Silicon Valley Start-Ups See Cash Everywhere
The market for high-technology start-up businesses is so intense in Silicon Valley that some companies are being showered with millions of dollars from investors -- without even asking for it.
It is a phenomenon called "pre-emptive financing," and it has become more common in the past several months.
The question is whether venture capitalists are moving too quickly, funding risky, untested start-up businesses -- just as they did during the heady, and ultimately unsustainable, technology-stock boom of 1999 and 2000.
Pre-emptive financing happens when a venture capitalist seeks out a promising start-up business and offers it money out of the blue, before the company tries to raise a second or third round of cash. If the offer is good enough, in theory, the venture investor will snag a piece of the company quickly, thus avoiding a costly bidding war that could erupt later once the company says publicly it is looking for cash and attracts several suitors.
Such bidding wars are increasingly common these days and have pushed up prices investors pay for stakes in some start-up companies. The median valuation of venture-funded start-up businesses -- the amount investors think these companies are worth -- soared to $15.2 million in 2005, from $10 million two years earlier, according to research firm VentureOne, a unit of Dow Jones & Co., which publishes The Wall Street Journal. Venture capitalists typically take stakes in small, private-sector companies, hoping for a payout later through a company sale or an initial public offering of stock.
The trend puts many start-up companies in the driver's seat. "I've had several [venture-capital] firms come to me long before we were looking for money," says Jason Goldberg, chief executive officer of Seattle online job-search concern Jobster Inc. His company, after getting unsolicited calls from two venture firms last year, raised $19.5 million in additional financing much earlier than it had planned. Young companies in wireless communications, computer games and consumer Internet services are big targets for pre-emptive funding calls these days.
It all highlights how desperate some venture capitalists have become to find homes for the huge amounts of cash they have raised, and how few companies there are that really deserve their money. Last year, venture-capital firms raised $25.2 billion from investors, the most since 2001, and they are struggling to put all that money to work.
"There's such a dearth of very high-quality opportunities," says Michael Greeley, a general partner with IDG Ventures in Boston. "Investors will move very aggressively right now." IDG has hired a recruiting firm to set up meetings between IDG partners and promising start-up executives, he says, to help his firm develop relationships and, in some cases, possibly pre-empt the process of formal fund raising.
Some investors are so eager to one up each other that they don't even bother to find out who to call at promising start-ups. A Pasadena, Calif., home-improvement Web site, Done Right, operated by a company called Perform Local Inc., received an email in January from a well-known investment firm inquiring about putting cash into the company. Paul Ryan, Done Right's chief executive officer, says the missive wasn't sent to him or to his executives -- it landed in a general corporate email inbox. Mr. Ryan wasn't put off by the impersonal plea: "We're having very good discussions with [the firm] right now," he says, declining to name the potential investor.
The risk of pre-emptive financing is that investors are so eager to seal deals early that they will overlook flawed business models and management and invest imprudently. The trend "absolutely harkens back to the bubble days" of 1999 and 2000, says Tom Blaisdell, a general partner with DCM-Doll Capital Management, Menlo Park, Calif. Mr. Blaisdell and others note pre-emptive funding has its upsides: If venture capitalists can offer financing before anyone else, they sometimes have more time to investigate a company's business and work with it to come up with mutually favorable investment terms. Many investors say the start-up market isn't as frothy as it was in the bubble, with sentiment tempered by the lethargic market for start-up initial public offerings of stock.
Indeed, not all venture firms are embracing the practice. Still, many start-up companies are leveraging pre-emptive funding calls into even more money.
Jobster, which does business with Microsoft Corp. and Cisco Systems Inc., raised $8 million from two well-known venture-capital firms in 2004. Just a few months later, Mr. Goldberg, the CEO, received unsolicited calls from two other firms offering him more money, and at terms that valued the company much more richly than had its first two investors, Ignition Partners and Trinity Ventures. Mr. Goldberg declined to name the two new firms that contacted him.
Those calls got him thinking that perhaps he did need more funding. So Mr. Goldberg called another venture firm, Mayfield Fund, which had expressed interest in Jobster months before but hadn't invested. Mayfield wound up leading the $19.5 million round of funding in August; the two pre-emptive cold-callers didn't get a piece of the deal.
