Farr reports that Marin will likely perform as well as two other strong tech IPOs in 2013, enterprise software Model N and smart grid maker Silver Spring Networks. Their outstanding performances, in which both exceeded target IPO price and jumped by about 30 percent in their respective market debuts, show Wall Street’s confidence in Bay Area tech.

Marin was founded in 2006. Its cloud-based digital advertising platform helps companies manage digital advertising spending across search, display, social and mobile advertising channels like Google, Bing and Yahoo. Revenue has tripled in the past three years, a strong sign for investors.

Despite optimistic forecasts, Marin has yet to reach profitability. Last year the company lost more than $26M despite nearly $60M in revenue. Tony Evans, who wrote a report about Marin for Triton Research, called their financials “horrendous” at first glance.  The company has admitted  publicly that it does not expect to be profitable for some time.

In a previous interview with Farr, Managing Partner Jim Moore discussed what Marin must do to Wall Street in its good favor post-IPO: provide predictable estimates and full transparency.

Trading begins tomorrow.

Read the Full Article at VentureBeat Here

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We are also at a point in time when the large tech platform companies are struggling to keep up with innovation cycles in areas like cloud, mobile and security and are seeking outside innovation from the start-up world. Many large players like SAP, Citrix, and EMC are not only pursuing acquisition targets, but now have start-up accelerator programs, further indicating their desire for inorganic innovation and growth.

The 2012 tech M&A activity is an indicator of the bootstrapped boom. According to a recent report by CBInsights, 76% of acquired companies in 2012 had no venture or private equity funding. While none of these bootstrapped acquisitions hit the billion-dollar mark (the eight in 2012 were venture-backed), these founders were able to grow a lean, self-sustaining start-up into a profitable business with minimal outside capital and enjoy sizable exits.

So who were the leaders in the 2012 M&A market?

• Ninety-four percent of acquisitions were made by strategic buyers
• Google and Facebook were the most active acquirers buying 12 companies each
• Four hundred and fifty-five acquisitions were made in the state of California
• The UK edged out New York’s 138 acquisitions for the year
• One hundred acquisitions of Canadian companies positioned it as the second-largest international market behind the UK (and excluding the US)

Source: CBInsights

Of course, many companies who take VC funding have similar exits via M&A or in some cases, IPO. Some businesses need more capital up front to obtain market validation, particularly those that require heavy sales and marketing infrastructure.

So what will 2013 hold for tech M&A? We believe it will remain the most active of the M&A markets as corporate buyers look to accomplish strategic goals and put large cash reserves to work.

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Jim’s panel starts at 1:19:00 in the video above.

Managing Partner Jim Moore Leads Big Data Panel at AppNation

Last December our Founder and Managing Partner, Jim Moore, led a panel discussion at AppNation titled: Big Data Spotlight: Big Data is Dead! Long Live Smart Data! “Big data” was one of the hottest buzzwords in the enterprise space in 2012, and the panel unraveled that hype to take a look at the future of enterprise class data. The takeaway? Having “big data” only turns a profit if it’s useful to the business, hence the need for “smart data.”

Enterprises must be able to extract business insight from their large, disparate information bases. This requires the ability to consolidate data sources, run complex analytics and visualize the results all in real-time. “Everybody, every department in an organization, wants to have real-time access to data so they can make decisions directly,” said Josh Williams, President and Chief Scientist at Kontagent.

To this end, the megavendors providing the suites many enterprises already use for business intelligence are developing analytic tools to tackle big data problems: products like SAP’s HANA and IBM’s SPSS. But there are issues preventing enterprises from doing the data crunching that can give a competitive edge. For one thing, there is a serious skills gap in many organizations between the people making business decisions and the people who can find value in big data. Because of this issue many companies are jumping on the big data trend by accumulating massive stores of data, but aren’t doing anything with it.

Enter a new wave of business intelligence tools, coined “data discovery” by Gartner, that fill the data scientist skills gap in many organizations. This class of application integrates all of an enterprise’s disparate data sets, simplifies the analytics process with interfaces for business users, and provides visualizations and reports in real-time, turning big data into smart data. In addition, successful data discovery vendors are providing collaborative tools within the software, as well as mobile and tablet apps to access the data, taking advantage of the social and mobile trends in the enterprise. While these solutions may not provide heavy duty data mining capabilities and predictive analytics (although some do), they at least enable business users to interact with big data and make better decisions.

