October 31, 2007 by jack petrie.

Congressman Weiner Luncheon

On Monday, October 29th, NYSIA and Information Builders hosted a luncheon featuring Congressman Anthony Weiner’s speech on Entrepreneurial Growth in New York City.

Congressman Weiner discussed how New York City’s economic future will impact the technology sector and emphasized three points: 1) Government recognizes a need to help medium-sized businesses offset the high costs of doing business in NYC and the primary vehicle for that assistance is in the form of tax incentives; 2) Net Neutrality is necessary regulation to insure ongoing growth and opportunity; and 3) Immigration is of paramount importance to both the tech sector and the continued thriving of New York City.

New York Software Industry Association Monthly Meeting

Jack Petrie, SVP of CresaPartners will be among the panelists at the New York Software Industry Association’s (”NYSIA” www.nysia.org) November Monthly Meeting featuring a Two Hour Startup Bootcamp: The Faster Fast Track! The bootcamp will be held at JPMorgan Chase’s offices at 277 Park Avenue on the 17th Floor. The other panelists include Paul S. Ellis, Partner at Scarola Ellis LLP; Ed Golud, President of Revenue Accelerators; Erik K. Grimmelmann, Chief Architect of Send Word Now Communications Inc.; Warren Haber, Jr., Managing Partner of Crossbar Capital and Michael Lopez, CPA at Amper Politziner & Mattia.

NYSIA Sales & Marketing SIG

The following morning, CresaPartners will be hosting the November 7th, 2007 New York Software Industry Association’s Sales & Marketing SIG Panel Discussion on Selling to the CIO, featuring Edward I. Golod of Revenue Accelerators and Michael Minelli of Partnering With the CIO.

Revenue Accelerators - Ed Golod

Mr. Golod has 25 years of in-field sales leadership using value to build high-tech consultative sales engines. He has “hunted” over $210M in new business selling to Sr. executives in the Fortune 100. A thought leader and writer in value-based consultative selling for Sr. level relationships, he has studied over 500+ software firms to develop a new style of Business case selling to mentor high tech sales teams. Along with his deep knowledge in Enterprise software, Infrastructure, and Networks, Mr. Golod’s ability to rapidly “understand” complex IT businesses and processes is of high value to his clients.

Partnering with the CIO - Michael Minelli

Michael Minelli is a successful sales professional and client advisor. He manages clients for SAS Institute, the largest privately owned software company in the world. Michael worked with C-level executives and their teams to analyze, diagnose and transform current information and data challenges into value-based solution opportunities for CRM, Financial Management, Performance Management, IT Management and Supply Chain Intelligence. His most recent engagements have been with clients such as Time Inc., Cablevision, Foxwoods, Scholastic, Major League Baseball, S&P and Sony.

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October 26, 2007 by jack petrie.

Israeli Tech Breakfast Series

I recently attended the Israeli Tech Breakfast Series’ October 11th, 2007 Breakfast discussion of Web 2.0 Israeli Innovation & Investment held at The Harvard Club and hosted by Loeb & Loeb LLP.

All-Star Panel

The panel discussion was moderated by Loeb & Loeb LLC’s Lloyd Rothenberg and featured LivePerson’s President & CFO, Tim Bixby; Crossbar Capital Managing Partner Charlie Federman; Pando Networks’ Co-Founder & CFO, Yaron Samid; and Yissum Technology Transfer Company of the Hebrew University of Jerusalem’s CEO, Nava Swersky.

Israel’s Technology Boom

The panel’s consensus was that Israel’s technology companies are rapidly becoming global, and not purely Israeli companies. Additionally, as the rest of the world adopts a global perspective, other countries are taking a page from Israel’s historical playbook by marketing to the globe.

What are some of the reasons for Israel’s booming technology sector?

• Comraderie - the social network in Israel is tighter by virtue of the country’s size, education system and military requirements;
• Technical Expertise - Israel’s top engineering talent provides original and innovative solutions for early-stage development;
• Persistence - Israeli entrepreneurs don’t give up easily.

