Venture Capital Where the Bets Are
The technology world is revving up again as venture capitalists seek out a new batch of young start-ups they hope will become the next Yahoo or eBay.
Through the third quarter, venture capitalists have poured some $16.2 billion into 1,605 deals, according to VentureOne, an industry tracker owned by Dow Jones & Co., publisher of The Wall Street Journal. That's a far cry from the $95 billion that flowed into start-ups at the height of the tech boom five years ago. But it's on par with the $21.5 billion invested in 2004 and in keeping with the industry's historical norms.
THE JOURNAL REPORT
See the full Trends report.This time around, the VCs aren't looking just to Internet start-ups or biotech firms for hot growth. Many are exploring new markets overseas, as well as underserved sectors such as alternative energy. Many also are placing their bets on more mature companies -- start-ups that weathered the tech downturn and now boast a cool new product or, better yet, a profit.
Here's a look at some trends playing out in the venture-capital world.
1 > THE CHINA STRATEGY
Venture capitalists got a wake-up call this summer when China's version of Google -- Baidu.com Inc. -- went public and saw its stock price more than quadruple on opening day. Baidu made clear that despite considerable risk, an immature capital market and regulatory flux, start-up opportunities in China can't be ignored, especially as U.S.-trained entrepreneurs head back home to start businesses.
As a result, many venture-capital firms that usually only like to back start-ups close to home are developing China strategies. Some, like DCM-Doll Capital Management, have formed partnerships with Chinese venture-capital firms that can clear regulatory hurdles and provide a road map to the hottest entrepreneurs in Shanghai and Beijing. Others, like Accel Partners, have teamed up with Asia-savvy VCs like Beijing-based IDG Venture Investment Inc. Still others, like Gary Rieschel, a former Silicon Valley VC, have moved to China to set up shop.
To minimize risk, venture capitalists sometimes are backing hybrid companies: those with operations in both Silicon Valley and Beijing. That strategy, they say, ensures that entrepreneurs can expand their market while protecting their intellectual property -- by keeping it in-house instead of sharing it with a local partner.
2 > CLEAN TECH
With energy prices on the rise and policy makers groping for solutions to the problem of fossil fuels, a new crop of venture capitalists are going green. Their dollars are funding everything from solar-power sheaths that roll out on rooftops to wind-driven turbines to nanotechnology.
Alternative-energy technology will likely grab 10% of all venture dollars by 2009, up from about 2% four years ago, according to research firm Cleantech Venture Network. Some $700 million went into alternative energy in the first half of the year, up 21% from a year earlier, the firm says. Venture investments in the sector are likely to total $1.5 billion for the year, up 25% from 2004.
"The energy and water markets are starving for new, advanced technology-oriented solutions," says Ira Ehrenpreis of Technology Partners, a Palo Alto, Calif., venture firm with a clean-tech focus. Clean tech, he says, "remains one of the underserved areas of investment in the venture asset class today."
But not for long. What once was a niche market populated by unknowns now is attracting big-time players like New Enterprise Associates and Kleiner Perkins Caufield & Byers, perhaps Silicon Valley's best-known venture firm. Kleiner is backing several energy-related companies, including a developer of new fuel-cell technology. Meanwhile, another brand-name Silicon Valley firm, Draper Fisher Jurvetson, announced in October that it will launch a $150 million clean-tech-focused fund called DFJ Element.
3 > DIGITAL LIVING ROOM
It's the 21st century, and the Jetsons' time may have finally come. VCs are chasing start-ups that get all your entertainment gadgets to work together, as well as creating appliances that respond to remote and automated control. Fueling these breakthroughs are two huge developments: the maturing of home networking gear and the rapid deployment of broadband services, which speed up the delivery of music and video files.
One of the biggest players in this sector is Intel Capital, which hopes to repeat its success with Wi-Fi networking investments. Tapping a $200 million fund dedicated to the digital home, Intel Capital has funded more than a dozen start-ups that create everything from chips for digital TV sets to software that supports home networks. Other players funding similar start-ups: Walt Disney Co. and Motorola Inc.
