulness in spirit has always a key factor in successful startups. Look at Bill Gates or Steve Jobs for example. Neither of these geniuses were serial entrepreneurs before starting their first major success. I don't know where I come down on this one just yet but I think it is an important and intriguing topic for debate.

The Beauty and Limitations of Multiples

noreply@blogger.com (VentureReturns) — Mon, 03 Dec 2007 14:01:00 +0000

OK, so let's talk multiples. I know that this is so exciting to some of you that you can hardly wait. In all seriousness though, multiples are one of the funnest parts of entrepreneurship, VC, and private equity. Multiples are put simply numbers that you can multiple against the operating metrics of a company (like revenue, EBITDA, cash flow, downloads, monthly unique visitors on a site, etc) that yield a rough valuation estimate for that company. We use multiples as the basis of our valuation work at http://www.venturereturns.com/. We kind of consider ourselves multiples junkies. So what is so exciting about multiples? Lots of things, so I will go into more detail here.

Simple to use. One of the coolest things about multiples is that they are simply to use. It is often very hard to find the right multiples, but once you find them, they make valuing a company easy. VR makes finding them easy for you (http://www.venturereturns.com/company_komp_builder.php?newFlag=N&pType=5). Now, for example, let's assume you are interested in the value of a particular Saas (software as a service, like Salesforce.com) company. Saas multiples are really high right now--generally between 6-8x revenue and 30-40x EBITDA. This means that if you have a Saas company doing $5M in revenue, it could be worth up to $30-40M.

Multiples yield business insight. Multiples can actually teach you a lot about different businesses. For example, they can basically tell you what the value of $1 of revenue in one kind of business is worth versus the same amount of revenue in another business. Again, let's take Saas as an example. Let's compare Saas to hardware companies. Hardware companies are lucky if they can get 0.8-1.5x revenue multiples. The revenue multiples teach us that $1 of revenue in a Saas business is worth about $6-8 of hardware business. This can be instructive as entrepreneurs are considering business opportunities, as VC and PE investors are looking at deals, and as businesses are making investment decisions. I can promise you that any investor worth his or her salt will think carefully about multiples. Most big institutional investors only want to make investments where they can reasonably expect a chance of at least a $100M exit. For larger funds, this can be an even bigger number. For Saas companies, you could expect this kind of exit by generating $12-17M in revenue. For hardware companies, you could only expect this kind of exit by generating $100M in revenue. BTW, this doesn't mean that you shouldn't start a hardware company necessarily--you had just better realize that it brings a unique set of challenges. For a variety of reasons you may want to couple a software company with a hardware company (think Blackberry). This kind of thinking is also helpful when you think about strategic investment decisions in a company. I was recently talking with an entrepreneur acquaintance who does generates 20% of his business from a traditional enterprise software product and 80% from a Saas product. The enterprise software product has much longer sales cycles, costs a lot more to manage and deploy, and is a giant pain to maintain relative to the Saas product. I told him that I thought every dollar of Saas revenue was worth $2-3 dollars of enterprise software revenue and that I would seriously consider abandoning any future sales of enterprise software just to focus on the Saas business. Maybe I was wrong but multiples can clearly inform this kind of thinking.

Multiples generally point to a leveraged exit. One of the exciting things about multiples is that they remind us that modern finance has taught us that indefinate streams of cash flow can be equated to a lump sum payment now. Further, we know that the lump sum payment now is generally bigger than the cash stream. This fact sits at the foundation of modern entrepeneurship on both the early-stage and late-stage sides of the camp. Nearly all venture or private-equity backed investors and entrepreneurs are not interested in creating busineses that simply generate a healthy cash flow indefinately. This might be nice for those entrepeneurs looking to create a lifestyle business but it doesn't work for investors because they have to give money back to their investors in some reasonable timeframe--typically within 5-7 years. So for VCs and private equity investors, they need to believe that they will be able to convert a cash flow stream into a lump sum return within about 5-7 years. Multiples remind us what we can reasonably expect here. The great news is that while you may not be able to live high on the hog while you are building your business, you should be able to look forward to a time when you get a really nice payment.

So what are the limitations of multiples?

I may have to talk about this more later because I promised my wife I would go downstairs. However, here are my initial thoughts. Obviously multiples are not a full blown analysis. In fact, they are not even close. At VR, we use a multiples-based method due to the scarcity of data on the companies we are valuing. While they aren't perfect at all we do believe that they can give enlightening information about valuation ranges, industry /company valuation trends, etc. At the end of the day some form of comprables analysis will always be the critical foundation to any valuation of a private company.

Demographics of Entrepreneurs

noreply@blogger.com (VentureReturns) — Wed, 21 Nov 2007 14:23:00 +0000

We recently pulled together some numbers about our user community at www.venturereturns.com. I thought that they were interesting not only because they told us something our user community but because I think that we have the most comprehensive data set on venture and private-equity backed entrepreneurs. This information provides some good insight into some key demographic end experience details about modern entrepreneurs.

Here are some key demographics from the www.venturereturns.com database. I find it interesting how few women entrepreneurs there still are. Maybe even more interesting is that, despite the really young entrepreneurs all over the news like the founders of YouTube, Facebook, etc., the average age of entrepreneurs is 47. Also interesting is that nearly 60% of those in our database are C-level executives. Finally, I would have guessed that the "typical" entrepreneur would have founded more companies. As it stands, the typical entrepreneur has only founded 1.5 companies.

