« January 2007 | Main | March 2007 »
This story cracked me up. If it's true, then Eric Schmidt is walking around with business cards that name him as "Chariman" of Google's Executive Committee. (Theories as to what the typo means can be found in the article and its comments).
Geez, a market cap of $137 billion and they get the same quality copy editing as your average Israeli restaurant menu.
At the risk of getting into trouble for calling attention to other peoples' investments, Yedda have managed to raise a $2.5M round with one of our competitor funds (Genesis, BTW. I forgot to add their name when I initially uploaded this post. Nothing personal, my friends.)
Yedda, for those of you who might not know, is a useful community-based online question-asking-and-answering service. You can partake of their service by using the handy widget on the right-hand column here.
They have a really great team and a good product, and all I can do is wish them the best of luck.
I am very proud to announce Giza's latest investment in the Internet field: Koolanoo Group.
Koolanoo has developed a platform for creating and running vertical social networks. Founders Oded Kobo and Guy Grinberg believe that the future of the social networking space lies in finding new, more defined communities and exploring new geographical areas in which to launch new social networks.
Currently, the company maintains two sites:
Giza decided to invest in this project on the strength of entrepreneurs who are driven, energetic, and incredibly creative when it comes to new marketing efforts; as well as a vision which looks beyond just the usual US and English-speaking market.
Managing director Ori Israely led Giza's investment on this one, and I am proud to be a member of the team. Giza is also joined by a group of first-rate private investors.
Oded and Guy have a big vision for Koolanoo and it will be an interesting ride with them there.
Every week we run across a number of articles that catch our eye. As a
regular feature, we round them up for a little something we call The List:
In The List the other day, I linked to this article from Business 2.0 about the Incredibly Shrinking VC Model. The article deals with a trend that is becoming increasingly common in Venture circles: small investments.
Charles River has started up an early stage fund which parcels out $250,000. Y Combinator picks out a few promising startups and gives them $20,000 seed investments.
Giza itself has the Ofek project, where we do small seed investments with an eye to putting in more serious money during Round A. In the last year, we have done five such deals, and we have a handful of others in the pipeline at the moment.
Why all the seed funding all of a sudden? Obviously, it's a reaction to the way the high-tech market is going. Internet companies are hot commodities again, but Internet companies are relatively cheap to start (given the drop in bandwidth costs as well as the availability of open-source software).
Also, a lot of VCs got burned badly during Bubble 1.0 by companies whose burn rates were wildly disproportionate to revenues. This time around, the emphasis is on lean and mean startups. All of which means that a lot less money is needed at first.
The model makes a lot of sense. As opposed to semiconductors or telecom equipment, with Internet companies, you can usually get some idea if the product will work in a relatively short time period, a year or less. The idea is to put down a small bet, see if it has traction, then put down a bigger bet later.
The only downside, of course, is that we have limited bandwidth as far as our ability to help manage our portfolio companies. And a $250,000 investment involves as much work going forward as a $2,500,000 and sometimes even more (smaller companies with less experienced entrepreneurs often need more help and guidance). So it would be very difficult to invest a large-size fund of $100M or more just on these types of deals.
However, we have high hopes for this model. In the end I think it's good for both VCs and entrepreneurs. And I hope to be proven right.
I spent the day at the Israel Internet Association's annual conference at Airport City. I noticed that VC representation at the conference was almost nil save for myself and a few of my colleagues from Giza. I suppose this has something to do with the general tone of the ISOC-IL conference, which seems to be geared a bit more towards academics than entrepreneurs.
At any rate, the discussion was fairly interesting, especially an afternoon session dedicated to blogs, forums, and talkbacks. The bottom line here: Israelis like their talkbacks, which are seen as a combination of national sport and healthy venting of steam that might otherwise endanger society.
One of the participants at the session was a journalist named Dvorit Shargal, who blogs under the name Velvet Underground. Apparently, her blog has been making a lot of noise in the local Internet space over the past year. She routinely gets dozens of comments on each post. And for a while she was the subject of rampant speculation before she revealed her true identity.
Until this afternoon, I hadn't heard of her.
In fact, I probably couldn't name any of the big-league Hebrew-language bloggers. This fact ties into a growing realization I've been having lately. I've been doing a lot of work with one of our portfolio companies which is working on piloting its Internet product in the Israeli market. As a result, I have been meeting with a host of local portals such as Tapuz and Nana.
In the last couple of years, it appears, a rich and varied world of local, Hebrew-language sites has developed in Israel: search engines, portals, social networks, gaming sites, blogging platforms, videocasting sites, you name it. Israel has dozens of local Internet brands, which are as readily familiar to local Web surfers as MySpace and Flickr are to surfers overseas.
Except that I'm willing to bet that most of my colleagues in the local venture world have not heard of half these sites, and have probably visited even fewer.
Of course, there is an explanation for this. We are by nature focused on investments that promise major returns. Israel, on the other hand, is a small, relatively closed market which doesn't hold much potential for creating huge companies. Which means we are much more in tune with the Internet culture than we are of the one that is happening in our backyard.
I suppose this isn't necessarily a major tragedy, although it does make you wonder whether we're not missing out on some potentially interesting companies.
Every week we run across a number of articles that catch our eye. As a
regular feature, we round them up for a little something we call The List:
Or, as they say in Zlangese,
Benchmark and Accel have invested $12M in Zlango, a company which has developed a unique picture-based language for sending messages over mobile. The "glick" is that Zlango is an actual language, albeit a rudimentary one, rather than just sending a message in picture code. (You can read the company's announcement, in Zlango, here).
Zlango's value proposition is more or less obvious to your average 12-year-old, and decreasingly so the farther away you get from that age. We saw the company almost a year and a half ago, back in their early days. At the time we weren't really set up to deal with this type of investment and took a pass on it. Which is unfortunate, because I think the product is going to be a big success.
Having said that, I did get some sticker shock when I saw the size of the round. Obviously, this is the kind of play that requires big-time marketing. Even more so considering that it is a cellular application. But still, $12M is an awful lot.
The comments section in the Tech Cruch article are fairly instructive, split up fairly evenly between those who get the value prop, those who don't (presumably, no 12-year-olds there), and those complaining about inflated company valuations.
Anyways, congratulations Yoav and company. Now you should get your graphics guys to come up with a Zlango word for "bubble".
It's now been two months since Yahoo! unveiled their new search marketing program, the one known as Panama and something like two weeks since they started rolling the thing out. After having Google eat its lunch for the past couple of years with everything related to textual and search advertising, Yahoo! hopes that Panama will be a worthy competitor to Goog's Adwords in the text advertising space.
The new program bases its ad rankings not only on the money bid for the specific keyword(s) but also takes into account the potential click-through rate for the ad. The idea being that the new system will maximize ad revenues per ad.
I've been waiting to see how the rollout will affect Yahoo's fortunes. I have a soft spot in my heart for the perennial #2 of the Internet world. The big question is whether Panama will be enough to turn Yahoo's stock around, especially compared with Google. (Business Week seems to think no, Arrington hopes yes).
I subscribe to the school of thought that Panama will be good for everyone. More choices should mean more advertising dollars will migrate online.
Has anyone out there started using the new system? Any comments to share?
Every week we run across a number of articles that catch our eye. As a
regular feature, we round them up for a little something we call The List:
Recent Comments