This is exactly what enterprises struggling with information overload need, and data discovery software has recently seen an explosion of growth. Gartner predicts data discovery to outgrow the overall business intelligence market by a factor of three until 2015. While the traditional vendors are racing to develop data discovery solutions, products like Tableau, QlikView, and Pentaho are seeing the most rapid adoption. They provide standalone data discovery applications that often run alongside existing business intelligence suites.

Venture capitalists are jumping on the data discovery trend as well, with recent rounds of funding for companies like Platfora, GoodData, and ClearStory Data, which promise to make big data accessible to business users. Accel Partners has a $100 million fund dedicated solely to big data, and the Data Collective was founded last year to fund big data startups. Data discovery has been a similarly hot region for M&A, with Dell’s acquisition of Kitenga, IBM’s acquisition of Vivisimo, and Oracle’s $1.1 billion acquisition of Endeca providing just a few examples.

As the big data revolution continues, successful software companies will help enterprises to cash in on their data with minimal headaches. The combination of organic and inorganic growth from the major vendors, as well as the dozens of data centric startups receiving funding, heralds an exciting new era for smart data.

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These acquisitions present a few interesting insights. First, each transaction, if not the catalyst, represents an obvious competitive response. For instance, Oracle’s purchase of Vitrue, a social media management and analytics platform, for $300 million in late May was quickly followed by moves from Salesforce.com and Google.  Deep-rooted enterprise strategies of these firms are in parallel alignment and hinged on making plays now.  Not only that, but looking at the high price tags, multiples, and volume of transactions—it looks like the large legacy platform vendors aren’t taking the “in-house” route.

Second, what can the transactions of 2012 tell us about what to expect in 2013? There’s no lull in sight. The social enterprise, both analytics and networking, seemed to be the hottest area of consolidation in 2012, with an evident spike in activity towards the middle of the year. Considering the short time it took for the social enterprise space to be rolled-up we, along with industry analysts, expect the same trends to spill over into other enterprise verticals. More than 65% of enterprises will adopt a mobile device management solution  over the next five years, big data analytics is growing at 54.9% CAGR by 2017, and even social enterprise software, still with an abundance of life, is expected to hit $4.5 billion in revenue by 2016 at a 42.4% CAGR. With recent analyst reports classifying the astronomically-booming SaaS space as “flat,” despite still being up 20% YTD, and evidence of multi-sector consolidation surfacing in 2012, it should be an equally exciting 2013.

As BYOD takes center-stage and enterprises are looking for more efficient and secure ways to tackle their big data needs, empower their mobile workforce, and ramp up enterprise-wide transparency and communication, keep an eye out for a lot of activity in these three specific enterprise solutions. Moreover, security software, cloud platforms, and continued SaaS plays will be all over the enterprise radar as well. Share your thoughts, offer projections, and stay tuned for an in-depth analysis of each particular sector now that we’ve rounded the corner to the New Year.

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It’s not surprising there is heightened interest around M&A, especially since it was announced last week that 2012 IPOs slumped to the lowest level since the financial crisis. With the less-than-stellar (and highly publicized) IPO performances of Facebook and Zynga, we expect to see an increase in activity in M&A in 2013.

To sum it up, IPO is no longer the only mark of a successful company. It’s important for founders to know all of their options – and the sooner, the better. By preparing for an exit from the start, and bringing in helpful experts along the way, entrepreneurs can focus on the most single most important part: continuing to grow the business.

The result of our session was the Idiot’s Guide to technology M&A, the third in a series of Idiot’s Guides (see also Angel Investing and Getting Funded). Check out the start of the M&A Idiot’s Guide below and read in entirety here!

Most entrepreneurs will tell you they’re going big and will accept nothing less than an IPO. But when the reality of running a business sets in, getting acquired is no small feat, itself.

“With the exception of about half a dozen companies, every tech startup is for sale,” said Jim Moore, founder and CEO of J Moore Partners, a firm that specializes in tech M&A.

In Silicon Valley, where startup activity is at an unparalleled high, mergers and acquisitions are the fastest-growing exit for venture-backed companies. According to a recent study by Ernst and Young, the volume of M&A in the technology space surged 41 percent in 2011, reaching levels not seen since the dot-com boom.

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As the World Series frenzy is settling, we reflect on all of the elements that led to the Giant’s win.  And note how their strategy so similarly points to victorious technology companies.