4 > NEW KIDS ON THE BLOCK
During the tech boom, it seemed everyone wanted to be a VC. Nearly 1,000 venture firms were actively investing in tech start-ups. Now? Through the first three quarters of this year, only 608 firms were actively investing, a drop of 42% from 2000, according to VentureOne. It's likely that many more, especially newer firms with dicey track records, will fold.
And yet the industry is replenishing itself. A new crop of VCs have hung out shingles to try their hand at the game, and a select few are getting a good response from blue-chip endowments like Harvard, Stanford and Yale. Ever eager to buoy their returns, managers there are backing a handful of hot firms trying out new investment strategies, often in underserved regions like the Pacific Northwest. Among them: Ignition Partners, staffed by several former Microsoft Corp. executives, and Maveron LLC, co-founded by Howard Schultz, chairman of Starbucks Corp. Both are based in Seattle.
5 > ROCK STARS
What do Colin Powell and U2's Bono have in common?
Last August, Gen. Powell made waves when one of Silicon Valley's best-known venture firms, Kleiner Perkins Caufield & Byers, announced he joined the firm as a part-time venture partner. Gen. Powell adds to Kleiner's star power and gives the firm a seasoned hand when it comes to navigating Washington's ways and targeting hot tech spots across the globe.
Meanwhile, another Silicon Valley shop, Elevation Partners, signed up Bono. The firm, which is starting to invest its first, $1.8 billion megafund, is targeting digital-media deals -- and that's where Bono comes in as an adviser and partner.
6 > WEB 2.0
A new crop of Internet companies are rising from the ashes of notorious burnouts like Pets.com and Webvan -- and venture capitalists are only too eager to help them along, pumping $7.6 billion into the Internet sector in this year's first three quarters, up from $6.5 billion a year earlier.
So what makes this crop of Web sites a better investment than the previous ones? For one thing, online advertising has finally taken off. Start-ups can now use ad dollars to fuel Web sites that offer free services such as blogs and social networks, which allow people to introduce themselves online through mutual friends.
Facebook, for instance, connects college students across the country through social networks at schools, while Mania TV! broadcasts its own television shows over the Internet. Both sites raised $12 million in initial funding recently, an unheard-of amount even 18 months ago.
Other hot start-ups include RealTravel, which uses blogs and social networks to personalize travel by letting people share experiences and advice. Zvents is a local search engine that guides consumers to new activities.
7 > OLDER AND WISER
Even though hot Internet companies are attracting plenty of dough at a very early stage, many venture capitalists are looking for more-seasoned bets where they can put bigger chunks of cash to work.
After getting burned in the tech bust, and with fund raising up 16% over the third quarter of 2004, these investors are putting their money into more-mature tech companies that weathered the downturn and now have products and customers.
So far this year, the bulk of venture capital, 78%, has gone into later-stage deals like Vonage Holdings Corp., an Internet-based telephone service that has raised over $400 million in venture capital.
8 > ADOPTING ORPHANS
In the search for seasoned investments, industry veterans Terry Garnett and David Helfrich have launched a new firm focusing on venture buyouts. Their goal: to find "orphan" technologies and products that big companies have developed but abandoned -- such as Wyse Technology Inc.'s computer terminals -- and spin them out into separate companies. The deals represent a cheaper, safer way to find ready-for-market products, the logic goes.
9 > TELECOM COMEBACK
EBay Inc.'s acquisition of London-based Skype Technologies SA, a deal valued at around $4 billion, has focused renewed attention on the hard-hit telecom sector. Skype's service enables people to talk over the Internet free of charge, by using voice over Internet protocol technology, or VOIP. Customers are signing up in droves.
Many VCs got badly burned on telecom deals. Some $15 billion went down the drain in the past five years as telecom failed to meet big promises. But activity appears to be on the upswing as carriers -- eager to battle it out with cable companies and cellular providers -- up their capital spending.
By and large, venture capitalists continue to pump money into old companies they've nurtured through the slump. Besides VOIP, developments in fiber optics, broadband access and video also are driving spending.
