Volition Capital announced a $10M investment in Globaltranz this week. We couldn’t be more excited about the investment so I thought I’d share a little bit about why. Globaltranz enables small businesses to go online to comparison shop and procure freight capacity – most notably trucking and other modes of transport. It is somewhat analogous to how consumers use Expedia or Orbitz for airline travel, but in Globaltranz’s case, the end customers are businesses that are procuring freight. Next time you’re driving on the road, look around at the trucks on the road – Globaltranz probably had a hand in putting cargo on that truck.
The value proposition is very simple. Globaltranz offers more selection and better rates to small businesses that ship goods. In tougher economic times, the ability to save money on non-core functions like shipping is really valuable to small businesses. On the flip-side, Globaltranz offers freight carriers (e.g. trucking companies) a low cost way to reach the small business customer. It’s too expensive for carriers to sell small businesses direct, yet they certainly value additional volume given the fixed-cost nature of their business. The value is very clear to all parties which is probably why the company is growing so aggressively.
Globaltranz represents exactly the kind of company that Volition loves to invest in. They are high growth: ~100% year-over-year growth for a number of years in a row. They have a sizable and diversified revenue base. They are bootstrapped: having never raised any institutional capital throughout the company’s history. They are led by an experienced and dedicated management team. And they have aspirations for greatness: their stated goal is $1 billion in revenue which given the size of this market is attainable. They have accomplished a lot without any investment, and it is our hope that through our partnership and capital, the company will achieve even greater heights going forward.
Needless to say, we are very pleased to be the first institutional investor in Globaltranz.
I was curious about which companies are worth less than Facebook’s purported $50 billion valuation – so I decided to look it up. Here are some of the blue chip names (and market caps) you can get at a lower valuation than Facebook without paying Goldman Sachs’ exorbitant transaction fees:
- EMC – $47.2B
- Bristol-Myers Squibb – $45.1B
- France Telecom – $42.5B
- Target – $42.5B
- BMW – $42.4B
- Grainger – $42.3B
- Nike – $41.6B
- Morgan Stanley – $41.4B
- Dow Chemical – $39.9B
- UnitedHealth Group – $39.4B
- News Corp – $39.2B
- Colgate-Palmolive – $39.1B
- Eli Lillly – $38.9B
- Nokia – $38.0B
- AIG – $37.3B
- Halliburton -$36.7B
- VMWare – $36.6B
- BlackRock – $36.3B
- Walgreen – $36.1B
I was thinking randomly about how many bit.ly combinations there are and how much unique shortened URLs they can generate given their current construct. Here’s their construct:
- Up to 6 characters after bit.ly/
- Any mix of capitalized letters, lowercase letters, and numbers
If you limit the combinations to only ones where bit.ly is the domain (and not partner domains), and you presume they can go up to 6 characters (i.e. 1–6) as opposed to exactly 6 characters – how many total combinations are there? Any math whiz out there who can figure it out pretty quickly and enlighten us in the comments section? My small math brain was getting cramps thinking about it.
Given that they shorten 40–50 million URLS per day, I also wonder how long they can last on this construct. Probably a long time I suspect even including their growth. Random thought for the day, and thanks for the help.
The investment thesis for G5 is pretty simple. 100% of mid-size businesses would love to have an online presence that consistently generates high quality, low cost leads – and 99% of mid-size businesses don’t know how to do it. To achieve the goal you need to be expert in website design, search engine optimization, search engine marketing, and multi-channel lead management. And, perhaps most importantly, you need to understand how all of these areas interrelate specifically in your industry. G5 fills that gap in certain large verticals where they have domain expertise – like self-storage, multi-family housing, and senior living. The thousands of mid-size businesses that have become G5 customers have their website and marketing efforts outsourced to and managed by G5, and they see the impact immediately in terms of low cost, high quality leads.
The wide disparity in results between using G5 and doing it yourself has led to a highly recurring, bootstrapped business which is right down the sweet spot of Volition Capital’s investment focus:
- High growth & solid revenue base: 20 consecutive quarters of record revenue.
