Funding announcements aren’t terribly interesting as most most press releases don’t provide any insight into the underlying health or traction of the business. You might see user numbers, but rarely active users or revenue figures.

For example, Path, the mobile social network also just raised a Series B, a whopping $40 million. However, there wasn’t even an official announcement on the story – just confirmation. No word on how user count is growing. Path is maintaining a low profile.

That’s what makes SEOMoz’s story so unique and interesting. While we’re still guessing Path’s number of active users, here’s what we know about SEOMoz – directly from SEOMoz.

Financials

Revenue – $11,467,510 for 2011 (projected $18 to $20 million this year)

Net Income – $121k (clear focus on growth)

Pre-money valuation – $75 million (negotiated up from $70 million)

Cash balance prior to funding – $2,172,232.78 (to the penny!)

Marketing

85% of new customer via inbound marketing

Paid Users/New Trial Users

14,619/4,075 (as of March 2012)

Conversion Rate

56% (Trial to Paid User)

Traffic

6.9 million visits in 2012 through April 21.

You can even read emails between SEOMoz CEO Rand Fishkin and Foundry VC Brad Feld and the official pitchbook. And the list goes on – use of proceeds, personnel moves, etc.

If you know SEOMoz, the fact that they are so open about their business is nothing new. Transparency is one of their core values and something they take seriously. Despite the positive news with the recent raise, SEOMoz had a rather frustrating experience going through the same process in 2011. You can read all about that failed exercise on Rand’s personal blog.

The interesting thing is that even with SEOMoz’s continued growth and success, business transparency is most certainly not catching on. Wireframe software provider Balsamiq might be another notable example, but these companies are rare. Afterall, disclosing internal performance metrics as a means to success, is something they don’t teach in business school. Who knows, perhaps they should.

As for coverage, an often asked question is what’s our global breakdown? or do we even have international firms?  The answer is ‘Yes’.  The PE industry is certainly US-heavy and our database reflects this.  Of the 2,044 currently listed, 1,366 are US-based (67%).  However this percentage has been steadily falling.

If you notice any missing entries, don’t hesitate to let us know.

Time in Operation/Assets Covered

10. Simple

Private equity firms like to invest in businesses that are easy to understand. They need to be able to make a decision about whether or not their investment is going to be profitable, and overcomplication (whether high regulation, advanced technology, etc.) means that they have to spend more of their time and money on due diligence before they can come to a conclusion. All other things being equal, simpler is better.

9. Significant Barriers to Entry

A business that can be easily set up by anyone is a difficult business to be in, as there is nothing to stop other entrepreneurs or investors replicating the successful plan and taking away market share. Barriers to entry, be they capital, technology, staff or even networks make a business more desirable for investors.

8. Low Capital Expenditures

A requirement to constantly reinvest profits in the acquisition of new equipment and similar capital expenditures is a big turn-off for investors.

7. Market Leadership

There are few businesses that do not have any competitors at all, so private equity firms look for the market leaders. Pioneers in a field will be first on the ground with new and improved products and services, meaning that they reap the benefits of offering these developments to customers at an early stage.

6. Strong Management In Place

When purchasing or investing in a business, private equity firms prefer situations where there is already competent business management in place willing to stay. Good management in place can more easily deal with any changes that are instituted by the investors as well as steering staff and processes through the acquisition. Layering in performance based incentives then creates a situation where everyones’ interests are aligned.

5. Growth Potential

The intent of an investment or purchase of a company is always to increase profits over time. It is a better strategy to spend money on a company that has room for growth than one which has reached its peak. After all, this can result in a small initial investment growing to much larger profits and so a better cost-benefit ratio for the investor than spending more money on an equivalent stake in a stagnant company.

4. Established/Diversified Customers

An established customer base provides a means for the company to make money, and loyal customers allow a greater degree of confidence in the future of the business. The more diverse the customer base the better the opportunities for growth and introduction of new products and services.

3. High Margins

Private equity firms like businesses where there is ample room to streamline operations and increase profits.  Businesses with high margin products offer the most flexibility in terms of finding ways to cut costs and boost the bottom-line and ultimate return on their investment.

2. Unique Products/Services

When private equity firms are deciding on which businesses to invest in, those which are providing something unique will always be highly attractive. A unique selling point generally means limited competition and opens up the possibility of cornering the market and making the business a leader in their field.

1. Recurring Revenue

Private equity firms hate surprises and a business with a locked-in, repeat customer base allows for steadier profits and a greater ability to grow revenues. Businesses with recurring revenue generally command high multiples and are easy to sell.

Missing something?