Gender
Female: 7.7%
Male: 92.3%

Age
Under 25: 0.4%
26-30: 1.6%
31-35: 4.4%
36-40: 18.5%
41-50: 46.6%
51-60: 25.7%
61-70: 2.8%
70+: 0.0%
Average Age: 47

Current Role of the Entrepreneur
CEO: 28.6%
President or COO: 13.3%
CFO or equivalent: 14.1%
Head of Technology: 12.9%
Chief Scientist: 3.5%
General Counsel: 1.2%
Head of an Operating Unit: 6.3%
Head of Business Development: 9.4%
Head of Marketing: 5.9%
Head of Sales: 4.7%

Industry of Entrepreneur
Biopharmaceutical: 9.3%
Business Services: 2.3%
Computers and Electronics: 3.5%
Construction: 0.8%
Consumer Products: 2.3%
Defense: 0.8%
Financial Services: 0.4%
Healthcare Services: 5.8%
Information Systems: 3.5%
Insurance: 0.8%
Internet / SaaS: 7.8%
IT Services: 0.8%
Materials and Chemicals: 0.8%
Media: 1.2%
Medical Devices: 7.4%
Nanotechnology: 0.8%
Networking Technology: 8.6%
Real Estate: 1.2%
Semiconductors: 8.6%
Software: 20.6%
Telecom: 1.2%
Wireless: 8.9%
Other: 2.7%

How the Entreprenuer Got Connected to their Venture / PE Fund
Previously received funding from the fund: 4.7%
Previously worked with one of the investors: 50.0%
Somebody at my company reached out to the fund: 6.4%
Somebody at the fund contacted me: 16.5%
Through a mutual friend or industry contact: 6.4%
Through an angel group: 13.1%
Through another fund:2.1%
Other: 5.5%

Number of Companies the Entrepreneur Has Founded
0: 24.0%
1: 30.4%
2: 24.0%
3: 13.6%
4: 4.8%
5: 3.2%
6+: 0.0%
Average: 1.5

Mo Money, Mo Problems Part 2

noreply@blogger.com (VentureReturns) — Wed, 14 Nov 2007 06:06:00 +0000

So in my last entry I promised to get you some data that either validated my the hypothesis i put forth in the last post or not. My hypothesis was basically this: most companies are either going to be successful or not within the first few rounds of funding. Most companies will be on their way to success by the time they raise a Series C (and many by the time they raise an A or B). Companies that are still raising money after Series C (and some after a Series B) to fund losses could actually be increasing their chances of failure. I guess the most radical way to phrase it could be "Don't raise a Series C unless you are profitable (or close to it) and you are raising the money to fund growth."

I think that I have got the data and I think it shows that I was sort of right but not nearly to the extent that I believed. Below is a chart, I apologize in advance that it is so small. I can't seem to figure out how to make it the right size.

In any case, the chart shows all companies that have received a series A and then shows how many of them go on to receive subsequent rounds of financing. I manipulated this data from a few different sources. There are two metrics I looked at 1) "total" percent which is number of companies receiving that series of funding (e.g., series D) divided by the total number of companies that received Series A funding and 2) "consecutive" percent which is defined as number of companies receiving that series of funding (e.g., Series D) divided by the total number of companies receiving the immediately prior series of funding (e.g., Series C). The "total" percent gives you a sense of the percent of companies overall that make it that far in financing rounds. The "consecutive" percent gives you a sense of how many companies move on to the next level of financing from the previous level. In other words, assuming that I am already a Series C financed company, how likely is it that I will become a Series D financed company.

I have also divided the data into different sets: "All Companies," "IPO Companies," "Failed Companies," and "All (Excluding Clear Successes)". Let me explain:

All Companies includes every company in my data set.
IPO Companies includes only companies that eventually IPOed.
Failed Companies includes only companies that eventually went bankrupt or were shutdown.
All Excluding Clear Successes includes All Companies less IPO Companies. This set is designed to create a benchmark of "normal" companies. IPO companies are considered abnormal because they are the creme de la creme and are often profitable and executing on a great business model from the get go. "Normal" companies have a chance of succeeding and a chance of failing. They typically raise money because they have to whereas clearly by the later Series, IPO companies are raising money only to fuel growth not to fund losses.

So why is this important? I have highlighted in different colors above some important points:

Let's start with the yellow highlighted areas. These areas show that companies that will fail are actually more likely than their "normal" (look at the "All (Excluding Clear Success)" category) peers to raise Series B, C, and D rounds. The margin is quite slim and I am not sure if it is statistically significant but it looks like at least some confirmation of the "Mo Money, Mo Problems" hypothesis. This phenomenon is true from both a "consecutive" point of view and a "total" point of view. In other words, Series B companies destined to fail are more likely to raise a Series C than are "normal" Series B companies. It is not surprising that IPO companies are more likely than any other category to raise Series B, C, and D rounds because, as our hypothesis would predict, these are the companies that are generally seeking growth capital to fuel an already successful business model.
The "Series D" effect for IPO companies (look at the green higlighting). 100% of IPO companies go from Series A to Series B (the real figure is actually 99.9%). 95% go from Series B to Series C. However, after that there is a significant drop. Only 69% of Series C go to Series D and by the time you get to Series E, only a minority of companies will go on to IPO. Put a different way, many companies that will ultimately IPO will never have to go beyond a Series C and most will never go beyond a Series F. If you are investing in a Series F company that hasn't found a successful business model you should keep this in mind.
The "Series F+" effect (look at the red highlighting). This simply shows that whereas a minority of companies destined to IPO and "normal" companies go from a Series E to a Series F, the majority of companies destined to fail do. Again, this is another moment of truth to consider before investing in the F-round of a company.