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Is VC money for start-ups drying up?

Stephen — Fri, 03 Feb 2012 11:34:10 +0000

Are the geese with the golden eggs flying south for a while?

While the last few years have seen a bit of a boom in venture capital funding for Irish start-ups, the next two years don’t look so rosy. In 2011, 159 Irish technology companies raised €274m from investors while in 2010 tech firms received €310.2m, according to the Irish Venture Capital Association (IVCA).
Since the start of the credit crunch in 2008, 547 Irish SMEs raised venture capital of €1.1bn. “These funds were raised almost exclusively by Irish VCs who during this period supported the creation of up to 20,000 jobs,” says Regina Breheny, director general, IVCA.
“However, there was a sharp fall off in funding in the second half of 2011. This decline is largely due to a pull back by overseas VC investors,” says Maurice Roche, chairman, IVCA and partner, Delta Partners. “We have serious concerns that Irish venture capital firms too will start to run short of funds in 2012. This will place a major brake on the future expansion of Ireland’s indigenous tech sector. In particular start-ups that have received investment in recent years from the Seed Funds will have great difficulty raising additional capital.”

2011 Summary:

Funds Raised
The IVCA VenturePulse survey shows that high tech Irish companies raised €274.4m from investors in 2011, despite the continuing global credit crunch. This compares with funds raised of €310.2m in the same period of 2010 and to €288.1m in 2009. While first half funding in 2011 rose 58% over 2010 to €161.9m, the second half of 2011 saw a decline of 46% to €112.5m.

Companies
The number of companies that raised funds in this period was 159, compared to 156 in 2010 and to 139 in 2009. Amounts raised ranged from €100K to €20m.

Seed/Early Stage
In 2011, 82 companies raised €104.9m (38% of funds raised). This compares with 63 companies and €53.6m (17% of funds raised) in 2010 and with 65 companies and €71.2m (25% of funds raised) in 2009.

Pinterest – the sleeping social giant to watch

Emma — Fri, 03 Feb 2012 10:28:30 +0000

If you haven’t tried using Pinterest, you should. Why? Because it’s quietly becoming a dominant social force on the web and it’s where all the cool people are hanging out. Forget Facebook, Pinterest is a visual social network where people can show off their good taste, not their bad behaviour.

How does it work?
Pinterest is easy and fun. Users simple ‘pin’ content from different sites on the Web to a virtual cork board. There are numerous categories on the cork board such as photography, food, fitness, clothing and home. Users create their own boards and ‘pin’ stuff they find interesting and their followers can see what they pin. Users and followers share information with each other in a visual and interesting way and users can ‘re-pin’ stuff they find interesting.
According to the Ignite Social Media blog, Pinterest’s audience is mainly female – between the ages of 25 to 54. ComScore says the social network has over four million users and the Google Ad Planner shows nearly 1.5 million unique users are visiting Pinterest daily, and spending 14+ minutes on the site. Compare this with the average Facebook user who spends 23 minutes on the site each day.

Getting smarter
What’s interesting about Pinterest is its philosophy – it’s a discover & share social network and poses no real threat to individual privacy. The most ‘damaging’ thing it can do is show other people you have poor taste.
Brands are also paying attention to it. For example, online shopping site Etsy is using it to great effect. It has over 45,000 followers on its Pinterest brand page and every time it pins a new item to its page it essentially advertises that product to its followers.
Brands also don’t have to rely on complex data processing to target specific groups of people because if people are interested in a brand’s products, they’ll simply follow it.
As the first generation of Facebookers mature and it slowly dawns on them that sharing one’s life with hundreds of virtual contacts probably isn’t the smartest thing to do, they will look around for alternative ways of expressing themselves. As people get older they become more private but they remain interested in what other people are doing. Pinterest is a social network for people who are interested in what other people find interesting. That’s what makes it a sleeping giant.

Facebook makes history with its IPO

Gerard — Thu, 02 Feb 2012 10:09:46 +0000

Let the good times roll?

Facebook’s initial public offering (IPO) has thrown up some interesting figures – the kind of figures that either excite or disappoint would be investors. The IPO, which will raise at least $5 billion for the firm this Spring, but could raise as much as $10 billion, is historic. It values the company anywhere between $75-100 billion.

The shape of things to come:

• The company produced a $1.6 billion profit last year from $3.71 billion in revenues
• Zuckerberg has a 28.4% stake in his company but more importantly has 56.9% of the voting shares
• Zuck has complete control of his company and will “control all matters submitted to stockholders for vote, as well as the overall management and direction of our company”
• Zuck only received a salary of $500,000 in 2011 with a bonus of $220,000
• Advertising brought in $3.2 billion of revenues in 2011 compared to $1.9 billion in 2010
• Facebook has 845 million users worldwide, up 39% from 2010
• Research and development costs rose to $114 million in 2011 from $9 million in 2010
• Facebook pocketed $557 million in revenue from social gaming partners such as Zynga in 2011
• The number of ads on the site grew 42% and the average price per ad grew 18% between 2011 and 2010
• Google’s IPO raised $1.9 billion at a valuation of $23 billion in 2004, making Facebook’s IPO the largest ever for a digital company

READ MORE: Who will cash in if Facebook is worth $100 billion?

