The average company exiting through a public offering is more mature than a company that exits through an acquisition, at least since 2000.

There is good reason for this extra maturation. Public investors are often seeking to buy shares in companies that will continue to operate independently long into the future. In contrast, corporate acquirers may buy companies when they are very young before the company has demonstrated its ability to sustain itself. There are a variety of reasons why a company might be bought without demonstrating financial sustainability; a fledgling company might be acquired for its assets (technology, customer, contracts or management) or it may be acquired as a defensive maneuver – to eliminate the opportunity for the company to become a long-term threat.

It could also be argued that Sarbanes-Oxley legislation, which requires additional internal process documentation and oversight by public companies traded on U.S. exchanges, has delayed public offerings. Companies must ensure they will be compliant with Sarbanes-Oxley regulations, and that they can afford to pay the associated costs, before they can issue public stock for the first time.

From the period of 1996 to 2008, the average company that IPO’d was 8 months older than the average company to be acquired. It’s worth noting that this pattern didn’t hold true during the Internet boom. In the period of 1996 to 1999, the average software company making its initial public offering was five months younger than the average company being acquired (according to Dow Jones Venture One data).

The general trend of IPOs taking longer to realize than acquisition also puts pressure on investors to push for larger exit values. VCs are judged by their investors based upon a number of metrics, one of which is call the Internal Rate of Return (IRR). An IRR is an accurate way of measuring the average annual rate of return on invested capital adjusted for the timing of cash flows. A simple relationship that comes from this math is the fact that longer times to exit reduce the effective annual return. Returning 200% of invested dollars in 1 year implies a higher average annual increase in value than returning 200% of invested dollars in 10 years. As a result, the delay in exit time drives VCs to require higher exit values to adjust for the delay. While in theory the increase in value can be justified by the company’s ability to expand its operations and increase revenues over that period, every exit is ultimately a negotiation and this delay drives VCs to target higher exit values.

NYConvergence ORIGINALRegistration for the January 2009 NY Tech Meetup is now open according to an e-mail we just received from blogger and social-media strategist Nichelle Stephens. Currently, 74 spots remain available. We're sure that more will open up soon. If...

This morning I met with Unigo founder Jordan Goldman at their headquarters in Manhattan. Unigo describes their service as, "a new platform for college students to share reviews, photos, videos, documents, and more with students on their campus and across the country." Jordan noted that they are the world's largest resource for information on U.S. colleges. Currently they serve 250 colleges but are looking to cover all of the 4,200+ colleges in the U.S.

Unigo moved into public beta in September and received a lengthy writeup in the New York Times upon their launch.

In the 15-minute video interview below we discuss where the idea came from for Unigo, the 20+ person team, comparisons to Yelp and Facebook, the Unigo marketing plan and the business model.

Jordan shares his story about how he created his business plan and how he was able to find angel investors. If you are starting a business or looking for an angel investor, it's worth listening to how he made it happen. Jordan leaves us with his thoughts on 2009.

Fog Creek Software, founded by Joel Spolsky, has moved into their new offices located at 55 Broadway in lower Manhattan. Joel has a post discussing the reasons for the move along with some insight on the new space. The post is well worth a read as Joel explains why he gives each developer a private office, why they installed a marble shower (see image below) and why they didn't want the Initech look. He notes that they spent over $500,000 on upgrades to the space which can all be seen in the photo gallery.

A person's work space is so important to the overall morale that person has for not just their job but the company as a whole. While I've learned that it doesn't have to be super fancy or cutting-edge, it has to be a place where the person can call home - especially if you expect the person to work more than the bare minimum.

Joel was one of the panelists several months ago at an event on startup hiring. I filmed the entire two hours and if you are planning on hiring staff, including developers, the videos are a must watch.

It will be interesting to get Joel's reaction in a year to see if the investment in the space was worth it.

Here are a couple of photos from the office: 

NYConvergence ORIGINALOrganizer-elect Nate Westheimer just put out the call for companies with "cool tech" to suggest themselves as presenters for the upcoming January 2009 meetup. Interested businesses can put themselves in the running for a five-minute speaking slot by replying...

While the events that trigger the acceleration of vesting can vary by contract, there are a few common structures.

