Benjamin Kuo’s Blog

Dear readers: we will not be sending out our daily emails next week, and posting on the news portion of our site will be light. But, before everyone goes on break, a little light entertainment (or torture, as it may be…). And, Happy Holidays to all of you!

Twas the night before the IPO

(with many, many, many apologies to Clement Clarke Moore)

‘Twas the night before the IPO, when all through the house
Not a blogger was stirring, or moving a mouse;

The executive summaries were hung by the chimney with care,
In hopes that investors soon would be there;

The employees were nestled all snug in their beds,
While visions of stock options danced in their heads;

And the CTO in his Birkenstocks and I in my cap,
Had just settled our brains for a long nap;

When out on in the market there arose such a clatter,
I sprang from my desk to see what was the matter.

Away to my browser I flew like a flash,
Emailed my broker and started raising some cash;

The market on the crest of the sub-prime snow,
Gave light to some trouble brewing below;

When, what to my wondering eyes should appear,
But a Silicon Valley angel, without any fear;

What a Web 2.0 investor, so lively and quick,
I knew in a moment his money would do the trick;

More rapid than eagles his companies they came,
And he whistled, and shouted, and called them by name;

“Now, Facebook! now, Digg! now, Youtube and MySpace!
On, Flickr! on Zimbra! on Feedburner! and Twitter!

To the top of the market! to the top of the wall!
Sell them! Sell them! all of them now!

As dry leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky;

So up to the tech blogs the companies they flew,
With their sites full of Widgets, and video, too.

And then, in a twinkling, I saw on the blog,
The interviews, the podcasts and a picture of a bull dog,

As I cleared out my browser, and was turning around,
From Sand Hill road, a VC came too with a bound;

He was dressed in khaki, and a sharp blue blazer,
And he carried a Blackberry, and a presentation laser;

A bundle of term sheets he had stashed in a sack,
And he looked just like he just had a snack;

His checkbook–how it twinkled! His wallet, his Blackberry!
His portfolio was like roses, his money so merry!

His companies were trendy, a few on road show,
And the exits on his web site were as nice as the go;

I had lunch with him at a deli,
Talked about vesting and preferences, while eating a bagel with jelly;

He wanted the whole round, plus two seats on the board,
And I laughed, but I took it, because it was all I could afford;

A wink of his eye, and a twist of his head,
Soon gave me to know I had nothing to dread;

He spoke not a word, but when straight to his work,
Filled us with stock options, then turned with a jerk;

And laying his finger aside of his nose,
And giving a nod, to his private jet he rose;

He sprang to his seat, to his team gave a whistle
and away they all flew like the down of a thistle;

But I heard him exclaim, ‘ere he flew out of sight,

“Happy Exits to all and to all a good night!”

comScore just released their Top 50 web rankings for November, and several Southern California companies made the rankings. Among the top sites, Fox Interactive Media (including MySpace.com) was number 5; at number 22, was Gorilla Nation; Shopzilla–undoubtedly boosted by the holiday shopping season–was at number 26; Yellowpages.com — out of Pasadena — was number 29; Disney Online, at number 30; United Online was number 40; and ARTISTdirect at 46.

Also among the rankings was the top 50 advertising networks. A quick scan of the list shows a number of Southern California companies ranking highly in this sector: ValueClick is ranked number 6 on the list; MySpace at 28; Gorilla Nation at 29; AdDynamix at 35; and Business.com at 38.

There’s a fascinating article this morning from the Wall Street Journal, reporting that NBC is shipping its writing work overseas to writers unaffiliated with the Writers Guild of America. It looks like Hollywood is yet another industry (on top of software, radiology, and investment banking) which is looking — in thanks to the WGA strike — at offshore outsourcing.

For anyone interested in a detailed, play-by-play of the WGA strike, Los Angeles attorney Jonathan Handel has a well thought out, detailed analysis of the day to day developments in his blog.

For anyone who has been making the rounds of the holiday parties and networking events, one of the things you hear quite a bit now is people bragging about their traffic numbers. Just today, Funny or Die — the video site from comedy star Will Ferrell — reported that it had “surpassed 50 million views” of the firm’s hallmark “The Landlord” video. The video is hilarious — however you have to wonder how (and if) those traffic numbers correlate in any way to revenue. I recall a podcast I did last year with Tony Greenberg of Ramprate, talking about the costs of hosting video on the Internet. Traffic isn’t exactly free, and I wonder what the actual costs versus revenue numbers are for all that video traffic.

