Category Archives: Start-up data

Now it’s Yelp! IPOs in 2012… and again founders’ age

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IPOs do not seem to stop in 2012. Now it’s Yelp before Facebook! You’ll find below my usual cap. table format. As with many stories, there is no data on one founder. He left Yelp before the IPO, I am always surprised where there is nothing on him in the prospectus…


The Founders and Their Army Russel Simmons (left) and Jeremy Stoppelman, plus a few of the hundreds of thousands of Yelpers who post regularly on their site. Ref: Inc.

More interestingly is statistical data, that I have updated with now 116 companies. You can check founders’ age, years to IPO or VC amounts relatively to fields, geography and times of foundations. I also add % ownership of founders, employees and investors after IPO.

As a reminder, you can have a look at the full data in the attached pdf (or by clicking on the picture),


Click on picture to access full pdf data

Some final graphical illustrations about
– the age of founders relative to year of foundation

– some correlations (or not) between sales, VC amounts, nb of employees.

Is venture capital a universal solution?

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Following my post from last Friday, here is a series I have been asked to write for EPFL start-ups. It is logical that it appears also here. This first chronicle is about Aleva, a great EPFL start-up, and it is also abotu venture capital. Here it is.

10.02.12 – Aleva Neurotherapeutics has succeeded in raising 10 million Swiss francs in venture capital. The EPFL start-up has shown that this type of financing is not out of reach for young Swiss companies.

For this initial article in the “start-up of the month” column, it was a “must” to talk about Aleva Neurotherapeutics. Andre Mercanzini, its founder, got his PhD at the Microsystems Laboratory (LMIS4) headed by Prof. Philippe Renaud. What was my motivation? André is a shining example of the enthusiastic and persevering entrepreneur. He obtained an Innogrant in 2008. This grant enables apprentice-entrepreneurs to devote their time to their start-up project for one year. The life of an entrepreneur is not exactly a bed of roses, and as well as enthusiasm you need courage. And you shouldn’t do it alone. By persuading another entrepreneur, Jean-Pierre Rosat, to join the adventure, Andre convinced three venture-capital funds (based in Lausanne, Basel and Zurich) to invest. But it was only in August 2011 that the raising of the 10 million francs became a reality, a full three years after Aleva was founded!

I’m not going to say much about the activity of this start-up. Aleva develops electrodes for neurosurgery and these are implanted in the brains of patients suffering from Parkinson’s disease or severe depression. I am not going to say more about Andre Mercanzini either; he can describe his adventure better than anyone else. On the other hand, I’ve noticed that Andre has already become a role model for other entrepreneurs from EPFL and that he himself had the opportunity to prepare his thesis in a very entrepreneurial laboratory. If you go to the page of LMIS4 mentioned above, you will see that no fewer than 13 start-ups originate from there. Emulation is a key element here.

Risk capital: for start-ups with rapid growth

What matters also to me, beyond the entrepreneurial qualities of the two founders, is to show that venture capital is not an unreachable objective. About 10% of EPFL start-ups have raised such funds. Some entrepreneurs who appeal to institutions in the venture capital area subsequently complain about their conservatism. Others avoid them like the plague, referring to them as “vulture capitalists”. This is open to debate. It’s undeniable that this type of investor is looking for companies with a potential for rapid and global growth, and not all start-ups can fulfill this criteria.

There is now available in the world, in Europe and in Switzerland, much more money than there was 20 years ago, even if there is a lot less than during the “irrational exuberance” period of the Internet bubble. It always has been, and will continue to be, difficult to find money (for any kind of project in fact). However, Aleva, but also Biocartis and TypeSafe (other start-ups from EPFL) have shown that it is possible. Is venture capital a must? I sometimes tend to think so when it concerns high-tech start-ups and I know that I’m sometimes reproached for giving it too much importance. I simply note that a very large number of successful American companies have applied for these funds and that boot-strapped companies are the exception in the USA. In Europe, it’s the opposite!

“In Switzerland, we prefer a small entity that you can control from A to Z”

I would like to finish with a quotation from Daniel Borel, another entrepreneur who studied at EPFL. “The only answer I can suggest is the cultural difference between the United States and Switzerland. When we founded Logitech, as Swiss entrepreneurs, we had to play the internationalization card very early on. The technology was Swiss, but the United States, and later on the world, defined our market, whereas the production quickly became based in Asia. I wouldn’t be at ease with myself if I were to paint a negative picture, because I think that many things evolve and that many good things happen in Switzerland. But it seems to me that in the United States, people are more open. When you obtain funds from venture capitalists, you automatically accept an external shareholder who helps you manage your company, but who can also sack you. In Switzerland, this vision is not so widely accepted: we prefer a small entity that can be controlled from A to Z, rather than a big undertaking that you can only control at 10%, which can be a limiting element.”