- Capital efficient & founder-owned: They have never taken any outside capital or debt.
- Under-served geographic area: Beautiful (and hard-to-get-to) Bend, OR
- Volition Capital investment: First and last institutional capital, active Board involvement
One attribute of G5 which is key to all of our investments is we want to see the team have an “aspiration for greatness”. Every Volition portfolio company needs to have both a proven business and breakout potential. The latter starts with the management team thinking big – which is certainly the case here. The number of mid-size businesses that could benefit from using the G5 platform is not just thousands, or tens of thousands – but potentially hundreds of thousands if not eventually millions. The first-generation “local search” vendors adjacent to this space have a narrow/weak offering and poor value proposition – which is readily obvious given their high customer churn rates and lack of profitability. G5’s intensely loyal customer base and strong financial performance demonstrates that they are doing things both differently and better. We believe G5 represents the next-generation in local marketing solutions and couldn’t be more proud to partner with them.
What if there was a U.S. company that knew more about commerce and money flow in China, than China itself does? Firstly, China would not be happy about that. And, they’re not. Secondly, this company would own an incredibly valuable asset, which they do.
This company has 300 million Chinese users using its payment platform to process payments. This company also had the largest online retailer in China with 200 million Chinese shoppers. This company also owns the largest B2B trading platform in China with 50 million suppliers on it giving it a granular view into China’s trading industry. Between all of these properties – this U.S. company would be collecting invaluable data daily about how Chinese consumers shop, how Chinese businesses are transacting, and how money flows within and outside of China. What if this were the case?
This is the case, and the company might surprise you. The company is Yahoo. Yahoo put itself in an incredibly compelling position in China through its $1B+ investment in Alibaba in 2005. They are now the largest shareholder of Alibaba. Since 2005, the three primary properties underneath the Alibaba Holding Company have all grown to become landmark properties in China. These properties are Alibaba (largest B2B marketplace), Alipay (Chinese Paypal), and Tao Bao (Chinese eBay). The growth and leadership position of these properties in China have put Yahoo in the position of having as much or more visibility into Chinese online commerce and money flows, than perhaps any other company in the world. And, for that reason, China is not happy about it.
Something has to give in the middle of this conundrum as “China’s Alibaba” is now trying to buy back Yahoo’s stake. But, why would Yahoo sell its stake in a holding company that is arguably worth more than Yahoo itself? Something has to give as it is untenable that the Chinese government would let a U.S. company sit in such a strategic position in the Chinese economy. It’s one of the more interesting dramas to watch over the next several months on the global technology landscape.
Through our portfolio companies, we have a view into how Google is perceived for both large enterprise and small/medium enterprise computing needs. In some board meetings, I find myself exhorting management teams not to underestimate the impact of Google. In other board meetings, I find myself cautioning management teams not to overestimate Google. This dynamic is best portrayed in a recent Goldman Sachs IT Spending Survey.
When IT execs are asked about their top 3 strategic IT vendors today, the top three are:
Google ranks 13th out of 18 large IT vendors. This lends credence to the “don’t overestimate Google” refrain. Arguably, Google’s lone successful product is still search. For example, Chrome, Google Apps, Mobile Phones, and Gmail are not close to being market share leaders in any of their respective segments.
But when IT execs are asked about their top 3 strategic IT vendors in 3 years, the top three are:
Surprisingly enough, HP and Microsoft go from the top 3 to the bottom two. This lends credence to the “don’t underestimate Google” refrain. Infinite resources, sheer determination, and a business model that turns industries upside down is the type of competitor not to underestimate.
I’m not sure it matters if Google succeeds in winning certain product categories. Through the process of trying to win, Google will upset traditional business and delivery models which will in and of itself have a material impact on enterprise computing. Even if Google “loses”, their impact will be far-reaching. That’s the reality enterprise IT companies have to prepare for.
