TechJournal South Header

Posts Tagged ‘M&A’

Online, mobile M&A deals up, values down

Friday, July 12th, 2013

YahooOnline and mobile mergers and acquisition deals increased by 7 percent in the first half of 2013, but value decreased 29 percent, from $32.54 billion in the second half of 2012 to $23.16 billion.

The median revenue moved from 2.3x to 2.1x, while the median EBITDA multiple increased from 10.0x to 16.0x, according to the  Berkery Noyes mid-market investment bank, for the first half 2013 mergers and acquisitions trend report

Yahoo!, with 13 transactions, was the industry’s most active acquirer in first half 2013. Aside from its $1.10 billion acquisition of Tumblr, Yahoo! has mainly focused on small, mobile-based transactions this year.

Tumblr was Yahoo!’s largest deal in the Online & Mobile Industry since 2003, when it acquired search and internet advertising company Overture Services for $1.63 billion.

SaaS & Cloud was the most active market segment and underwent a 15 percent increase in volume, totaling 291 transactions year-to-date. M&A activity in the Communications segment improved 22 percent since second half 2012, making it the sector with the largest half-to-half year increase. One notable Communications transaction in first half 2013 was Dropbox’s acquisition of mobile email application Mailbox.

Mobile a strong driver

mobile devicesIn addition, acquirers are looking to add mobile solutions that aggregate relevant content in relation to individual users, as news is shared in real-time.

There were several deals over the past six months that focused on news summary and content sharing, such as LinkedIn’s acquisition of Pulse for $90 million, Google’s acquisition of Wavii for $30 million, and Yahoo!’s acquisition of Summly for $30 million.

“Mobile continues to be a strong driver of M&A activity in the information marketplace,” stated Mary Jo Zandy, Managing Director at Berkery Noyes. “Content delivery methods are evolving, and acquirers in general are showing more interest in semantic technologies that improve the end-user experience.”

Surging app user base affects IT, business strategy, M&A

Friday, June 14th, 2013

mobile devicesThe growth rate of app users has been 251 percent (CAGR) over the last 5 years. It has outpaced the growth of the stationary internet users worldwide by an astonishing factor of 15.

Stationary internet user base is still more than two times bigger than mobile app user base, but its growth rate (CAGR =16 percent) looks rather deplorable compared to mobile. There are 4 major implications every company has to deal with.

There are many reasons for the massive growth of the app user base.

Where does it all lead?

The wide range of Apps is one of the main drivers. Apps and smart mobile devices create a win-win alliance that goes beyond the software-PC alliance. Apps provide the intelligence for smart devices to be used as a tool for almost every daily activity.

The mobile device provides the technological basis but more important provides the context in which the app creates value for its user. There are no other mass market devices that users carry around 24/7, that are as personal and that provide location information at all times.

Where does it all lead to? We continue our discussion on the impact the app-eco system has on the industry by highlighting 4 consequences this rapid market growth will have.

1. The number of mobile app users will overtake stationary web users: This seems evident as there is no end in sight for the growth of mobile app users. Eventually a great part of today’s 7 bn (international Telecom Union) mobile subscribers will possess a capable device and will make use of apps.

The biggest challenge will be to tap into the developing countries with their 5.2 bn mobile subscribers. It will be only a matter of time until the industry will pour out cheap capable mobile devices for far less than 100 USD to allow monthly subscription plans with ARPUs of around 5 USD.

2. IT development will become mobile: If private and business users are mobile, IT solutions will have to follow. Mobile app development business has already become a multi-billion dollar business (see report: The Market for Mobile Application Development Services), but this is just the beginning.

Enterprises will mobilize their IT solutions to provide e.g. mobile access to company databases as well as to reach out to their customers for marketing, sales and service purposes.

Hundreds of thousands of IT developers will have to be trained in mobile programming languages as well as in GUI design and user flow. The IT service industry is about to realize these changes and the business opportunities this development will have in the next 10 years.

3. The mobile channel will become a key strategy element for every company: There is no industry that is not affected by the new mobile channel. It will be a challenging task to create, develop, maintain and manage hundreds of mobile services on an increasing number of platforms and for a diversity of internal and external user groups. This task is not being addressed properly in the majority of the company strategy and operation units at the moment.

4.M&A M&A will become hot: Because of the speed the market developments and the time it takes to implement changes within an organization, companies will open their pockets and start to buy apps and mobile service companies to keep up with the pace of the market.

The first specialized service providers like Apptopia have jumped on the train and offer matching services for buyers and sellers of apps. Apple’s new App Transfer service also facilitates the ownership changes of an app business.

These market developments emphasize the importance of formulating a mobile strategy that is covering all app strategy dimensions from mobile use case definition, platform selection, target group prioritization, decision on the proximity to core services, selection of open or walled garden sourcing strategy to organizational implementation of mobile into the existing company structures.

Regardless of the time scale, this inevitability makes your mobile/app and web strategy in the long run more important than your PC/web strategy.

To get the stats behind these market changes, read research2guidance’s “The Smartphone App Monitor Vol. 10”, the comprehensive source of app market analysis.

Entrepreneurs looking for an M&A exit need good social profiles

Thursday, May 30th, 2013

mergers and acquisitionsFasken Martineau, a leading international business law and litigation firm, says a survey of senior M&A executives primarily based in the United States that leads to some compelling observations about the growing use of social media platforms such as LinkedIn and Facebook in reporting M&A deals.

The study found that some 32% of respondents reported using a social media platform to communicate a transaction.

Fasken Martineau surveyed these executives before the Securities and Exchange Commission issued its April 2, 2013 report providing companies with positive guidance for communicating material, non-public information via social platforms.

Testing attitudes toward social media

The well-publicized report was the result of an investigation into whether a Facebook post from Reed Hastings, Netflix CEO, may have violated Regulation FD, which prohibits public companies from disclosing material, nonpublic information to certain individuals before it is made available to the general public.

This new survey from Fasken Martineau creates an opportunity to test whether the SEC’s guidance alters attitudes towards social media in the M&A realm.

“Our survey revealed that senior M&A executives are certainly using social media, and some are using it to research and communicate deals,” said Kareen Zimmer, a partner in Fasken Martineau’s corporate and M&A practice groups.

“Interestingly, however, social platforms are currently viewed by M&A professionals as having less value than other sources of information, and most don’t currently see great value in social media’s application outside of post-merger integration. It will be very interesting to see if the SEC guidance will impact this perception and if in fact we will see an increased acceptance of these tools in the M&A and general Finance community,” added Ms. Zimmer.

Key Findings

Entrepreneurs looking for an exit should not ignore the quality of their social profiles:

  • 36% of respondents used social media platforms to research potential acquisition targets in the last year
  • 48% used social platforms to investigate companies involved in transactions.

LinkedIn and Facebook play different roles among M&A executives using social media:

  • 72% said that LinkedIn added the most value to due diligence versus other social platforms, while only 50% said Facebook added value.
  • Of those that used social media to disclose a transaction, 78% used Facebook while 44% used LinkedIn.

