Alibaba’s Silence Isn’t Golden For its I.P.O

Posted on June 11, 2014June 11, 2014 by admin

Brokerdealer.com blog extract below courtesy of June 10 WSJ Aaron Back reporting.

Jack Ma, executive chairman of Alibaba. European Pressphoto Agency

As Alibaba Group prepares for the bright lights of Broadway, it is keeping potential investors in the dark. There is yet time to illuminate things.

The Chinese online-shopping giant is likely to release an updated regulatory filing soon in preparation for an initial public offering in New York, expected to raise more than $20 billion. A pre-IPO document released in May left gaping holes around Alibaba’s business and who controls it.

It seems a bare minimum to identify the more than two dozen partners who will effectively control Alibaba via special rights to appoint a majority of board members. The nature of these partners’ business relationships with Alibaba also should be known. It was a big oversight that the initial filing omitted this information. The Wall Street Journal has reported that the names of the partners will be included in the updated filing.

In addition, investors have complained that Alibaba didn’t break down results for its two moneymaking retail sites, Taobao and Tmall. Last month’s filing emphasized the importance of the Tmall business in the mix of the two. Faster Tmall growth means more revenue per item shipped. A higher Tmall contribution also would bode well for the transition to mobile devices, where it is harder to sell ads.

BrokerDealer Credit Suisse Back in the IPO Business

Posted on June 11, 2014 by admin

Brokerdealer.com/blog news extract below courtesy of June 10 WSJ and reporters Telis Demis and Evelyn Rusi

The chinos are gone. So is the sprawling Silicon Valley hub.

But more than a decade after its fall from the peak of the dot-com-banking business, Credit Suisse Group AG CSGN.VX -0.33% is at the helm of some of the sector’s biggest deals.

The bank is one of the lead managers of the expected $20 billion-plus initial public offering for Alibaba Group Holding Ltd., the Chinese online shopping and e-commerce giant.

Credit Suisse also helped lead IPOs for Weibo Corp. WB +1.39% , which operates a Twitter TWTR +2.61% -like service, and online cosmetics retailer Jumei International Holding Ltd. JMEI +0.82% , earlier this year.

Credit Suisse’s climb back in tech banking began with a Starbucks SBUX -0.77% -fueled brainstorming session in 2010 between Jim Amine, the firm’s global head of investment banking, and David Wah, global head of technology banking Continue reading →

UK-based Financial Technology Start-Up Scores With London Bankers

Posted on June 10, 2014 by admin

BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook

The British capital is staking a claim as a global leader for financial technology start-ups.

Andrew Testa for The New York TimesTransferWise, which offers foreign exchange transfers without large bank fees, is one of the companies making up London’s growing financial technology start-up scene.

On Monday, TransferWise, one of the city’s most prominent financial technology companies, said it had raised $25 million from a range of investors, including Peter Thiel, a co-founder of PayPal, and the British billionaire Richard Branson.

Started by two Estonian friends in 2011, TransferWise uses peer-to-peer technology that allows individuals around the world to swap currencies without incurring large bank transfer fees.

The company says it has processed roughly 1 billion pounds, or $1.7 billion, of transactions over the last three years, saving its customers around £45 million in banking fees that would have been incurred when sending money to another country.

The London-based start-up, which in 2013 raised $6 million from investors, including from Mr. Thiel’s venture capital firm, Valar Ventures Management, offers foreign exchange transfers across Europe but has yet to break into the United States. (The company offers a limited product for dollar transactions that does not include using peer-to-peer technology to match customers in different countries.) The company’s largest markets are currently Britain, Germany and France.

The full article can be found at NYT DealBook.

GoDaddy to Tap Public Markets for IPO

Posted on June 10, 2014June 10, 2014 by admin

BrokerDealer.com blog extends thanks to NYT DealBook for below news extract.

GoDaddy, the domain name registration giant, plans to sell its shares to investors in an initial public offering.

Courtesy of NYT DealBook

The company, which filed a prospectus with regulators on Monday, is preparing to tap the public markets about two-and-a-half years after it was bought by a group led by the private equity firms Kohlberg Kravis Roberts and Silver Lake. GoDaddy previously sought to go public in 2006, but a deal never materialized at that time.

GoDaddy allows individuals and small businesses to set up Internet domain names, offering services like website building, hosting and security. The company had 57 million domains under management as of Dec. 31. It generates the majority of what it calls bookings — gross sales before refunds — from sales of domain names.

K.K.R. and Silver Lake, along with the venture capital firm Technology Crossover Ventures, paid about $2.25 billion for GoDaddy in December 2011. The company plans to use some of the money raised in the I.P.O. to reduce its debt.

It also plans to make a $25 million payment to its private equity and venture capital owners, to terminate an agreement under which the owners have collected fees.

For the full story, please visit NYT DealBook article.

Do’s and Don’ts When Raising Capital

Posted on June 10, 2014 by admin

BrokerDealer.com/blog thanks the Sydney Morning Herald for below extracts re: profile of top gun entrepreneur Greg Taylor and guidance on best ways to raise capital for start-up enterprises..

Entrepreneur Greg Taylor

“..Raising capital is stressful and incredibly time consuming. It’s a full time job. So if you embark on a money raising mission, make sure your business is at a stage where it can survive (and hopefully flourish) with minimal input from you. The raise will demand most of your time and attention for the next little while.

It’s actually a lot like internet dating. You write a profile (information memorandum) you go on a first date (swipe right), you decide if you’d like to see each other again, (thank-you text), one party plays hard to get (valuation), meet the parents (due diligence), buy a ring (appoint lawyers), ask the question, (term sheet) and get married (settlement).

Once you’ve got a little seed money to work with, it really then becomes an issue of timing. If you go to the market looking for money before you have a concept or product, you don’t have as much leverage with investors and could potentially be beaten down on your valuation. So founders are generally better off building the product and getting as much traction as possible before courting investment to reduce the risk profile of their venture.The longer you can hold off, the more leverage you have with investors. But the longer you wait, the more risk there is that your competitors will land funds and get the jump on you. And it can be hard to play catch up.

Preparing the business for a capital raise correctly is critical. My advice is to find yourself someone who knows what they are doing. I was incredibly fortunate to have met a trusted adviser who works in the digital space.

QUICK TIPS FOR RAISING CAPITAL

Dos

Have all your legal documents prepared and in order.
Ensure the information you provide to potential investors is easily understandable and clear. Some aspects of the business may seem simple to you but complex to them. It’s always better to put more information than less.
Have all of your company information (ABNs, insurance, contracts) centralised and easily accessible so that it can be supplied to potential investors upon request.
You will end up getting married, so make sure your new partners and you both have the same goals (exit strategy, founders’ roles etc) and that the culture is right.
Be prepared to negotiate and get a deal done.

Don’ts

Don’t think you have the cash in the bank until it’s in the bank
Don’t be cocky. You need to show investors that you not only have a good idea, but are willing to listen and learn off them. Most of the time, they are investing 80 per cent in you and 20 per cent in the product.
Don’t have an unrealistic goal on valuation – its better to have 10 per cent of something huge than 100 per cent of nothing.

Greg Taylor is the co-founder and CEO of Clipp, an app that allows consumers to open, view, share and pay their bar tab or restaurant bill seamlessly and securely. Clipp secured $1.55m investment in November 2013. Greg sold his previous venture, eCoffeCard for an undisclosed amount earlier this year.

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