Starting this week, about 190 million Windows PC users in the EU will be offered the chance to change browsers as part of the Microsoft settlement. The process should take about 3 months. The browsers being offered were selected based on market share in the EU. Here are the 12 browsers being offered:
- Google Chrome
- Mozilla Firefox
- Windows Internet Explorer
The browser selection pane is a non-standard horizontal scrolling pane where the top 5 browsers by market share show up first, and will randomly ordered. The remaining 7 browsers show up when you scroll to the right, and those will be randomly ordered as well. It should be interesting to see, if the results ever get published, what the mix will be once all is said and done.
(disclosure: we are investors in Flock)
It’s exciting times these days after we launched Volition Capital on Monday (01/11/10). Commensurate with that launch, we also launched the Ask Volition blog – which is a Q&A blog that is authored by various folks at Volition. The first post on the blog is: Why did you choose the name Volition Capital?
Despite all that’s going on, I decided to publish the 3rd version of the Global VC Blog Directory (v1: May 2009, v2: Sept 2009). The past two versions have been based on Google Reader subscribers. Some requests came in to do a ranking via monthly uniques to better show current readership – so this edition is ranked by monthly uniques according to Compete. The specific number is the average monthly uniques in Q409 [(Oct+Nov+Dec)/3]. While Compete does have data for well trafficked subdomains (e.g. blogname.wordpress.com), approximately 50% of the lesser trafficked blogs on subdomains did not register unfortunately. I also couldn’t isolate traffic statistics for blogs embedded into a broader site (e.g. www.firmname.com/blog). Blogs without traffic stats are on a separate list below. Apologies to those I couldn’t get data for. Interestingly, lesser trafficked blogs with their own distinct domains did seem to get picked up more reliably. Give me feedback on whether you prefer the ranking on subscribers or monthly uniques – I’m not fully committed to either yet. Expect version 4 of this directory in April 2010 based on Q110 data. As always, if I’m missing any new or existing VC/PE blogs, please leave it in the comment field.
Links to subscribe to the Global VC Blog Directory in bulk via Google Reader (RSS/OPML) – will be updated, but still based on v2: Sept 2009:
- Top VC Blogs: Top 10, Top 25, Top 50, Top 100
- US VC Blogs: California, Massachusetts, New York
- Global VC Blogs: Europe, Canada, Israel
- Entire Directory: The Global VC Blog Directory
The Global VC Blog Directory (Avg. Monthly Uniques – Q409)
- Fred Wilson, Union Square Ventures, A VC (100,279)
- Guy Kawasaki, Garage Technology Ventures, How To Change The World (82,838)
- Paul Graham, YCombinator, Essays (71,924)
- Brad Feld, Foundry Group, Feld Thoughts (45,633)
- Mark Suster, GRP Partners, Both Sides of the Table (39,389)
- Bill Gurley, Benchmark Capital, Above The Crowd (23,084)
- Dave McClure, Founders Fund, Master of 500 Hats (21,462)
- Josh Kopelman, First Round Capital, Redeye VC (12,972)
- Bijan Sabet, Spark Capital, Bijan Sabet (12,451)
- Jeremy Liew, Lightspeed Ventures Partners, LSVP (12,097)
- Mark Peter Davis, DFJ Gotham Ventures, Venture Made Transparent (12,010)
