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September 29, 2004
AVST Closes $10 Million in Series B Funding
Investors Recognize AVST's Prominence in the Evolving Enterprise Communications Market
Foothill Ranch, Calif., Sept. 28, 2004 — Applied Voice & Speech Technologies, Inc. (AVST), a leading provider of second generation communications solutions for the enterprise market, today announced further validation of its strength in the market with $10 million in new funding. Ignition Partners led the round with participation from Dolphin Equity Partners. Additionally, existing AVST investors have an option and have expressed a commitment to participate in the B round with an additional $2 million in investments. AVST plans to use the proceeds from this funding to accelerate product development and expand its sales and marketing efforts to support the increased demand for its innovative enterprise communications solutions.
"This is the first institutional round of funding for AVST," said the company's President and CEO Hardy Myers. "The investment by these two prestigious equity firms as well as the additional committed investment from our existing investors validates our business model and leadership position in the market. The increased capital from this fundraising will enable AVST to further accelerate the development and distribution of our world class CallXpress® communications solution to meet the demands of the rapidly evolving enterprise market."
Catering to businesses and organizations of all sizes, AVST has uniquely combined the strengths of its world-class unified communications platform, CallXpress, with its innovative speech applications platform, Seneca™, to create a powerful second generation enterprise communications solution. With many companies seeking to replace their first generation technology over the next 24 to 36 months, CallXpress delivers a best-of-breed solution with its broad integration capabilities, scalability, modularity and extensive feature set including advanced voice messaging, unified messaging, and speech-enabled auto attendant and personal assistant capabilities.
AVST has over 34,000 systems installed worldwide and an impressive list of customers, including many Fortune 500 companies, professional sports teams, healthcare facilities and government agencies. AVST also has a strong long-term OEM relationship with Ericsson which distributes CallXpress worldwide in 15 languages under the "OneBox™" brand. With strong distribution partners including Verizon's Enterprise Solutions Group, Altura Communication Solutions and Norstan Communications as well as 150 additional independent resellers worldwide, AVST is poised for rapid growth.
"We choose investment opportunities by identifying businesses that can exploit major technology trends," said Steve Hooper, General Partner and one of the founders of Ignition. "There is a large market opportunity for second generation enterprise communications solutions, and AVST, with its world class CallXpress platform, is well positioned to take advantage of this growing demand."
Cascadia Capital, a national investment bank specializing in the financing of companies in a number of market sectors including information technology and communications, assisted AVST in securing the financing.
About Ignition Partners
Ignition Partners, headquartered in Bellevue, Wash., is a premier venture capital firm focused on early stage computing, network infrastructure and telecommunications startups in the Western United States. Ignition brings together an unparalleled combination of domain focus, technical expertise and operational experience. Ignition's partners are proven business leaders with more than 160 years of combined experience, who have built some of the world's most successful businesses of the last two decades, including Microsoft Windows, McCaw Cellular Communications, AT&T Wireless and Microsoft's enterprise business. For more information, please visit www.ignitionpartners.com.
About Dolphin Equity Partners
Dolphin Equity Partners, L.P., (www.dolphinequity.com) specializes in investments in emerging media, communications and related information technology companies operating in the U.S. and abroad. Located in New York, Dolphin currently manages over $340 million in capital.
About Cascadia Capital
Cascadia Capital (www.cascadiacapital.com) offers corporate finance, mergers & acquisitions, strategic advisory services, and capital market services to companies across North America. Cascadia Capital serves emerging growth and middle market companies, both public and private. The firm focuses on the following sectors: Information Technology, Communications, Security & Defense, Healthcare, and Industrial & Consumer.
About AVST
Applied Voice & Speech Technologies, Inc. (AVST) is a leading developer of enterprise communications solutions for businesses of all sizes. Through its world-class unified communications platform, CallXpress®, and its innovative speech applications module, Seneca™, AVST offers the industry's most powerful suite of enterprise communications solutions. AVST's solutions enable direct access to an enterprise's communications infrastructure including voicemail, email and fax messaging from any voice or data device via a touch-tone, GUI or speech interface. Established in September 2003, AVST was formed from the combined businesses of Sound Advantage (established in 1997) and the CallXpress division (established in 1982) of Captaris, Inc.