Even with guidance from the SEC, social media may remain a minor player in the M&A realm for some time to come:

  • Given the unsettled state of regulatory guidance for the use of social media at the time of the survey, the percentage of executives who used social media to communicate a transaction (32%) may be considered high.
  • However, a large majority (77%) said that they do not have a social media strategy specifically for M&A, 65% do not anticipate developing such a strategy, and 74% were neutral to negative on the importance of a having a social media strategy specifically to impact M&A transactions, a bias that may be difficult to overcome despite the SEC’s guidance.

The full Social Media M&A Survey may be downloaded at

Social Media and Proxy Contests

Survey respondents reported that among the many types of corporate events, they see proxy issues discussed most prominently on social networks, beating out managerial announcements, M&A transactions, quarterly financial results, restructurings and recapitalizations.

Fasken Martineau has a strong leadership position on the subject of proxy contests, having published its 2013 Canadian Proxy Contest Study in February. This study found that dissident shareholders are winning most proxy contests that occur at Canadian-based companies.

Best and worst states for business ranked

Tuesday, May 7th, 2013

TexasFor the ninth year in a row, CEOs rate Texas as the #1 state in which to do business, according to Chief Executive magazine’s annual Best & Worst States Survey, released today. Florida, North Carolina, Tennessee and Indiana also made the top five.

The results may alleviate some fears in North Carolina, where other such evaluations have not placed the state as high as in previous years.

The states rated worst for business are California, New York, Illinois, Massachusetts and New Jersey.

It’s interesting that states with powerhouse venture capital sources and nation-leading business sectors such as California, Massachusetts, and New York top the list of worst states for business in these polls time after time. Makes you wonder just what these business-friendly state rankings really mean.

Best 5 States for Business Rank 2013
Texas 1st
Florida 2nd
North Carolina 3rd
Tennessee 4th
Indiana 5th


Worst 5 States for Business Rank 2013
California 50th
New York 49th
Illinois 48th
Massachusetts 47th
New Jersey 46th


The Best & Worst States Survey measures the sentiments of CEOs on a range of issues, including regulations, tax policies, workforce quality, educational resources, quality of living and infrastructure.  For the 2013 survey, 736 CEOs from across the country evaluated the states between Jan. 16 and Feb. 14, 2013.

Ohio was the biggest gainer in this year’s survey, rising 13 spots from #35 to #22. “Ohio is doing some amazing things to attract and support a pro-business environment,” said Don Taylor , CEO of Fairlawn, Ohio-based Welty Building Company. The biggest loser was Delaware, which dropped 13 spots to #27.

California hostile to business?

CEOs say California’s poor ranking is the result of a perceived hostility to business, high state taxes and onerous regulations, all of which drive investment, companies and jobs to other states. According to the California Manufacturers & Technology Association,California accounts for 12.6% of total U.S. GDP, but only has a 2.2% share of investments in new and expanding manufacturing sites.

“When you investigate acquiring businesses in some of the states rated poorly for business conditions, the anecdotes all wind up being true,” said Kevin Hawkesworth , President & CEO of Florida-based Shaw Development. “The horror stories about these states are real.”

“California, Illinois and New York are simply awful states to operate facilities or employ people,” according to another CEO. “We will do almost anything possible to minimize our exposure to these anti-business environments.”

Piles of regulations a problem

“Thank you, California!” responded one Texas-based CEO facetiously. “Keep applying pressure on your job creators and we will keep welcoming their moves to Texas.”

A common theme among CEOs is the burden of constantly changing regulations. “Business is too hard without dealing with piles of regulations that are constantly changing,” said Rick Waechter , CEO of Boston Magazine. “I believe there have to be controls, but keep them simple and straightforward—and most importantly, don’t make it a moving target.”

“CEOs continue to tell us that California seems to be doing everything possible to drive business from the state. Texas Governor Rick Perry , by contrast, personally makes it his mission to lead corporate recruitment and economic development efforts in his state,” saidJ.P. Donlon , Editor-in-Chief of Chief Executive magazine and

Playbook for success

“The playbook for successful states boils down to three simple moves: engage in real dialogue with business leaders, adapt policies to create an attractive environment, and effectively communicate your story to real job creators,” said Marshall Cooper , CEO of Chief Executive magazine and “This year’s rankings prove that smart policies result in increased investments, jobs and greater overall economic activity.”

2013 Biggest Gainers Positions Gained
Ohio +13
Minnesota +6
Alabama +5
Arizona +4
Kansas +4
2013 Biggest Losers Positions Lost
Delaware -13
Mississippi -8
Missouri -7
Kentucky -4
Wyoming -4

For complete results, including individual state rankings on multiple criteria, CEO comments, methodology and more, please

Private equity firms optimistic, stage set for increase in deals

Tuesday, April 30th, 2013

Dollar signPrivate equity firms are in a state of growth and considerable optimism, according to newly released results from the 2013 McGladrey Private Equity Survey.

Whether that translates into increased deals, larger deals, or better valuations remains to be seen. But a surge in merger and acquisitions activity is expected.

The survey, which includes responses from 125 private equity firms, shows that more than three-quarters of respondents (77 percent) are optimistic about their own economic conditions, with 20 percent reporting a neutral outlook and only three percent reporting that they were “not optimistic.”

“These survey results clearly indicate that private equity firms are regaining confidence,” said Don Lipari , national leader – private equity services for McGladrey.

Enthusiastic about growth opportunities

“These firms have exited companies they could, held tight to existing portfolios and taken advantage of obvious cost-cutting opportunities.  Now, having spent several years cautiously watching for signs of an economic turnaround, they are enthusiastic about growth opportunities in the year ahead.”

Despite growing optimism, the survey does suggest that firms remain cautious about the economic conditions around them, with less than half (48 percent) reporting optimism about the global economy. The cautious sense of optimism about the external economic environment was also apparent when respondents indicated which external factors were having a high impact on their portfolio companies’ performance.

While more than half of the respondents indicated that typical factors such as “market conditions” and “energy costs” had a high impact, a relatively small number (16 percent) chose international economic factors. At the same time, a smaller but still considerable number of respondents pointed to policy matters such as regulatory compliance (30 percent), taxes (29 percent) and health care costs (15 percent).

Surge in M&A on the horizon?

With a potential surge in M&A activity on the horizon, the survey also sheds light on some of the risks and barriers firms must confront while managing their portfolio investments. While respondents reported running into a wide range of issues, the survey revealed a particularly notable – and surprising – series of challenges related to IT infrastructure.

Specifically, more than one-third of the respondents indicated that they “always” or “usually” find portfolio companies to have outdated business applications, infrastructure limitations, inadequate business analytics, and inadequate web and e-business capabilities. In each case, the number of respondents who said they “sometimes” encountered these problems was also more than 50 percent.

“While a solid IT infrastructure is widely recognized as a ‘must’ in the corporate world, these survey results indicate that private equity firms have yet to make  IT due diligence a ‘must’ when targeting acquisitions,” said Dave Noonan , national director – private equity consulting, with McGladrey.