So, why come to NYC?

What does New York offer to these companies that they can’t find in Israel:

1. Access to media and financial markets and customers,
2. Human factors - desire to pursue the “American dream”,
3. Greater opportunity (for success).

The follow-up event in The Security Breakfast Series NY will be a breakfast on November 1, 2007 discussing Public Transportation Investing in Homeland Security and Innovation at The Harvard Club from 8AM-9:30AM.

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October 25, 2007 by jack petrie.

CresaPartners recently cohosted the October 10th, 2007 iBreakfast’s Venture Capital Outlook featuring Idealab & First Round Capital’s Howard Morgan, New York Angels & Rose Tech Ventures’ David Rose and Newforth Partners’ Robert Hoffer.

Rose Buds

Rose began by observing that there are relative few truly new concepts, but offered some personal platitudes he invokes in making investment decisions:

Invest in the jockey, not the horse - this is commonly heard from venture capitalists and Rose suggests that it is rarely about the business plan. All business plans are bound to change and the successful entrepreneur must be adaptable.

The venture concept must be scalable - monetizing purely content plays is difficult as people want free content. An advertising model must be scalable. The best models are “platforms” which allow the company to scale and offer other services besides content.

Additionally, the venture concept must be monetizable and saleable.

M&A Perspective

Hoffer’s forte is investing in the “Digital Media Value Chain” and he suggested that the mpeg4 will drive all future media. Hoffer emphasized that in the current climate, limited partners returns come from merger & acquisition activities rather than from successful initial public offerings. He suggested that the last money “in” to an investment provides the greatest opportunity for returns and suggested that the valuation process can be a competitive tactic by investors to minimize the position of early investors.

Idealab’s Ideas

Howard Morgan discussed the two stages of venture capital investing: 1) too early and 2) way too early. (In fact, he writes a blog on the topic, titled www.waytooearly.com). Morgan looks for the six “P’s” from a venture investment opportunity: 1) people, 2) product, 3) plan, 4) profits, 5) passion and 6) persistence. Morgan also emphasized the important distinction between product users and product customers.

Future Bets

As far as trends for the future, some of the concepts discussed included:

• The office of the future - technology will take the place of travel;
• The concept of the “living room” - doesn’t exist any longer;
• Second World-type virtual domains and avatars will continue to grow;
• Radio - is on the rebound and growth will be driven by podcasting;
• Movies - can’t compete with video game new releases.

All in all, another great discussion organized and moderated by Alan Brody of iBreakfast. See you next month!

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October 19, 2007 by jack petrie.

Facebook-application developer, Buddy Media, recently leased office space at 1841 Broadway, NYC. Buddy Media was represented by CresaPartners’ Kristian Hansen in the transaction. Buddy Media is the developer of Acebucks, the primary virtual currency application for the Facebook social-networking platform.

Acebucks will soon launch an API which will enable other Facebook developers to integrate the virtual currency into their applications. Additionally, Acebucks can be used to purchase virtual and physical items through the soon-to-be-launched Facebook store.

Living in a Virtual World

Many online games and virtual reality platforms already use virtual goods and currencies for participants. Examples include Second Life, Utherverse and Club Penguin, a virtual world for children which was recently acquired by Disney.

About Buddy Media

Buddy Media recently received $1.5 million in angel funding from a group that includes Facebook investor and board member Peter Thiel, best-known for his role in founding PayPal. Buddy Media’s other investors include Mark Pincus, a serial entrepreneur who runs a Facebook poker application, Howard Lindzon of Biltmore Ventures, James Altucher and Robert Ehrenberg.

CresaPartners hosts Facebook Developer Summit

In June of this year, CresaPartners hosted the first-ever NYC Facebook Developers Summit, organized to promote the opening of the Facebook platform to third-party development. More than eighty people attended, including Facebook founder Mark Zuckerberg. During the summit Zuckerberg mentioned the company’s projections of 100 million unique users within the next year.

