Venture Capital: Startups got their groove back in 2005
"One hopes, by this time, the gifts are unwrapped and the holiday dinner is fully digested. Now, it's time for reflection -- looking back at the highlights and lowlights of a very active year in Seattle's emerging technology community.
Most agree that 2005 will be remembered as a time in which the entrepreneurial energy returned.
"It was a great year," Frazier Technology Ventures' Dan Rosen said. "We are seeing a lot of the same things that were predicted to happen in the 1998, 1999, 2000 time frame finally coming to pass."
Here's a month-by-month walk down memory lane.
January: Ignition Partners lands a big fish when a former Microsoft chief financial officer, John Connors, decides to join the Bellevue venture capital firm. The move helps cement Ignition as a powerful force in Seattle's startup community, and it reunites Connors with several former Microsoft executives who co-founded Ignition in 2000.
Connors, who managed more than $60 billion while at Microsoft, admits that there will be a learning curve when dealing with startup companies that require $1 million or $2 million.
"It will take some coaching by other partners on how to think about things," Connors said at the time of his move. "I bet I will screw some stuff up along the way, but if I work hard at it, hopefully, I will get it right."
February: Everett-based Zumiez, a retailer of snowboarding and skateboarding gear, files for an initial public offering. It is one of only two companies in the state to go public in 2005, down from six the year before. The lack of IPOs leaves Seattle- area venture capitalists scratching their heads -- not to mention checking their empty wallets. Zumiez performs well in its debut, proving once again that Seattle is a hotbed for retail concepts. The stock more than doubles, leading to a secondary public offering in November. So why don't more Seattle VCs invest in retail?
March: It's the five-year anniversary of the Nasdaq peak of 5,049 -- an occasion that most venture capitalists, investment bankers and entrepreneurs never want to forget. Given how many references I still hear about the great Internet bubble of 2000, it appears as if important lessons were learned.
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"I have a lot less hair and lot more gray ones at that," Maveron's Dan Levitan said in a story this year reflecting on the bubble. "I think we were all caught up in it to some degree or another, and I certainly hope that I am far smarter and far more humble than I was then."
Has it really been five years? It seems just like yesterday that HomeGrocer.com trucks were buzzing around the city and Loudeye was hosting its elaborate IPO party.
Some euphoria returned in 2005, with valuations rising at startup companies and venture capitalists engaging in bidding wars for hot deals. But the craziness of 2000? I don't think so.
April: Two long-time titans of the Seattle software industry merge as Attachmate and WRQ combine forces in a private equity deal. Attachmate founder Frank Pritt calls the merger a "perfect match," creating a company with 950 employees and more than $200 million in sales. Layoffs ensue later in the year, and the company, which decides to locate in Seattle, rebrands as AttachmateWRQ.
May: Frazier Healthcare announces a $475 million venture capital fund, making the Seattle firm one of the biggest in the Pacific Northwest. It promptly gets to work, participating in the $44 million financing round for Calypso Medical. The Seattle medical device maker uses the money, one of the largest rounds in a Washington company this year, to continue development on a new technology that allows doctors to pinpoint exact locations of tumors."
Most agree that 2005 will be remembered as a time in which the entrepreneurial energy returned.
"It was a great year," Frazier Technology Ventures' Dan Rosen said. "We are seeing a lot of the same things that were predicted to happen in the 1998, 1999, 2000 time frame finally coming to pass."
Here's a month-by-month walk down memory lane.
January: Ignition Partners lands a big fish when a former Microsoft chief financial officer, John Connors, decides to join the Bellevue venture capital firm. The move helps cement Ignition as a powerful force in Seattle's startup community, and it reunites Connors with several former Microsoft executives who co-founded Ignition in 2000.
Connors, who managed more than $60 billion while at Microsoft, admits that there will be a learning curve when dealing with startup companies that require $1 million or $2 million.
"It will take some coaching by other partners on how to think about things," Connors said at the time of his move. "I bet I will screw some stuff up along the way, but if I work hard at it, hopefully, I will get it right."
February: Everett-based Zumiez, a retailer of snowboarding and skateboarding gear, files for an initial public offering. It is one of only two companies in the state to go public in 2005, down from six the year before. The lack of IPOs leaves Seattle- area venture capitalists scratching their heads -- not to mention checking their empty wallets. Zumiez performs well in its debut, proving once again that Seattle is a hotbed for retail concepts. The stock more than doubles, leading to a secondary public offering in November. So why don't more Seattle VCs invest in retail?
March: It's the five-year anniversary of the Nasdaq peak of 5,049 -- an occasion that most venture capitalists, investment bankers and entrepreneurs never want to forget. Given how many references I still hear about the great Internet bubble of 2000, it appears as if important lessons were learned.
advertising
"I have a lot less hair and lot more gray ones at that," Maveron's Dan Levitan said in a story this year reflecting on the bubble. "I think we were all caught up in it to some degree or another, and I certainly hope that I am far smarter and far more humble than I was then."
Has it really been five years? It seems just like yesterday that HomeGrocer.com trucks were buzzing around the city and Loudeye was hosting its elaborate IPO party.
Some euphoria returned in 2005, with valuations rising at startup companies and venture capitalists engaging in bidding wars for hot deals. But the craziness of 2000? I don't think so.
April: Two long-time titans of the Seattle software industry merge as Attachmate and WRQ combine forces in a private equity deal. Attachmate founder Frank Pritt calls the merger a "perfect match," creating a company with 950 employees and more than $200 million in sales. Layoffs ensue later in the year, and the company, which decides to locate in Seattle, rebrands as AttachmateWRQ.
May: Frazier Healthcare announces a $475 million venture capital fund, making the Seattle firm one of the biggest in the Pacific Northwest. It promptly gets to work, participating in the $44 million financing round for Calypso Medical. The Seattle medical device maker uses the money, one of the largest rounds in a Washington company this year, to continue development on a new technology that allows doctors to pinpoint exact locations of tumors."
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