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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:
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
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 15th-16th, 2007 at The Island Hotel in
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
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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September 27, 2007 by jack petrie.
CresaPartners will cosponsor and host the October 10th, 2007 iBreakfast panel discussion on “Where are Venture Capitalists Placing their Bets Today?” Panelists include Dr. Howard Morgan of Idealab & First Round Capital and David S. Rose of NY Angels & Rose Tech Ventures.
Monetizing Web 2.0
As we enter the next of stage of the Internet Economy, Digital Media and Web 2.0 Social Media are everywhere. So where are we headed now? You can get a very good idea by looking over the shoulder of Investors to see where they are focusing their interests. Understanding what Investors are thinking can make a big difference in where you take you company. So join us for the next iBreakfast season on monetizing Web 2.0.
First Round Capital/Idealab - Dr. Howard Morgan
Dr. Howard Morgan has more than 25 years of experience serving as a mentor, advisor and investor in entrepreneurial ventures. He is a partner with First Round Capital and began working with Idealab in 1997 becoming Vice Chairman in 2000. He is also President and Founder of the Arca Group, Inc., a consulting and venture capital investment firm specializing in the areas of computer and communications technologies. Howard was also a professor of decision sciences at the Wharton School of the University of Pennsylvania, a professor of computer science at the Moore School at the University of Pennsylvania who received his Ph.D. in operations research from Cornell University and his B.S. from the City University of New York.
New York Angels/Rose Tech Ventures - David S. Rose
David S. Rose heads New York Angels and Rose TechVentures. He is an entrepreneurial executive and investor with extensive experience in high technology and communications, venture investments, finance and government.He was named by Inc. magazine to the 1998 Inc 500 list as CEO of one of the fastest growing private companies in America. Red Herring magazine has described him as “a patriarch of New York’s Silicon Alley” for his early leadership in developing the city’s high technology corridor and Crain’s New York Business named him one of the City’s 25 most influential technology executives. Mr. Rose has a B.A. from Yale University and an M.B.A. in Finance from Columbia University Business School.
Program Details
The program will consist of breakfast and networking, followed by the panel discussion and will conclude with a question-and-answer period and closing remarks. It will be held from 7:30-10AM at CresaPartners,
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September 27, 2007 by jack petrie.
CresaPartners will host the New York Software Industry Association’s Sales & Marketing Special Interest Group’s October 3rd, 2007 panel discussion on “How to Differentiate Yourself in the Marketplace”.
Suggestica - Rajesh Setty
Rajesh Setty is a serial entrepreneur, investor and author. Currently, he serves as the president of Suggestica, a company that powers vertical discovery engines. He also serves as the chairman of iPolipo, a company that aims to make scheduling simple.
Rajesh Setty began entrepreneurial life the old fashioned way—by failing hard. Settyhas built company divisions, led teams and took on challenges with unabashed enthusiasm. His first venture in
Rajesh has also written and published seven books, including his latest book “Beyond Code” (foreword by Tom Peters) which was published in late 2005. Rajesh maintains a blog called Life Beyond Code (http://blog.lifebeyondcode.com) and speaks at conferences and companies in US and
Great Lakes Marketing Company - Robert Algeri
Robert is a partner at Great Jakes Marketing Company, a marketing communications firm that crafts marketing strategies and creates marketing materials like websites, brochures, logos and strategic mail campaigns. The company specializes in serving the marketing needs of mid-sized business-to-business companies.
Robert is responsible for all aspects of business development and operations. However, his primary responsibility is to ensure that Great Jakes consistently exceeds the expectations of its clients. Robert currently sits on the Steering Committee of the Business Development Network, a highly selective group of business professionals. Additionally, he has held various board positions at the New York Legal Marketing Association, including Information Officer.
Program Details
The program will consist of breakfast and networking, followed by the panel discussion and will conclude with a question-and-answer period and closing remarks. It will be held from 8-10AM at CresaPartners,
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September 5, 2007 by jack petrie.
Tighter Mortgage Market Demands Lower Risk Profile
by Shawn Gilreath & Jeanne St. John of CresaPartners
The implosion of the sub-prime residential lending market has been well covered by the media in recent months with the collapse of Ameriquest, New Century, Novastar, Ownit, Mortgage Lenders Network USA and many others. This drop in the residential debt marketplace also has caused repercussions in the commercial mortgage markets.
In May, two of the five groups that were buyers of the lower grade levels of commercial mortgage backed securities debt stopped buying these debt tranches. Seeing the devastation in the sub-prime market, bond rating agencies are requiring higher subordination levels and have begun lowering ratings on commercial mortgage backed securities bonds.
