Internet stock investors: Bambi on Google

If I were an active investor in internet stocks, I would read everything that Bambi Francisco has to say, especially about the large internet companies. She has amazing prescience. I\’ve been reading her for columns for years. Today she has an excellent post at AlwaysOn.

Company and Product Launch Events

Startup companies with finished products need publicity, media and blogger coverage, and analysts and reviewers to take note of what they are doing. They also often need investor interest. Since investors often flock to the same hot deals, it can be good to have a large number of investors exposed to your deal at the same time.

Some launch events give startups a chance to reach all these audiences at the same time.

DEMO is a semi-annual event that has featured pitches from some of the remarkable technology companies of our time. Investors and the media pay a lot of attention to the companies that get selected to present at DEMO. At every DEMO, conference organizer Chris Shipley chooses a number of DEMOgods that are worthy of special attention.

Contingent Value Rights

When a company is publicly traded and has a high daily trading volume,
the market continually prices the shares, and buyers and sellers can
trade the shares at any time.

But when a company is privately held, there is usually little or no
market for shares, even though the shares have some value. It is
difficult to find buyers of privately held shares, precisely because
there is no ready market for the shares if the buyer decides later to
sell them.

And pricing shares in a privately held company is also extremely
tricky. I have heard of people overpaying wildly for privately held

Powering Businesses with Float

I never had much interest in banking or insurance until reading The
Warren Buffett Way last year and realizing how Buffett made his fortune
by investing the \”float\” from his insurance companies. Now I think
about this concept all the time and wonder how it might be applied to
my internet companies.

From the 2004 Berkshire Hathaway Annual report:

\”… Berkshire has access to two
low-cost, non-perilous sources of leverage that allow us to safely own
far more assets than our equity capital alone would permit: deferred
taxes and \”float\”, the funds of others that our insurance business

Notes to Myself from Berkshire Hathaway Shareholder Meeting

The Berkshire Hathaway shareholder meeting was fabulous. A great experience to sit at the feet of Warren Buffett and Charlie Munger. (Thanks Darren, for making this trip possible!)

I love my blackberry. I was able to take a lot of notes during the Q&A session which lasted about five hours. I am not a trained reporter, and my notes may contain a few mistakes (I\’ve caught and corrected a few already), so please don\’t accept this as an accurate transcript. Like my post says, these are notes to myself, and in places they are rather cryptic.

Here goes:

Idea Stage Investing: Hitting Singles, Not Home Runs

I keep puzzling over the fact that only 2% of venture capital flows into early stage companies when it is also reported as a fact that early stage investment funds provide the highest average returns. Maybe VCs like to swing for the fence and only invest in companies that have huge potential–admittedly, most seed stage companies don\’t.