“The deficiencies respondents reported finding post-acquisition could interfere with a firm’s ability to execute its plan and result in substantial capital outlay; if combined, they could cripple an investment. That’s why it’s crucial for firms to not only conduct an IT review during the due diligence phase of acquisitions, but that they also review existing investments to plan appropriately for add-ons, carve-outs and exits.”

Read the McGladrey Private Equity Survey for more details.

Deal volume up, values down in online and mobile M&A

Friday, April 12th, 2013

Berkery NoyesYou can see what’s hot and what’s not looking at the merger and acquisition picture in any industry, and in online and mobile, analytics, SaaS, mobile payments and food service and content firms are like spice to the big dish Internet companies these days.

Deal volume increased three percent relative to the prior quarter in online and mobile industry mergers and acquisitions in the first quarter of 2013, according to mid-market investment bank Berkery Noyes in its mergers and acquisitions trend report, but transaction value decreased 50 percent, from $15.8 billion in Q4 2012 to $7.9 billion in Q1 2013.

The SaaS/ASP segment experienced the largest quarterly rise in volume, improving 16 percent. Meanwhile, transaction volume in the E-Commerce segment increased six percent between Q4 2012 and Q1 2013.

Highest value deal

The segment’s highest value deal in Q1 2013 was Google’s announced acquisition of Channel Intelligence for $125 million.

In addition, major financial technology players completed several large Online and Mobile payments acquisitions during Q1 2013. For instance, ACI Worldwide acquired Online Resources Corporation for $203 million and FIS acquired mFoundry for $120 million.

M&A involving transactions with a large mobile component increased 33 percent over the past three months. Along these lines, there were several acquisitions in the food service information and content space.

Yahoo, OpenTable buys

YahooThis included Yahoo!’s acquisition of Alike, which enables users to make recommendations about their favorite food establishments; and OpenTable’s acquisition of Foodspotting, an application that helps users share information about particular dishes.

With four transactions, Yahoo! was the most active Online and Mobile Industry acquirer during the quarter. Several of Yahoo!’s recent acquisitions demonstrate its renewed focus on mobile under CEO Marissa Mayer .

Yahoo! has already completed three mobile transactions thus far in 2013, acquiring social news application Summly, as well as applications Alike and Jybe. In contrast, Yahoo! only made two mobile transactions last year, both of which occurred in Q4 2012.

E-marketing and Search segments

As for the E-Marketing & Search segment, M&A activity increased nine percent in Q1 2013. \

“The ability to better profile and target consumers has necessitated the development and growth of companies that can analyze shoppers’ behavior and develop appropriate offerings to the consumer,” said Evan Klein , Managing Director at Berkery Noyes.

“This shift has led to the growth of data analytics businesses and, with the need to develop deeper relationships with consumers, the growth in loyalty marketing companies.”

Twitter bird

Just call me Larry.

Regarding the segment’s social media marketing subset, one notable acquisition in Q1 2013 was Twitter’s acquisition of BlueFin Labs.

A key goal of acquiring the social television analytics company is for Twitter to gain additional advertising revenue by leveraging viewer data. TiVo and The Nielsen Company completed E-Marketing acquisitions in 2012, both of which focused on improving the ability to measure digital audiences.

A copy of the ONLINE AND MOBILE INDUSTRY M&A REPORT FOR FIRST QUARTER 2013 is available at the Berkery Noyes website.

Expectations rise for venture capital in 2013

Thursday, April 4th, 2013

Ernst & YoungDespite a challenging year for venture capital investment in 2012, the U.S. VC-backed industry remains substantial. Better portfolio company exits and returns suggest the slump in fundraising could be over in 2013, according to Ernst & Young’s tenth annual Venture Capital Insights and Trends Report.

According to the report, there is evidence of money flowing into companies that are perceived as lower risk. For example, there is a shift away from social media towards enterprise– the companies that are attracting greater VC interest are those that provide a service and are getting paid for it, rather than those that have a good idea, but have difficulty monetizing it.

Historically, the U.S. venture industry has been dominated by investments in technology and healthcare since in the U.S. more than half of the VC pool consists of companies in these two sectors.

Healthy exit environment crucial

Though U.S. VC investment activity overall declined by 15 percent to $29.7 billion in 2012 compared with 2011, and the number of investment rounds also fell, the drop was not as pronounced, declining by only four percent to 3,363. These U.S. numbers compare to global VC declines at 20 percent in amount invested and eight percent in deals.

“While 2012 was a tough year for global venture capital, the U.S. held relatively steady,” said Bryan Pearce , Director, Venture Capital Advisory Group, Ernst & Young LLP. “However, a healthy environment for venture backed company exits will be crucial for the U.S. VC industry outlook in 2013. Equity markets have started the year positively, which suggests these better exit prospects may materialize.”

Exit activity is also an important pre-condition for an uptick in fund-raising by VC firms.  While global exits of VC backed companies declined by 27 percent in terms of amount raised and by 30percent based on the number of IPOs, the number of VC-backed IPO exits and the capital raised in the U.S. were relatively stable, after adjusting for the Facebook IPO proceeds of $6.8 billion.

Companies exiting via IPO are typically more advanced than those exiting via M&A. The median amount raised prior to IPO of$78.4 million and time to exit of 7.4 years, far exceeds the respective figures of $16.7 million and 5.1 years for M&A exits.

A number of venture capitalists who participated in the recent Southeast Venture Conference (SEVC) in Charlotte, NC, noted that most firms today are going to exit via M&A and should consider that from the very beginning.

VC model is realigning
VC firms are rethinking their investing strategies favoring investing smaller investments, at a later stage and on tougher terms.

This shift reflects two trends – the substitution for VC fund money in early stage companies by Angel investors, incubators/accelerators and corporate initiatives as well as a need to demonstrate a shorter time to exit in order to return capital to their investors, show a track record of success and, thus, start the process of opening and raising a new fund.

“The flow of capital being returned to LP investors has slowed significantly, which in turn has restricted investors’ ability to re-invest in new funds,” added Pearce. “Therefore, investors are showing a preference for the most successful ‘brand’ name funds, seeking out depth of experience and track record. They are also demanding better terms from VC funds, while the funds are requiring portfolio companies to meet stricter milestones and meet tighter time frames.”

Increasing role of corporate venture
Corporate venture investing is on the rise surpassing pre-dotcom levels in 2012. Corporate venture activity is especially strong in the IT sector and being driven by a combination of healthy corporate cash balances and corporate seeking external innovation due to the rapid pace of technological change as the rise of mobile, big data and cloud computing has created a disruptive business environment.

Corporations are eager to invest in venture-backed companies that can help them fill the innovation deficit in their strategy and innovation capabilities. The link between corporate investment and ultimate acquisition, however, is not always present in the U.S. In all sectors in the US only 2 percent of companies were acquired by an existing corporate investor in 2011 and 2012.

