M&A 2010: Who Will The Buyers Be?

Confidence is a funny thing: Too little leads to low self-esteem, too much makes one arrogant.

When venture capitalists are confident, it means they expect their startups to outpace the growth in the overall market—a good thing for startups or a bad thing for the rest of the economy.

Mark Cannice has been tracking venture capitalist confidence for half a decade at the University of San Francisco’s School of Business and reports that venture capital confidence is slowly improving from its fourth quarter 2008 low. “Notable return of exit opportunities—especially headline acquisitions—is breathing life into the venture business model,” Canice says. (Read our earlier coverage).

That’s a sentiment that seems to be shared across the board. When the Venture Capital Journal surveyed investors for its January issue, it heard the same optimism for an M&A surge:

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Behold: Apple’s iPad, the New Newton

For tech nerds, today’s big Apple product announcement was a little like Christmas, with Steve Jobs as Santa Claus. But now, with wrapping paper strewn across the floor are you satisfied with the iPad? There’s a lot to be excited about. The device seems reasonably priced. You’re not locked into an AT&T contract, just a […]

Book Report: Green Metropolis

January is the cruelest month when it comes to reading. Books from both Christmas and my birthday vie for time and attention like so many petulant, raucous children. David Owen’s Green Metropolis has been a source of some amusement and entertainment for me and I recommend it to anyone looking at the green buildings market.

The gist of Owen’s book is simple, the entire world would be better off living in Manhattan. Baring that, they should at least live as those in Manhattan do, stacked on top of each other in high-rise apartments within easy walking distance of shops, offices and restaurants.

Perhaps this is the conclusion any staff writer for The New Yorker might arrive at.

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Vancouver Venture Firm Is In The Game with EA

Game maker Electronic Arts is poised to invest in a newly-formed, $200 million Canadian venture capital fund made up of former EA employees, peHUB has learned. The firm, called VanEdge Capital, expects to hold its first close on $100 million from six limited partners, including EA, later this month.

Vancouver-based VanEdge plans to focus on early stage digital media opportunities in the United States and abroad and has garnered support not just from one of the world’s largest video game publishers. Limited partners currently executing final diligence on the firm include the Export Development Bank, the Business Development Bank, the British Columbia Investment Management Corp. (one of Canada’s largest pension funds), BC Renaissance Capital Fund and Nicola Investments, says firm co-founder Paul Lee.

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Events of the Valley

Oh what I wouldn’t give to live in San Francisco again. Clean air, some of the world’s greatest food and a chance to be in the midst of some of the greatest innovators in the world. (Let’s ignore for a second those pesky earthquakes.) Maybe the best part of living in the Bay Area is […]

Early-Stage Pharma Deals Drop

In a year that has been tough for every sector, few entrepreneurs have had as tough a time raising funds as the founders of pharmaceutical startups. Just ask entrepreneur Nolan Sigal.

Sigal says that he has been trying to raise between $12 million and $15 million in a first round of financing for allergy drug startup Tunitas Therapeutics for more than a year. He says he has pitched some 60 VCs and was hoping to use the funding to help push the company through clinical trials.

However, the number of first-round pharmaceutical and biotech companies financed have fallen by nearly 70% in 2009, according to Thomson Reuters (publisher of peHUB). Some 49 drug companies managed to raise $513 million in venture capital during the first 11 months of 2009, compared to 159 startups that raised $1.13 billion throughout all of 2008, according to Thomson Reuters data.

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Zynga Poised to Exploit Global Keiretsu

Zynga’s new investors are building an online keiretsu on a global scale that the social gaming company may be well poised to exploit, records show. The firms, Moscow-based Digital Sky Technologies (DST), New York-based Tiger Global Management and Palo Alto, Calif.-based Andreessen Horowitz, recently led a $180 million investment round for an undisclosed stake in […]

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Wells Fargo Doubles Down on Norwest Venture Partners, Commits $1.2B

Wells Fargo has committed $1.2 billion to venture capital affiliate Norwest Venture Partners, nearly doubling the amount it had invested just three years earlier. Norwest Venture Partners will invest the money in technology startups and other growth-stage private companies based in the U.S., India, Israel and China over the next three to four years, says […]

Cleantech Coming to Los Angeles

The confluence of technology and entertainment has long been the dream of entrepreneurs and venture capitalists living in Los Angeles. But Digital Hollywood, like so many other dreams born in the basin, has proved to be less substantial than appearances would suggest. The Los Angeles area is uniquely poised to grab a piece of the […]

5 Questions for Will Honeybourne

First Reserve Corp. managing director Will Honeybourne knows a few things about the energy industry. He’s worked in Texas for more than a quarter of a century and has been with the energy-focused private equity shop for eleven of those years.