- Larry Cheng, Volition Capital, Thinking About Thinking (11,851)
- Eric Friedman, Union Square Ventures, Marketing.fm (11,520)
- Multiple Authors, Union Square Ventures, Union Square Ventures Blog (11,408)
- Albert Wenger, Union Square Ventures, Continuations (9,729)
- Christine Herron, First Round Capital, Christine.net (9,561)
- Mendelson/Feld, Foundry Group, Ask The VC (9,270)
- Seth Levine, Foundry Group, VC Adventure (8,206)
- Nic Brisbourne, Esprit Capital Partners, The Equity Kicker (8,052)
- Fred Destin, Atlas Venture, Fred Destin’s Blog (7,928)
- Ryan Spoon, Polaris Venture Partners, ryanspoon.com (7,904)
- Jason Mendelson, Foundry Group, Mendelson’s Musings (7,763)
- Jon Steinberg, Polaris Venture Partners, Jon Steinberg (7,595)
- Marc Andreesen, TBD, Blog.pmarca.com (6,982)
- David Cowan, Bessemer Venture Partners, Who Has Time For This? (6,744)
- Roger Ehrenberg, IC Capital Ventures, Information Arbitrage (6,396)
- Dan Rua, Inflexion Partners, Florida Venture Blog (6,278)
- David Hornik, August Capital, VentureBlog (5,920)
- Stewart Alsop, Alsop-Louie Partners, Alsop-Louie Partners (5,346)
- Ted Rogers, PPI Ventures, Venture Capital Brazil (5,146)
- Ed Sim, Dawntreader Ventures, Beyond VC (3,973)
- Jeff Bussgang, Flybridge Capital Partners, Seeing Both Sides (3,224)
- Ouriel Ohayon, Lightspeed Gemini Internet Lab, MYBLOG by Ouriel (3,102)
- Rick Segal, JLA Ventures, The Post Money Value (2,723)
- David Lerner, Totius Group, Columbia Venture Lab, David B. Lerner (2,627)
- Rob Hayes, First Round Capital, Permanent Record (2,596)
- Rich Tong, Ignition Partners, Tongfamily (2,589)
- Mike Speiser, SutterHill Ventures, Laserlike (2,324)
- Will Price, Hummer Winblad, Will Price (2,066)
- Peter Rip, Crosslink Capital, EarlyStageVC (1,926)
- Rob Go, Spark Capital, robgo.org (1,908)
- Chris Fralic, First Round Capital, Nothing To Say (1,826)
- Matt Winn, Chrysalis Ventures, Punctuative! (1,757)
- Satya Patel, Battery Ventures, Venture Generated Content (1,744)
- Multiple Authors, Highway 12 Ventures, Highway 12 Ventures Group (1,700)
- David Beisel, Venrock Associates, GenuineVC (1,590)
- John Ludwig, Ignition Partners, A Little Ludwig Goes A Long Way (1,562)
- Sarah Tavel, Bessemer Venture Partners, Adventurista (1,518)
- Mike Hirshland, Polaris Venture Partners, VC Mike’s Blog (1,492)
- Martin Tobias, Ignition Partners, Deep Green Crystals (1,426)
- Christopher Allen, Alacrity Ventures, Life With Alacrity (1,283)
- Mo Koyfman, Spark Capital, Mo Koyfman (1,128)
- Derek Pilling, Meritage Funds, Non-Linear VC (1,090)
- Kent Goldman, First Round Capital, The Cornice (1,084)
- Greg Foster, Noro-Moseley Ventures, SouthernVC (1,082)
- David Aronoff, Flybridge Capital Partners, Diary of a Geek VC (847)
- Matt McCall, DFJ Portage Venture Partners, VC Confidential (844)
- Lee Hower, Point Judith Capital, Venturesome (802)
- Allan Veeck, Pittsburgh Ventures, Pittsburgh Ventures (789)
- Paul Fisher, Advent Venture Partners, The Coffee Shops of Mayfair (777)
- Rob Finn, Edison Venture, Ventureblogalist (734)
- Jason Caplain, Southern Capitol Ventures, Southeast VC (723)
- Baris Karadogan, Com Ventures, From Istanbul to Sand Hill Road (712)
- David Feinleib, Mohr Davidow Ventures, Tech, Startups, Capital, Ideas. (709)
- Ryan McIntyre, Foundry Group, McInblog (675)