“In 2012, corporates cemented their important role in the VC ecosystem,” continued Pearce. “Where they choose to make an investment, typically in the later stage in the U.S., the valuation of the business in that round was usually greater than in companies at a similar stage with no corporate investor.”

U.S. Regional Outlook
As of January 2013, $167.9 billion was invested in 8,288 companies. Investment remains heavily weighted towards Silicon Valley –since 2000, cumulative equity raised in the Bay Area of $62.2 billion exceeds the total raised in New York, New England and Southern California – the next largest hotbeds – combined.

These same areas also ranked top five globally in terms of number of deals. New York witnessed the largest increase of active VC investors, approximately 150 percent in 2012 compared to 2006.

At the SEVC in March, one VC noted that it took substantially more investment dollars to get those West Coast firms to an exit. East Coast firms, he noted, used their capital more efficiently. A number of VCs at the event said they were actively seeking to diversify geographically and specifically interested in regions such as the Mid-Atlantic and the Southeast.

The data in our Turning the corner: Global venture capital insights and trends 2013 report has been sourced from Dow Jones VentureSource.

Tech, financial services M&A deals expected to increase

Wednesday, March 6th, 2013

KPMGThe technology, financial services and healthcare sectors, among others, expect an increase in their companies’ or clients’ deal activity in 2013 compared to 2012. according to a survey conducted by KPMG LLP, the U.S. audit, tax and advisory firm.

Smaller, mid-market deals are driving the trend because they’re simpler to execute, but other dynamics contribute. Many firms have plenty of cash on their balance sheets and favorable credit terms are available.

Of the more than 400 survey respondents, 60 percent said that they would do more deals this year than last year.

The simpler financing terms associated with smaller deals, as compared to both large transactions and the megadeals, will drive middle-market M&A activity in the balance of 2013, according to 24 percent of the poll population.

Smaller, mid-market deals driving activity

However, 49 percent of respondents felt that collectively, simpler financing terms, fewer risks and integration challenges, as well as the less complexity of due diligence that’s needed for deals valued under $250 million, will serve as the catalyst for a deal market dominated by middle-market activity in 2013.

In fact, 22 percent of survey respondents indicated that in 2013 thus far, the deal market is already experiencing a high volume of middle-market activity; they also acknowledged favorable credit terms (11 percent) and elevated levels of cash on corporate balance sheets (eight percent) as driving the recent deals in the marketplace.

Corporate buyers have the advantage in the M&A space over private equity buyers (six percent) halfway through the first quarter of 2013.

Underlying fundamentals improving

“The underlying fundamentals in the deal market are improving, with the combination of a stabilizing U.S. economy, favorable credit terms, open debt markets, and high cash balances paving the way for an increase in M&A volume this year,” said Dan Tiemann , Americas lead for KPMG’s Transactions & Restructuring practice.

“As a result, companies may be highly motivated to execute transactions that drive their growth agendas, including deals that allow for business transformation and optimize new operating models.”

Effect of new regulations

When asked what effects new regulations might have on their ability to do deals in 2013, 21 percent of the poll population stated that they will cause integration challenges during the M&A process and in post-deal phases for their companies and clients.

Eighteen percent cited that new regulations have temporarily delayed their ability to do deals, followed by seven percent who have delayed M&A activity indefinitely; however, another seven percent cited they will actively pursue deals because of new regulation.

The breakdown of respondents includes M&A professionals in the following sectors: technology (17 percent); financial services (17 percent); healthcare (14 percent); diversified industrials (nine percent); energy (eight percent); and consumer markets (seven percent).

What happens after you land that venture round?

Tuesday, February 26th, 2013
Justin Reger

Justin Reger

By Allan Maurer

While landing a round of venture financing can help drive a startup’s growth, the best venture firms bring more than money to the table when they make a deal.

Justin Reger, a principal at LLR Partners, a middle market private equity firm with more than $2 billion under management, says that the first step his firm takes following its investments – whether as a majority or minority investor – is set-up a strategic planning session.

Reger, who manages LLR’s technology practice and previously an investment banker with Citigroup focused on technology, about the added value investors provide their portfolio companies at the upcoming Southeast Venture Conference in Charlotte, NC, March 13-14.

First: strategic planning

“Soon after we close a deal,” says Reger, we hold a two-day offsite strategic planning session, first for one-year and then for three. We hire a moderator who knows the industry.”

LLR starts by sharing its due diligence findings with the company and its management team. “We put that on the table and build the strategic plan with the team. We don’t say what they could do. It’s more to create a framework. Then we build up operations and tactics to support the plan.”

LLR then revisits the plan with the company each year. Some have accomplished their goals, some have not. The plan is updated annually.

Second: augment management teams

Next, LLR looks at a company’s management team. “Often, teams are incomplete,” says Reger. “They may have a solid CEO, a CFO, and maybe a head of sales. They may not have a product or marketing manager. We don’t look to replace senior management, but rather to augment the bench from our network.”

That is often guided by the results found by an outside assessment firm hired during LLR’s due diligence process. “They identify key areas that need to be upgraded or augmented to drive value.”

Third: Getting to $100 Million

Next, LLR looks at the company’s finance function, where infrastructure is “typically lacking,” says Reger. “The typical company we invest in has a strong product in a well defined market, but has to breakthrough from $10 million to $15 million in revenue to $100 million.”

Fourth: M&A possibilities

Reger says LLR also sometimes “Serves as an outsource M&A arm for the company. We canvas the network of adjacent players and make calls, qualify opportunities, work with management to see if it’s a fit and help with integration.”

Many companies in which LLR invests also benefit from channel partner development, Reger notes. “There is an ecosystem of larger players, resellers, OEM sales channels and a portfolio company’s ultimate acquirer might be in that system. The IBMs, SAPs, and HPs of the world. We have pretty good contacts at those organizations.”


Top ten cities for private tech M&A ranked

Tuesday, February 26th, 2013
Washington DC

Washington, DC made this years list of the top ten cities for private tech M&A at number 7.

PrivCo has released rankings of the Top U.S. Cities For Private Tech M&A, based on the number of private tech companies acquired in 2012.

PrivCo has provided its Exclusive Top 10 Ranking below, with Silicon Valley ranking as the #1 metro area with 226 private tech company acquisitions in 2012.

Ranked just behind it were New York (Ranked #2) & Boston (Ranked #3).

San Diego, Research Triangle miss top ten

Interestingly, up-and-coming tech hubs like New York City, Los Angeles, and Atlanta are challenging traditional leaders like Raleigh-Durham’s “research triangle” and biotech hub San Diego, who missed this year’s Top 10 U.S. Cities For Private Tech M&A.