The biggest venture deal in the third quarter was in telecom: Investors plunked $150 million into San Francisco-based FiberTower Corp., which makes wireless equipment for cellphone towers. Another start-up to watch: Force10 Networks Inc. The Milpitas, Calif., company makes high-speed switches and routers used in large data centers. The company has raised $300 million in venture capital and is planning an IPO.
10 > LATE EXITS
Every VC goes into an investment looking for an "exit": a merger, sale or initial public offering. The good news for venture capitalists is that 2005 could turn out to be the best year for mergers and acquisitions since 2000.
Corporate buyers paid $21 billion to acquire 255 venture-backed companies through the third quarter, compared with $23 billion in all of 2004. Venture-backed public offerings are still slow, but starting to show signs of life. After a rough first six months, 16 venture-backed start-ups went public in the third quarter, compared with 13 for the previous six months.
The bad news for venture capitalists is that it's still taking a long time to reach an exit. On average, the companies that were bought have battled through the tech downturn and, as a result, are older, an average of 5.5 years -- the highest in a decade, according to VentureOne. As for IPOs, the start-ups that went public in the third quarter averaged 5.8 years old. That's down from six years in 2004.
风险资本－钱往何处投
风险资本家们而今正在放眼全球，努力搜寻那些有望成为新一代雅虎(Yahoo)或eBay的初创公司，伴随他们的这种努力，科技世界重新焕发了新的活力。
根据道琼斯公司(Dow Jones & Co.)旗下风险资本研究机构VentureOne的统计，截至今年三季度末，美国风险投资交易总计达到1,605宗，涉及金额162亿美元。这一数字虽与五年前科技业风险投资全盛时期的950亿美元相比相差甚远，但相对于2004年同期的215亿美元而言，水平却也基本相当，维持在历史正常水平范围之内。
风险资本如今追求的高增长目标已经不仅仅局限于互联网初创企业和生物技术公司。许多风险资本在开拓新的海外市场以及像可替代能源这样的新兴行业。也有不少把赌注押在了比较成熟的公司身上──这些当年的初创企业成功地度过了科技泡沫破灭后的行业低迷期，如今已开发出一流的新产品或者更令人欣喜的是已经开始盈利。
下面我们来看看风险资本领域的一些新的趋势。
1. 中国战略
中国版Google百度(Baidu.com Inc.)的成功上市唤醒了沉睡中的风险资本家。这家中国搜索引擎公司今年夏天进行首次公开募股，股票首日上市交易价格就飙升了三倍以上。这种情形明确表明，尽管还存在风险相当大、市场不成熟、制度不健全等诸多问题，但是投资中国初创企业的巨大潜在机遇不容忽视，尤其是考虑到目前这种在美学有所成的中国企业家纷纷回国创业的潮流，情况更是如此。