The first is called single trigger acceleration. In single trigger acceleration, the vesting is accelerated when a change of control (AKA acquisition) occurs. Investors, however, might find giving key managers single trigger acceleration disconcerting. What happens if the acquirer requires the key personnel to stick around through the post-acquisition transition? If these key managers get their payouts on the day the transaction occurs, they may not have an incentive to help out after the acquisition, a risk that can scare of likely acquirers.

As a result, managers that are likely to be key to the transition of the company after its acquisition are typically offered double trigger acceleration. This structure requires two events to take place in order for acceleration to be triggered. First, a change of control must take place. Second, the manager must either work for the acquirer for a pre-determined period or be dismissed by the acquirer. These managers still get their payout, but have an incentive to support the acquirer after the acquisition.

Double trigger acceleration is an important requirement as it can prevent the expectation of selfish behavior from derailing acquisitions.

As with most people, print media takes up less and less of my life. Over the years, I’ve let my subscriptions to TIME, The Economist, and The Wall Street Journal go un-renewed.

However, since living in New York City, one publication has been the anthem for my love for New York: New York Magazine.

This year, however, I’ve even been a bit delinquent in renewing, and so I recently received an offer to give away a free subscription when I renew. I was probably going to renew anyway, but I figured this would be a great opportunity to share something I love. (Note to subscription departments, this tactic works.)

So, this morning, in honor of last week’s “Reasons to Love New York (especially right now)” issue, I asked a simple question on Twitter:

I have 1 free NY Mag sub to give away. @ me why NYC is the best place to do tech startup.

The winning submission is from Matt Trush (@lfstyl) of NY startup Convos:

@innonate NYC constantly reminds you that you don’t know everything, yet surrounds you with opportunity to experience anything

I loved every submission (especially Kortina’s about NYC’s women), but Matt’s words rang very true to me, and reminds me that learning is an important element of success. In fact, Matt’s words mirrored closely the words I ended my Commcencement Address with: “Know what you don’t know, and use the resource of ignorance.”

In a lot of ways, Matt’s submission is also a good fit with Mark’s citation of Frank Sinatra, “If you can make it here you can make it anywhere.”

Those quotes combine to great a perfect guide for succeeding in New York:

Be hungry enough to make it to the very top, but also be constantly humbled by the awesomeness of the world around you.

Anyway, with this as your guide, New York has a lot to offer.

By the way, read below for all the submissions. There are some great ones:

• tmarman: @innonate The diversity in NYC helps us avoid the echo chamber - unlike SV where everyone is so tech focused. http://bit.ly/akJ7 #innoMag
• sstrudeau: @steingart @innonate bootstrapping !== VC. If I was looking for early VC, I’d pick SF over NYC unless I was tied to media
• lfstyl: @innonate NYC constantly reminds you that you don’t know everything, yet surrounds you with opportunity to experience anything #innoMag
• tspatz: @innonate It’s the people! NYC folks are EXCITED to build new stuff and work together. They can SEE the potential in ideas. #innoMag
• sstrudeau: @innonate NYC is worth it for media/content-centric startups (blog networks, original video, etc.) for the breadth of “creative” talent here
• sstrudeau: @innonate IMO NYC is a non-ideal place for most startups; overhead is too high. If I were bootstrapping, I’d go to PDX. #innoMag sdisruption: @innonate Alleys that actually exist in NYC are metaphorical and not filled with trash. #innoMag
• michele_perras: this is awesome! RT @Innonate: Pumped my friend @somewhatfrank has compiled a calendar of all the tech confs in ‘09 http://bit.ly/jQoR
• ari_ratner: @innonate Not in NY but I’ll give it a try. NYC is better simply because it has some of the best minds in every industry. #innoMag
• MikeDuda: @innonate The depth of talent in supportive services like marketing are unparalleled & NYC culture most perseverent in world #innoMag
• noneck: @innonate you forgot the drama queens and band nurds.
• FurtiveSpy: @innonate Because interest is focused on the Project and the talent not the person/people. It’s NextNY & NY Tech not VallyWag. #innoMag
• FurtiveSpy: @innonate Because Nate is here in NYC :) #innoMag
• muratny: @innonate because it is the center of the universe (really) #innoMag
• kortina: @innonate cause the women in NYC are the best in the world. great place to live while you’re building something
• jdrive: @innonate Willy Sutton was asked why he robbed banks. His answer? That’s where the money is. Why start up in NY? Its where the customers are
• DimaM: @innonate @ShakeShack =) #innoMag
• karls_mlab: @innonate - Because no one is more than one degree of separation and/or a few blocks away.
• mediaeater: @innonate #1 NYC=No fear #2 NYC=Original vision + thought leaders, #3 If you make it here you can make it anywhere #4 Meetup + community

It’s been a little over a week since I became the Organizer-elect of the New York Tech Meetup; and since then, I’ve spent most of my time working with others to shape the next phase of the largest organization in NY technology.