Top 10 U.S. Cities For Private Tech M&A in 2012

(Ranked By Total Number of U.S. Private Tech Companies Acquired in Each Metro Area)

1. Silicon Valley
2. New York
3. Boston
4. Los Angeles
5. Seattle
6. Austin
7. Washington, D.C. (Arlington)
8. Atlanta
9. Dallas
10. Houston

To access PrivCo’s 350 page 2012 Private Tech M&A Industry Report:

Tech CFOs expect revenue increase in 2013, BDO says

Thursday, February 21st, 2013

BDODespite concerns about a global economic slowdown, 58 percent of technology CFOs anticipate revenue to increase in 2013, according to data released today by BDO USA, LLP. CFOs foresee overall revenue increases of 8.7 percent – an increase of 6.1 percentage points from 2.6 percent in 2012.

Of those CFOs who anticipated revenue growth, 20 percent expect their business’ bottom line to increase by 5 to 9 percentonly about one-in-ten CFOs surveyed expect revenue to decrease.

M&A activity to remain strong

Merger and acquisition (M&A) activity is expected to remain strong in 2013, according to the CFOs surveyed.

Nearly all CFOs expect M&A activity will increase (60 percent) or remain the same (25 percent) as 2012 levels. CFOs predict that M&A activity will be primarily offensive (72 percent).

Thirty-three percent of financial officers identifying access to technology assets and intellectual property as the primary driver for M&A, followed by revenue and profitability (29 percent) and market share (20 percent).

Primary reason for M&A?

While access to technology assets and intellectual property (IP) has always been a factor for technology companies’ acquisition strategy, this is the first time in survey history that CFOs cited it as the primary reason for M&A activity.

“We are at the beginning of a new ecosystem in the tech industry. The ‘acquire or retire’ mentality is growing among technology companies who see acquisitions as a way to enhance their IP and gain access to talent that will advance their brand and product portfolio,” said Aftab Jamil, partner and director of the Technology and Life Sciences practice atBDO USA, LLP.

“Acquisitions by Facebook and Google are excellent examples of recent M&A trends that focus on the acquisition of talent and IP as the primary strategic drivers.”

These findings are from the seventh-annual BDO Technology Outlook Survey, which examined the opinions of 100 chief financial officers at leading technology companies throughout the United States. The survey was conducted from December 2012 to January 2013.

Other major findings from the 2013 BDO Technology Outlook Survey include:

  • Software sector driving M&A activity. Of CFOs surveyed, 63 percent expect the competitive software/cloud computing sector to drive the most deal activity, a 62 percent increase from 2012. Hardware (13 percent) and social media (10 percent) are also expected to be key drivers.
Technology Sector 2013 2012 2011
Software, including cloud computing 63% 39% 32%
Hardware 13% 11% 10%
Social Media 10%
Biotech/Life Science 7% 12% 15%
Clean Tech 6% 6% 13%
  • IPO attitudes impacted after a challenging 2012. Two-thirds of CFOs believe that the problems characterizing IPOs in 2012 will impact IPO activity this year. While 48 percent anticipate IPO activity will increase, this is down from 63 percent who forecasted an increase in 2012.
  • This trend mirrors recent findings published in the annual BDO IPO Outlook Survey that predicted slower growth in the IPO activity in 2013. While the JOBS Act attempts to reduce the regulatory burden for emerging growth companies seeking to launch IPOs and was enacted to open additional streams of capital for private technology companies, 79 percent of technology CFOs feel that it will have no impact on IPO activity in 2013.
  • CFOs turning to private debt and private equity to raise capital. For companies who are seeking capital, 52 percent of CFOs say they will look to private debt in 2013. However, private equity gained additional footing in 2013 with 42 percent noting that it serves as their primary strategy, up 13 percent from 2012 (35 percent). Fewer CFOs say they will look to public equity (4 percent) or public debt (1 percent).

    “2012 was a strong year for private equity investment in the technology sector,” Lee Duran, Partner and Private Equity practice Leader at BDO. “Software, especially cloud computing and SaaS-based technologies, along with IT services, drove deal flow. As we look forward to 2013, we can anticipate larger conversations around valuations as the industry works to establish more realistic figures based on achievement and rooted in potential for future growth.”

Will there be an app economy in five years?

Wednesday, February 20th, 2013

By Allan Maurer

Ron ShahThe mobile app economy is a big deal right now, with app developers commanding higher than average salaries and companies stumbling over each other to get on the mobile bandwagon. But, in five years, says Ron Shah, vice president at the Stripes Group venture firm, “many people will bypass apps altogether.”

By then, Shah says, “Just accessing the web on your phone will be so much better you won’t need 79 apps. Consumers will want to download apps less and less and just things on the open web.”

Also, he notes, “Two app stores now have a chokehold on user capabilities. That’s an unnatural place to be. Companies don’t want Apple or Google sitting between them and their customers.”

Shah is focused on sourcing and executing technology, software and internet investments as well as strategy and business development with portfolio companies at Stripes, which closed its current $350 million fund early in 2012.

Participating in the Southeast Venture Conference in March

Shah is actively involved with the firm’s investments in Kareo, Netbiscuits, eMarketer, Elance, MyWebGrocer,, Folica and Perimeter.

Prior to joining Stripes Group, Ron co-founded Endgame Capital, which focuses on land investment and development in the mid-Atlantic region.

People network in groups large and small at SEVC.

People networking at a previous Southeast Venture Conference.

He’s one of more than two-dozen venture capitalists and investors participating in the upcoming Southeast Venture Conference in Charlotte, NC, March 13-14.

Shah will talk about the merger and acquisitions environment in areas where he has expertise at the event. “We’ve invested in several companies providing deep technologically integrated services in various industries,” he says.

He expects to see media companies, which made a round of acquisitions three or four years ago, to be looking to buy again. “They’re coming up on another cycle where they need to buy again to service their customers.”

Avoiding the Deathstar approach to software

He adds, “There’s a lot of pressure for those guys to figure out how to service existing relationships in a world that looks very different from ten years ago. They need to know what customers are consuming, how they consume and so on.”

IBMAnother big trend he sees in M&A is in SaaS. “We’ve seen significant acquisitions of SaaS companies by the big guys – Oracle, IBM, SAP, Salesforce all bought several. They realize their clients are not in spending millions on the Deathstar approach to building software. People are coming from the bottom end and taking revenue from them, so they need to acquire to have cost effective offerings.”

He also notes that “In Enterprise technology, buyers have been aggressive with the evaluations they’ve been paying in core areas such as customer relationship and talent management and business intelligence.”

They can all be consolidated to some extent, he says. “We saw some of that in the marketing automation space. Then the larger players ended up getting bought: Buddy Media by Salesforce, Vitrue by Oracle.”

A process of consolidation

It’s a process, he explains. “Companies spring up in the venture space and rise to the forefront in a typical category. They buy smaller companies with innovative features. Then, if they’re playing in an interesting category, the big tech guys will buy them.”

Even after that big step in consolidation, three or four years later some of the big players realize they don’t have the right play in a category and “The cycle starts all over again,” says Shah.

mobile devicesNext he says mobile device analytics is likely to see some consolidation. “A lot of the core tech companies feel the need to bolster their offerings,” Shah notes.