Commercial mortgage backed securities investors are now demanding lower risk profiles from securitization programs and requiring higher returns in order to compensate for the increased risk. Some of the demands to reduce risk include increasing debt service coverage, increasing amortization and reducing loan-to-value. This tightening in the market is already trickling down as stricter financing terms and higher interest rates on new loans to property owners. Commercial mortgage backed securities woes are being further compounded by treasury yields rising to their highest point in five years. Perhaps hardest hit will be property owners who purchased real estate in recent years, used floating rate debt and assumed that generous debt programs and low rates would be available for several more years. For companies occupying real estate, this shift in the commercial mortgage backed securities market may have dramatic adverse results.
A large amount of capital was allocated this year for real estate investments. Most market players agree that less capital will be available in 2008 and the dollars that are allocated will require higher rates of return.
Companies considering a sale/leaseback or other transactions in 2008 should consider executing those strategies now, while there is a surplus of capital.
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August 31, 2007 by jack petrie.
CresaPartners will host the New York Software Industry Association’s Sales & Marketing Special Interest Group’s September 5th, 2007 panel discussion on The Psychology of Selling - Using Influence Techniques to Close More Sales.
Three Esteemed Experts
The panel will consist of three experts on sales training, development and influence techniques: Lawrence Sharpe, Director of the Neo-Sage Institute; Robert Heiss, President of Sandler Sales Institute and Dr. Edward M. Petrosky, Leadership Consultant and Executive Coach with Tools For Success.
Neo-Sage Institute - Lawrence Sharpe/Director
Larry has a varied background which began in the United States Marines, continued with English instruction in
Sandler Sales Institute - Robert Heiss /President
Robert is the founder and owner of Sandler Sales Institute, which specializes in business development strategies, sales productivity training and executive coaching. Bob’s experiences as salesman, Regional Manager and VP of Sales have taught him that a focus on successful behaviors, attitudes and techniques can help people overcome self-limiting beliefs and achieve personal and professional visions. Bob is an experienced public speaker and published author of many articles on sales and marketing.
Tools for Success - Dr. Edward M. Petrosky/Leadership Consultant




Dr. Petrosky is a psychologist by training who utilizes his insights into people, relationships and group dynamics to improve employee engagement, commitment and teamwork. His services include organizational consultation, executive coaching and staff development and training. Dr. Petrosky entered his profession to help people rise to life’s challenges and realize their potential. He has consulted organizations on such issues as increasing alignment with organizational mission and vision, increasing emotional intelligence, improving customer service and retention and reducing workplace anger.
The panel discussion will be held from 8-10AM at CresaPartners, 100 Park Avenue (40th-41st Streets), 24th Floor, New York, NY.
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August 29, 2007 by jack petrie.
CresaPartners recently cosponsored the 8/15/2007 iBreakfast’s Innovator Evening at 140 Broadway with judges naming MyHound the winning presenter. The presentations were judged by Josh Brotstein of SAS Investors, Thomas Blum of G.C. Andersen Partners, LLC and Rosalind Resnick of Double R Ventures LLC.
SAS Investors - Josh Brotstein
Founded in January 2001, SAS Investors was formed to facilitate the creation and growth of seed- and early-stage technology companies in the Mid-Atlantic and Northeast regions (New York, New Jersey, Connecticut, Maryland, Delaware, Pennsylvania, Massachusetts, Rhode Island). Located in New York City and backed by Canaan Partners, Rho Capital Partners, and Sevin Rosen Funds, three of the country’s largest and most prominent venture capital firms, SAS Investors is positioned as one of the region’s leading backers and builders of core technology companies.
Prior to co-founding SASI, Josh has developed and operated business units for Fortune 100’s in the media, communications, and financial services industries, specifically heading up the Internet content and commerce efforts for NBC, Citibank, Prodigy, and CNBC.
G.C. Andersen Partners, LLC - Thomas Blum
G.C. Andersen Partners, LLC is a premier, New York City based boutique merchant bank that advises and invests in emerging growth and middle market companies. The firm was founded in 1996 by G. Chris Andersen, a former Vice Chairman of PaineWebber and a former head of the Investment Banking Group at Drexel Burnham Lambert. The six partners, five of whom were senior bankers at Drexel, have an average of over 25 years of investment banking and principal investing experience and have worked together extensively over their careers. During their careers, they have consummated hundreds of transactions, representing over $100 billion in value. To date, G.C. Andersen Partners has made 18 investments totaling approximately $57 million with a realized return of $259 million (unrealized value of $7.4 million) and an IRR of 222%.
Thomas has spent 22 years as an investment banker and an investor in private equity and venture capital opportunities. Before joining G.C. Andersen Partners in 2006, Thomas ran Channel Capital LLC, a firm he founded in 2001 to provide venture capital and financial advisory services to emerging companies. While with Channel Capital, he became an active angel investor, backing eleven companies. Mr. Blum serves on the Board of Directors of Landauer Metropolitan Inc., Supertron Technologies, Inc. and Interactive Frontiers, Inc. He received a BS in Engineering from Princeton University and an MBA from Harvard Business School.