因此，许多以往只愿投资本国或周边地区初创企业的风险投资公司如今也开始在制订中国战略了。一些公司，如DCM-Doll Capital Management，已与中国本地的风险投资公司展开合作，借助中国合作伙伴为其清除监管制度上的障碍并提供与上海、北京最炙手可热的企业家取得联系的路线图。另外一些公司，如Accel Partners，与类似IDG Venture Investment Inc.这样精于亚洲业务的同类公司结成了伙伴。还有一些公司，如以前的矽谷风险投资公司Gary Rieschel，则直接将公司搬到了中国开展业务。
为了最大程度地降低风险，风险资本家们有时喜欢投资于那些在矽谷和北京皆有业务的混合型公司。他们说，这类公司的这种战略可以确保它们在拓展市场的同时有效地保护自己的知识产权──因为它们无须让当地合作伙伴分享自己的无形资产。
2. 清洁科技
随著能源价格的上涨，加之政府决策者在不断努力探寻解决为石油问题的良方，新一代风险资本家走上了绿色环保之路。他们正在将资金投向从屋顶太阳能设施到风力发电机到纳米科技的广泛绿色环保领域。
根据Cleantech Venture Network发布的数字，到2009年，将有10%的风险投资进入替代能源技术领域，而四年前这个比率只有2%。这家研究公司称，今年上半年投入替代能源领域的投资总额在7亿美元左右，较去年同期增长了21%。该领域今年全年的风险投资总额有望达到15亿美元，较2004年增长25%。
重点投资于清洁技术领域的风险投资公司Technology Partners的艾拉?埃伦普赖斯(Ira Ehrenpreis)说，“能源及水市场如今急需新型、先进、技术导向型的解决方案。眼下清洁技术领域的“风险投资依然不足。”
但是这种情况不会持续太久。这个曾经名不见经传的偏门领域如今已经吸引了像New Enterprise Associates和Kleiner Perkins Caufield & Byers这样的一流公司的眼光。Kleiner或许算得上是矽谷最赫赫有名的风险投资公司了，它已投资了好几个与能源相关的公司，其中一家正在开发燃料电池新技术。另一家著名的矽谷风险投资公司──Draper Fisher Jurvetson──已在10月份宣布要设立一个总金额1.5亿美元、名为DFJ Element的清洁科技投资基金。
3. 数字化起居室
现在已是21世纪，1950年代的电影《摩登家庭》(The Jetsons)中所描述的时代或许终于到来了。那些致力于整合家庭娱乐设备和开发遥控和自动化控制家用电器产品的初创公司如今成了风险资本追逐的目标。家庭网络技术的成熟以及大大加速音乐视频文件传输速度的宽带服务的迅猛发展成了推动这一趋势取得突破性进展的两大重要因素。
该领域首屈一指的风险投资机构当属一心再现其投资Wi-Fi网络辉煌业绩的Intel Capital。拥有一个2亿美元数字家庭投资基金的Intel Capital已经投资了十几家相关初创企业，这些初创企业研制开发的产品从数字电视晶片到家庭网络软件不一而足。投资类似初创企业的风险资本公司还有沃尔特-迪斯尼(Walt Disney Co.)和摩托罗拉(Motorola Inc.)。
4. 新玩家
科技热时期，似乎所有人都想从事风险投资。当时有将近1000家风险投资公司在积极投身于科技初创公司的投资。现在呢？根据VentureOne的统计数据，截至今年三季度末，仍在进行此类投资的公司只剩下了608家，与2000年相比减少了42%。而且可能还会有更多的公司逐渐淡出，尤其是那些业绩欠佳的后起公司。
然而这个行业同时也显现出不俗的造血功能。一批新的风险投资公司已经涌现出来，要在这个领域一试身手。甚至连哈佛(Harvard)、斯坦福(Standord)和耶鲁(Yale)等著名大学的大型捐赠基金也跃跃欲试。由于迫切希望提振基金收益，那里的基金经理们如今正在为一些尝试新型投资战略的热门公司提供资金支持。它们投资的目标区域通常是诸如濒临太平洋的西北部等投资不足的地区。这些公司中包括由几位前微软(Microsoft Corp.)高管组建的Ignition Partners以及由星巴克(Starbucks Corp)董事长霍华德?舒尔茨(Howard Schultz)与他人共同创建的Maveron LLC。这两家公司总部都设在西雅图。
5. 摇滚明星
美国前国务卿科林?鲍威尔(Colin Powell)和U2乐队主唱波诺(Bono)有何共同之处？