While part of this has meant meeting up with the current stakeholders in the NYTM (Scott & Dawn), most of my work has been around three areas: Listening to the Community; Forming the NYTM Board; Planning my Community Committee; and, Planning January’s Meetup.

Here’s are the updates I can share in each of those areas and how you can get involved:

Listening to the Community

In the last week, I’ve received dozens of emails, engaged in many conversations on the NYTM listserv, and read several blog posts relating to the future of the NYTM and the NY tech community. I’ve also met face-to-face with several folks, including my friend Sanford (who posted this after the election) to recap all of the ideas shared.

Of the many things I’ve heard, I think Sanford’s actions of openning some of his schedule — as a comunity resource — is a large part of what’s needed from the community at large. I’m glad he and I see eye-to-eye on this stuff. It’s not a coincidence we were #1 & #2 in that election and both instituted “office hours” in the same week.

So, one way you can be involved in changing the NY tech community is by openning yourself up to the larger NYTM community and also doing some version of office hours. Get people in your door and meet folks you wouldn’t ordinarily meet. Go visit people you’d like to learn more about. We could have a culture of connectedness here — and that wouldn’t be a bad place to start.

Forming the NYTM Board

As Scott mentioned back in November, the new NYTM will have a board to guide and preserve the future of the New York Tech Meetup, as well as serve the broader NY tech community. Forming the first board is almost complete and is being handled mostly by Dawn and Scott. For the sake of transparency, you should know that I lobbied to make this Board full of our tech community’s greatest luminaries and that they represent a diverse constituency. I felt that the board needed folks who had been around the longest and had the most information and resources to share. I’m excited to see how my input on the matter ends up shaping the next Board. Regardless of its composition, I’m sure it will make our community stronger in the longest run.

Planning the Community Committee

“Community Committee,” “Organizer Committee,” “Organizer Board”: this is the group I’ve spoken most about, am most excited about and have had the hardest trouble naming (partially because the name means the least while the work will be the most important).

At the next Meetup, I’ll unveil the final plan, but already I’ve shared a lot about how I see this committee working out:

The Community Committee will the the source of coordination and communication throughout the ecosystem. It will be a 10 - 15 member committee comprised of community organizers and connectors: folks who have deep and broad knowledge about the NY tech community and have displayed a tendency to disseminate that information among the ecosystem’s many communities.

The purpose of the committee is to provide coordination among those organizers, rather than forcing coordination upon the organizations themselves. It’s about system optimization, not re-engineering or replacing.

So, using lightweight tools, the Community Committee will task itself with making sure critical information and networks traverse the ecosystem and that community stakeholders are strengthened by the rest of the Community Committee and their networks.

Besides the requirement to be deeply involved and connected in the broader community, being a part of this committee will also require specialized knowledge of specific sectors of the community. We need your expertise! As with the Board, I believe linking diverse groups together is mission critical for our community. And lastly, the biggest requirement is being bought into the idea that the most important work in this community will go unrecognized. I’ve always found that community organizers who want to be front and center get the least done. Everyone involved in this, including me, will have to be comfortable enjoying seeing the fruits of their labor in the success of others. Self-promoters need not apply.

PS: Info on how to apply will come at the next Meetup, or just drop me a note any time.

Planning January’s Meetup

There’s still a lot I have to learn from Scott and Dawn about running the Meetup, but before the New Year look for information in your inbox on how to apply to present at the next Meetup. The Meetup will still be at IAC for the next few months so it will still only fit 400 people. As for selecting the presentations for the next Meetup, be aware that I’m going to try a combination of curation from yours truly (as it has been in the past) as well as community voting.

Stay tuned.

NYConvergence ORIGINALVideo publishing platform company Magnify recently raised funding that was reported at $750,000 -- an unconfirmed amount that CEO Steve Rosenbaum tells us is one of a "series of tranches" the software company plans to go after. We saw...