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This is just one of many fascinating bits of information I picked up at the Cooley event in Tel Aviv this week. The Event was about Opportunities to Raise Capital and Achieve Liquidity in the U.S. Markets. In other words, it was about the different exit opportunities and the pros and cons of each.

Too many internet and technology related conversions I go to, are dead boring and offer no real benefit perhaps maybe that of networking. This one was surprisingly professional, enriching and highly practical. So for you, fellow entrepreneurs, I’ll share some of the interesting exit strategies discussed.

Let’s start by getting these two definitions out of the way:

• M&A - Mergers and Acquisitions - merging and acquiring of different companies (in this context, we’re talking about you’re company being bought by the Googles or Yahoo!s of the world).
• IPO - Initial Public Offering - first offering to the public of your company’s shares on the stock market.

So You Wanna File For IPO In NASDAQ…
The first Panel, moderated by Robert Brigham from Cooley Godward Kronish LLP, discussed current issues companies face in the U.S. IPO market. Panel members were: Aryeh Fund from KPMG, Yoram Inbar from Merrill Lynch, Ronald Lehmann from Fischer Behar Chen Well Orion & Co. and Rick Mann from Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.

Here are some of the interesting points raised in this panel:

• Israeli companies traded in the US market enjoy more flexible reporting requirement. For example: there’s no obligation to report the salaries of the top 5 executives in the company AND the filing of the IPO to the SEC can be done confidentially. The latter gives the company the advantage of picking the right time to penetrate the market.

• Yoram Inber mentioned the advantages of raising funds by IPO in comparison to raising from VCs or “angles”. These advantages include: validating the product in the global arena and detachment from the local market, increasing name awareness by being reviewed by research firms and attracting highly qualified employees by offering options.

• But IPO is no walk in the park. Aryeh Fund highlighted that it requires a shift in mind set from a small privately held company to a pubic company. There’s suddenly great significance and responsibility in making sure financial reports are professional and accurate. Internal control and reporting to the SEC requires the top management’s time and attention and it increases accounting expenses significantly. This is something Israeli CEOs don’t always take under consideration when filing for IPO.

• Not all companies are right (or ready) for IPO. According to Yoram Inbar, the profile of a company that files for IPO in the U.S. market should be:
  • Strong management
  • Addressable market in the U.S.
  • Protected IP (intellectual property)
  • Sustainable business model
  • Turnover of $10-15 million per quarter.

• It’s important not to file for IPO too soon (when your quarterly revenues are lower than $10 million ). Israeli companies that hurry to file for IPO dilute the reputation of Israeli companies is the global market. For such companies, there’s always the options of IPO in AIM or TASE, which are more suitable for smaller IPOs.

• Another exit strategy discussed was “Dual Tracking”, which means pursuing both IPO and M&A at the same time. The down side is of course lack of focus and very high overhead in managing both processes simultaneously. But the upside in increased name awareness and higher valuation can be great.

• So what does an Israeli company need to do to prepare for a U.S. IPO?
  • Build a management team - In particular this means hiring a CEO that can take the company on a road show and a CFO which is familiar with the US market and can handle research analysts. This may seem trivial but is sometimes what founders find most difficult to do. Emotionally attached to their “baby”, many founders often view themselves as the most qualified to lead the company when if fact they lack experience and knowledge of the U.S. market.
  • Select the right investment bank to lead the IPO - Not all banks are right for all IPOS. First, it should be a bank of the right size. A smaller IPO will probably get the attention in deserves from a boutique investment bank rather then going from Merill Lynch, which handles mostly big-time IPOs . A presence of the Bank in Israel, industry knowledge and strong equity platform are also important.
  • Corporate House Cleaning - Post Enron and WorldCom, the importance of corporate and accounting house cleaning is pretty obvious. What this means for example is making sure employee options are in order, no withstanding loans to officers etc.

And now for the more viable EXIT opotion: M&A
Between 1997 and Q1 of 2007 start ups exited 8 time more by M&A than by NASDAQ IPO. The second panel, led by Richard Climan from Cooley discussed the more viable EXIT option: M&A. Members of this panel were: David Chertok form Meitar Liquornik Geva & Leshem Brandwein, Yoav Hineman from Magnolia Capital Partners, Barry Levenfeld from Yigal Arnon & Co., Hillel Schuster from KPMG, and Dr. Ayal Shenhav from Danziger, Klagsbald & Co..

