debbiegage

Jim Goetz of Sequoia Capital -- who joined AdMob's board and led its Series A round in September 2006 -- says the company was not overvalued and there is no Internet bubble. "It's way too early to talk about a bubble." On the contrary, he claims AdMob was worth more than the $750 million Google was willing to pay for it. How much more? He won't say, but after only three years, the company was at $100 million run rate in revenue and still had most of the cash it had raised. "That's one reason why we pushed for stock," Goetz said, "so there's a meaningful upside in AdMob's future." People have forgotten how long it took for an economy to develop for e-commerce, he said, and there's still a long way to go. But the biggest reason Goetz said he invested in AdMob

The whopping $750 million in stock that Google paid for AdMob today is 16 times the $46.8 million in venture capital that the mobile ad network raised. Gridley -- who heads the investment bank Gridley & Co. -- says that although $750 million may be a drop in the bucket for Google, the high price confirms her theory that bubble-like valuations for Internet companies have returned "with a vengeance." (AdMob investor Jim Goetz of Sequoia disagrees with Gridley, by the way -- see my next post). Over the summer Gridley met with more than 150 companies, mostly digital, to ask about their perspectives on deals, and we asked her what she sees coming.

Here's a podcast of Zynga CEO Mark Pincus and one of his board members -- Bing Gordon of Kleiner Perkins -- telling a class of business school students at Stanford a couple of weeks ago how to build a great company. The most interesting part of the podcast is not Pincus, who said his vision of the Internet is like cable TV -- "always on, selling people shit...and hopefully it's not all shit" -- but Gordon, a veteran of Electronic Arts, who probably has his hands full right now because Pincus has been under attack all week by TechCrunch's Michael Arrington for allowing Zynga users to be scammed by expensive offers for virtual goods to use in Zynga's games -- a situation Pincus has been trying to correct.

The number of companies listed on U.S. exchanges has dropped by more than 22% since 1991 and nearly 39% since 1997, even though that was around the beginning of the dot-com boom, Grant Thornton reports in a study that was two years in the making and was first reported by peHUB. U.S. exchanges are losing ground to exchanges in China, London, Italy, Tokyo, Toronto, Australia and Germany, where listings continue to increase. In the U.S., meanwhile, there are not enough new IPOs to replace the number of companies that are being delisted. Grant Thornton estimates a possible loss of 22 million U.S. jobs because of this situation and points to a "wholesale erosion" of the infrastructure that supports IPOs -- sell-side research, brokers, capital commitments by exchanges. U.S. stock markets now favor "computer-driven trading interests at the expense of long-term investors and the U.S. taxpayer," the report said.

But they may not be going public. Four VCs -- Sharon Wienbar at ScaleVP, Sandy Miller at Institutional Venture, Brian Jacobs at Emergence and Courtney McCrea at Weathergage (a fund of funds) -- appeared earlier this week on a panel at Dow Jones LP Summit and were asked to predict the future. They all see a big pickup in VC-backed exits -- thousands of companies that are five to 10 years old that will be ready to go out by next summer. But they also aired what have become usual complaints about the harms of going public for small-cap companies:

Possibly over 50, according to the National Venture Capital Association -- and that doesn't include firms that have not renewed their memberships in the trade association for next year. The NVCA won't name names, but reports that its membership has fallen from 480 firms in 2007 (an all-time high) to 450 firms in 2008 to 425 firms in 2009 -- a decrease of 55 firms, over 11%. Most of the firms dropping out did so because they're not raising a new fund, said NVCA vice president Emily Mendell.

This week I reported that Mohr Davidow had combined two of its cancer-fighting biotech startups -- CELLective Diagnostics and The DNA Repair Company -- into a third, new company called On-Q-ity. Last month I reported that Box.net, a Draper Fisher-funded service to share and store content online, had purchased another Draper, Fisher-backed company -- Increo. It turns out that this is a trend. Mohr Davidow's Sue Siegel said she knew of two other venture firms that are talking about ways to combine each other's portfolio companies, and a glance through the tech blogs of the last couple months shows that Softbank Capital and angel investor Ron Conway may be doing the same.

ZeroIPO released a list of the 28 companies that went public last Friday on ChiNext, the new NASDAQ-style exchange in Shenzen. Intel Capital and a coalition of Chinese investors backed Silver River, an IT company in Zhejiang, and Warburg Pincus backed Lepu Medical, which makes syringes and other medical equipment in Beijing. Shares of both companies opened substantially higher than their listing prices -- Silver River's was up 55% and Lepu's 110% -- although trading had to be temporarily halted on Friday due to concerns about speculation. The shares of most companies fell this week, although they've now started to recover. See the report -- "A Touch of Warm Sunshine after the Cold Winter" -- after the jump.

Even though eBay's $1.9 billion sale of Skype to Silver Lake and a coalition of other investors has been the subject of a bitterly fought lawsuit, Silver Lake wants more of these "carve-out" deals, managing director Alan Austin told the Limited Partners Summit in Silicon Valley this afternoon. (Today is conference day for me). "Right now we have tremendous numbers of big companies looking around and saying, 'Hey, here's a business that's not core to us, we're thinking about selling.' It creates opportunity," Austin said. (Skype allows people to make free phone calls over the Internet). "Also, it's a leveraged deal -- not a ton, but significant leverage. Not 70% to 80% of the purchase price, but more like the old days -- the traditional capital structure we used to have before 2006 or 2007." Deals like Skype are also the reason Silver Lake raises such big funds, Austin said --

Can John Doerr -- Al Gore's business partner over at Kleiner Perkins -- really write a credible review of Gore's latest book? Doerr has weighed in at VentureBeat and on Amazon.com on "Our Choice: A Plan To Solve The Climate Crisis," which was released today and which Doerr calls "the perfect and powerful sequel to 'An Inconvenient Truth'." "When mankind confronts and conquers the climate crisis, it will be because one man made Our Choice clear," Doerr writes. No offense to these two guys, but what else would you expect Doerr to say?