Facebook Finally Files For $5B

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The long-awaited filing of Facebook was finally published yesterday. Amazing numbers, amazing success. You’ll find below the capitalization table and revenue numbers I (approximately) built form the S-1 document and you can compare it to the exercise I had done in 2010.

According to my analysis (I tried to take into account existing shares as well as options and restricted shares differently), Zuckerberg owns 20% of the company, the investors (preferred stock) about the same. IPO shares could be 5%. You can also have a look at the different rounds. And the difference is common shares (which may include investors) and employee options. Finally, I cannot comment on founders’ shares and you may have a look at the old table again.


click on table to enlarge Facebook 2012 cap. table

Revenues of $3.7B, a profit of $1B and 3’200 employees in 2011. A possible market value of $100B and an additional $5B in the bank. Google did not have such numbers. (Google had $1.4B in revenues, 2’500 employees and raised $1.2B at the IPO. It was only 6 years old though whereas Facebook is one year older. In 2005, Google had $5B in sales, $1.5B profit and 6k employees!) I had already compared both in a post in 2010: Google vs. Facebook and I have update the curves below.


click on table to enlarge

In the last 4 years, the yearly growth of Facebook has been over 80% for revenues and over 50% for the number of employees. I might be over-optimistic by saying that the average employee stock value is $4M (because of investor ownership of these shares too). The cap. table which follows shows numbers as guessed in 2010 and published in a post entitled The Social Network, when the movie was released.


click on table to enlarge Facebook 2012 cap. table

click on table to enlarge

New IPO filings (AVG Technologies) and new start-ups stats

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I noticed at least 4 IPO filings this month, not bad. These are Audience, Infoblox, Millennial Media and most important to me as a European citizen, AVG Technologies. European filings in the USA are sufficiently rare to be noticed, and this time the company has Czech origins. After discussing AVG, I will show you an update of my start-ups data coming from these filings.

AVG did not experience the typical start-up process. Indeed the founders sold their shares to a private equity group in 2001, ten years after the incorporation. The investors then grew the company and attracted new investors including Intel Capital, TA Associates as well as a Polish fund. You may know about AVG, I am using it as a free anti-virus but I did not know it was a European start-up…


Click on picture to enlarge

The revenue growth is quite impressive as you can see in the cap. table (about $150M in 2010 from $100M in 2008). I found a 2000 presentation where the founder gave the facts and figures for 1996-2000. Then the revenues were respectively 17M and 55M Czech Korunas. One Krona was about €0.03, which means in the €0.5-1.5M. Not a bad growth at all. Why did the founders sell, I do not know and I am not even sure what they do today. They do not seem to be role models in Brno. Tomas Hofer seems to be active in another start-up however. If someone has more information on the founders, please comment or contact me.


Tomas Hofer

You can visualize the other cap. tables in my full data document. I do not have much to say about them, but I have updated my stats in the tables which follow, including new data on the amount of VC money raised. I also did a new classification in addition to geography and fields: years of incorporation.


Click on picture to access full pdf data

The end of a Silicon Valley adventure

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I read this morning about Magma’s acquisition by Synopsys for $507M. In many cases, such an acquisition would look like a success. Here I am not sure…

EDA is an industry I appreciate because it is the perfect description of start-up dynamics. I will not describe it here but if you want to learn more you can read my previous contributions on the topic. I was also lucky to meet the CEOs of both companies, Aart de Geus and Rajeev Madhavan, two legends of the EDA industry, not to say of Silicon Valley (SV). Let me quote myself with a few paragraphs from my book in 2007.

“The only recent success story is Magma Design Automation. Its founder, Rajeev Madhavan, studied in his native country, India, then in Canada. He had founded two successful start-ups, LogicVision (sold to Synopsys) and Ambit (acquired by Cadence). He could have been satisfied enough but Magma became his new adventure.”

I should add that Andy Bechtolsheim, another SV legend, was a business angel in Magma, with investment amounts similar to a VC.

“It is still premature to bet on Magma’s future and its capability of becoming a giant. Some clouds have appeared on the horizon. Litigations are not a rule in Silicon Valley but they do happen. … In early 2005, Synopsys and Magma faced each other concerning the activities of one of Magma’s founders while at Synopsys and the ownership of some patents. The issue was finally resolved in 2007. But in 2005, Magma’s share price dropped by more than 50% from one day to the next and it only recovered two years later.”

