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July 14 2010
by Todd Hixon

The iPad Turns 6

In two weeks we have the six-month birthday of the iPad (announced January 27, 2010).  A few things have become clear, some aligned with my expectations and some not [see the surprised /not-surprised postscript on each paragraph]: The tablet category is off to a strong start.  Apple has sold ~3 million units.  All the usual ...

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June 11 2010
by Todd Hixon

The View From The Dark Side #2: Participating Preferred

Entrepreneurs often dislike participating preferred stock.  It can be a contentious term at investment time, and I often sense resentment at exit time when investors “get $XX million off the top”. “Participating preferred” refers to convertible preferred stock with a special liquidation right: preferred stock holders receive return of their investment, and then they share ...

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May 19 2010
by Todd Hixon

Venture Lite

The “Cloud” and other forces have slashed the cost of starting an IT company  and produced a surge in seed investing.  We discussed this in a segment of our annual meeting last week, which was attended by professional limited partners (“LPs”), individual LPs, and entrepreneurs, as well as the NAV partners.  There was strong energy ...

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April 23 2010
by Todd Hixon

The View From The Dark Side: #1, Why VCs Are Greedy

[This is the first of a series of posts that attempt to explain how the venture capital business looks from the VC side.] VCs are often characterized as greedy, eg:  “vulture capitalists” or (the more contemporary phrase) “not founder friendly”.  Like any broad characterization, there is truth and untruth here, and good and bad reasons ...

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April 14 2010
by Todd Hixon

Three Ways To Sell A Business

Frequently entrepreneurs and investors come to the point where they want or need to find an M&A exit.  Is the time right?  What should they expect? Here’s a framework that I hope is helpful.  Buyers pay for three things:  strategic opportunity, growth, and earnings/cash flow.  Which of these you have to offer will influence who’s ...

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March 17 2010
by Todd Hixon

Teeth versus Tail

In one of his radio chats, Governor Patrick of Massachusetts talked about increasing the number of government jobs in the Commonwealth as a means to increase employment.  “After all [he remarked], government jobs are just as good a private sector jobs”.  That troubled me, and here’s why. Gov. Patrick’s point, I infer, is that a ...

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February 25 2010
by Todd Hixon

Five Reasons To Believe in Tablets

We recently made an investment in Tap ‘n Tap; they provide an Android-based software framework that enables OEMs to create tablets that compete with the Apple iPad. You have to believe a couple of things for this investment to work out: 1) the tablet market will be big, 2) Android will be a major part ...

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February 12 2010
by Todd Hixon

Pay to Pitch?

Should entrepreneurs pay third parties to help raise money? This is a perennial question in the venture world. It comes down to two things: Will the investment in outside help pay off? Will investors see paying for help as a negative factor? There are different kinds of fund-raising help. The main ones are: “investment bankers”, ...

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February 9 2010
by Todd Hixon

The Seduction of Venture Debt

Summon up your picture of a VC:  insouciant air, expensive casual clothes, youthful with a touch of gray for gravitas, cruising the 101 in a Porsche, thinking about moving up to a Tesla.  Does this guy have a sub-prime mortgage?  No way, you think!  But probably he does, not on his house but on his ...

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January 8 2010
by Todd Hixon

The Power of Tying Services to Products

Consumer marketers speak of “Moments of Truth”. I had one last night. I walked the dog in the evening and, later, when I went to put my iPhone on the charger, the phone and its holster were gone. The phone was set to silent. Merde! I retraced my steps with another phone and a flashlight, ...

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