Headquartered in Orange County, CA, AVST maintains facilities in Bellevue, WA and the United Kingdom and has remote sales offices across the United States. With over 34,000 systems installed worldwide, AVST's communications solutions are sold and supported internationally by an extensive network of resellers and OEM partners. For more information contact Denny Michael, VP of Marketing at 949-699-2300 or access the company's website at www.avstgroup.com.
Posted by Dave at 5:16 PM | Comments (0) | TrackBack
September 27, 2004
Entellium raises $2M
Entellium Press Releases announces funding by Ignition Partners. They are in the Salesforce.com fast follower category. An interesting combination of overseas development and Seattle based management. Could be a trend of the future.
Posted by Martin at 10:25 AM | Comments (0) | TrackBack
September 26, 2004
random thoughts: lessons from the vineyard
i have a 24 acre vineyard and winery. we grow and make pinot noir. this year as part of our regional exchange program with burgundy, we have two interns from that region. both of our interns are from wine growing families; one of them is from a very famous domaine (winery) in burgundy that has been making beautiful wines for 200 years. these two gals are here to "learn" from "new world" wine making practices.
last week we were pressing off the first of our fermentors, and one of the interns suggested that after pressing, we should fluff up the grapes; our answer, "why would we do that? we'd never done that before?" we were told that we'd extract an extra 5-6 gallons of juice left in the grapes. that simple tip applied across our fermentors will net us about 100 extra gallons, about 40 cases of wine. i guess over 200 years, you learn alot of these lessons. we were humbled. all we could "teach" them in return was the fun of riding pallet jacks down hill.
later we asked what the french wine makers were worried about. most of their worries revolve around labor availability and costs. we probed, but...
was this a small reminder and real world example of the innovator's dilemma? at a tactical level, you know every nuance of the process and your market; you've honed the business system to make the very best product. in fact, you dominate your categories; you are the benchmark of excellence. but you can be insulated by your success; can you respond at a strategic level to gross changes in markets and technologies? do you really even see it?
just a thought.
Posted by Dave at 9:33 PM | Comments (2) | TrackBack
September 21, 2004
Thoughts on mobile content
Rafat Ali of PaidContent.org asked me to comment on my ideas on mobile content. Here they are: paidContent.org's ContentNext Series: Mobile Device As A Content Creator
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September 17, 2004
Clearwire raises $160M
In probably the largest private stock offering in Washington state history, Craig McCaw has raised $160M for Clearwire reports the Seattle Times. Craig has been hit or miss lately, but looks to be investing heavilly in this one. Still not clear what their advantage is going to be other than licensed spectrum for wireless broadband. Unlike his previous cellular efforts, this time he will face significant competition from unlicensed spectrum (Wifi, WiMax, etc.). Will be interesting to watch.
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Kirkland-based Clearwire, billionaire Craig McCaw's latest venture, has quietly sold $160 million in common stock, according to a document filed this week with the Securities and Exchange Commission.
The amount is a huge sum for a new public company, let alone a private entity such as Clearwire, which unveiled its plans for wireless broadband service only this summer. But McCaw's name appears to attract interest.
McCaw is best known for starting McCaw Cellular Communications, which he sold to AT&T for $11.5 billion in 1994. He later rescued Reston, Va.-based Nextel Communications in 1995 by investing about $1.1 billion and turning it into one of the country's largest wireless carriers.
The SEC filing does not identify the investors but does say the money came from 23 investors in nine states. Most of it, $134.7 million, came from Washington.
Clearwire declined to comment.
McCaw's vision for Clearwire includes rolling out wireless broadband access to the Internet through licensed radio spectrum. A wireless modem, instead of a cable or telephone wires, is used to connect to the Internet. Speeds are expected to be 25 times faster than dial-up, the company has said.
On Thursday, Clearwire officially launched the service in Jacksonville, Fla., where community leaders cut through a ribbon of coaxial cable and telephone cord in front of a library. The company plans to be in 20 markets in a year. Next up is St. Cloud, Minn.
In March, McCaw merged his Flux Fixed Wireless with Clearwire Holdings, an Arlington, Texas, wireless Internet service provider that held leases to broadcast spectrum allotted to schools in the 1960s.
