Tag Archives: IPO

When a cap. table is a nightmare!

As I wrote recently, IPO filing is accelerating (just check my recent post on LinkedIn and Pandora). Maybe, it should not be so much. Too much may mean a speculative bubble A recent one is Active Network. I tried to build the cap. table. Piece of cake, usually, even if I am sure, they have some mistakes. And I was lucky, Active had filed but failed in 2004 (a sign?), so I also have the 2004 cap. table. But it was a nightmare. I could not find anything about the founders, not much about how much the company really raised, even if I have full disclosure on liquidation preference.

So here is first the 2004 cap. table (once again I must mention that information given is subject to possibly many inaccuracies)

And here is the 2011 new table.

Not very sexy, not to say awful! I do not talk only about the pictures themselves that you can download and enlarge, but also about the messiness of the structure! But still interesting…

Pandora wants to go public

Something is going on. LinkedIn has filed to go public, many lesser known companies have succesfully done it and it is now Pandora. You can read a lot about Pandora’s filing so my contribution is limited to the following points:

– you can read below the cap. table of Pandora (and enlarge it by clicking or even download the picture, ask me for the excel file if interested)
– there were 3 founders: Tim Westergren, Will Glaser, Jon Kraft but only the first one is mentioned in the filing and the equity of the two other ones is unknown. I made the assumption that the remaining common shares belong to them, but it canot be true. It is just an assumption.
– Pandora has raised nearly $100M with its investors.
Revenues are nice: $50M in 2010 and $19M in 2009, but the company never had a profitable year even if its recent quarters have been (about $1M for the July and october quarters).
– The company was founded in 2000, so it would have taken him 11 years to go public.

Will this be sufficient to concince investors? To be seen….

LinkedIn files to go public

The much anticipated filing by LinkedIn was announced last week and I could do my favorite analysis, the capitalization table and equity structure of the start-up. My main frustration came from the fact that there is no information on the founders’ shares. LinkedIn has five founders and only Reid Hoffman shareholding is known. Wikipedia states that “the company was founded by Reid Hoffman and founding team members from Paypal and Socialnet.com (Allen Blue, Eric Ly, Jean-Luc Vaillant, Lee Hower, Konstantin Guericke, Stephen Beitzel, David Eves, Ian McNish, Yan Pujante, and Chris Saccheri).” Linkedin mentions them in its Founders web page. This just means their equity level is rather small… here is LinkedIn cap. table (assuming a virtual IPO date and price per share).

Another interesting disclosure is the full list of LinkedIn investors:

A typical success story (not Silicon Valley though)

I just learnt about Isilon yesterday. It certainly shows how disconnected I have been from the start-up world these days :-(. Isilon was backed by Atlas and Sequoia and went public in December 2006. It finally got acquired this week by EMC for $2.2B!

Fred Destin mentions about Isilon in his blog so you will find more info there. What I did since yesterday is looking at the company numbers since its foundation in 2001. So first, here is its stock price history as well as its revenue/profit numbers.

It was not an easy success story. Following its IPO, the company missed its numbers, lost money (no profit) until this year so that the stock price does not show a nice growing curve (even if the VCs always had a nice multiple on their investment). But the company had to wait until the acquisition by EMC to see happy employees and investors. Destin claims Atlas will finally make a 22x multiple over its investment.

What is for me (and I hope for you too!) of interest is the shareholding structure that the next table illustrates. You will have to click on it to read the details. (As usual, if you want the excel file, just ask me).

What the IPO prospectus did not say is as interesting as the rich information it provides:
– not much info on the series A and B, except the total amount, but I could not distinguish Atlas, Madrona and Sequoia investments. It would probably possible to guess the real numbers as Sequoia invested (and probably led) in the series B whereas Atlas and Madrona invested in the Series A. With prorata rules, you can make your own guess.
– Paul Mikesell, a co-founder, is not mentioned anywhere so I have no clue how much he owns/owned of the company…

Finally, Isilon was not based in Silicon Valley, but in Seattle. It’s interesting to connect this to a recent post by Bill Curley entilted the Silicon Valley IPO’s anxiety. Though Silicon Valley remains a craddle of innovation, the ratio of IPOs its experiences compared to the rest of the USA, is quite low and Curley has some explanations.