- Marc Averitt, Okapi Venture Capital, OC VC (654)
- James Chen, CXO Ventures, PureVC (551)
- David Pakman, Venrock Associates, A Venture Forth (646)
- Rachel Strate, EPIC Ventures, Wasatch Girl (528)
- Jeff Joseph, Prescient Capital Partners, Venture Populist (446)
- Max Niederhofer, Atlas Venture, Life In The J Curve, baby (445)
- Jason Ball, Qualcomm Ventures Europe, TechBytes (413)
- Pascal Levensohn, Levensohn Venture Partners, pascalsview (397)
- Saul Klein, Index Ventures, LocalGlo.be (102)
Additional VC Blogs (No Traffic Data)
- Multiple Authors, Volition Capital, Ask Volition (n/a)
- Tim Oren, Pacifica Fund, Due Diligence (n/a)
- Jeff Clavier, SoftTech VC, Software Only (n/a)
- Stu Phillips, Ridgelift Ventures, Soaring on Ridgelift (n/a)
- Scott Maxwell, Openview Venture Partners, Now What? (n/a)
- Raj Kapoor, Mayfield Fund, The VC In Me (n/a)
- Howard Morgan, First Round Capital, Way Too Early (n/a)
- Rob Day, @Ventures, Cleantech Investing (n/a)
- Steve Jurvetson, DFJ, The J-Curve (n/a)
- Philippe Botteri, Bessemer Venture Partners, Cracking the Code (n/a)
- Andrew Parker, Union Square Ventures, The Gong Show (n/a)
- Marc Goldberg, Occam Capital, Occam’s Razor (n/a)
- Allen Morgan, Mayfield Fund, Allen’s Blog (n/a)
- Daniel Cohen, Gemini Israel Funds, Israel Venture Capital 2.0 (n/a)
- Max Bleyleben, Kennet Partners, Technofile Europe (n/a)
- Jeremy Levine, Bessemer Venture Partners, Nothing Venture, Nothing Gained (n/a)
- Michael Eisenberg, Benchmark Capital, Six Kids and a Full Time Job (n/a)
- Sagi Rubin, Virgin Green Fund, The Grass is Greener (n/a)
- Vineet Buch, BlueRun Ventures, Venture Explorer (n/a)
- Richard Dale, Sigma Partners, Venture Cyclist (n/a)
- Steve Brotman, Silicon Alley Venture Partners, VC Ball (n/a)
- Ho Name, Altos Ventures, Altos Ventures Musings (n/a)
- George Zachary, Charles River Ventures, Sense and Cents (n/a)
- Jacob Ner-David, Jerusalem Capital, VC In Jerusalem (n/a)
- Ed Mlavsky, Gemini Israel Funds, GOLB: Is This Israel? (n/a)
- Michael Greeley, Flybridge Capital Partners, On The Flying Bridge (n/a)
- Sid Mohasseb, Tech Coast Angels, Sid Mohasseb (n/a)
- Peter Lee, Baroda Ventures, Seeing Eye To Eye (n/a)
- Ted Driscoll, Claremont Creek Ventures, Evolving VC (n/a)
- Justin Label, Bessemer Venture Partners, Venture Again (n/a)
- Adam Fisher, Bessemer Venture Partners, Savants in the Levant (n/a)
- Gregoire Aladjidi, Techfund Europe, Investing In What’s Next (n/a)
- Todd Dagres, Spark Capital, Todd Dagres Tumblelog (n/a)
- Santo Politi, Spark Capital, This and That (n/a)
- Robert Goldberg, Ridgelift Ventures, Tahoe VC (n/a)
- John Abraham, Arrowpoint Ventures, JMA’s Views On Everything (n/a)
- David Dufresne, Desjardins Venture Capital, Dav-Generated Content (n/a)
- Brad Burnham, Union Square Ventures, Unfinished Work (n/a)
- Brian Hirsch, Greenhill SAVP, New York VC (n/a)
- Multiple Authors, Foundry Group, Foundry Group (n/a)
- Charles Curran, Valhalla Partners, VC Blog (n/a)
- Multiple Authors, Brightspark Ventures, Let the Sparks Fly! (n/a)
- Jon Seeber, Updata Partners, Jon’s Ventures (n/a)
- Todd Klein, Legend Ventures, Media VC (n/a)
- Multiple Authors, True Ventures, Early Stage Capital (n/a)
- Adi Pundak-Mintz, Gemini Israel Funds, Adisababa’s Weblog (n/a)
- Don Rainey, Grotech Ventures, VC in DC (n/a)