That spectrum has the advantage of being used by one entity at a time. By contrast, spectrum used by another wireless technology, Wi-Fi, can experience interference.
Clearwire also recently purchased NextNet, which develops a kind of plug-and-play wireless broadband technology referred to as non-line-of-sight. NextNet is in 20 markets around the world, including Mexico, the United States and Africa.
Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com
Posted by Martin at 2:43 PM | Comments (0) | TrackBack
September 15, 2004
Wildseed Launches Identity Phone
Check it out. Wildseed's very, very cool phone and technology for teens (and anyone who would like a personalized phone) launched with Dobson and CellularOne.
This thing is very cool and totally personalizable.
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September 13, 2004
Rendition Networks gets funding
Thanks Tricia for reporting this!
Rendition Networks raises $6M, Ignition Partners lead.
Posted by Martin at 11:55 AM | Comments (0) | TrackBack
September 11, 2004
VC Pitch Tips
The most important thing in having a successful pitch to a VC is to have a great business and a great team, but even if you have both it doesn't hurt to have a super crisp, logical, compelling pitch. Here are 5 basic tips that I have seen really work.
1. Outline
First, have an outline. Be organized. The best top level outline I have heard it from one of the super masters of presentations, Jerry Weissman. Before you focus on all the snazzy charts, make sure you do the following:
• Tell them what you are going to tell them: Show them where you are going to take them, on the title slide.
• Tell them how you are going to tell them: Have an agenda slide and stick to it.
• Tell them: make sure the body of your presentation always reinforces your opening point.
• Tell them what you told them: wrap up, recap and go for the close.
2. In a nutshell
One great tool for making this organzation stick is what I call the "in a nutshell" slide. This is using your agenda slide to tell the skeleton of your whole arguement. When presenting to Steve Ballmer it often happened that you never got off the first slide after the title, so make sure it really works for you.
Normally, I like to see In A Nutshell slides that act as a template. On one side they highlight, even number the key elements of your story/pitch/arguement and in parallel on the other side they give the top support points in summary. As you then move through the deck you keep the left hand template to reinforce the whole arguement and help people remember where you are in it.
3. Clear, simple case
Show why your company/investment should exist in the first place. Do the simple case using what we call your ABCs or situation/gap analysis. Where:
• A = Today: the current situation in the market/big growing
• B = Tommorrow: the place the market should be/juicy opportunity
• C = Gap: what's missing to get to B/the special play you are poised to make to fill it and win
4. Simple positioning and proposal
Then tell why your way of filling this gap is better than everyone else's. One simple outline for this is what we call the XYZs - "We are the only X company/product that solves Y customer problem in Z unique way," where
• X = your category: critical for VCs, we need to put you in some box, to make comparisons; never invent a category, improve one.
• Y = the target: the buyer, the person who actually writes the check, great if you actually have some.
• Z = your differentiation: your advantage, or the key positive distinction you have over your competition.
It also helps if you can back all this up with real support, like your team's track record, customer traction, a real competitive analysis (thier ABCs), etc. A demo is not enough. Proof is better than claims.
5. Best foot forward first and strongest
Tune the organization of your story to the stage of your company. And always put the strongest stuff upfront.
• An EIR: It's all about YOU and the market opportunity/competitive gap.
• A seed: It's all about initial market validation (quotes from friends with important job titles in your target customer's industry), then about the product spec, the team and the above.
• A round: It's all about initial customer traction and economics - some demonstrated willingness to try and pay - show the best real numbers you have, then about the product itself relative to others, then the above/
• B round: It's about momentum - show the sales numbers, the trends and the economics, then all the above.
Then of course have a well thought out and agressive enough ask.
PS: Also, take a look at Cliff Atkinson's Beyond Bullets. Very nice stuff on how to have the maximum impact with PPT.