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October 19, 2007 by jack petrie.

Third Quarter 2007 Market Overview

Tenant’s Viewpoint

While recent economic factors have created a certain sense of unease, the commercial real estate market will remain a Landlord’s market for the foreseeable future, based primarily on the current short supply and high demand. Unless we see significant job losses in Manhattan we expect market conditions to remain steady. Many are watching for year end, post-bonus layoffs at the large financial services firms, which may start to trigger a softening of demand for office space. In the interim, many tenants are adopting a wait-and-see attitude and suspending or postponing any space searches not driven by schedule or lease expiration. “Move-in” condition space that does not require significant construction remains difficult to find, and landlords remain bullish in both their negotiating stances and pricing positioning. Security deposits are becoming more aggressive, particularly for hedge funds and start-ups.

Market Overview

The subprime mortgage crisis and subsequent credit crunch have yet to make an impact on New York City’s commercial real estate market, which historically has lagged changes in the financial sectors by about 12-18 months. With vacancy rates still at 5% for Class A space in Midtown, we continue to be in a Landlord’s market. Downtown continues to improve overall, and Midtown South remains incredibly strong at 3.8% vacancy. We have seen very slight increases in vacancy from Q2 to Q3 2007, but asking rents have continued to rise, indicating a continued bullish outlook by commercial landlords.

Trends & Statistics

Midtown
Midtown Class A vacancy rates increased slightly for the first time in over a year, from 4.6% in Q2 to 5% in Q3, yet the asking average asking rents also increased by $3.02 per rentable square foot (”rsf”) or 4.01% to $78.21/rsf in the same period. Class B vacancy rates also increased slightly from 4.1 to 4.3% (or by 8.5%) with an increase in asking rents of $7.38/rsf (or 15.8%) to $54.21/rsf.
Since Q3 2006, Class A vacancy rates have decreased 7.41% (from 5.4% to 5.0%) and the average asking rent has increased $14.97/rsf or 23.6%. Class B vacancy decreased from 4.7% to 4.3% (8.5%) and asking rents increased $9.29/rsf (20.4%). Q3 2007 net absorption was 550,979 rsf for Class A, with negative absorption of 211,951 rsf in Class B properties.

Midtown South (Class A & B)
Q3 vacancy increased from 3.7% to 3.8% from the prior quarter, with asking rents increasing $3.18/rsf (7.0%) to $48.86/rsf . A year ago (Q3 2006), vacancy was 5.3%. This shows a decrease of 28.3%. Asking rents in the same period increased $12.47/rsf or 34.3%. Midtown South no longer proves to be a value alternative as prices have risen commensurate with Midtown over the last year. Net absorption in Midtown South in Q3 was 158,229 rsf.

Downtown
2007 Class A vacancy reduced 23.4% from 7.7% in Q2 to 5.9% in Q3, with asking rents increasing $3.35/rsf (6.96%) to $51.48/rsf. Class B also improved from 9.4% vacancy in Q2 2007 to 8.3% (11.7%). Asking rents improved 3.27% (or $1.39/rsf) to $43.88/rsf. A year ago, Class A Vacancy was 10.6%, and class B was 10.4%. Asking rents were $44.80/rsf and $32.13/rsf, respectively. This shows a 23.4% reduction in vacancy for Class A (11.7% for Class B) and an increase of 7.0% (Class A) and 3.3% (Class B) in asking rents.

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October 9, 2007 by jack petrie.

CresaPartners Named Silver Sponsor

CresaPartners has been named a silver sponsor of the 2007 AeA Technology Capital Conference, October 15^th-16^th, 2007 at The Island Hotel in Newport Beach, California.