In September the Wall Street Journal reported that three out of every four venture-backed of start-ups fail.  It is hard to get the timing and product offering right.  Even if you recruit top talent, you still are not assured success.  It is how you form that talent into a positive team culture working toward a greater goal that helps a business beat the odds and find success.  So, how do you do this?

• Drive employee investment

When you look at the Giants’ leadership you have Larry Baer as the president who credits his organizations success to the coach, players and fans rallying the community and strengthening the position of his team.  This galvanizing leadership approach is also evident in many successful tech companies.  When Tony Hsieh stepped into a CEO role at Zappos, he developed a company culture statement that starts: “The best leaders are those who lead by example and are both team followers as well as team leaders.”  Zappos and Tony Hsieh with the Delivering Happiness movement is probably one of the most praised tech companies for its culture. Even with the sale to Amazon for $928M in 2009, and subsequent move to Las Vegas—the culture thrives because of Hsieh’s ability to build a community the employees embrace and want to protect.

• Grow leaders money can’t buy

Establish leaders that empower each individual to do their job.  Look at how Bruce Bochy did managing the Giants this season, he knew how to put good people in place, and then allow them to do their job.  At the World Series, struggling starter Tim Lincecum was taken out of the rotation and put in the bullpen for the World Series.  In his new position, he thrived and became a key player in the Giants’ win.

Once a startup and now an icon of Silicon Valley, Google implements one of the most effective ways of investing in their employees through their “20% time” policy. Google employees are encouraged, to devote one fifth of their work week towards individual projects and experiments, as long as they advance Google in some way. The philosophy is simple; smart and creative people will thrive in a culture that gives them freedom, allows them to innovate, and asks them to be leaders. As a result, some of Google’s most innovate products have been created from the 20% program, including Gmail, Google Earth, Google Talk and Google News.  Apple similarly began a new initiative allowing its employees to spend time on pet projects called “Blue Sky,” in an effort to drive employee retention.

•  Put the Team First

Just like professional sports, there are a lot of egos to manage in a business.  Good managers are consistent at delivering the message: “We are all in this together, and there is no one above the team.”  We saw this with Bochy’s decisions not to reactivate left fielder Melky Cabrera after his drug suspension to preserve the team dynamic.  At Zappos, every employee that is hired goes through a two-week training course and at the end is offered a check to leave.  Only a few people over the years have taken up this offer, getting employees to buy-into the culture as immediately as they are hired.

• Emphasize Culture Matters

Before the playoff and World Series games, you would see Giants players horsing around in the dugout. Rather than reminding the team of the high stakes game ahead of them, Bochy allowed the team to relax, and enjoy playing together.  It is so important, that company leaders reinforce on a daily basis the company values.  Many companies with a history of success offer extensive employee reward and benefit programs, but those with a unique focus differentiate their cultures from the rest. At Salesforce.com, the work culture has a particular focus on philanthropy. While the company gave away more than $3 million last year, their focus on community service allows employees to give back to their community without taking time out of work; everyone gets six paid days off per year for charitable work. “Employees ‘rave’ about the company’s commitment to philanthropy. They are committed, too: in 2011, our employees volunteered over 75,000 hours with more than 900 organizations,” states the company’s website.  Salesforce is consistently listed on Fortune’s annual list of 100 Best Companies to Work for.

•  Surround Yourself in a Supportive Environment

One important success factor in team performance stems from the ecosystem around it. Not only do the giants have an avid, die-hard fan base in San Francisco, but the Giants’ AT&T Park has a unique design that makes it potentially advantageous to the home team. Features like the expansive Triples Alley, a high brick home-run wall next to McCovey Cove, and the heavy coastal air give the Giant’s a leg-up on any visitor. However, successful teams cannot just rely on their arena. Since 2010 the Giants were a total of 55 games over .500 at home, but when they started the playoffs with three straight losses at home, they were forced to find the winning solution within their team chemistry. Outside of their comfort zone, with the usual tactics not working, the Giants had to find success much like a bootstrapped startup would, with no funding, a product in development, and, hopefully, a phenomenal team.

For us The World Series games weren’t just great to watch for the sport.  It was about rooting for a team that achieved success and community above and beyond each individual contribution.  We embrace this story and strive to achieve this type of success in our own business practices. Let us know your favorite moment of takeaway of the 2012 World Series.