The M&A session focused on:

• Trends in the U.S. M&A Marketplace for Venture-Backed Companies
• What U.S. buyers look for when acquiring venture-backed companies
• How Israeli companies can position themselves for an M&A exit
  
• The key negotiating points and regulatory challenges

The big take away from this session is: It’s A Sellers Market!

Here are some of the interesting points in more detail:

• Company valuations are rising, there are currently more auctions for every hot company AND more private equity is entering the market. It’s an M&A boom of unprecedented proportions. The recent acquisitions of My Space by Rupert Murdoch, of LastFM by CBS, and of Stumbleupon by Ebay are just a few examples.
• We’re witnessing massive amounts of liquidity. The estimate is of that over $200 billion in private equity is now competing with strategic buyers. These private buyers can offer synergy benefits (with other companies in the portfolio) that aren’t less attractive than those offered buy strategic buyers.
• In a sellers market, M&As can offer quicker exit, non-price terms in favor of the seller, and hiring investment bank on success based fees.
• Another interesting point raised was that start ups that were funded by the “Chief Scientist” should know that there’s a fine to pay when you go for IPO (because you take IP out of Israel).

Don’t let all this talk about EXITs, and the current acquisitions boom, make you forget the lessons of the .com bubble. EXIT is NOT a revenue model! Think sustainable business model and if you think big enough, EXIT will follow…

This new gadget takes coffe tables to a whole new level. The current price tag means I won’t be putting my feet up on this table in the near future, but still, you’ve got to see this:

Just select any address, click the “Street View” button and you’ll get a 360-degree ground level view. Drag the image to move around or click on the arrows to advance forward down the street.

Click the image below to give it a try…

This new feature by Google Maps is not only very cool but also very Mashable. So for those of you who are thinking “I must have this on my site” Google merged two of its existing application programming interfaces: the Gadgets API and the Maps API at allow you to add it.

Twenty of the hottest new startups from around the world will demo their products in the TechCrunch20 conference this September in San Fransisco. The conference was announced earlier this year and is still open to any startup that will be ready to present in time for the conference. The only condition is that the product or service has not been announced anywhere else before. This adds a nice “cutting-edge” flair to the event…

For the 20 startups selected this is a golden opportunity to get up close and personal with leading professionals in the industry. More importantly, it will put the chosen startups in a position to select the investment they wish to take, rather than hungrily seeking investment.

A team of twenty experts will help select the final 20 startups to present at TechCrunch20. These are the 5 of the panel members:

Chris Anderson, editor-in-chief of Wired Magazine and author of The Long Tail.

Marc Andreessen is the co-founder of Ning, a web application that lets you create your own little social networks. He’s also the co-founder and chief technical mind behind Netscape Communications Corporation and co-author of Mosaic, the first widely-used web browser.

Roelof Botha is a partner at Sequoia Capital . Prior to joining Sequoia Capital, Roelof served as the Chief Financial Officer of PayPal (EBAY) and worked as a management consultant with McKinsey & Company.

Caterina Fake the co-founder of Flickr

Brad Garlinghouse is SVP, Communications & Communities at Yahoo!

Here are the rest of the TechCrunch20 panel members.

Good luck to those of you who decide to go for it!

For the novice user, every security message that pops up is very alarming. Terrified of the security alert, most users don’t even bother to read the message. For them the messages “Click to delete your entire data” and “Click to use the software you just installed” is pretty much the same. In both cases they would click “cancel” just to be on the safe side.

The problem with Vista is that on every move you make, it asks you to “allow” or “cancel”. I dread the day the group of family members and friends I provide support to, lead proudly by my mom, upgrade to Vista. Vista has been launched a few months ago already and now it’s coming to the mass. Mark my words fellow techies, we’re going to need another hour each day just to answer emergency “allow” or “cancel” questions.

This very funny video gives you a sneak peek to Vista:

Not that you really have a choice (if you’re a PC user like me), but for those of you who want to learn more before you upgrade:

• Here’s a pretty balanced review of Vista by TechnologyReview.com
• A less balanced review featuring the incompatibilities of Windows Vista
• Tips on how to tweak Vista

Those of you who have already upgraded, you know what I mean. For the rest of you, start practicing the word “A-L-L-O W”…

Your image and profile when you submit or mark software, your comments and your software recommendations. This version highlights user activity to help you identify users with similar taste in software. Whether you come to Beta Marker to share and download great software or to let off steam and report crappie software, the spotlight will be on YOU.

Beta Marker version 1.1 is also packed with cool new features you’ve requested, like video demos, a changed marking system and much more.

We’ve got about 72 hours of final code changes, debugging and little sleep before the launch.

See you, literally, on June 1st!