There’s a windfall of information about the private equity industry online.  Here’s a list of some of the best resources online about the field.

Research

Center for Private Equity and Entrepreneurship: Part of the Big Green’s Tuck School of Business, the Center is an awesome showcase of leading research on the private equity field, covering everything from venture capital to leveraged buyouts.

Private Equity Demystified: An Explanatory Guide (.pdf): A great overview on how the entire PE industry works with definitions of key terms, explanatory diagrams, and even a detailed (fictional) financial model of a leveraged buy-out.  The research paper starts basic, first addressing  the “what” and then moves into “how” of private equity transactions work.

Quora on Private Equity: Quora is an amazing site to learn from experts in a variety of fields. and the Q&A on PE is very valuable.  The site’s really a giant forum to ask and answer questions and the quality of professionals in the PE field is extremely high.

Blogs

The problem with private equity blogs (and blogs, in general) is that while many of these blogs start out strong with really valuable content, they tend to taper off quite quickly.

The Private Equiteer: This site is an insider’s guide to the private equity industry, complete with “tips, tricks and trade secrets,” there’s a ton of info here for newbies and experienced private equity professionals. (Hint: most of the content is available for purchase but if you subscribe to the site’s feed, you can access some of it freely).

Private Equity Beat: This blog is part of the Wall Street Journal’s blog network and provides trends and insights from other Dow Jones products like LBO Wire and Private Equity Analyst.

Carried Interest: This blog looks at the business of private equity firms as well as the lifestyle of its participants. Written from an Australian’s perspective.

Going Private: The Sardonic Memoirs of a Private Equity Professional: Unfortunately, there hasn’t been a new post on this blog since 2009, but it deserves mention anyway for all the great information on its pages.

News and Information

AltAssets: The site to follow the daily news flow of global transactions and data on the private equity industry.

DealBook: Begun as a daily newsletter, The New York Times’ DealBook has become a full-fledged resource for deal makers.  Editor Andrew Ross Sorkin’s attention to quality ensures that news and opinion is top notch.

PEHub: This site is an interactive forum for the private equity community.  It’s geared for professionals and not to be upseated by the NYT’s DealBook (see previous entry), PEHub is written by Thomson Reuters Deals Group journalists. Thomson Reuters, by the way, also manages Buyouts News that does, well, what its name implies.

Term Sheet: Fortune’s PE/VC news section formed by PEHub founder Dan Primack.

Books

• Venture Capital and Private Equity: A Casebook (Josh Lerner)
• King of Capital: The Remarkable Rise, Fall and Rise Again of Steve Schwarzman and Blackstone (Carey, Morris)
• Value: The Four Cornerstones of Corporate Finance (McKinsey and Co.)
• Principles of Private Firm Valuation (Stanley Feldman)
• Lessons from Private Equity Any Company Can Use (Memo to the CEO) (Orit Gadiesh)
• Barbarians at the Gate: The Fall of RJR Nabisco (Burrough, Helyar)

Jobs and Careers

eFinancialCareers: Job boards specifically for private equity professionals.  It has global career listings.

Vault.com: Vault provides career intelligence for various industries but began with a focus on finance and consulting.  There’s a lot of free info on the site and some guides (you’ll need to pony up some dollars) that can prove very fruitful for a career in private equity: Vault Guide to Private Equity and Hedge Fund Interview, Vault Career Guide to Private Equity, and Vault Guide to the Top Private Equity Employers.

FINS Finance: Part of the Wall Street Journal, this site has job listings as well as industry hiring trends, career paths and help on securing a job in PE.

Transactional

Private Equity Clearinghouse: Own a stake in a partnership or other exempt private equity interest? The Private Equity Clearinghouse is a marketplace that provides liquidity to an otherwise illiquid market for direct investment stakes.  Private equity holders put their equities out for bid to other investors and the transaction is consummated through the system.

For those professionals looking to understand more about the private equity industry, there’s a ton of data, news, and opinion on the industry to learn from.

Zack Miller helps investment businesses grow. He was part of the early team at Seeking Alpha and heads up business development at Covestor. He is the author of the book, Tradestream your Way to Profits: Building a Killer Portfolio in the Age of Social Media (Wiley, 2010) and runs Tradestreaming.com, where investors learn directly from experts. ]]> http://www.privateequityfirms.com/blog/2011/10/top-free-private-equity-resources-from-across-the-web/feed/ 0 http://www.privateequityfirms.com/blog/2011/09/biggest-buyouts-in-history-where-are-they-today/ http://www.privateequityfirms.com/blog/2011/09/biggest-buyouts-in-history-where-are-they-today/#comments Thu, 29 Sep 2011 15:19:22 +0000 Sam Nelson http://www.privateequityfirms.com/blog/?p=81 By Mark Di Vincenzo

When you look at the biggest private equity buyouts in history, it’s easy to spot the glory years — 2006 and 2007, before a severe recession rocked the nation.