- Art Marks, Valhalla Partners, Entrepreneurial Quest (n/a)
- Rob Schultz, IllinoisVENTURES, Go Big or Go Home (n/a)
- Tony Tjan, CueBall Capital, Anthony Tjan (n/a)
- Cem Sertoglu, Golden Horn Ventures, SortiPreneur (n/a)
- Larry Marcus, Walden Venture Capital, Walden Venture Capital (n/a)
- Anupendra Sharma, Siemens Venture Capital, So Little Time, So Much… (n/a)
- Steve Jurvetson, DFJ, Uploads from Jurvetson (n/a)
- Gil Debner, Genesis Partners, TechTLV (n/a)
- Multiple Authors, Tech Capital Partners, Tech Capital Partners Blog (n/a)
- Simon Olson, FIR Capital Partners, Venture Capital Thoughts and Reflections (n/a)
- Josh Sookman, RBC Ventures, Startup Life (n/a)
- Vishy Venugopalan, Longworth Venture Partners, Longworth Venture Partners Blog (n/a)
- Chip Hazard, Flybridge Capital Partners, Hazard Lights (n/a)
- Ed French, Enterprise Ventures, TechGain.net (n/a)
- David Stern, Clearstone Venture Partners, The Raging Insterno (n/a)
- Jonathan Tower, Citron Capital, Adventure Capitalist (n/a)
- Dan Parkman, Venrock, Disruption (n/a)
- Charlie Kemper, Steelpoint Capital Partners, Opine Online (n/a)
- Eric Ver Ploeg, Metric Ventures, Pocket Watch (n/a)
- Jeff Bocan, Beringea LLC, Jeff Bocan (n/a)
- Boris Wertz, w media ventures, w media ventures (n/a)
- Charlie Federman, Crossbar Capital, CosmicVC (n/a)
- Multiple Authors, Golden Horn Ventures, Golden Horn Ventures (n/a)
If you know of any other VC/PE blogs, please put the URL in the comment field. It will be included no later than the next update.
When investors and entrepreneurs talk about “burn rate”, they’re generally referring to the amount of cash a company consumes through its normal operations every month. For many venture-backed companies, they have a negative burn rate meaning that they are expending more cash than they are collecting. The obvious rationale to burn cash is that by spending more now, your company will be able to grow revenue faster, acquire market share and separate from the competition.
Investors will talk about “high burn rate” companies, “capital efficient” companies, companies that are “burning too much”, etc. But, how does this translate to hard numbers? Here’s my rule of thumb:
- Cash Flow Positive: If the company is growing and cash flow positive – congratulations. The model has been proven, you never have to raise capital again.
- $0–$250k burn rate: This is still a “capital efficient” company – a $10M round could last 3–4 years which is an eternity.
- $250k-$500k burn rate: This is average. Many young venture-backed companies are in this zone. A $10M round lasts 1.5–2.0 years.
- $500k-$750k burn rate: This is on the high side. You could be accused of “burning too much”. A $10M round lasts a 1.0–1.5 years. That’s a tight timeframe to create value.
- $750k-$1M burn rate: This is a “high burn rate” company. A $10M round doesn’t even last a year. There’s no room for error.
- $1M-$2M burn rate: Many investors won’t touch a company burning this much. The exception is if the spend is due to aggressive marketing against a known acquisition model that is profitable against the lifetime value of a customer.
- $2M+ burn rate: Most investors will run like the wind.
While some sectors such as biotech, cleantech and communications services don’t follow these norms – it’s a pretty good benchmark for most emerging technology companies.