The year social media made money

Stephen — Wed, 01 Feb 2012 15:51:35 +0000

As Facebook prepares for its IPO and Google+ changes Google search and Twitter sits back on its big pile of investment cash – 2012 in the land of the social media giants already looks interesting.
2011 was the year that defined the big social networks in that they finally started to make some real cash (and late to the party investors looked up).
According to the most recent figures from eMarketer, Twitter’s ad revenues grew 233% in 2011 to reach €139.5 million. LinkedIn, which went public, enjoyed a 95% increase in ad sales to hit $154.6 million. However, with revenues of $4.27 billion in 2011, $3.8 billion of that from advertising, Facebook is the big Daddy on the farm. It also now controls 28% of the online display ad market in the US.
eMarketer predicts Twitter will continue to grow and land ad revenues of $540 million by 2014.

‘Bring your own’ to work saves money for firms

Stephen — Tue, 31 Jan 2012 12:49:15 +0000

You're more likely to take proper care of your laptop if it's your own

Bringing your own laptop to work has been the preserve of start-ups and SMEs for many years now. Larger organisations, scared off by possible security issues, have mainly shied away from employees using their own devices at work. However, a new report by Citrix shows that its three year old employee bring-your-own (BYO) programme is working and saving it money.
The main savings are as a result of fewer desktop support requests and incident reports, as employees worldwide buy and maintain their own work devices.
“Whilst the total number of Citrix employees has increased by 2,000, we are have made significant savings on IT,” says Martin Kelly, vice president of information technology. (No figure was given but there was an emphasis on the word significant).
Each employee who wants to ‘bring their own’ is allocated a stipend to put towards a device of their choice. Once purchased, they are required to install and maintain anti-virus software as well as purchase a three year support agreement.
Logically a worker is also likely to protect and take care of their device even more if they see it as their own.

Electric Ireland launches energy saving guide

Mark — Tue, 31 Jan 2012 10:47:59 +0000

Who, these days, doesn’t want to save energy and consequently save money? One of the biggest growth areas in the economy is the energy conservation sector and the biggest electrical company in Ireland, Electric Ireland has just launched a new advice tool to help business customers save money by using energy more efficiently.
The Office Energy Expert tool is essentially a framework for firms to take a detailed look at their office energy use and then employ simple tasks to reduce energy consumption.
“Companies do not need to incur large costs to make a real difference to their energy costs, with savings of up to 20% wholly achievable by using this tool,” says Liam Molloy, general manager, Electric Ireland.
To try the Office Energy Expert hit the link: www.electricireland.ie/office.

Who will cash in if Facebook is worth $100 billion?

Stephen — Sun, 29 Jan 2012 13:55:48 +0000

The Wall Street Journal believes the most anticipated initial public offering since Google’s will be filed this week. Facebook, it seems, is finally going public. It could mean as much as $10 billion in cash for the social network, valuing the company at $100 billion. While many of the early investors will immediately become even richer, over 1,000 Facebook employees will also become overnight millionaires.
Facebook depends mainly on advertising revenue for its profits. EMarketer estimates that Facebook’s ad revenue will grow 52% to $5.78 billion this year and will reach $7 billion in 2013.
Even still, a $100 billion valuation seems very, very high. Bubbly high, considering Amazon.com is worth around $90 billion and McDonald’s Corp. is worth around $100 billion. The $100 billion valuation of Facebook is based on very optimistic predictions that it will remain the world’s fastest growing social network for many, many years to come. And who knows? Maybe it will.

Mark Zuckerberg
Facebook stake: 24%
(Worth around $24 billion)

Accel Partners (VC)
Facebook stake: 15%

Dustin Moskovitz
Mark Zuckerberg’s roommate at Harvard and co-founder
Facebook stake: 6%
(Yep, $6 billion worth)

Eduardo Saverin
One of the three original founders of Facebook
Facebook stake: 5%

Digital Sky Technologies (VC)
Facebook stake: 5%

Sean Parker
Facebook’s first President
Facebook stake: 4%
(Worth around $4 billion)

Peter Thiel
First big outside investor when he put up $500,000
Facebook stake: 3%

Microsoft
Facebook stake: 1.6%
(Worth around $1.6 billion)

Greylock Partners (VC)
Facebook stake: 1.5%

Meritech Partners (VC)
Facebook stake: 1.5%

Elevation Partners (Bono’s VC firm)
Facebook stake: 1.5%
About $1.5 billion if all goes well.