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What Every Entrepreneur Should Know When Seeking Funding

I was lucky to spend an evening at the November PandoMonthly fireside chat listening to AngelList Co-Founder, Naval Ravikant, talk about how he and AngelList have disrupted Venture Capital.  If you don’t know Naval from AngelList, you may know of him as the founder of consumer review website Epinions, or as the entrepreneur that sued his VC’s, or as the force that pushed the JOBS act in Washington.

Our takeaway from Naval:

Money has karma too. “The ultimate goal is to create something brand new, spread it to the world, in volume, and get paid for it,” said Ravikant, when asked about the mindset of an entrepreneur. “Money as success is like a scorecard.” When you have a strong position it is easy to push too hard, voiced Ravikant, but if you are successful it is important to give something back in the end. Moreover, don’t choose your business partners based on money. His rule of life is compounding interest; your best business partners are those that you work with for decades. Make sure that you like your business partners, that you trust them as well, and that they have realistic views. At his core, Ravikant follows his own advice; when asked why AngelList doesn’t charge for the better part of its services, he answered that “our motto at the end of the day stands for the startup.”

Unfundable companies should not be funded. Ironic to hear from an investor who started a website devoted to catalyzing and simplifying the investor-startup relationship. A lot of great companies can be and have been built without funding.  At J. Moore, we are fortunate to work with many successful bootstrapped companies who have achieved high growth, profit, and market leadership, including Survey Monkey, AdParlor, and HB Gary.  Funding is not synonymous with the likelihood of a company’s success.  Like Ravikant observed, we continue to see more and more great businesses built with leverage, little capital, and fewer heads.

The cost of building a business has collapsed. Ravikant argued that AngelList or even the rise of the incubator, such as Y-Combinator, did not disrupt the startup industry. What disrupted the industry is the increasing capability to start, run, and spread a business using the inexpensive, or mostly free, services of other startups. For instance, as an entrepreneur you can market with Facebook, obtain funding from AngelList, and connect via Twitter. The resources for young entrepreneurs are endless. The problem that hasn’t been solved for startups, says Ravikant, are customers. In the meantime (startups pay attention) there will be dozens of incubators who will take your application straight from AngelList starting in Q1 next year.

Overall, Naval is proud of AngelList’s role in matching funders with fundraisers: “If I’m enabling more startups,” asserts Ravikant, “then that is unequivocally a good thing.” As I finished my pizza and walked out the door I couldn’t help but smile and think what a great time it is to work in technology, where we have all the tools to innovate, from product creation to financing.  Leave a comment and let us know your thoughts.

Photos from the Event

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We are deep in the trenches with mobile as an M&A advisor and investor. Recently we helped launch a mobile asynchronous gaming company, Tap Saloon, starting with the release of Skinz Golf.  In addition, we are in the market with several companies innovating in mobile through advertising technology, new content distribution vehicles, ecommerce and data.

There is no question mobile is “hot” with record consumer adoption.  TechCrunch recently reported: “The unstoppable rise of smartphones and tablets will see 1.2 billion of the devices being bought worldwide next year, analyst Gartner is predicting. It also forecasts sales of 821 million of the smart devices this year — which is says will account for 70 percent of total devices sold in 2012.”  According to Yahoo mobile data traffic has doubled over the last couple years and digital game sales –including social games, mobile apps, and digital downloads – has increased by 47 percent since the third quarter in 2011.

We hosted leading mobile executives, investors and founders to discuss these consumer mobile trends and opportunities at Alfred’s Steakhouse in San Francisco last week in conjunction with the Open Mobile Summit, as part of our firm’s executive dinner series.

Jim Moore kicked-off the evening asking, “What’s the key thing that hasn’t been figured out yet in this sector?” Without hesitation, Niko Bonatsos, Associate at General Catalyst Ventures, quickly interjected, “mobile monetization on every level.” Once the floor had been opened up dinner guests including the head of mobile from Demand Media, as well as founders from start-ups including Socialize, Sparkart, YogiPlay, and Hook Mobile explored a number of subjects relating to mobile.  With a strong focus on monetization as a key determinant of growth, topics from user experience, mobile “language,” and cross-platform compatibility were discussed in depth.

It was established that consumer usage and engagement drives mobile innovation.  Mark Curtis, Co-Founder and CCO of Fjord, a UK-based digital service and design company, stated, “You have to simplify, focus on and understand what to leave out…if you have hundreds of different services you interact with on a daily basis you’re going to preference the ones that are easier to work with.” While guests agreed simplification is essential for brands moving to mobile, the discussion of what type of content, payments, and advertising practices was in question.