Magma’s stock suffered again in the following years as the curve below shows it:

“Costello bitterly complains about a disappearing culture in Silicon Valley. The region has become greedy and individuals forget to give back to the community. There is too much litigation. Out of the ambitious start-ups of the nineties, only Magma has passed the main obstacles. But Magma has not proved yet that it can become a giant. Or will it disappear like Quickturn or Avant! ? No other new start-up seems to have the potential of threatening the established players. In the unstable, dynamic, innovative world of Silicon Valley, this is not a good sign.”

Now EDA is left with three big players, Synopsys, Cadence and Mentor. No start-up seems to be threatening them and the market is not really growing anymore. This is indeed not a good sign.

PS: Just as a reminder and because I now do this often, here is Magma’s data at IPO. Just note it is not very different from the price it is bought for in 2011…

What’s a start-up?

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Why should I ask such a question 4 years after publishing my book and isn’t this obvious? I do not think it is when I see how many times I need to clarify the difference between a start-up and any corporation. After all, any corporation being launched is a start-up, right? Not so. Thanks to my colleague Pascal :-), I just read another article by Steve Blank, Why Governments Don’t Get Startups, who gives the perfect definition:

“While large companies execute known business models, startups are temporary organizations designed to search for a scalable and repeatable business model.”

In my book, I had said it this way: “A start-up is a company which is born out of an idea and has the potential to become a large company” and I had also added “Apple, Cisco, Google, Intel, Microsoft, Oracle, Yahoo, YouTube. You certainly know these names. These companies did not exist forty years ago. They are technology giants today.”

Why do I like Blank’s definition? Because of his use of “temporary” as well as “search for a scalable and repeatable business model”. Apple, Cisco, Google, Intel, Microsoft, Oracle, Yahoo, YouTube clearly belong to the start-ups; I had not mentioned that non-existing business model.

Now Blank adds something:

“Scalable startups require risk capital to fund their search for a business model, and they attract investment from equally crazy financial investors – venture capitalists. They hire the best and the brightest. Their job is to search for a repeatable and scalable business model. When they find it, their focus on scale requires even more venture capital to fuel rapid expansion.”

This is the typical Silicon Valley model of fast and usually non-organic growth. Gazelles have often yearly revenue growth of at least 50%, not to say 100%. Look again at the growth rates of Gazelles and Gorillas in my post on the topic or at the revenue growth below (table 8-8 from the book).

I see at least two opened debates:
– In Europe, the growth is often slower, at least less than 100%! Is slow growth compatible with a start-up definition?
– Blank sees two phases of VC funding, the first one to search and validate the business model, the second one to fuel rapid expansion. At least Oracle and Microsoft never had the second funding and their growth was more than 100% during their first 10 years!

10 lessons from the Dropbox story

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Forbes recently published Dropbox: The Inside Story Of Tech’s Hottest Startup or is it its legend already? (I should thank my colleague Mehdi for mentioning the link to me, 🙂 )

It looks so similar to many of Silicon Vallley success stories that we should sometimes be a little skeptical about such beautiful stories. In any case, it is worth reading and here are my 10 lessons from it:

1- YOUNG GEEK – Drew Houston, the “typical” American start-up founder, began playing with computers at age 5 and began to work with start-ups at age 14. Steve Jobs knew this kid who had reverse-engineered Apple’s file system. He was 24 when Dropbox was launched.
2- ROLE MODEL – “No one is born a CEO, but no one tells you that” is what Houston learnt but when he saw one of his friends starting his own company he thought “If he could do it, I knew I could”.
3- COFOUNDER – In 2007, Paul Graham selected him in his Y Combinator program but insisted he has a cofounder. This would be MIT dropout, Arash Ferdowsi.
4- FRIENDLY ANGEL – Months later, they are supported by Pejman Nozad (famous with Saeed Amidi for their family rug business turned into office space [Logitech, Google] turned into investing [PayPal]).
5- VENTURE CAPITAL – Soon, Nozad introduced them to Michael Moritz (Sequoia’s legendary investor in Yahoo and Google) who invests $1.2M.
6 – MIGRANTS – Both Ferdowsi and Nozad have roots in Iran. They chatted in Farsi when they first met.
7- TALENT & PASSION – “I was betting they have the intellect and stamina to beat everyone else” claims Moritz. “Houston and Ferdowsi moved offices again and often just slept at work.”
8- LEAN & SPEED – Ycombinator funded Dropbox in June 2007, Sequoia in Sept. 2007, followed a year later by $6M from Accel and Sequoia. 9 employees in 2008 (with 200’000 users) and 14 people in 2010 with 2M users.
9- CUSTOMERS – In 2011, Dropbox should make $240M in revenues, from only 4% of its 50-million user base. 70 people and profitable.
10- RESOURCES – Being profitable did not prevent Dropbox to raise another $250M from Index, Greylock, Benchmark and existing investors. At a $4B valuation.

