Client Update
M&A activity in the technology
industry continues to be very active, both for public
and private companies. Following a very successful six-month
engagement with LaunchSquad, our client Net6
was purchased by billion-dollar software company
Citrix
Systems. Of course we can’t take all the credit,
but the high-profile pieces we placed for Net6 helped
build credibility for this upstart among potential acquirers.
Over the last several months,
we coordinated a launch for Cenzic,
securing an invitation to present at the coveted DEMO
conference and generating feature
coverage in several key technology and security
publications.
We’ve also welcomed several new clients to the
roster in recent months, including:
 Trade
Promotions Management company based in Chicago.
 A
startup focused on improving information processing
for data-intensive web applications.
 A
new venture, resulting from the merger of Kanisa and
Serviceware, which provides software that reduces service
and support costs.
 A
soon-to-be-launched provider of Voice Over IP (VOIP)
applications.
Upcoming Events
 LaunchSquad
is excited at
the opportunity to work with venture capital firm DFJ
to promote its upcoming 1st Annual Draper Fisher Jurvetson
Venture
Challenge, in which entrepreneurs will compete for
the chance to win $250,000+ in seed stage funding. The
event takes place on June 2nd at the Computer History
Museum in Mountain View, California.
On May 17th, LaunchSquad
is pleased to co-host the Paradigm Network's round table
event: “Venture Funding: Insights from the Experts.”
The event will feature top VCs alongside CEOs of recently
funded portfolio companies and shed light on the latest
insights on how to successfully close your next round
of financing. To date, the panel includes participants
from Venrock, Rutberg & Co., Canaan Partners, Vocera,
Idetic and Habeas. For more information, visit the
Paradigm site or contact LaunchSquad Partner Jason
Throckmorton at
throck@launchsquad.com.
 We’re
working again with b.a.y.
fund,
this time to promote an event
in conjunction with the San
Francisco Giants at beautiful
SBC Park: “Batters
Up for
b.a.y. fund,” a fantasy
baseball day and on-field
family picnic on Saturday,
June 18th. The event provides a unique opportunity for
b.a.y fund kids, as well as
event sponsors and participants, to mingle with
former San Francisco Giants
players and other celebrities,
including Mayor Gavin
Newsom and possibly
Governor Arnold. If you are
interested in attending or
sponsoring, please contact
LaunchSquad Partner Jason
Mandell at
Jason@launchsquad.com.
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 The
Ledger Interview:
Tim Draper,
founder, managing director, Draper
Fisher Jurvetson
DFJ maintained a very active level of funding throughout
the downturn. What was your strategy?
Buy Low, Sell High. ;) While the venture community was
dealing with problems in the downturn, we figured that
they wouldn't have the focus to do very many new deals,
so we decided to be really active during that time period.
Do you think
other firms that went into hibernation during that period
are regretting it now?
We will have to see how successful we were before declaring
victory.
What would
you change about the structure of the VC industry?
I would take it as a larger question. To do the restructuring
I want would be an overhaul of the entire capital market
system. It has become too litigious, and too regulated
for companies to operate. Also, given the advances in
technology in recent years, I think a simplification
to the trading process is in order. The idea of a transfer
agent is antiquated. Sarbanes Oxley made it so that
I have dropped off all my public boards and so will
many others. I suspect that it will have the exact opposite
effect that it intended. Many good people will leave
public boards. The tax code is ridiculous and should
be one line: "How much did you make this year?"
DFJ has aggressively
expanded both regionally and internationally. Are you
concerned that the U.S. (and even Silicon Valley) is
in danger of losing its leadership in entrepreneurship
and private investment?
Silicon Valley will always be the godfather of entrepreneurship,
but since the advent of the web and Hotmail, everyone
with access to the web has perfect information and in
an information economy, that means that entrepreneurship
can happen everywhere. Interestingly, we often lose
sight of what makes us great. I believe that the Silicon
Valley has lost some of its wild abandon and enthusiasm,
and those have been picked up by people in other regions
and other countries. It is unfortunately a little like
America. We became great because of Freedom. How free
are we now?
Your
BizWorld Foundation seems to have really
hit its stride. What are the main differences between
building a technology startup vs. a non-profit?
Both have to figure out their model. And we have just
begun to nail it down at BizWorld after 10 years. We
have a great board and a great team at BizWorld and
they really do some good work for society. Teaching
kids about business and entrepreneurship fires them
up for all their other subjects. The main differences
are the customers. The customers at BizWorld are the
teachers and the donors. They have to buy in emotionally,
or see the proof of the pudding. We have made great
strides at BizWorld to prove its importance to societies
everywhere. It is now in all 50 states and in about
20 countries.
If you weren't
a venture capitalist, what would you be doing?
I would be running for Governor. Or a poet.
Who in the
world would you most like to have dinner with and why?
I would like to have a dinner with all of those who
have helped me succeed in business. David Salem, Bill
Edwards, Mel Lane, Steve Walske, Sabeer Bhatia, Bill
Gross, and of course, all my partners and employees
the DFJ Network, our Limited Partners, the WK's and
my extended family.
I would also like to have dinner with all the geniuses
I've known or those I haven't met yet. Steve Jobs, Audrey
McLean, Niklas Zennstrom, Janus Fries, Gorbachev, Fan
Zhang, Don Henley, Mark Pincus, Morton Lund, Larry Ellison,
Vinod Khosla, Paul Allen, David and Eleanor Shannon,
Will Edwards, Arnold, and my partners. Together I think
we might be able to reconstruct America (maybe even
the world).
I also like the idea of having dinner with about 100
five-year olds. I always seem to learn the most from
them.
What's your
outlook for 2005?
I think 2005 will be a banner year for entrepreneurs
looking for capital. The venture capital industry is
actively investing again. In technology, I see a few
major trends. The major trends I see coming are Skype
and video. Skype is a new service that allows free calls
worldwide through the Internet, and they have had 40
million downloads in about a year. Companies should
be adapting to this new technology for their voice (and
IM) service or they will join the computer graveyard
and the buggy whip manufacturers. Video is important
because it is becoming more and more prevalent in our
society, and the technology is almost here for video
on demand. DivX and Akimbo are some of the early winners
in this world. I suspect there will be others. Some
other trends I see out there are "community"
services and social networks. Some companies have become
profitable friend networks, and I think new business
models will become more prevalent. I think there may
be opportunities coming in video teleconferencing companies
like Viditel, or video history companies.
Fact or fiction:
Gov. Schwarzenegger and his allies will successfully
lobby Congress to allow foreign born citizens seek the
White House, and he will one day be President of the
United States.
Never underestimate Arnold. He is capable of great things.
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