By the end of the evening it was clear the opportunity is open to engage and monetize the mobile consumer.  Join the conversation: where do you think there is real promise—and what is just hype?

J. Moore Partners’ Executive Roundtables are confidential forums for industry leaders and entrepreneurs to connect and discuss business opportunities and insights in emerging technology fields. Company details discussed at dinner remain private.

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He also discussed the hot areas buyers and investors are currently seeking including mobile, cloud and data analytics resulting out of the rapid convergence of the consumer and the enterprise. These types of companies have been quick to scale and tend to be capital efficient – which buyers and investors seek when considering investing strategic dollars.

Additional company attributes include predictable revenue (subscription and/or recurring charge model), unique IP or business model, strong market position and a sticky user base. But the most important assets of building a successful company highlighted by Moore? People. “It’s crucial to create a well-rounded mix of operators with experience, talent, and tenured advisors,” said Moore.

Moore also touched on recent mobile transactions by Apple and Google, specifically highlighting those in the mobile and enterprise security space, mobile-focused computer vision software, and enterprise and consumer social network solutions. Social CRM was also discussed as a huge opportunity in the enterprise space, as Forrester has predicted it to be a $1.2 Billion industry in 2012.

Regarding the exit itself, Moore discussed both IPO and M&A as viable options. Given the recent IPO performances of technology heavyweights Facebook and Zynga, M&A has experienced a strong resurgence in the shift away from public markets. If an acquirer can find a company that is a fit wiht the product, financials and team, it is a safer alternative for entrepreneurs who spend years building their vision into something valuable.

Source: Thomson Reuters/National Venture Capital Association

All, and all it was a great day at GMIC, and we appreciate our partnership with the Great Wall Club and Korea’s BeSuccess Team. If you are curious to learn more about topics covered during this talk – leave a comment or give us a call.

The theme of the Conference was “Connecting Global Innovators,” and the crowd was all a buzz discussing the shifts, challenges, and opportunities for growth in fastest growing markets. The next GMIC conference will be in Beijing in May 2013.

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CodeNow: Teaching Kids To Code from ShineOn Storytelling on Vimeo.

More than 50 Bay Area tech founders, executives and civic leaders came together on Tuesday, October 16, 2012 at Trinity Ventures’s Dolores Labs in San Francisco to meet CodeNow and discuss how coding can help inner-city youth get out of poverty and into successful computer science careers. According to the US government, in 2011 computer programmers were the most wanted position in the US with 220,000 new jobs. In San Francisco alone there is a reported 3,800 new jobs with expected growth of 30% by 2020. CodeNow teaches underrepresented high school students skills in computer programming, providing a pathway to this expanding job market.

J. Moore Partners’ Founder, Jim Moore, kicked-off the evening talking about how graduates of engineering and computer science majors typically will make a salary of $70,000 out of school compared to average graduate salaries at $41,701. He introduced CodeNow as a solution to helping engage underrepresented youth in computer science, and as a pathway out of poverty. Rebecca Miller of Trinity Ventures echoed Moore’s sentiments, and highlighted how these skills were so in need for the VC’s portfolio companies. Ryan Seashore, founder of CodeNow, presented a video of the students participating in the program in Washington DC expressing how CodeNow helped demystify coding and made it feel possible for them to pursue engineering careers. Seashore, along with Board Member Roy Bahat, encouraged the community to support CodeNow and bring it to the San Francisco Bay Area. The program is in need of space, computers, mentors and funds and hopes to launch in San Francisco in 2013 once funding is in order.

This event was part of J. Moore Partners’ community platform bringing together technology founders, executives and civic leaders to discuss technology solutions that can evolve and provide greater access of healthcare, education and environmental conservation. We were delighted to partner with Trinity Ventures, VentureBeat and Broadway Grill in developing this event, and want to thank our amazing host committee: Dan Scholnick (Trinity Ventures), The Honorable Gavin Newsom, Gwyneth Borden (IBM), Hooman (Alice Radio/Producer of Olive), Ian Hunter (Zaarly), Jerry Kennelly (Riverbed Technologies), Jim Moore (J. Moore Partners), Jonathan Abrams (Founders Den), Kathryn Pellegrini Inglin (J. Moore Partners), Kathy Hurley (Pearson Foundation), Libby Leffler (Facebook), Rebecca Miller (Trinity Ventures), and Roy Bahat (IGN).

More Event Coverage

To find out more about CodeNow, click here.

See More Event Photos Here!

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