Sep. 12, 2013
Anthony J. McCusker
See more on Anthony J. McCuskerGoodwin Procter LLP | Menlo Park | Practice type: Technology
The venture capital market is in the process of evolution, McCusker said.
"The trend in technology costs declining and the increased presence of angel investors, as well as the trend to brand name VCs raising larger funds, has led to traditional VC rounds to come later in the corporate lifecycle, and angels and incubators are often leading the early rounds of financing."
There are a lot of angels and entrepreneurs who have either sold companies or gone public, McCusker said, adding, "They have a keen desire for others to grow their businesses and are investing money in the early stage."
With advanced technology, such as the cloud, McCusker added, "Companies don't even need big rooms for servers, so infrastructure and real estate costs are not as significant as they were five or 10 years ago."
The idea is to raise less money, and test out ideas quickly.
"A lot of companies starting now are coming up with minimally viable products, then they are off the races," McCusker said. "They makes tweaks and they get customers, rather than spending two years hoping that it takes."
He added, "It's good for entrepreneurs, who can fail or succeed quickly. If you fail, you can pivot quickly and don't put all the eggs in one basket."
In 2012, McCusker said that he completed 138 venture capital financings, totaling more than $900 million, and this year has so far worked on more than 100 VC deals.
Among them are TuneIn, for $25 million; Eventbrite, $60 million; Twilio, $70 million, Series D; and Okta, $25 million, Series C.
In another focus of his practice, McCusker completed 16 mergers and acquisitions over the course of 2012 and expects to complete a like number this year.
Among them was the sale of Digg, a community news sharing site, to his client the Washington Post for $12 million this year.
Weighing in on the state of M&A as a whole, McCusker said there are potential good deals out there that might not be making the front page of the Wall Street Journal.
"Not all of them will be Google or Apple," he added. "But there are a bunch of companies whose products should be out there, and for a reasonably small amount of money and good jobs for their teams, private companies are buying these. You can plug in and play and it's a huge win."
As for initial public offerings, in the last 18 months McCusker's transactions included Xoom, valued at $101.2 million; Marketo, $78.7 million; Trulia, $102 million; and Gigamon, $128.2 million.
"IPOs are very strong," he added. "The public market is very receptive to growth deals right now."
- PAT BRODERICK
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