Double R Ventures LLC - Rosalind Resnick
Double R Ventures offers a broad range of advisory, consulting and private equity investing services to startups and emerging businesses. Founded by Rosalind Resnick, one of the Internet’s best-known entrepreneurs and strategists, Double R Ventures seeks to partner with a select group of dynamic companies and individuals to create value on and off the Net.
Rosalind Resnick, a former business and computer journalist who built her Internet marketing company, NetCreations, Inc., from a two-person home-based startup to a public company that generated $58 million in sales, is the Founder and CEO of Axxess Business Centers, Inc., the leader in strategic consulting, business plan development and outsourced financial and marketing services for startups and emerging businesses. She co-founded NetCreations in March 1995 and served as the company’s CEO and President until December 2001, pioneering the concept of 100% Opt-In® email marketing in 1996 and spearheading the company’s successful IPO in 1999. In 1994, Ms. Resnick co-authored The Internet Business Guide and, from 1994 to 1997, served as the editor and publisher of Interactive Publishing Alert, a semi-monthly newsletter tracking trends and developments in online publishing and advertising. Her articles about entrepreneurship and small business regularly appear in Entrepreneur.com, and Rosalind has been a guest lecturer at Harvard, NYU and Pace University business schools. Rosalind received B.A. and M.A. degrees in History from The Johns Hopkins University in 1981. She serves on the board of Do Something, Inc., a New York-based not-for-profit organization that empowers young people to change their world.
MyHound - Ardy Khazaei, President
MyHound.com is a website where users sign up for e-mail notifications of new CD and book releases, concerts, tour dates, and other events related to their favorite artists - from famous rock stars and bestselling authors to indie bands, unknown actors and niche writers.
The company’s services are based on the belief that consumers are devoted to their cultural interests and eagerly anticipate news related to their favorite artists.
“MyHound.com’s strategy is to focus on the passions of its users,” said Ardy Khazaei, President of My Hound Media. “They no longer have to worry about missing a new release from a favorite artist or author - MyHound.com will alert them, giving them peace of mind and control over the information that they receive. In addition, our breadth of coverage across entertainment categories gives our users the convenience of a ‘one-stop shop,’ and keeps them coming back for more.”
MyHound.com solves two problems in the cluttered online information environment. First, consumers want relevant, accessible and accurate information about their particular favorite artists- personalized rather than generic or irrelevant. This need is particularly acute in the case of lesser known artists and performers who form the “long tail” of their industries. Second, marketers seek greater accuracy and effectiveness in reaching specific, targeted audiences.
My Hound Media was founded by Ardy Khazaei, a media industry executive with experience in traditional and digital media, as well as management consulting.
Parseon - Rosemary Polsky-Newman, CBO
Parseon Inc. reads through and parses scientific text in specific “verticals” such as life sciences, and promises results almost as good as human indexers, but at a fraction of the cost. Chief Business Officer Rosemary Polsky-Newman got a nod by being asked for her business plan. She says Parseon’s technology uses natural language processing and does things that a generalized search can’t.
ODA Consulting - Roger Dean, President
ODA Consulting is the leading provider of innovative management and technology solutions, with an emphasis on processes and procedures. Founded in 2001 to ensure the reliability and accuracy of television and radio production, integration, and distribution, ODA Consulting has expanded to become a technology solution provider serving a variety of industries, including financial services, manufacturing, healthcare, and advertising.
Roger Dean is a strategist who is equally capable of developing technology in response to management visions as he is in executing detailed and complex media projects. His work has involved the design and execution of solutions in New York, London, Hong Kong and Tokyo. The most visible example is the huge, block-length LED sign on the front of 745 7th Avenue in New York City, a project that included the associated analog and digital backroom hardware and the coordination of the corporate visual message.
Day:37 LLC - Stuart Ginsberg , Producer & Partner
Stuart Ginsberg began his career in entertainment public relations, publicizing independent films, television specials and Broadway shows. His experience includes film festival strategies, branding, unit publicity and grass roots marketing. His last producing project, Followers, garnered numerous film festival awards and received national distribution by Castle Hill Productions. For the film, Ginsberg raised finishing funds, oversaw marketing and branding and arranged sales meetings. Ginsberg has also produced short films, commercials and industrial videos. Ginsberg was a founding member of the “Back East Picture Show”, a film festival in Hoboken, New Jersey, aimed at helping the independent filmmaker. Previously, he was the Director of Communications for the School of Visual Arts and earned his B.A. from American University in Washington, D.C.Also presenting were television.com, llc - Eric Illowsky/President, Design Buggy - Chris Kincade/CEO and Nonprofit Sponsorship Network - Wendell Minnick, CEO.
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