Eu's Spain Bank Rescue May Bring Only Brief Respite

Editor’s note: Glenn Solomon  is a partner with GGV Capital. Some of his recent investments include Pandora, Successfactors, Isilon, Domo, Square, Zendesk, Quinstreet, and Nimble Storage. He blogs regularly at www.goinglongblog.com, where the focus is on growth stage entrepreneurs who are thinking big. Follow him on Twitter @glennsolomon. Stanford-born and Seattle-based Tableau Software (DATA) enjoyed a tremendous debut on the public markets on Friday, closing on its first day of trading at over $50/share, up over 60 percent from its $31/share IPO price. The company raised over $250 million through the sale of approximately 14 percent of the company, and its enterprise value now sits at approximately $2.5 billion. For the pundits who’ve been arguing that the tech IPO landscape is in crisis, deals like Tableau serve as a powerful reminder that the public market is eager for certain tech companies. In fact, over the past year or so, there have been several other high-profile tech IPO winners, such as Workday, Splunk, Palo Alto Networks and ServiceNow. What lessons can aspiring tech entrepreneurs learn from Tableau and these other Wall Street success stories? Here are few. Stand Out In The Crowd Tableau has built a highly attractive business. Growth has been very strong – March quarter revenue growth was over 60 percent, to $40 million. The company is operating in a huge and proven market: The data analytics and visualization space has produced big winners across several software generations and remains interesting, as big data pushes the limits of existing solutions. Finally, Tableau has been able to show profits, albeit modest, as the company has grown rapidly. For all these reasons, public investors flocked to Tableau. If you’re considering an IPO for your company in the future, recognize that public fund managers have many companies from which to choose. More specifically, small-cap growth managers have between 500-1,000 companies in their universe. Given the enormity of this number, a typical manager will only follow 50-100 companies closely and, depending on strategy, will likely only invest in 25-50 of these in any one year. Tableau stands out in this sea of stock tickers. Does your company stand out? If not, what investments do you need to make to help you rise above the noise? Price Your Company Right Cynics will suggest that Tableau left money on the table. Since the stock popped over 60 percent on the first day of trading, the company clearly could have set its IPO price higher and raised more money. This misses the point. Tableau recognized that its IPO is a chance to establish a new shareholder base. By pricing the IPO at $31, the company surely had its pick of new investors since most everyone, seeing the obvious good deal, wanted to get in. I’m sure Tableau’s management team spent time evaluating who was most likely to hold their IPO stock and add to their ownership over time. If the company has done its job well, Tableau has stacked its shareholder list with the best, long-term oriented fund managers. This will serve the company well for years to come. You should spend time getting to know potential VC investors before you take money into your company. Consider prioritizing things like alignment of outlook and ability to help add value ahead of price. Taking the highest price limits dilution in the short-term, but if you add a VC who either can’t help or has a different vision than you for your company, you’ll likely regret the decision down the road. Patience Is An IPO Virtue Tableau deferred its IPO for several quarters. In fact, had it used a $100 million in revenue run rate as a threshold for IPO timing, as many others do, the company would have now been public for over a year. Because Tableau waited longer, the company was able to continue to invest in its business. With more time and investment likely came increased visibility and predictability, which is critical to performing as a public company. Also, Tableau has become more valuable during the past year, as it has grown and solidified its leadership position in the market. With a higher valuation, Tableau’s IPO brought in more money and established a larger public float than would have been possible a year ago. Public fund managers dislike small, or “thin,” float deals; such thin float IPOs often lead to more stock volatility, which is difficult to manage. As you build your company for IPO readiness, consider waiting until you have predictability well under control and your valuation allows you to sell a larger amount of stock without taking more than 15-20 percent of dilution. Clearly Tableau is a remarkable company. Emulating these three traits will help you succeed, as well.

Retooling the traditional public library for a more technically savvy populace is no small feat, especially when library budgets across the U.S. have been gutted these past few years. That sad state of events has forced some libraries to take matters into their own hands. Consider the case of the Northlake Public Library in Northlake, Illinois — it wants to give its communinity (and especially the town’s children) access to a slew of new digital creation tools to help inspire the next generation of makers and artists, and it’s decided to turn to Indiegogo in hopes of making it happen. All told, Northlake trustee Tom Mukite is looking to raise $30,000 to outfit the library with an iMac, a drawing tablet, a Wacom Cintiq display, a fancy lightbox, and (perhaps most tantalizing) a 3D printer for youngsters and local makers to feed their projects to. In a bid to attract younger would-be readers, Mukite says the staff is also planning to use the funding to expand the library’s cache of graphic novels — there’s been plenty of debate about the value of these highly-visual tomes as motivators for childhood and adolescent literacy, but the folks in Northlake firmly believe that they’ll help get reluctant readers devouring content as well as help improve language skills for non-native English speakers. Oh, and then there’s the pièce de résistance — a nine foot tall statue of Dr. Bruce Banner’s green alter-ego hulking out, again meant to attract the kiddies. I’ll admit I don’t really get that part, but then again I was the sort of kid who needed to be carefully coaxed out from among the stacks anyway. It’s not exactly the first time we’ve seen the crowdfunding model applied to spreading literacy — Cassandra Elton and a group of fellow University of Iowa students used Indiegogo to turn a wild-eyed idea into the roving Antelope Lending Library earlier this year even though they missed their funding goal by some $7,000. Northlake’s creation-friendly angle is an intriguing one — I can’t think of any child who wouldn’t like to see their doodles converted into a real-life action figure, and hooking these kids on the joys of making things could help inspire a new generation of designers, entrepreneurs, and engineers. [Image via the Metropolitan Library System]