Posted by at 9:41 AM | Comments (0) | TrackBack
September 7, 2004
more random thoughts: china
great set of recent stats and articles on china:
1. http://www.mckinseyquarterly.com/ab_g.aspx?ar=1483&L2=7&L3=8
2. http://www.mckinseyquarterly.com/article_page.aspx?ar=1468&L2=7&L3=8
3. http://www.mckinseyquarterly.com/article_page.aspx?ar=1361&L2=7&L3=8
Posted by Dave at 10:00 PM | Comments (0) | TrackBack
New Fuel Reformer web site by SIRTI
The Spokane Intercollegiate Research and Technology Institute (SIRTI) has launched a new web site: Welcome to the Fuel Reformer Document Repository. Sponsored by the U.S. Army you can track the current state of fuel cell reformer technology. Lots of good (free) research on hydrogen and industry overview articles.
Spokane and the Northwest are becoming quite the center for alternative fuel activities.
Posted by Martin at 10:04 AM | Comments (0) | TrackBack
September 2, 2004
China: The World’s Biggest Market Opportunity or Newest Gold-Rush Fad
Rich and John just went on a "fact finding" trip to China - a month after some 300 valley VCs did the same (although I heard they flew first and had guided tour busses).
China is the hot topic amongst tons of venture folks all over. And I have to say, Beijing and Shanghai are amazing places jam packed with entreprenuers. The country is a huge and growing consumer market and huge and growing supplier of technology. It makes total sense for just about every company to put China on their strategic roadmap. But before you jump in and start direct investing in Chinese companies right and left there are some things to consider. Here are a few observations and reflections:
The China Market Three factors are worth paying strong attention to China's hugeness, diversity, and complexity.
Hugeness.
• It is a huge consumer market, but growing also as global corporate players
• There are 1.3 billion people and over 300mm cellphones
• Incredible growth rates, GDP, technology adoption
• Pundits speculate that it will overtake Japan in 5 years, US in ??
Diversity: One of the things that we heard over and over again while there was that there is not one China there are two or even three Chinas.
• New China: East, wealthy, capitalist, techie, global
• Old China: rural, poor, backward, disconnected
• Youth: migrating, discriminating, ambitious, influencial
Complexity In other words things that we take for granted cannot be in China.
• Wildwest: it is still a fast and loose place. Rule of law is growing, but trust and integrity are a lot more important ways to mitigate the risk of investing in one company and seeing all the funds mysteriously funneled into another.
• Local culture: You have to know it. The language, Guanshi, connections, cash/verbal dealings - these are things you need to understand well.
• Government: Many folks we talked to said that China is the most capitalist country in the world, more so than the US. And there is a lot of truth to this. They also said the government is working hard to foster this - opening, fostering markets, making it easier for foreign investment. But the government and its agenda are still a major force. And while international ownership/IP rules are improving they are still complex and of concern.
Venture Capital in China
Capital
• Traditionally most of the foreign (often Hong Kong or Taiwan) capital has gone to big buyouts, privatizations
• Or for small, early stage deals it has all been local angels or family money
• But now there are some big valley entrants – notably NEA, Sequoia
• There is an emerging IPO and acquisition market (with a lot of Cayman Island companies) - not the recent investments by Amazon, Google, and Yahoo
• The pressure of listing on the NASDAQ has been very healthy in terms of adding financial discipline
• A friend there said in terms of capital markets her there are a lot of booms, and bust, with cycles are high and fast
Entrepreneurs There are two types:
• Chinese returnees (ABCs = American Born Chinese, or foreign Stanford grads going back home). These are the classic valley entreprenuers. Polished, speak English, went to Stanford, know how to build great PPTs. These folks are very popular with foreign VCs and deals with them are getting bid up quickly.
• Domestics. There is a much bigger universe of local, highly aggressive busines people with great local knowledge, often 2nd/3rd timers. But they don’t speak English, are deeply networked, and intertwined with family. They will often be skeptical of venture capital but one VC we talked to said they are totally focused on them. They see getting a 2-3X return just in terms of professionalizing such companies.
Risk Pay attention
• This market is a lot less about product or technology risk. Most companies are not taking that much of it. They are following the Korea model, where a company like Samsung just out executed others, sold domestically and regionally and then built a huge global brand.
• It is a lot more about people/management risk. As mentioned before who you work with, their honesty, profesionalism, etc. are all key.
For more notes on this trip take a look at some of the entries on Marketing Playbook ("juxtipositions","extreme best of both", "know your market", "dragrace", "ads everywhere",and "big") and Zagula Spells Trouble.
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