Trading Details: SHOR was originally priced at $10.50 (at the top end of its range) on June 28th and then was re-priced at $9.50 (at its mid-range) when it opened on July 3 (it opened to the public at $10.00).  ShoreTel ended up at $12.15 (+27.89% from IPO price) after its first day of trading.  It closed at $12.77 (+34.44% from IPO price) in Day 2 trading. 

IPO Delay Background: ShoreTel was set to trade on June 28th, then got hit with a patent suit by Mitel Networks (ShoreTel CEO John Combs‘ ex-company) on the eve of its IPO.  If you read into the infringed patent claims, the details do not seem to affect core business processes (realize that I am no patent attorney, but I can differentiate between features and core technologies): (1) Automatic Web Page Generator; (2) Portable telephone user profiles using central computer; (3) Automatic telephone feature selector; and (4) Local area communications server.  It is of no surprise that Mitel also filed for its IPO, so its timing on the patent suit presumably had a modus operandi.  ShoreTel plans to defend the lawsuit, issuing a statement that ”We believe we have meritorious defenses to Mitel’s claims.”  In any case, the suit seemingly resulted in a 5-day delay in ShoreTel’s IPO and a $1.00 reduction in its original offering price. 

Relational Capital Update: I have argued in the past that the strategic investment connections (as a form of relational capital) bode well for a company about to go public (See CapitalBLOG post, Infinera IPO Soars: Why Relational Capital Matters).  For example, I was (serendipitously) examining the investment capital network of Apple and Google and stumbled upon the below map.  The main hypothesis here is the “Midas touch” exemplified by the co-investment ties of Apple and Google as a predictor of successful IPO companies. 

Google+Apple Investment Relational Map (Pendants dropped).  Notes: (1) Of the 52 related active companies on the map, 22 are private, 6 are acquired, and 24 are public = 46% linked public companies (a very high relative percentage); (2) note the presence of ties to recently successful IPOs Infinera and Aruba Networks; and (3) note the presence of Apple’s ties to ShoreTel Networks also noting its proximity to Lam Research, another successful public company.  ShoreTel–>SoarTel?

Conclusion: ShoreTel continues to have an upside considering its recent activity and patterns in comparison to its recent IPO brethren of Aruba Networks (ARUN) and Infinera (INFN).  Realize that I do not consider myself as an investment expert, only a network analyst identifying strategically connected IPOs and then tracking trends associated with their related companies. 

Infinera had a 14M share offering with a price range of $10-12, it priced at $13 and opened yesterday at $16.04.  It closed at $19.71 after reaching a high of $21.24 in mid-day trading (low = $16.00).  As a result, Infinera (INFN) was up 52% if you got in at the IPO and up 23% if you got in at the opening bell.  This is particularly noteworthy because the NASDAQ was down 1.77% yesterday.  From the CNN article, independent IPO analyst Tom Taulli states, “In hindsight [Infinera] looks like it was underpriced.”  This hails the sentiment I offered in my March 2 blog post, Infinera IPO Filing: The Juniper Net Works?  Here I was bullish on Infinera because of its relational capital via co-investor ties to 24 public companies and multiple board ties to Juniper Networks.  I repeat two of these maps below:

Infinera Investment Relational Map. Notes: (1) Juniper Networks as both an investor (orange oval) and related company (green box) via Kleiner Perkins & JAFCO; (2) Kleiner multiple public co-investment ties to Venrock (Photon Dynamics, Pharmacyclics, Geron, Echelon, & NeoMagic) & Sprout (Synaptics, Verifone, & eHealth); and (3) 17 investors on the map reflecting 7 rounds of capital ($315M total raised). (Source: LinkSV.com)

Infinera & Juniper Networks Board Relational Map (Pendants dropped).  Notes: (1) Direct tie to Pradeep Singh (Juniper CTO/Founder); (2) Multiple direct ties (Kenneth Goldman, Pradeep Singh, & Vinod Khosla (Former)); and (3) Multiple indirect ties (Alex Balkanski, Reed Hundt, Dan Maydin, & Peter Wagner (Former)). (Source: LinkSV.com)

Two interesting changes on the map occurred since the March 2 post: (1) Reed Hundt (Former FCC Chair) now on the Board of Infinera; and (2) Vinod Khosla (Khosla Ventures, Former KPCB) now a former board member on Infinera.  Such changes are important to note in the days preceding the IPO. 

