Sunday, January 7, 2007

5AM Ventures Closes $150M Fund II - I’m In!

I am thrilled to report the recent closing of 5AM Ventures Fund II.

Thrilled, in part, because I am lucky enough to be a Limited Partner in the fund!

Fund II is a $150M fund focused on early-stage biotechnology and medical device companies. VentureWire Professional reports it here (subscription required). In particular:
5AM Ventures has closed its second health care venture fund at $150 million and has funded three early-stage companies from the new vehicle, Managing Partner Andrew J. Schwab told VentureWire.

The Menlo Park, Calif., firm held a final closing on Dec. 19 for the fund, which had a $150 million target. The fund more than doubles the $65 million debut partnership the firm raised in 2003.

So, why did I invest in 5AM Ventures (and, indirectly, in their Portfolio companies)? Simple:

  1. I always invest in the people. John Diekman, Andy Schwab, and Scott Rocklage are guys with the proper moral compass. I've spent a lot of time with these guys, and their entire team, and consider myself lucky to know them all. In addition to being very good and knowledgeable investors, they are very good people. In my most recent interaction with John, as an example, it was natural for me to end my time with him with the following: "John, you are a consummate gentleman, generous, and gracious." If you know John, you will know what I'm talking about. 5AM Ventures has also assembled an extremely impressive Scientific Advisory Board which brings them some clear advantages.

  2. I always invest in the market. The biotechnology and medical devices markets are focused on bringing life-changing advances to mankind. These are big-money markets today, and the next 10 years will see some amazing breakthroughs (pay no attention to my review of Next). Early-stage investors, like 5AM Ventures, are investing at the right time to see some seriously big returns. At $150M, it's a relatively small fund for biotech (which, I think is to their advantage), but the likes of John, Andy, and Scott have the knowledge and contacts to find and win the right to invest and grow the best companies. In essence, a smaller fund focused on early-stage investments with a well-connected team in a booming and liquid sector means, to me, that their chance for one or two very big wins are higher than most.

  3. I always invest in firms that can execute. 5AM Ventures is young, to be sure. Founded in 2003 with a $65M Fund I means that there has not been much time to measure their success as a firm. However, their portfolio speaks for itself. That's great progress for a $65M fund over a 3-year investment period. VentureWire reports that Fund II already has 3 investments in Fund II (which are not yet on the Portfolio page).

Bottom line: I don't know how to invest in biotech. I believe in the market and the timing for the market, but I couldn't pick the winners. No chance. I'll stick to what I know (Enterprise/IT, Virtualization, Open Source, Mobile, Internet Services) and leave the biotech space to these folks, thank you. I'll invest in the investors and, wherever I can, help them be successful.

Best of luck to the entire 5AM Ventures team!

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Thursday, January 4, 2007

AppleScript Shell for Mac OS X

This is truly cool, if uber-geeky.

I've been coding of late. Working on a prototype for a new application that would, at least initially, integrate tightly into the Mac OS X operating system.

As such, I've been up to my ears in Objective C and AppleScript.

Thankfully, this discovery came at the perfect time.

It's a program, written in PERL, that provides for a command-line shell for AppleScript applications under Mac OS X. It's called "ash", for AppleScript Shell, and is available here.

It's just like the good old days. Programming in the '80s. Caveman style. Just the way I like it!

Many thanks to Hayne of Tintagel for this nice piece of work.

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Daylife: A Beta That Rocks

Marc Hedlund over at the O'Reilly Radar announced the launch of Daylife today.

A quick peek at Daylife really impressed me. Take a look at the Daylife Tour.

Looks like they are indexing both news web sites as well as blogs. I expect they will compete with folks like TechMeme, TailRank, and Newsvine, and Buzzfeed (in the Social News category) for your attention.

The visuals on the site are stunning.

Very nicely done for a Day-1 launch of a Beta product.

Congratulations to the team... I wish them the best of luck!

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Michael Crichton: Next Review

I'm a big fan of Michael Crichton, so I was thrilled to receive his current book, Next, as a Christmas gift.

