IPOs on the Upswing

Anyone who follows the IPO market knows that it usually registers somewhere around 8.5 on the Richter scale. Up and down; boom and bust. Well, now we're back to boom!

According to Renaissance Capital, IPO filings numbered 300 in 2005, 104 in 2006, and are on track to exceed 350 in 2014 if recent trends continue.

One of the primary reasons why IPO filings rise and fall so precipitously is the strong or weak performance of recent IPOs. There is a very strong herd mentality here.

Kindred Biosciences is up nearly 130% so far in 2014, and other 2013 filings have performed quite strongly as well. In fact, several other issues are up more than 50% YTD and 2013 filings are on average up nearly 6% in 2014.

This bodes well for companies who are well-prepared and are considering whether now is the time to execute an IPO.

Yahoo Shoots the Acquistion Shotgun

Do you have a great startup with revenue but still at a very early stage? Running out of money but can't find investors? Thinking a large company would not be interested in acquiring your company?

Well think again. Yahoo has acquired 37 companies the past 18 months. And according to reports from research firm CB Insights, more than half of those had raised under $5MM in capital at the time they were acquired.

The spectrum of businesses Yahoo purchased is extremely broad. It appears they are mimicking Google's "Darwinian" process of buying or starting new businesses and seeing which gain traction, while terminating those that do not. Among Yahoo's acquisitions were companies in the fields of mobile gaming, CRM, image recognition, video conferencing, fantasy sports, e-commerce analytics, and much more.

I can't give you insight on how to get on Yahoo's acquisition radar screen, but then again, entrepreneurs are known for their resourcefulness and this is a great opportunity for you to deploy yours!

Nature: The Original Team Player

We think of ourselves as being at the top of the species heap when it comes to teamwork, but it turns out that may not quite be the case. Termites collaborate among many thousands of individuals with no brain to build incredibly complex and useful structures.

Man has long capitalized on the innovative products of Mother Nature, particularly the complex bioactive chemicals used to treat disease. It turns out though, that termite teamwork is one of nature's innovations about to have a lasting impact on human endeavors.

Now, innovative Harvard University scientists have designed tiny robots programmed with "termite rules" that collaborate to build complex structures independently of outside input or blueprints. Mimicking termite teamwork, the 8" x 4.5" robots manipulate foam bricks to build pyramids, towers, and even castles. If a ramp or stairway is needed to reach the top, well they just build one. Robots roam the construction site, using their infrared sensors, accelerometers, and ultrasound sensors to detect what needs to be done and then just do it. (I wonder if they're wearing little Nike running shoes.) :-)

The applications of this innovation in human-denied environments are monumental. No question in my mind that this development will one day have the world-shaking impact of biotechnology or the Internet.

Invent Your Large Company Too

Former GM auto parts maker Delphi Automotive has reinvented itself since its 2005 bankruptcy. At 34%, its return on invested capital is now nearly double the industry average of 18%. How did Delphi accomplish these stellar results? It did so primarily by focusing on innovative products such as safety devices and electronics, rather than commodity products like spark plugs and ball bearings--in the process whittling its product line down by nearly 75%. Now, Delphi's criteria for accepting new orders keys on a judgement of whether it raises the return on invested capital, not just whether it keeps the production lines running or makes automakers happy. As with the rest of the US auto industry, it took a near-death experience to wake up Delphi, but its experience shows that even multi-billion-dollar corporations can reinvent themselves.