Colin Stewart, a blogger over at the Orange County Register, commented today on the buyout of Irvine-based U-Nav by Atheros, mentioning that the deal values the firm at roughly $1M per employee — roughly par for the course as M&A deals go. While the professionals mostly concern themselves over multiples of revenue a company sells for, for a lot of venture backed companies without publicly available revenue numbers, it’s often useful to compare the buyout price given their employee levels–along with how much in venture capital went into the firm–to figure out if the deal was a dud or not.

It’s always interesting to me to see the kind of technology being developed at local universities, which ends up channeled into (usually) obscure defense and government projects, but which could potentially be spectacular commercial applications.

For example, I ran into a small USC spinoff a few months ago, Sentinal AVE, which develops software which can take live video webcam images, and overlay them into systems like Google Earth/Microsoft Live. As much fun as you can have with consumer oriented, mapping systems, imagine if you could take a live webcam feed –and there are literally millions of these — and overlay them in real time onto a 3D map. Sentinel has a demo which shows web cameras from the USC campus overlaid, in real time, on a 3D (pan/tilt/scroll) map of the campus. Sentinel is currently focusing in on perimeter security systems areas, but I’m surprised that a Microsoft, Google, or Yahoo doesn’t jump on this kind of technology to gain an edge on their competitors in the competitive online mapping space.

Very few companies seem to successfully get from the academic mindset (think research grants/DARPA/large government contracts) into the wider commercial market. Companies which have made or are making that transition here include Language Weaver (another USC spinoff), Fastsoft (Caltech), and Alelo (USC), among others. There’s a huge latent potential in many impressive projects, across the all of the schools here, which are great from the technology standpoint but often fail to make it to commercialization.

Some efforts which are aiming at helping increase the commercial usage of the research in the region–for example, Bob Nidever’s UC in SoCal site, which includes recent info on university related technology licensing and technology transfer, and the USC Stevens Institute for Innovation.

I have recently been filling out “secondary security” questions from various online financial providers, and have been quite disturbed to find that lots (if not all) of the questions I’ve been asked have been the exact same information I’ve been asked to post to social networking sites like Facebook. For example: What high school did you go to? What city were you born in? What’s your birthday? What are the names of your pet? What’s your favorite color? What’s your favorite book?

Square 1 Bank, a banking firm which primarily serves the entrepreneurial and venture capital market, announced Monday that it has expanded into the Los Angeles area with a new office. The move is the latest by a number of service providers to staff up in Los Angeles. In the last few months, I’ve run across a number of venture firms — including Mission Ventures and Prism Ventures — scouting out office space in L.A., and even Silicon Valley’s storied law firm to the technology industry Wilson Sonsini Goodrich and Rosati has been eyeing an office in Los Angeles.   Square 1 and Wilson Sonsini have all maintained offices in San Diego for some time (Mission is based and was started in San Diego); Prism Ventures is out of Boston.

Square 1’s office will be staffed by Chris Erro and Peter Drees. Drees was previously at Comerica, Erro was formerly at Agility Capital and VenCore. Square 1 joins Silicon Valley Bank (disclosure: SVB is a sponsor of socalTECH) in the market with a specific focus on venture backed firms.

The Los Angeles Times just posted a great article on the technology industry here: L.A. tech party scene heats up. Well, it’s been heating up for awhile, but it’s good to see the rest of the world starting to notice (again)… From the article:

Venture capital fuels a boom in the Southland. Entrepreneurs, bloggers and others meet at social events to find investors, discuss ideas or just have fun. In the high-tech world, Southern California is almost as cool as Silicon Valley.

Atticus Wagner at the Tech Coast Angels let me know last week that the Tech Coast Angels is now taking applications for their Fast Pitch event coming up in January. For entrepreneurs who aren’t familiar with what a “fast pitch” is, it is a very short, 60 second “elevator pitch” on your company. The idea behind the competition is to pit a number of entrepreneurs — all looking for funding — in a competition to see who can best convince an investor to make an investment in their company. It’s very informative, entertaining, and actually a useful skill to have. Last January, the winner of the Fast Pitch was Leads360. Frank Peters (podcaster and president of the Tech Coast Angels) has an archive of that winning pitch posted on his podcast page; Leads360 eventually raised $3.25M in a venture round from Rustic Canyon Partners.