The book was pretty classic for a Crichton novel. Lots of technology, speculation on how that technology may be used (or abused) in the future, lots of characters, a few chase scenes, industry espionage, political soapboxing, legal and moral issues, the role of the venture capitalists, a hint of sex, and a story line that tries to tie it all together.

For this book, though, I didn't think that the "novel" parts of the book were particularly interesting. I liked that there were multiple story lines happening all over the world and they (mostly) all came together at the end, but the "coming together" parts seemed pretty forced to me.

The technology side of the book is quite good, as usual. Crichton provides some great discussion on the Biotech industry, gene therapy, transgenic species, gene patenting, the use and ownership of human tissues in research and development, legal issues galore, and the commercialization of the University research programs. All great stuff. Crichton is no dummy.

Bottom line: This is way better than Airframe, but not as good as Jurassic Park. In about the same league as Disclosure. Worth a read if you are interested in the technology, but don't buy it for the story.

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2007: The Year of Enterprise M&A


First week of the new year, and we have a nice-sized ($830M) acquisition of IronPort Systems by Cisco. Here's a link to the press release.

All Hail The Return Of The Enterprise M&A Market!

OK. So, maybe I'm a bit premature with my celebration... But, I don't think so.

IronPort got started in 2000 and toughed it out through some slow years for the enterprise market. They persisted and grew. Their products are not sexy, but certainly are needed. The uptick in IT spending in 2006 likely brought them a nice valuation kicker to support the lovely acquisition price of $830M.

There are many Enterprise/IT startups that are in a similar position right now. Increasing sales traction, no real IPO market available, but the big boys still need them to grow their product/technology portfolio, customer base,  and market share. And, where else will they get to an exit?

My 2007 prediction is for a marked increase in M&A transactions for Enterprise/IT focused startup companies. Bigger valuations, combined with the need for VC firms to wind down some of their 1999 and 2000 vintage funds will add fuel to the fire.

So, was the IronPort deal a good deal? Some data:

Not much else out there for Joe Public. My sense from these numbers and some other digging was that IronPort was likely looking at 2007 forward revenues of $160M+. Many congratulations to the IronPort founders, CEO Scott Weiss and VP Corporate Strategy Scott Banister for building a great company.

Om Malik covers the story here. And, VentureBeat covers the story here.

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Wednesday, January 3, 2007

New Year’s Resolutions from Alexis Lakes

My good friend Alexis Lakes, CFO of RWI Ventures, kicks off the new year right with some New Year's Resolutions over at peHUB.

Alexis is a new VC blogger, and this is a great post.

Topics included:

    Resolve to never lose sight of ownership percentage and expected terminal value of your investment.

    Resolve to be bigger than your ego and do the right thing by your investors with respect to under-performing companies.

    Small Fry: Resolve not to be star struck by big firms wielding crappy deals in hopes of getting on their holiday party invite list.
    Player: Um. Gee. If you can find a sucker to delay a fire sale of your company - possibly buy it a lottery ticket chance of success, what can I say? More power to you, as your actions benefit the company and your investors. Of course, I couldn’t do your job, that is for sure. I need my sleep.

    Resolve to trust your partners and to be worthy of their trust.

Thanks Alexis! And... Happy New Year!

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Monday, January 1, 2007

You Are Spider-Man

Spotted this on TechCrunch.

As a Superhero, looks like I am Spider-Man (or, Iron Man, as the mood suits):

Your results:

You are Spider-Man

Iron Man
The Flash
Green Lantern
Wonder Woman

You are intelligent, witty,
a bit geeky and have great
power and responsibility.

Click here to take the "Which Superhero are you?" quiz...
As a Super Villain, looks like I am Dr. Doom:

Your results:

You are Dr. Doom

Dr. Doom
Lex Luthor
Poison Ivy
Dark Phoenix
Mr. Freeze
The Joker
Green Goblin

Blessed with smarts and power but burdened by vanity.

Click here to take the "Which Super Villain are you?" quiz...
As a kid, The Flash was my favorite. I'm off by just 5%. I'll take it.

I grew up reading and collecting comic books. Still have an old box in the garage with some nice ones saved away for a rainy day.

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