"Nothing gets a VC moving like the idea that someone else might get their deal," Mr. Goldberg says. Mayfield Managing Director Allen Morgan says he isn't surprised top-drawer start-up businesses like Jobster are getting pre-emptive offers. "We're all hungry for returns," he says.
Other start-up companies also are benefiting. Gibu Thomas, a co-founder and CEO of Sharpcast Inc., which makes software that helps people access, share and back up digital content between various electronic devices, says he struggled to raise money for his start-up company in late 2004 and early 2005. But last August, Sharpcast snagged $3 million from two firms, Draper Fisher Jurvetson and Selby Venture Partners, and two months later, other venture capitalists clamored to put more money into the company.
Greg Gretsch, a managing director with venture firm Sigma Partners, visited Sharpcast after hearing about it from an engineer who worked there. When Mr. Gretsch asked if the company was thinking about fund raising, Sharpcast executives said they had just raised money and weren't looking for more.
"I'd like to do a pre-emptive round," Mr. Thomas recalls Mr. Gretsch saying. Adds Mr. Thomas, "I didn't even know what a pre-emptive round meant."
He does now. Sigma recently signed on as the lead investor in a new $13.5 million funding round for Sharpcast, an investment that valued the company at a price more than three times its valuation in August. Sharpcast says Mr. Gretsch says he was so impressed with Sharpcast that "I was motivated enough to jump through hoops and do a deal with them fairly quickly" at a rich price.
Sharpcast's product won't be launched until the spring, Mr. Thomas says.
硅谷初创企业周遭黄金触手可及
在硅谷，高科技初创企业火爆异常，有些企业甚至不用开口，投资者们就会把数百万美元资金砸给它们。
这是一种被称为“抢先融资”(pre-emptive financing)的现象。最近这几个月，这种现象正变得日益常见。
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? 风险投资新使命 扶上马再送一程
? 网络公司：将烧钱进行到底现在的问题是，对于那些风险大、不成熟的初创企业，风险资本家的融资是否太快了？他们是否会重蹈1999年、2000年科技股迅猛发展、最终却难以为继的覆辙？
风险资本家挑选具有发展潜力的初创企业，在它进行第二或第三轮融资前，突然向它提供资金的行为称为抢先融资。理论上来讲，如果风险资本家的融资方案足够诱人，他们可以很快与公司达成参股协议，避免企业公开寻求资金而引发众多竞争者参与的高成本竞标大战。
目前此类竞标大战日益常见，而且不断抬高投资者购买初创企业股份的价格。根据道琼斯公司(Dow Jones & Co.)旗下的调查公司VentureOne的信息，接受风险投资的初创企业的估价中值──即投资者心中这些公司的价值，从2年前的1,000万美元飙升至2005年的1,520万美元。风险投资者一般购买小型未上市公司的股份，希望以后从公司出售或首次公开募股中获得收益。