PS (November 18): I was wrong, there was more information available online: I could find the precise allocation of preferred stocks (notice there was a 2.4 stock split) and in addition Mikesell is mentioned…

Intuitive Surgical

Here is a start-up that I heard about through various channels. As I am not an expert of medical technologies, it is not too surprising that this 15-year old, $10B company was unknown to me. You can learn more about Intuitive Surgical from their website or from answer.com. 15-year old? You may tell me it is not a start-up anymore, but it surely was! as I often do when I discover such companies, I studied its growth and its capital structure at IPO. Here they are:

What is interesting is that despite its impressive growth, Intuitive’s IPO was not a huge success. It raised little money at a price per share which is not the typical $14 that I often see with Nasdaq IPOs. It was only $9 per share. When I published this blog it was at $275!! (see the chart at the bottom of the post)

Final comment, Intuitive was based on technologies from research centers, which licensed these against equity. You may be interested in what MIT and SRI International got for their IP.

Skype IPO filing

What’s interesting about Skype new filing in addition to all the comments you may find is their current cap. table and investor structure. I hope we will know more about all this when the company files additional material. For the moment, here are the numbers I could built from their S-1 document dated August 9. It is obvisouly very different from what I published at the time of acquisition by eBay. See my post of April 2008.

First the investors:

Second the full cap.table if Skype was going public at the price paid by the investors to buy Skype from eBay:

I will publish more when/if the company goes public…

Maxlinear IPO and shareholders

Maxlinear is new technology company going public and good news, it is a semiconductor company. You will find all the info you need on the web. Xconomy most recently annouced the Maxlinear IPO: MaxLinear IPO Prices Stock Above Range at $14 a Share

So here is my usual and favorite work on such companies: its equity structure, its investment story together with the pie chart. I have done it fast so I do not promise it is out of mistakes but it gives once again a good view on how founders, investors and employees are diluted.

Tesla Motors and Paypal, a tale of two founders

Tesla Motors recently filed to go public. Behind the success story is a strange tale of founders. You should read first the Wikipedia page about Tesla. You will see that there are five founders. Because there’s been a litigation and a judge decision, it shows that defining a founder is not so easy. My definition of founders would be limited to Martin Eberhard and Marc Tarpenning, but because their initial business angel has become the CEO, it is more complex according to the judge.

What is even more interesting is that Elon Musk, the BA and CEO, was a founder of Paypal, or more precisely of one of the two start-ups which merged to give Paypal (X.com and Confinity). Then he was fired or left Paypal, similarly to what Musk did to Eberhard and Tarppening. Amazing, no?

So I provide here two cap tables! The Tesla one first and the Paypal one follows. I hope you will appreciate the information and you can react about founders, investors and the sometimes sad stories behind the scene of success stories…

First the Tesla equity tables and investors. Click on the pictures to read them!

The reason why there are green cells is because the company is not public yet. So the IPO date and price per share are fictitious. I do not know how much the founders exactly have but there was apparently about 8M founders’ shares. Now the company has raised a lot of money:

Finally, here is how the share dilution occured:

Am I doing here a Freudian analysis? Whatever is the Paypal stories through the X.com and confinity merger:

The equity table

and the investors

The beauty of all this is that behind the numbers, their complexity, there are many untold stories about founders, business angels, investors and success. React…

A123, Boston and Atlas

I just met this morning Fred Destin in the beautiful Rolex Learning Center at EPFL. We both have a passion for entrepreneurs and architecture!

Fred told me he liked my equity tables and pies (check skype, mysql, Kelkoo, Synopsys, Genentech, Adobe, or the general one.

So as a small gift to Fred who is moving to the Atlas office in Boston this summer, here is the equity case of A123 Systems, an MIT spin-off which went public last September.

I am aware the pictures are not very nice but you can enlarge them and ask me for the excel file…

The Good Old Days

Two pieces of news caught recently my attention. One is entitled Frank Quattrone, Star Banker of Technology Ventures, Talks Wistfully of the Good Old Days—Before Netscape’s IPO.

The other one is less nostalgic because of the web site name, which I quite like: You’re in Deep Chip Now.

Here is the full text captured from the site:

I will not comment this but let me come back on Quattrone. Quattrone was a star of the IPO world as you may read from this Xconomy blog. What is striking is that in the last 8 years, following the Internet bubble, there has been less venture capital, fewer IPOs. The reasons are many. But the key question remains: are we facing a major innovation crisis? After the transistor in the 60’s, the computer in the 70’s and the PC in the 80’s, the Internet and mobile communications in the 90’s, what have the 00’s given us? And what about the 10’s… I do not have any answer. What about you?