That interest is fanned by a couple of macro trends. “People are spending less time on print and more on the web, no one can deny that, and within that, they’re spending more time on mobile devices.”

The natural conclusion? “Ad dollars will slowly migrate there because that’s where the eyeballs are, on smartphones and tablets.”


PrivCo names the top 20 M&A law firms for private tech deals in 2012

Wednesday, February 13th, 2013

M&APrivCo has just released its Annual Private Tech Company M&A Research Report: “The Top 100 Acquirers Of U.S. Private Tech Companies In 2012.

It includes: The Most Active Acquirers, The Companies They Acquired, What They Paid, Top 10 Target Co. Cities, Financial and Law Firm Deal Advisor League Tables, and More.” Included in this comprehensive, 350-plus page report are exclusive rankings of the most sought out M&A Law Firms for private company tech M&A deals in 2012.

PrivCo has provided its Exclusive Top 20 Ranking below, with Chicago-based international law firm Kirkland & Ellis topping the list as the #1 Law Firm in private tech M&A deals. Ranked just behind it were Weil, Gotshal & Manges (Ranked #2) & Jones Day (Ranked #3).

Top 20 Law Firms For Private Technology M&A Acquisitions In 2012: PrivCo Rankings

(Ranked By Number of Private Tech Company Acquisitions Firm Advised On)

1. Kirkland & Ellis
2. Weil, Gotshal
3. Jones Day
4. Davis Polk
5. Fenwick & West
6. O’Melveny & Myers
7. Cleary Gottlieb
8. Wilson Sonsini
9. Greenberg & Traurig
10. Goodwin Procter
11. Alston & Bird
12. Foley & Lardner
13. Hogan Lovells
14. DLA Piper
15. Latham & Watkins
16. Shearman & Sterling
17. Simpson Thacher
18. Clifford Chance
19. Skadden, Arps
20. Morrison & Foerster

To access PrivCo’s 350 page 2012 Private Tech M&A Industry Report:

Affectiva nabs funding to bring “emotional insight” to online video

Tuesday, August 7th, 2012

Affdex reads facial expressions using a webcam to help understand how people feel. (Graphic: Business Wire)

Are you ready to share not only videos you find interesting, but your emotional reactions to them? You may be able to do just that in the not too distant future. A company that has raised nearly $20 million in venture backing and several National Science Foundation grants is already marketing emotion-reading technologies.

Waltham, MA-based Affectiva has secured $12 million in Series C financing, backed by Hong Kong businessman Li Ka-shing’s Horizons Ventures and Kleiner Perkins Caufield & Byers (KPCB) Digital Growth Fund, with participation from existing investors.

The company’s technologies interest marketers and online video makers because it could sharpen their ability to create emotionally effective videos.

Affectiva, an MIT spin-off founded in 2009 by professor Rosalind W. Picard, Sc.D. and research scientist Rana el Kaliouby, Ph.D., has successfully commercialized emotion technologies, including Affdex, an automated facial coding platform and Q Sensor, a wearable biometric sensor.

Building on its momentum in market research, Affectiva will use the new funds to accelerate Affdex development of emotional insights for all forms of online video content, including advertisements, trailers, TV shows and movies.

Will use built-in webcams on laptops

Using the webcam found on laptops, tablets and smartphones, people will watch Affdex-enabled online videos and easily share their emotional experience with friends, family and content providers.

This accurate, scalable emotional insight will also allow content providers to optimize their content with improved relevance, engagement and viral impact, resulting in more user traffic and increased advertising revenue.

“Our goal is to make Affdex a globally ubiquitous tool that enables people to understand and share their emotional experiences online,” said David Berman, chief executive officer at Affectiva.

“While there is tremendous value for online video publishers to better understand consumer engagement with their content, we want to take this even further, so that consumers can see and share their own personal emotional scores.”

Opportunities for marketers

“Capturing and viewing online video has become mainstream. The ability to effectively measure real-time emotion while consumers are watching video has the potential to improve online engagement and satisfaction for users, in addition to creating opportunities for marketers to more effectively determine what consumers care most about,” said Mary Meeker, a partner at KPCB and Internet-industry expert.

The additional financing will also support the continued development for Q Sensor, already in use by hundreds of leading universities and corporations, to collect data and develop meaningful insights for areas such as sleep, anxiety, and stress.

Affectiva is partnering with a number of leading research and commercial institutions on healthcare applications for clinical and consumer health.

Affectiva previously raised $7.7 million from WPP, Myrian Capital and the Peder Wallenberg Charitable Trust, represented by Lingfield AB.

In addition, the company has also won several National Science Foundation (NSF) Small Business Innovation Research (SBIR) grants to further develop the cloud-based Affdex platform for brand managers seeking to optimize ad performance.

As a part of the financing, Frank Meehan at Horizons Ventures will join Affectiva’s board of directors and Mary Meeker, a partner at KPCB, will join as an Affectiva board observer.

CEOs rate best states for business: Texas No. 1, NC slips, Florida rises

Wednesday, May 2nd, 2012

TexasFor the eighth year in a row, CEOs rate Texas as the #1 state in which to do business, according to Chief Executive magazine’s annual Best & Worst States Survey, released today.

Florida rose one spot to take the #2 rank, while North Carolina slipped to #3.

Tennessee remained at #4 while Indiana climbed a spot to capture the #5 rank. CEOs named the worst states to do business as California, New York, Illinois, Massachusetts and Michigan.

The Best & Worst States Survey measures the sentiment of CEOs on business conditions around the nation.

For the 2012 survey, 650 CEOs from across the country evaluated the states on a broad range of issues, including regulations, tax policies, workforce quality, educational resources, quality of living and infrastructure.  The survey was conducted from Jan. 24 to Feb. 26, 2012.

Louisiana biggest gainer

Louisiana was the biggest gainer in the survey, rising 14 spots to be the #13th most attractive state in the country to do business. The biggest loser was Oregon, which dropped nine spots to #42.

CEOs surveyed said California’s poor ranking is the result of its hostility to business, high state taxes and overly stringent regulations, which is driving investment, companies and jobs to other states.

According to Spectrum Locations Consultants, 254 California companies moved some or all of their work and jobs out of state in 2011, an increase of 26 percent over the previous year and five times as many as in 2009.

“CEOs tell us that California seems to be doing everything possible to drive business from the state. Texas, by contrast, has been welcoming companies and entrepreneurs, particularly in the high-tech arena,” said J.P. Donlon, Editor-in-Chief of Chief Executivemagazine and

“Local economic development corporations, as well as the state Texas Enterprise Fund, are providing attractive incentives. This, along with the relaxed regulatory environment and supportive State Department of Commerce adds up to a favorable climate for business.”

Inhospitable business environments mean less jobs, as entrepreneurs and established corporations seek more cost-efficient and tax-friendly locales, said Marshall Cooper, CEO of Chief Executive magazine and  “This survey shows that states that create policies and incentives are rewarded with investment, jobs and greater overall economic activity.”