这种趋势把很多初创企业推到了决策者的位置。西雅图在线求职公司Jobster Inc.的首席执行长贾森?戈尔德贝格(Jason Goldberg)说：“在我们准备融资之前，就有几家（风险资本）公司来找我。”去年接到两家风险投资公司主动打来的电话后，公司在原定计划前额外筹得了1,950万美元。目前经营无线通讯、电脑游戏以及网上客户服务等业务的新兴企业是抢先融资追逐的焦点。
这些都充分说明了风险投资者为筹得的巨额现金找到下家的迫切程度，也反映了真正值得投资的公司如凤毛麟角。去年风险投资公司从投资者那里共筹得252亿美元，达到了2001年以来的最高点。同时他们也竭尽全力将所有筹得资金运转起来。
波士顿IDG Ventures的普通合伙人迈克?格里利(Michael Greeley)说，现在严重缺乏高质量的成交机会。一旦有好机会，投资者就会非常积极。IDG已经聘请了一家招聘公司来安排公司合伙人与有潜质的初创企业高层管理人员见面。他说，这既可以帮助企业发展对外关系，在某些情况下，还可能抢先开始正式筹资的过程。
一些投资者非常急切，他们甚至没时间查找初创企业的联系人。加利福尼亚州帕萨蒂纳Perform Local Inc.经营的一个家居装修网站Done Right曾在今年一月收到一家著名投资公司的邮件，询问是否需要融资。Done Right的首席执行长保罗?瑞安(Paul Ryan)说，这封邮件不是专门发给他或其他管理者的，而是发到了公司邮箱。瑞安对这封并非专门发给他的邮件并不反感。他说，“目前我们与（这家公司）的协商进展得非常顺利”。但他拒绝透露这家投资公司的名字。
抢先融资的风险在于：投资者过于急切的成交心情令他们忽视了初创企业在经营模式和管理上的一些不足，从而造成盲目投资。加利福尼亚州门罗帕克DCM-Doll Capital Management的普通合伙人汤姆?布莱斯德尔(Tom Blaisdell)说，这种火爆趋势绝对会让人想起1999年和2000年的泡沫时光。
不过，布莱斯德尔和其他人也都注意到，抢先融资也有自己的优势。如果风险投资者比其他人更早地发出融资邀请，有时就能赢得更多时间来全面调查被投资企业的经营情况，并与企业一块制定出互利的投资条款。很多投资者认为，股市对初创企业首次公开筹股反映冷淡，市场人气低迷，因此现在的初创企业市场不像以前那样充满泡沫。
事实上，并不是所有初创企业都接受抢先融资的做法。不过，还是有很多企业利用这些抢先融资的杠杆作用获得了更多的资金。
与微软(Microsoft Corp.)和思科(Cisco Systems Inc.)有业务往来的Jobster曾于2004年从两家知名风险资本公司Ignition Partners和Trinity Ventures筹得了800万美元。仅仅几个月后，首席执行长戈尔德贝格就接到了另外其他两家公司主动提供资金的电话，而且投资条件中对公司的估价比前两个投资者高出很多。戈尔德贝格拒绝透露这两家公司的名字。
但这些电话让戈尔德贝格想到或许公司确实需要更多融资。于是他联系了另一家风险投资公司Mayfield Fund。这家公司几个月前曾对Jobster表示出投资兴趣，但尚未付诸行动。与戈尔德贝格联系之后，Mayfield Fund在八月牵头为Jobster展开新一轮融资活动，筹得1,950美元。然而，那两个抢先融资公司却没有分得一杯羹。
戈尔德贝格说，除了别人可能会抢走自己生意的想法以外，没有什么事情能够让风险资本公司采取切实行动。Mayfield董事总经理艾伦?摩根(Allen Morgan)说，他对Jobster这样的顶尖初创企业接到抢先融资邀请并不感到惊奇。“大家都十分渴望得到投资回报。”
其他的初创企业同样获益匪浅。Sharpcast Inc.是一家软件开发公司，他们研制的软件可以实现不同数码产品之间的数据内容访问、共享和支持。其创始人之一、首席执行长吉布?托马斯(Gibu Thomas)说，在2004年底和2005年初的时候他费尽心思为公司筹集资金。但八月底Sharpcast得到了Draper Fisher Jurvetson和Selby Venture Partners两家公司300万美元的融资。两个月后，又有几家风险资本公司主动要求为公司进行融资。
风险资本公司Sigma Partners的董事总经理格雷格?格雷奇(Greg Gretsch)从Sharpcast的一位工程师那里了解情况后参观了这家公司。当格雷奇询问该公司是否考虑进行融资时，Sharpcast高层管理人员说他们的融资活动刚刚结束，暂时不需要更多资金。
托马斯记得格雷奇曾说：“我要进行一轮抢先融资。”托马斯补充说：“当时我都不知道抢先融资是什么意思。”
现在他明白了。Sigma最近正式成为Sharpcast新一轮1,350万美元融资活动的主要投资者。这笔融资交易对该公司的估价比八月份的三倍还高。Sharpcast称，格雷奇表示Sharpcast给他留下了深刻的印象，为此他有“足够的动力经受严峻考验”，尽快以优厚的条件与该公司成交。
托马斯说，Sharpcast的产品要到春季才会上市。
