Jason Ball's TechBytes

Technology & Venture Capital. Early stage venture capital news mixed with personal views and comments

Exit Valuation Trends: 2007 [Updated]

I posted last year’s figures from Icon Corporate Finance, showing how exit valuations were 1.5x -2x sales. I use figures like that as 3rd party data when discussing valuations.

This year’s data focuses on one of the same two metrics used last year price/EBIT (no price/sales data was provided). What’s clear though is that the multiples for 2007 are trending down from those of 2006…

Valuations2007_2

If you’re an entrepreneur out fundraising, you need to keep these multiples in mind. Many companies I’ve met with over the past 12 months have really pumped up their valuations. If the exit valuations aren’t increasing, then the entry price isn’t going to be increasing…

Fred summed it up well just before Christmas: funding in 2008 isn’t going to be the party its been over the past 2 years, so hold onto your hats.

P.S. Bonus points for spotting Fred in a Darth Vader mask in 2008!


[Update 28 January 2008]

Stacey over at GigaOm (thanks for the link love) has a good post on venture valuation trends from a US perspective- the party’s coming to an end stateside (and with the recent NASDAQ slide, perhaps even more abruptly):

… But for video startups who raised money based upon the valuations set by Google when it bought YouTube for $1.6 billion, or the open-source startups out there checking out MySQL’s eye popping $1 billion price tag on what’s reported to be about $50 million in 2006 sales, the party may be dragging to an end. Slide’s recent $550 million valuation set by private equity funds notwithstanding, free-spending strategic buyers are showing signs of coming to their senses, so valuations may be coming down…

Filed under: Mergers and Acquisitions

Apple Movie Rentals (and Macworld thoughts)

RentalsLike I do with every Apple iTunes new feature, I buy immediately to help promote the format. The introduction of Movie Rentals is no different…

If you rent a movie through iTunes, a new source appears in iTunes “Rented Movies”. I decided to watch Pirates of the Carribean (one of our portfolio companies’ software has been used in the various Pirates films). Seeing rentals at $2.99 makes me wonder what the cost of delivery and infrastructure is for a circa 2GB file? Is Apple making any money on the rental? If any one knows the economics, please post in the comments.

The other main highlight for me was Time Capsule. I’m a backup fanatic (ever since I had 3 mac laptops stolen in one fell swoop), and Time Capsule will really simplify my backup strategy. 1TB of storage sitting in our closet ticking away… well done Apple!

Filed under: Apple Computer

My new pet monster

MoshiI was given a Moshi Monster phone charm by our “secret santa” this year. I was pleased to see that Mind Candy (an Accel and Spark Ventures investment) was behind the charm and that it linked to a virtual pets style website. I’ve now registered and adopted a monster, my new, if somewhat despondent, moshi monster called Alpi:

Alpi

Moshi Monsters is kind of a Second Life for Kids with a tamagotchi thrown in… the puzzles they offer kids as edutainment are definitely cool -some of the brain teasers are very similar to nintendo’s Brain Training game. I haven’t spent long periods of time with my monster (and probably won’t), but I can see where kids could really get into this. The site has just launched, so traffic volumes are still relatively low, but they are growing. Only time will tell if this turns into a monster of an investment ;-)

Filed under: Software

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