For complete results, including individual state rankings on multiple criteria, methodology and more, please

Best 5 States for Business Rank 2012 Rank 2011
Texas 1st 1st
Florida 2nd 3rd
North Carolina 3rd 2nd
Tennessee 4th 4th
Indiana 5th 6th
Source:  Chief Executive magazine (              
Worst 5 States for Business Rank 2012 Rank 2011
California 50th 50th
New York 49th 49th
Illinois 48th 48th
Massachusetts 47th 45th
Michigan 46th 46th
Source:  Chief Executive magazine (              
2012 Biggest Gainers Positions Gained
Louisiana +14
Mississippi +8
West Virginia +8
Ohio +6
North Dakota +6
Source:  Chief Executive magazine (


2012 Biggest Losers Positions Lost
Oregon -9
Kentucky -8
New Hampshire -8
Nebraska -7
Minnesota -7
Source:  Chief Executive magazine (                                                

Want to reach Gen Y: try mobile, Internet radio, & baseball

Wednesday, April 4th, 2012

Nearly half (49%, 115M) of all American adults are Major League Baseball Fans and 15% (36M) are Avid Fans, according to the new Scarborough Sports Marketing study.

The study also reveals that there is ample opportunity to turn young fans into lifelong MLB enthusiasts as 44% of Generation Y are MLB Fans and 13% are Avid Fans. (view infographic).

Mobile, Internet radio and reality TV are ways to reach Gen Y, the study says.

We’re always interested in demographic data such as this – it always has broader implications than the specific data might suggest at first glance. For one thing, it suggests how to reach Gen Y for any reason and which tools would be effective. Digital marketing during baseball games is likely a great way to connect with a chunk of the Gen Y audience, for instance.

“Generation Y makes up 20% of the American adult population – that’s 46 million people,” says Bill Nielsen, Vice President of Sales for Scarborough Sports Marketing.

“Major League Baseball, MLB teams and advertisers understand how critical it is to continue to reach out to this younger demographic in an effective and efficient way, to build long-term affinity for the sport.”

Almost a third (30 percent) of Gen Y MLB Fans are willing to spend $25-$49 on a single game MLB ticket and 12% are interested in purchasing season tickets.

Gen Y MLB Fans are also 37% more likely than all MLB Fans to have bought MLB apparel with a team logo in the past 12 months. Retail spaces also offer an opportunity for fan outreach as more than half (56%) of Gen Y MLB Fans shopped at a sporting goods store in the past three months.

They use mobile, Internet radio, Twitter

Where can Gen Y MLB Fans be reached? They are 54% more likely than all MLB Fans to have used a mobile device to read a newspaper in the past 30 days, 84% more likely to have listened to internet radio in the past 30 days and 22% more likely than all MLB Fans to typically watch reality TV.

Gen Y MLB Fans are more than twice as likely as all MLB Fans to have visited Twitter in the past 30 days, 59% more likely to have read or contributed to a blog in the past 30 days and 68% more likely to have watched video clips online in the same time period.

Gen Y MLB Fans are 131% more likely than all MLB Fans to have visited in the past 30 days and 65% more likely to have visited in the same time frame.

“Generation Y is so active on Twitter and Facebook that any modern marketing campaign is incomplete without a social component,” continues Nielsen. “With youthful initiatives like the MLB Fan Cave in New York City and increased social media efforts, the league, teams and advertisers can reach younger audiences in the spaces where they are most engaged.”

Gen Y MLB Fans can also be found participating in a variety of different athletic and entertainment activities.

Gen Y MLB Fans are twice as likely as all MLB Fans to have played soccer, football or basketball in the past 12 months and 66% more likely to have played softball or baseball in the same time frame. They are also twice as likely to have attended an R&B/Rap/Hip-Hop concert and 49% more likely to have visited a comedy club in the past year.

Gen Y MLB Fans are 23% more likely than all MLB Fans to be Black/African American and 83% more likely to be Hispanic. The top local markets for Gen Y MLB Fans are Milwaukee (76% of Gen Y are MLB fans); Philadelphia (70%); Hartford, C.T. (66%); St. Louis (66%) and Albany, N.Y. (62%).

Looking at the two teams that play in the season opener, Gen Y makes up 21% of the total St. Louis population and 18% of theMiami population. 72% of Gen Y St. Louis residents watched, attended or listened to a Cardinals game in the past year and 36% of Gen Y Miami residents watched, attended or listened to a Marlins game in the same time period.

Top Local Markets for Gen Y MLB Fans

DMA % of Gen Y MLB Fans
Milwaukee 76
Philadelphia 70
Hartford, C.T. 66
St. Louis 66
Albany, N.Y. 62
Boston 61
Cincinnati 60
Syracuse, N.Y. 57
Providence, R.I. 57
Minneapolis 57

*Scarborough defines the different American generations as Generation Y (age 18-29), Generation X (30-44), Baby Boomers (45-64) and the Silent Generation (65+).

General Catalyst names early Facebook employee a venture partner

Monday, April 2nd, 2012

General CatalystKevin Colleran, a foundational Facebook employee who developed the initial advertising programs for the social network, is joining Palo Alto, CA-based General Catalyst Partners as a venture partner.

As Facebook’s second-most tenured employee at the time of his departure behind founder and CEO Mark Zuckerberg, Colleran offers tremendous experience for early stage and high growth companies.

In his new role at General Catalyst, Colleran will focus on mentoring young entrepreneurs in early stage investments.“Kevin’s experience monetizing social networks and deep understanding of the consumer experience make him a tremendous addition to our team”

Facebook’s seventh employee

Colleran began his career at Facebook in 2005 as its seventh employee and played a critical role establishing social media as an essential component of every brand’s marketing strategy.

During his tenure at Facebook, Colleran led some of the company’s largest advertising partnerships with companies including Procter & Gamble, Johnson & Johnson, and Coca Cola. His main focus was to help premier brands learn how to evolve their marketing strategies and adapt to the rising popularity of social media. In that role, he helped establish the very first Facebook brand pages for these global icons.

“There’s always been a high volume of talent and innovation coming out of Boston, and there’s been a significant uptick recently. The most recent IPOs of General Catalyst companies like Demandware and Brightcove are proof of that, and I’m especially excited to identify the next great ideas and help develop and nurture them into phenomenal companies,” said Colleran, who will be based in General Catalyst’s Cambridge, MA. office.

Will work with consumer sector firms

In his role as venture partner, Colleran will identify and work with early stage companies in the consumer sector, in addition to serving as a board member and board observer for high growth companies.

Having spent six years at Facebook traveling the world and meeting with brand managers, advertising agencies, and global CMOs he has helped them better understand the new marketing opportunities that social media has to offer.

“Kevin’s experience monetizing social networks and deep understanding of the consumer experience make him a tremendous addition to our team,” said Joel Cutler, managing director at General Catalyst. “We’re excited to have him on board.”

In addition to his experience at Facebook, Colleran brings a lifelong interest in entrepreneurship to his new role. While in high school and college, he won multiple national entrepreneur of the year awards and founded various marketing and Internet-based startups.