Access to Investment Capital

The AeA Technology Capital Conference is designed to provide privately held technology companies an efficient vehicle to access key investment professionals in one location. The two-day conference will feature presentations from 25 companies with 2006 revenues between $5 million and $75 million that are seeking funding for growth, product roadmap ramp, M&A activities, strategic partnerships and other transactions.

Private Equity Keynote Speakers

Robert Grady, a managing director at The Carlyle Group, and Patrick Haden, a partner at private equity firm Riordan, Lewis & Haden (RLH), will deliver the morning and luncheon keynote addresses. “Attendees will gain indispensable insight as the legendary Robert Grady and Patrick Haden share their perspectives on what investors evaluate when deciding whether to fund a company. We look forward to welcoming them both to this signature AeA event,” said Peter Craig, chairman of the AeA Orange County Council and chairman, Valicore Technologies.

Grady serves as fund head for Carlyle’s U.S. venture and growth capital group. In addition, he coordinates Carlyle’s global venture and growth capital effort of more than $3 billion under management in eight funds. Grady is a member of the board of directors for seven Carlyle portfolio companies: AuthenTec, The Health Central Network, Ingenio, Panasas, Secure Elements, Verari Systems and USBX. He is a former director and chairman (2006-2007) of the National Venture Capital Association.

Haden, a general partner at RLH since 1987, invests in high-growth middle-market companies and has guided many of the firm’s portfolio companies from rapid growth through the public market process. Haden sits on the board of directors of four companies ranging in revenue size from $100 million to $1.3 billion, including Tetra Tech, Inc. and Bradshaw International Inc.

Additional Sponsors

In addition to CresaPartners; Rutan & Tucker is the Title Sponsor, Comerica Bank, First Columbus Investments, Merrill Lynch and Silicon Valley Bank have stepped up as Silver Sponsors. Moss Adams LLP is sponsoring the luncheon, while Barney & Barney is the reception sponsor. WunderMarx|PR Inc. is the public relations sponsor. For more information, visit http://www.aeanet.org/capitalconference.

About AeA

AeA, the nation’s largest technology trade association with 2,500 member companies representing all segments of the high-tech industry, is dedicated solely to helping our members’ top line and bottom line. We do this in partnership with our small, medium, and large member companies by lobbying governments at the state, federal, and international levels, providing access to capital and business opportunities, and offering select business services and networking programs. For more information, please visit http://www.aeanet.org/.

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October 4, 2007 by jack petrie.

That was the overlying message expressed during the October 3rd, New York Software Industry Association’s (”NYSIA”) Sales & Marketing Special Interest Group’s panel discussion on differentiation, hosted by CresaPartners.

Differentiation as a Process

Each of the three panelists addressed a different segment of the differentiation process, with Great Jakes Marketing Company’s Rob Algeri tackling value definition, Sales Optimization Group’s Ron Hubsher focusing on sales efficiency and iPolipo’s Rajesh Setty discussing building lasting relationships.

Algeri emphasized identifying your company’s core differentiating value prior to communicating it to the marketplace. By accomplishing this, the implementation of the marketing becomes merely a matter of execution.

Hubsher discussed defining the ideal (or “un-ideal”) customer first, followed by the combination of focused targeting and a superior sales effort. Hubsher was adamant that companies should NEVER cut prices, as buyers purchase value and risk, not on price.

Setty presented his concept of building lasting relationships and developing depth of relationship as a differentiating factor. Just like the shampoo instructions (lather, rinse, repeat), his formula is simple: introduce yourself, repeat, and continue for the rest of your life.

A Business Case Approach to Enterprise Sales

Next month’s NYSIA Sales & Marketing SIG Event take place on Wednesday, November 7th from 8-10AM at CresaPartners, 100 Park Avenue, 24th Floor, New York, NY. A panel featuring Michael Minnelli of SAS Institute and Mike Barlow of Cumulus Partners, coauthors of the book, Partnering with the CIO, will join Edward Golod of Revenue Accelerators to discuss ways to improve deal flow and closure rates using a business case approach to enterprise sales.

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