Sept. 18, 2007 SDF VC PWC

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On Tuesday, September18, 2007 in Palo Alto at Pillsbury Winthrop Shaw Pittman LLP and SDForum held the third quarterly Venture Breakfast Series in partnership with PWC. The panel discussed valuations, hot sectors and late stage investing.
In short, unlike the dotcom bubble, Internet companies are making money with content and advertising. There is more late stage investment with companies that are already making 25 to 50 million dollars a year. Companies must prove themselves in the early stage before getting more money.

There may be a clean bubble. Right now, there is more investment in green, clean or alternative technology is than semiconductors. All the flash of the dotcom bubble failed because companies did not have the bandwidth to offer all those web services to the consumer. Eventually the bottleneck was removed with higher speed internet access but not before lots of start-ups had exhausted their burn rate.

While oil is now over eighty dollars a barrel and sees no chance of going down, we are still sitting in traffic burning gasoline. The roll out of all this new technology has not reached the average consumer and the average investor wants results. Of course with the internet, all you had to do was to write some software, buy a faster computer or string some fiber optic cable. Clean tech is more complex than that, requiring the reorganizing of an entire civilization. Slowing the burn rate on emitting carbon dioxide is more complicated than the burn rate on a start-up. It took two hundred years to get into this mess and investors should not expect to save the world by the end of the next quarter.

Below are the bios of the moderator and panel.

Allison Leopold Tilley moderated the panel discussion of the inside story behind the numbers and what investors see as current market trends. She is a partner at Pillsbury Winthrop and represents technology companies in securities and venture capital transactions, including mergers and acquisitions, private placements, public offerings, venture funds and joint ventures. Leopold Tilley is co-head of the Firm’s Information Technology Practice Team, Head of the Silicon Valley Business and Technology Group and co-head of the Southeast Asia Specialty Team.

The panel consisted of Steve Bengston of PWC, Paul Longhenry of 3i Venture Capital, Matt Niehaus of Battery Ventures, Bill Shaw of NASDAQ, Allan C. Thygesen of The Carlyle Group, and Sharon Wienbar of SCALE Venture Partners. There were three big questions put to the panel. Do valuations make sense? What sectors are hot and which ones are not? Is this a good time to be a late stage investor?

Steve Bengston runs the Emerging Company Services (ECS) group at PricewaterhouseCoopers. ECS refers companies to investors and offers audit and tax services. Bengston presented PWC’s Money Tree statistical report on seed funding over the past decade. Steve also presents the Money Tree data each quarter summarizing venture capital investment results and trends at www.pwc.com.

Paul Longhenry is a Director with 3i Venture Capital. After graduating from USC in Finance and Economics he worked at Bear Stearns, Yucaipa Companies and Sonim. He has extensive experience in VoIP services, network equipment providers, wireless handset vendors and commercial distribution channels.

Matt Niehaus graduated from Dartmouth and is a Partner at Battery Ventures bringing his knowledge of communication services and infrastructure technologies from VeriSign, R4 Global Solutions, Telegraph Hill Communications Partners, and J.P. Morgan Capital.

Bill Shaw is a Senior Managing Director for The Nasdaq Stock Market, Inc. in the Global Capital Markets department. Shaw helps b private companies go public.

Allan C. Thygesen, is a Managing Director of The Carlyle Group focusing on U.S. venture and growth capital investment opportunities. Thygesen has an M.Sc. degree in economics from the University of Copenhagen and an M.B.A. degree from the Stanford Graduate School of Business. Before joining Carlyle, he worked at Wink Communications providing end-to-end software platform for interactive television services. He developed relationships with Wink’s largest cable and satellite operator customers, broadcast and cable networks, advertisers and advertising agencies, and consumer electronics manufacturers.

Sharon Wienbar, invests in mobile, internet, and enterprise software companies at Scale Venture Partners. Sharon has Harvard BA and MA in Engineering as well as an MBA from the Stanford Graduate School of Business. She went on to work at Critical Path, Amplitude Software, Adobe Systems and Bain & Company. She is on the boards of Bellamax, Biz360, Facetime Communications, Glu Mobile, Merchant Circle, PlayPhone and Reply.com.

Copyright 2007 DJ Cline All rights reserved.