今年8月，矽谷著名风险投资公司Kleiner Perkins Caufield & Byers宣布鲍威尔以兼职合伙人的身份加盟该公司，当即引起了轩然大波。鲍威尔的加盟令Kleiner公司更加星光璀璨，同时使该公司有了一位了解政府政策动向的行家里手，可以引领该公司将目标投向全球范围内的科技热点。
与此同时，而另一家矽谷公司Elevation Partners则与波诺签了约。这家手中拥有18亿美元巨额基金的风险投资公司将目光瞄向了数字媒体业，波诺以顾问和合伙人的身份加盟实可谓适得其所。
6. WEB 2.0时代
新一批互联网公司正在从诸如Pets.com和Webvan等老一代网络企业早已坍塌的废墟中崛起，而风险资本也是迫不及待地追逐著这类公司。今年前三个季度投入该领域的风险资本总计达到了76亿美元，与去年同期的65亿美元相比有了明显的增加。
是什么使这些新的网站较之从前的同类有著更大的投资价值呢？一方面是因为网上广告终于出现了生机。如今该领域的初创公司可以利用广告收入支撑其所提供的诸如博客和社交网络等免费服务。
Facebook网站通过各学校社交网络的联网将全美所有大学生联系到了一起，而Mania TV!则通过互联网播出自己的电视节目。这两个网站最近一下子就筹集到了1,200万美元的资金，这样的事情就在一年半前还是闻所未闻。
其他同类热门初创公司还有RealTravel和Zvents。RealTravel利用博客和社交网络提供个性化的旅游资讯，人们可以在这个网站上发表自己的旅行经历和建议。Zvents则是一个地区性的搜索引擎，它为消费者提供最新的活动信息。
7. 越老越聪明
尽管热门互联网公司创业伊始就吸引了相当可观的风险资本，但许多风险资本家仍在寻找更加成熟的企业以便将更多的资金投入其中。
曾因科技股泡沫破灭而受到重创的投资者如今更愿将手中的钱投向那些成功经受了行业衰退考验、如今已开发出新产品并有了新客户的那些相对成熟的科技公司身上。
今年迄今为止，占风险投资总额78%的资金都进入了这一类公司，其中包括提供网络电话服务的Vonage Holdings Corp.。这家公司已经获得了4亿美元风险资本投资。
8. 收养“孤儿”
投资老手特里?加尼特(Terry Garnett)和戴维?赫尔弗里赫(David Helfrich)创办了一家著眼企业收购的风险投资公司。他们的目标是寻找那些大公司开发出来后又抛弃掉的“孤儿”技术和产品──比如Wyse Technology Inc.开发的电脑终端机──并将它们分拆到不同的公司中去。按道理，这样的交易是一种找到现成产品的既省钱又安全的途径。
9. 电信业卷土重来
EBay Inc.以大约40亿美元的价格收购Skype Technologies SA的交易使得人们将目光重新聚集到了曾经遭受沉重打击的电信业。Skype所提供的服务让人们可以使用一种叫做VOIP的技术通过互联网进行免费通话。如今订用这种服务的用户可谓络绎不绝。
许多风险资本一度在电信业投资中损失惨重。由于电信企业未能兑现其先前的美好承诺，过去五年中共有150亿美元的风险资本付诸东流。但是随著一心要和有线和移动网络服务供应商一决高下的电信运营商资本支出的增加，这个领域的风险资本投资活动似乎也活跃了起来。
总体来说，除了继续投资于那些它们曾经热衷的老牌公司外。风险资本同时也将VOIP技术、光缆宽带接入和视频技术的开发纳入了它们的投资重点。
今年三季度最大一笔风险投资交易就在电信业：投资者向生产无线网络基站设备的FiberTower Corp.投入了总计1.5亿美元的资金。还有一家初创公司值得关注：Force10 Networks Inc.。这家为大型数据中心生产高速交换机和路由器的公司已经吸引了3亿美元风险投资，眼下它正在计划进行首次公开募股。
10. 短期难以退出
每一笔风险投资终要为自己寻找一个满意的“退出”途径：合并、出售或是首次公开募股。在这一点上，对于风险资本投资者而言，好消息是2005年也许是2000年以来并购形势最好的一年。
截至今年三季度末，总计有255家有风险投资背景的公司被收购，交易金额总计达到210亿美元，而2004年全年的收购总额是230亿美元。由风险资本投资的公司进行公开募股的情况还不多，不过已经开始显现出生机。在今年艰难的前6个月之后，第三季度有16家此类初创公司进行了首次公开募股，而前6个月总共才有13家。
风险资本家面临的坏消息是，要找到满意的“退出”途径需要花很长的时间。根据VentureOne的数据，一般而言，上面提到的那些被收购的公司都经历过科技低潮期，所以这些公司的平均年龄是5年零5个月──这是十年来的最高纪录。而那些在三季度进行首次公开募股的初创公司的平均年龄是5年零8个月──这比2004年平均6年的水平有所下降。