At First Reserve, Honeybourne focuses on upstream oil and natural gas opportunities and services companies. He says that he has seen his fair share of ups and downs in the industry. Last month, Honeybourne was a panelist at Buyouts Texas, a conference affiliated with peHUB.

We’ve got 5 questions for Will after the jump…

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Endowments Pulling the Purse Strings

Endowments have always been the mother’s milk of venture capital and private equity funds, typically allocating 11.8% of their portfolio to these assets, as compared with the 8.8% of all institutional investors.

Yet only 33% of endowments have made new PE commitments this year according to a recent survey by Preqin and 35% won’t be making another commitment until 2011.

And if you’re getting revved up about pitching one of the big boy endowments on your latest fund, you may be disappointed.

The study found that 42% of endowments with over $750 million under management were over-allocated to private equity. That’s nearly three times as many over-allocated funds than the endowments with $350 million or less under management.

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Galleon’s Private Portfolio

I wrote about Galleon Management’s $300 million move into venture capital in August 2007. The firm had hired half a dozen investment professionals and opened an office on Sand Hill Road to invest in private companies looking to go public.

Today’s news that Galleon decided to wind down its funds after getting $1.3 billion in capital calls (thanks to a pesky insider trading scandal) may close the books on the firm’s operations, but its move out of venture capital happened at least a year before.

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Moritz Revisits Steve Jobs and Apple

When a person becomes known for one thing, it’s easy to forget that he once did something completely different. Few people remember, for example, that before Babe Ruth was a New York Yankees slugger he was a successful Red Sox pitcher, with 94 wins, 46 losses and a 2.28 earned run average.

So too, it is hard to remember that Michael Moritz was once a journalist for Time and a good writer before he became “the best long-ball hitter around” in his own right.

But if you haven’t had the chance to read Moritz’s work before, you’ll have a chance to pick up a new edition of his 1984 profile of Apple Computer, which is coming out on November 10 from Overlook Press.

Moritz’s “Return to the Little Kingdom” will have include “Moritz’s contemporary perspective on the state of Apple and the accomplishments of Steve Jobs in a new Introduction and Epilogue,” according to the publisher. No book signings

Rennovia Raises VC To Make Chemicals from Renewable Feedstock

Rennovia, an early-stage chemical development company, recently raised $6 million in startup funding from 5AM Ventures and Versant Ventures, according to regulatory documents. The funding is the first infusion of a proposed $12.3 million Series A round that the company is seeking, documents show.

The stealth Menlo Park, Calif.-based startup is working to make specialty chemicals from renewable feedstock. The company has not disclosed what chemicals it will make.

A chemical company such as Rennovia is something of an anomaly in Silicon Valley, where information technology and life science companies vie with cleantech for attention from venture capitalists. Still, some VCs are willing to go out on a limb for a compelling chemistry process applied to an industry that has long relied on petroleum as the principle input for its products.

Flextronics Executives Reboot as PE Firm

Michael Marks made the business of manufacture and supply-chain outsourcing safe for Silicon Valley to embrace, by building Singapore-based Flextronics into a global giant. During Marks’ reign, Flextronics made products as diverse as Legos to Microsoft Zune to XBox, and few people know more about how technology goes from concept to product.

Now he’s turned his substantial expertise, and that of his Flextronics CFO and CTO, toward private equity. Marks is a founder of Riverwood Capital, a Menlo Park, Calif.-based firm that last year began raising its debut fund with a $1.25 billion target.

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Carlos Santana and Tim Draper: Together at Last

Well, the inevitable has finally happened: Tim Draper and Carlos Santana laid down a track together. It was only a matter of time before one of the greatest syndicators and collaborators of Silicon Valley ran into one of the greatest collaborators of the music world. Call it “Risk Master Remastered” to the tune of Santana’s […]

Velocity Blog Picks Up Steam

People start blogs about the Silicon Valley tech scene every day, but the Forbes Velocity Blog is particularly notable because it’s written by one of the best journalists in Silicon Valley.

Brian Caulfield is a relentless reporter and skillful writer and the blog effort he spearheads is an important strategic addition to the Forbes family of publications. Outside of the Midas List and Brian’s coverage of the computer and gaming industry, Forbes has been surprisingly weak in its coverage of such a key part of the global wealth generation equation.

Reguarding That Giant Glut

Dan said earlier today that there’s a “giant glut of private companies looking to go public,” and it’s my sense that he’s right.

There has to be, right? So many venture dollars have been poured into private companies that there’s bound to be portfolios with companies just chomping at the bit to file a slew of S-1s. But how many companies are out there that could go reasonably go public today if you assume that a public company has to have $50 million in revenue and has to have reached break even?