Jim Breyer (Angel Investor)
Facebook stake: 1%

Goldman Sachs (Corporate Investor)
Facebook stake: 1%

Chris Hughes
Former employee
Facebook stake: 1%

Li Ka-Shing (Angel Investor)
Facebook stake: 0.8%

Matt Cohler
Former employee
Facebook stake: .8%

Jeff Rothschild
Vice President of Technology at Facebook
Facebook stake: 0.8%

Adam D’Angelo
Former CTO of Facebook and founder of Quora.com
Facebook stake: 0.8%

Owen Van Natta
Former COO at Facebook
Facebook stake: .8%

WTI (VC)
Facebook stake: 0.5%

Reid Hoffman
Co-founder of LinkedIn
Facebook stake: 0.5%

Mark Pincus
Co-founder of Zynga
Facebook stake: 0.5%
(That’s $500,000,000 clams for those not good at percentages)

Interpublic (Corporate Investor)
Facebook stake: 0.25%

T. Rowe Price (Corporate Investor)
Facebook stake 0.25%

Marc, Oliver, and Alexander Samwer (Angel Investors)
Facebook stake: 0.1%

General Atlantic (VC)
Facebook stake: 0.1%

Ezra Callahan
Facebook’ first ad sales guy
Facebook stake: 0.08%

Kleiner Perkins Caufield & Byers (VC)
Facebook stake: 0.073%

The Winklevoss Bros.
Enemies of Zuck
0.044%

Divya Narendra
Enemy of Zuck
Facebook stake 0.022%

Students – the future is clear, do your sums

Emma — Fri, 27 Jan 2012 11:00:06 +0000

Maths, Science and Technology graduates are in high demand. A second language is also beneficial

The chief executive of the IDA, Barry O’Leary, has advised students who are currently choosing a college course on where future opportunities for jobs lie. Foreign direct investment (FDI) companies continue to create jobs and most are seeking graduates with backgrounds in science, technology, engineering and maths. Many FDI jobs also require multi-lingual skills.
Irish Universities and colleges provide a wide variety of courses “which qualify graduates to meet industry needs to match with employment opportunities,” says O’Leary.
In the last 12 months, multinational companies with export-led growth created over 13,000 new jobs in Ireland.
“Students planning now for their future careers need to take this growth into account and consider in which sectors the greatest FDI job opportunities will be in the coming years,” says O’Leary.

EU toughens its stance on web privacy

Mark — Thu, 26 Jan 2012 10:42:27 +0000

Justice Commissioner Vivianne Reding

Digital giants like Facebook and Google are facing another bid by the European Commission to prevent them from using people’s data without their ‘explicit consent’.
Companies like Facebook and Google make billions of dollars a year from collecting data on people who use their services. This data is analysed and packaged in such a way that allows other companies target individuals with advertisements and offers.
The EC, however, see this an affront to individual privacy and EU Justice Commissioner Vivianne Reding wants to force all web companies that collect data in such a way to get explicit consent from their customers and users.
The Commissioner wants web firms to be transparent about how this information is used. She also wants to give users the right to completely erase any information they may have shared or posted online during their lifetime.
Commissioner Reding is determined to introduce stiff penalties for companies that don’t comply, including a €1 million fine or a fine of 2% of annual turnover.
Reding says the EC’s goal is to give people greater control over the information they share online. She believes each country should have a data protection authority whose role is to deal with complaints by consumers, carry out investigations and impose sanctions.
“This is a world of breathtaking possibilities and it should stay so,” she says. “It should be a world of innovation but there are also dangers around these new technologies [cloud computing and social networks] especially concerning the [loss of control] of one’s personal data.”

Timeline in the firing line
Facebook’s new ‘Timeline’ feature (see video below), which brings back a user’s entire Facebook history for everyone to see is also being scrutinised by the EC. The idea that Timeline could reveal a person’s ‘digital skeletons’ is something that doesn’t sit well with privacy advocates.

We Are Legion – the Anonymous film

Gerard — Tue, 24 Jan 2012 12:43:11 +0000

As SOPA meets its end and as the Irish government attempts to muffle the web, a new documentary on the rise of hacktivist group Anonymous is hitting screens around the world.
For those who don’t know, Anonymous is regarded by some as an underground group committed to defending the freedom of the Internet in the face of corporate myopia. Others see it as a group committed to criminal acts, especially against powerful and wealthy corporations and governments.

Civil disobedience
The film will be seen by those who want to censor the web as a propaganda video for criminal anarchists. For most who want the web to remain free of censorship, however, the film will be seen as a portrait of revolutionaries – a documentary charting the rise of a new model for civil disobedience across the globe.
We Are Legion is directed by Brian Knappenberger. The official site is here.