Economists say the recession is behind us, but we’re still limping along, and there are fears that the economy may double dip back into a recession. That has kept the deals of the past three or four years relatively small.

Here’s a list of the 10 biggest private equity buyouts, compiled by BusinessInsider, and a look at how they’ve worked out for the private equity firms involved:

10. KKR bought Alliance Boots in 2007 for $24.8 billion. The British pharmacy chain is the largest leveraged buyout in European history. Alliance’s former CEO, Stefano Pessina, partnered with KKR and took control of the company in 2007.

9. Blackstone in 2007 paid $26 billion for Hilton Hotels. The deal made Blackstone the world’s largest hotelier, but Blackstone was forced to restructure Hilton’s debt in 2010. The restructuring deal makes Blackstone’s investment look like a smart move.

8. KKR, Bain Capital and Thomas H. Lee bought ClearChannel in 2006 for $25.7 billion. The deal hasn’t worked out well for the three companies. The masses seem unwilling to pay for subscription radio, and the stock price for XM/Sirius — ClearChannel’s prized asset — has plummeted.

7. Goldman Sachs and TPG Capital bought Alltell in 2007 for $27 billion. About a year later, Goldman and TPG flipped it, profiting by nearly $3 billion.

6. Apollo Global Management and TPG bought Harrah’s Entertainment in 2007 for $27.4 billion. Apollo and TPG formed Hamlet Holdings and took Harrah’s private in 2008. Hamlet plans to change the name yet again to Caesars Entertainment and take it public again next year.

5. KKR and TPG bought First Data in 2007 for $29 billion — the largest technology deal in the history of private equity. First Data has expanded into Europe and elsewhere.

4. Bain, KKR and Merrill Lynch bought Hospital Corp. of America in 2006 for $32.7 billion. HCA went public a few years later, raising $3.8 billion, the largest sum ever for a company under the guidance of a private equity group.

3. Blackstone bought Equity Office Properties in 2007 for $38.9 billion. Most analysts concluded that Sam Zell got the best of  Steve Schwarzman, especially given that taking over the largest portfolio of commercial properties in the U.S. meant Blackstone had to assume Equity Office’s debt, all $16 billion of it.

2. KKR, TPG and Goldman Sachs in 2007 paid $44.37 billion for Dallas-based electric utility company Energy Future Holdings. It will be a good deal for the new owners, analysts say, if the company can pull off a successful IPO before long.

1. KKR bought RJR Nabisco in 1989 for $31.1 billion. The contentious deal spawned the buyout boom that followed for the next 20 years as well as a best-selling book and a TV movie, both titled Barbarians at the Gate.

Mark Di Vincenzo is a journalist with 24 years of experience and a New York Times best-selling author.

The fund is no doubt aimed squarely at Y Combinator, the current gold standard for incubators. Earlier this year, Y Combinator upped the ante big time against all other similarly styled programs when it announced that accepted teams would have the option of taking an extra $150k at ‘graduation’ (and on very favorable founder terms).

Y Combinator, which had little trouble attracting quality startup teams before the promise of more money, saw record applications as a result.

Now that money isn’t a differentiator with Y Combinator, TechStars, which has somewhat operated in Y Combinator’s shadow, will certainly see increased applications as well.

With so many teams applying, Y Combinator dramatically increased their ‘class’ size to accommodate.  It’ll be interesting to see if TechStars follows suit.

One thing that remains clear in all this, is that the new fund furthers the stranglehold TechStars has (alongside with Y Combinator) as the two most desired fast-track programs to be apart of.

Source: Google Trends

The participants involved and the exact size of the round is still a mystery but notably absent in all the press coverage is Yuri Milner’s group DST.

Given DST’s participation in most of the mega VC rounds of late, including Spotify, Airbnb, and Groupon just this year, it’s somewhat surprising DST’s name hasn’t come up.

As more details emerge, things could certainly change, but when one reads about $1 billion + VC valuation rounds, it’s hard not to think of DST.

While the pursuit of the CFA designation certainly won’t hurt your PE prospects (you’d be in pretty exclusive company), it would appear that it’s not as common or necessary as one might expect.

While users can also save searches, the project list feature was intended to allow users to create very specific/custom lists for later review or export. Saving general searches is great, but may include data that is not a close fit for the task at hand.

Since the site redo, over 8,000 pieces of data have been added to these lists.