Google is under fire in the UK for its tax practices in the country, and a new key witness (who spoke to The Sunday Times) might put them in deeper hot water when he hands over a reported 100,000 emails and documents to the British Revenue & Customs (HRMC) services. Barney Jones, a former Googler who was at the company between 2004 and 2006, says he has material proof that Google’s London sales staff which would negotiate and close sales for the UK market, despite claiming its Dublin HQ handled finalizing all deals. Jones was prompted to speak out by testimony given to the Commons Public Accounts Committee (PAC) last week by Google VP Matt Brittin, who said that London-based Google staff were never closing any ad sales deals, though some selling efforts were made there. Brittin had previously gone on record in November 2012 with statements asserting that no one in the London office was doing any kind of ad selling. The matter of where the deals were finalized is especially important because if a sale closes in London, it’s likely they’d be taxable in Britain, rather than in the extremely low tax-rated Ireland. Jones told the Sunday Times that Google is fully aware of this, yet there are still records of Google staff closing major deals from companies like eBay and Lloyds TSB, but Google doesn’t seem at all certain that any of the documentation will absolutely prove that it has done anything strictly against UK tax law, according to a statement provided by Google Direct of External Relations Peter Barron to the Sunday Times. “As we said in front of the public accounts committee, it is difficult to respond fully to documents we have not seen,” the statement reads. “These questions relate to Google’s business in the UK going back a decade or more. None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.” Google reiterated this statement to TechCrunch when we contacted them for comment. Ireland uses its lower corporate taxation rate, which is 12.5 percent, or a little over half of Britain’s 23 percent, to attract big names who base their European corporate headquarters there, including Apple and Facebook in addition to Google. The search giant is currently under fire from UK parliament members for its tax practices, thanks to a Reuters investigation that revealed statements it made last November to the PAC about its London operations may not have been entirely accurate. Amazon is next in the PAC’s sights for its UK tax practices, as Reuters has also recently uncovered evidence to suggest that it, too, is doing a lot of selling through an autonomous London-based unit, despite routing its sales on paper through a tax-exempt affiliate based in Luxembourg. In fact, for most on Google’s footing, avoiding taxes seems to be the exception, not the rule, and a recent piece by V3′s Madeline Bennett explains that even if this fresh round of hearings reveals that these schemes do run afoul of UK tax regulations, it’s unlikely we’ll see situations change all that dramatically. Governments are too dependent on the general economic benefits of hosting big corporations, and get too much out of awarding them contracts, she says, to risk doing long-term harm to those arrangements. Still, what Jones claims to have would be incredibly embarrassing for Google, especially if it spells out in no uncertain terms that closing deals was regularly handled by Google’s London staff, in direct contradiction to what Brittin has told the committee, but until we see the goods, there’s no telling how deep down the rabbit hole his information actually goes.

YouTube turns eight years old today, reminding each of us in some odd way how young or old we really are. Remember, the company launched back in 2005, the same year that Michael Jackson was found not guilty of child molestation, and Lance Armstrong was winning his seventh Tours De France, and Arrested Development was still on the air. A lot has changed since then, but YouTube’s growth remains strong as ever. YouTube announced that its community now uploads more than 100 hours of video to the platform every minute. Minute. That’s the equivalent of four days worth of video every sixty seconds. But of course, the supply makes sense when you consider the demand. YouTube claims that more than one billion people across the world come to YouTube for content each month, which comes out to nearly one in every two people who have access to the internet. Here’s a little perspective on growth: Two years ago, YouTube revealed that users were uploading 48 hours of video each minute, and last year it had grown to 72 hours. Eight years in, YouTube is still a growing platform, while Facebook may be slipping amongst younger and fresher social niche applications. Meanwhile, YouTube opens up new possibilities for startups who want to leverage its massive, active user base and content library. Telecast, in particular, comes to mind, as the betaworks company helps makes all those billions of videos discoverable and curated on mobile devices. Here’s what YouTube had to say about it, in the official blog post: And so, on our eighth birthday, we’d like to thank you for making YouTube the special place that it is. For showing us how video can create connections, transcend borders and make a difference. For clicking these links even if you aren’t sure what they’ll be, but you trust us. In short, thanks for making us better in big ways and small ones, too. We can’t wait to see what you come up with next.

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