After college, Colleran worked as a consultant with BMG Music in NY where he launched a music sponsorship company that focused on artists signed to the Arista and RCA record labels. In 2005 he was recruited to Facebook by Sean Parker, the company’s founding president.

iContact sale to Vocus is Updata’s third exit in 90 days

Monday, March 5th, 2012

Updata PartnersUpdata Partners, a leading technology-focused growth equity firm, says the sale of portfolio company iContact to Vocus for $169 million marks Updata’s third portfolio exit in three months, following the sales of Jobs2Web to SuccessFactors in December for $110 million and Numara Software to BMC in January for $300 million.

The sale represents a 2.7x return on invested capital and a 31% IRR for Updata.“Updata’s contribution was instrumental in iContact’s rapid growth and successful exit. Their strong operational experience and deep understanding of the software-as-a-service model catalyzed our breakout performance.”

In a recent interview, a Novak Biddle venture capitalist told the TechJournal that many large firms are flush with cash and he expects to see increased merger and acquisition activity as firms use M&A to grow. That’s good for the entire entrepreneurial ecosystem.

Updata first invested in iContact in 2007

Carter Griffin, general partner at Updata Partners and iContact Board member said, “The outcome is the culmination of a lot of hard work by Ryan Allis and his team and the positive dynamics of their market. The transaction also serves to reinforce Updata’s strategy of backing high growth technology companies.”

iContactResearch Triangle, NC-based iContact provides email marketing and social media marketing software-as-a-service to small and medium businesses. Updata initially invested in iContact in 2007, providing the first institutional capital.

Since the investment, iContact has grown rapidly and is now the largest privately-held provider of SMB email marketing software. The combination of iContact and Vocus creates the clear leader in cross channel integrated marketing software.

iContact Chief Executive Officer, Ryan Allis, commented, “Updata’s contribution was instrumental in iContact’s rapid growth and successful exit. Their strong operational experience and deep understanding of the software-as-a-service model catalyzed our breakout performance.”

Allis himself has been a strong advocate of “social entrepreneurship” and giving back to the community. He has authored a book about how he made his dream of creating a million dollar company come true — and has exceeded that dream.

For more information, please visit

Best schools to study video game design from California to the New York Highlands

Thursday, March 1st, 2012

The Princeton ReviewThe University of Southern California at Los Angeles and M.I.T. are the top two schools for studying video game design.

So says The Princeton Review ( — one of the nation’s best-known education services companies, which today reported its third annual list naming the schools with the best programs to study video game design.

The new list, “Top Schools to Study Video Game Design for 2012,” recommends 50 schools in all.  It names 10 undergraduate and 10 graduate schools in rank order to its respective “top 10″ lists and 22 undergraduate and 8 graduate schools as Honorable Mentions.  The Company’s full report on the 2012 list is accessible now at

The Princeton Review chose the schools based on a comprehensive survey it conducted in the 2011-2012 academic year of administrators at 150 institutions offering video game design coursework and/or degrees in the United States and Canada.

The survey, which included more than 50 questions, covered a wide range of topics from academics and faculty credentials to graduates’ employment and career achievements.

Criteria for The Princeton Review’s school selections covered the quality of the curriculum, faculty, facilities and infrastructure.  The Company also factored in data it collected from the schools on their scholarships, financial aid and career opportunities.

The Princeton Review’s top 10 undergraduate schools to study video game design for 2012 are:

  1. University of Southern California (Los Angeles, CA)
  2. Massachusetts Institute of Technology (Cambridge, MA)
  3. University of Utah (Salt Lake City, UT)
  4. DigiPen Institute of Technology (Redmond, WA)
  5. The Art Institute of Vancouver (Vancouver, BC)
  6. Rochester Institute of Technology (Rochester, NY)
  7. Shawnee State University (Portsmouth, OH)
  8. Savannah College of Art and Design (Savannah, GA)
  9. University of New Mexico (Albuquerque, NM)
  10. Becker College (Worcester, MA)

The Princeton Review’s top 10 graduate schools to study video game design for 2012 are:

  1. University of Southern California (Los Angeles, CA)
  2. Rochester Institute of Technology (Rochester, NY)
  3. Massachusetts Institute of Technology (Cambridge, MA)
  4. University of Central Florida (Orlando, FL)
  5. Southern Methodist University (SMU) (Plano, TX)
  6. Carnegie Mellon University (Pittsburgh, PA)
  7. Savannah College of Art and Design (Savannah, GA)
  8. DigiPen Institute of Technology (Redmond, WA)
  9. Univ. of California, Santa Cruz (Santa Cruz, CA)
  10. Drexel University (Philadelphia, PA)

Honorable Mentions– Undergraduate Schools (alpha order):

Bradley University (Peoria, IL)
Champlain College (Burlington, VT)
Columbia College Chicago (Chicago, IL)
DePaul University (Chicago, IL)
Drexel University (Philadelphia, PA)
Ferris State University (Grand Rapids, MI)
Full Sail University (Winter Park, FL)
Georgia Institute of Technology (Atlanta, GA)
Miami University (Oxford, OH)
Michigan State University (East Lansing, MI)
New Jersey Institute of Technology (Newark, NJ)
New York University/NYU POLY (New York, NY)
North Carolina State University (Raleigh, NC)
Northeastern University (Boston, MA)
Ohio University (Athens, OH)
Rensselaer Polytechnic Institute (Troy, NY)
University of Advancing Technology (Tempe, AZ)
University of California, Santa Cruz (Santa Cruz, CA)
University of Maryland, Baltimore County (Baltimore, MD)
The University of Texas at Dallas (Richardson, TX)
Vancouver Film School (Vancouver, BC)
Worcester Polytechnic Institute (Worcester, MA)

Honorable Mentions – Graduate Schools (alpha order):

DePaul University (Chicago, IL)
Full Sail University (Winter Park, FL)
Georgia Institute of Technology (Atlanta, GA)
New York University/NYU Poly (New York, NY)
Parsons – The New School for Design (New York, NY)
Sacred Heart University (Fairfield, CT)
The University of Texas at Dallas (Richardson, TX)
University of Utah (Salt Lake City, UT)

Visitors to the Princeton Review website area on this list can access additional information about the schools’ programs and click on links to the schools’ websites.

“Academic and professional programs in video game design studies – from very specialized college majors to highly concentrated graduate degrees – have evolved tremendously over the past 10 years,” said Robert Franek, Princeton Review’s Senior VP/Publisher.  “We salute the schools on our list this year for their commitment to this burgeoning field and the innovative programs they offer. For students aspiring to work in this more than $10.5 billion industry and for the companies that will need their creative talents and skills, we hope this project will serve as a catalyst for many rewarding connections.”

The Princeton Review is also known for its annual rankings of colleges, law schools and business schools in dozens of categories which it reports on its website and in its books including The Best 376 Colleges and the recently published book,The Best Value Colleges.

The Princeton Review is not affiliated with Princeton University and it is not a magazine.