Another French start-up going public!

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They may not be that many, but it is at least the 3rd French start-up going public in 2011, after Sequans and Envivio. Whereas these two ones went public on Nasdaq and NYSE, Mauna Kea Technologies went public in August on Paris Euronext. I did not anything about MKT until recently but I looked at their IPO prospectus.

A nice entrepreneurial story. Two founders, apparently friends before high school, launched MKT in 2000. Benjamin Abrat (MBA, a few years with Givaudan) and Sacha Loiseau (Ecole Polytechnique, PhD in astrophysics and a postdoc at Caltech) are the typical young entrepreneurs with not so much experience but probably a lot of mutual trust.

Not so common, in France at least, is the funding history:
– a seed round of €1.6M with the renowned French business angels: Marc Vasseur (Genset), Jérôme Chailloux (Ilog), Jean-Luc Nahon (Isdnet), Christophe Bach (Isdnet), Patrice Giami (Isdnet), Philippe Maes (Gemplus) and Daniel Legal (Gemplus)
– a 1st round in 2004, €5M
– a 2nd round in 2007, €20M
with a €50M IPO this year. here is my usual format for the equity history and structure.


(click on image to enlarge)

In an interview (in French), Sacha Loiseau gives his views on what French PhDs are lacking:
“What do you think of the PhD training ?
S. L. : It brings autonomy and initiative, two important qualities for fundamental or applied research. However, the French system does not cover other important topics, which are essential to the business world: the customer, teamwork, market intelligence, intellectual property and technology transfer, as well as mastering the English language. The strong point is that, facing tough problems, PhD students learn how to find a solution, often alone. This is a great asset for companies which must always innovate, but it may not favor teamwork, openness to the world… Many PhD students, I think, are isolated and do not know what their competitors do.”

More data on IPO and founders.

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Following a recent post on the age of founders, I just did a more systematic analysis on the topic and at the same time analyzed more elements on the cap. table of many companies. I had 47 companies in my previous post. Here I just have 100!

The two tables give the founders’ age, the number of years from foundation to IPO and the founders’ remaining equity at IPO by field and geography.

Now if you want to have a look at the full record, just click on the next picture, you will get a 107-page pdf with all data. But please be aware of some of the following difficulties. All this is best effort! The cap. tables are subject to mistakes and comparisons are tough to make. For example:
– Founders do not always share equally the initial stake.
– There is no real definition of founders but the group of people who recognize themselves as such.
– ESOP reserved for future grants is a quite artificial part of the overall picture.
– When age was not available, a indirect measure was to consider a BS is obtained at age 22.
– Directors include independant directors only, not the investors.
– Finally not all companies went public, some were acquired and some filed but did not go public (yet)

Is there anything worth noticing? Well Biotech/Medtech founders are the oldest whereas SW and Internet entrepreneurs are the youngest. Surprising? Not really, but remember, these are not statistically valid data, this is just a compilation…

Age of founders

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As I just mentioned in my previous post on Carbonite, I promised to have a look at the age of founders again. This follows some challenging comments from Pascale on a recent post, Is There A Peak Age for Entrepreneurship?

I have data, the ones I may bore you with when I publish cap. tables of IPOed companies. Well, the companies publish the age of their officers so when the founders are still active, you can get their age at IPO and getting the number of years from foundation to IPO, you have the founders’ age. Usually, the biographies also give the previous companies founded by these people. So I did yesterday the exercise in two broad groups: companies which went public recently (mostly in the last 5-10 years) and companies which had gone public in the 90s or even before. Just remember that in my book, I had compiled the age of the “famous” entrepreneurs and it was 27.

First the group of recent companies (52 founders from 25 companies):

Then the older companies (53 founders from 22 companies) with the average of the group but also of the two groups at the end.

These are not stats, just anecdotes and you should also see that when I did not have the age, I looked at academic background with the idea that you have a BS when you are 21… So the average is 34, increasing from 33 to 35. Definitely not the 27 I had, not the 40 either claimed by recent analysis. Is the glass half empty or half full, I will let you decide! I still wonder why the big successes seem to induce a lower average (if true!).

A final (and not related comment): “years from foundation to IPO” has increased from 3.7 to 6.8, being 5 overall. Still very far from what I had in Europe, which was closer to 9 or even 10 years.