My main point is that relational capital networks provide valuable additional information for IPOs.  A couple of key factors make IPOs particularly salient for capital network analysis: (1) S-1 filings indicate the actual amounts and percentages of ownership in the company (this becomes public for the first time); (2) Investors and board members care greatly about early-IPO pricings because federal regulations require a lock in period of at least 180 days before such insiders can sell their shares; and (3) When insider shares are sold, they typically trigger immediate market reaction. 

Don’t get me wrong, fundamentals are important in predicting IPO success, but they do not tell the whole story.  Look for key relationships (such as the Juniper tie, public company affiliations, key co-investments, and people ties such as Reed Hundt now on the board) to add to the data gathering process for IPOs.  LinkSViewer maps assist in this process because (1) pictures are quick reads (important in a time crunch), (2) network maps depict relationships in one place (and can be manipulated by the end user); and (3) this information is available much prior to the IPO (known at time of filing).  Realize that our source of data (LinkSV), only reports on (in the most part) Silicon Valley hi-tech companies, investors, and management teams - as a result there may be some missing information.  At the time of IPO, however, any information is golden because of the high level of uncertainty in at IPO.  Pricings factor in fundamentals, but to what extent do they include relationships?  I claim this is a key strategic advantage for would be institutional investors and day traders.  I repeat and expand upon the earlier quote:

“In hindsight [Infinera] looks like it was underpriced,” said independent IPO analyst Tom Taulli. “But it’s tough to get these things right. The market has been down quite a bit for the last couple days, but it really hasn’t impacted high-flier IPOs.”

Two of Taulli’s points are of further interest: (1) “…hasn’t impacted high-flier IPOs” demonstrates how IPO speculation can be used as part of a hedge strategy countering overall market inertia (at least in the current environment) - this was exemplified by the Infinera gain on a bloody market day; and (2) ”…it’s tough to get these things right” underscores the amount of incomplete information associated with an IPO.  More on this last point…reducing uncertainty requires a wide variety of sources such as network analysis in evaluating upcoming IPOs.  For example, I examine the pedigree of co-investors in an IPO company based on the idea that “success breeds success.”  Yet, this type of speculation has garnered some negative criticism.  As an example, I recall a comment I posted on the GigaOm website on debt-laden IPOs.  My comment touted Aruba Networks (prior to its IPO) based on its pedigree of investors Sequoia Capital and Matrix Partners:

Interesting post. Clearly there is a strange dynamic based on the BigBand and Clearwire IPOs. Who says the stock market is rational? Another way to speculate about IPOs is based on investor pedigree. I posted an item to our blog (2/7/07) illustrating the investment networks of BigBand, GluMobile, and Aruba. Of the three, Aruba has the best pedigree with their ties to Sequoia Capital and Matrix Partners (Apple & SanDisk as other co-investments). For those interested:
http://linksviewer.com/blog/?p=40

The comment elicited the following response:

Pedigree? Voodoo science…very irrational way to look at IPO’s or a company’s survability. Think about competition, product portfolio, and profits to get past smoking mirrors.

I found it unnecessary to comment on the above response because Aruba Networks (ARUN) gained 29% on its IPO date (3/26/07) and is currently one of the top IPOs in 2007.  This reply actually reiterated my point - that IPOs are often irrational.  The key point is that they are not necessarily irrelational.  Competition, product portfolio, and profits are presumably figured into the price point as valuation indicators.  But how can you put a price on capital relationships?  Realize that I consider myself an outsider on investing matters, merely pointing those in the know to information and metrics that may not be readily available and thus not factored into IPO initial pricings.  As another example, even after the Infinera IPO, I found no sources that tied Infinera to Juniper Networks.  IPO speculators, I surmise, are hungry for any information that provides them a strategic advantage - and capital networks and IPO network metrics seek to fill this void.  By the way, Infinera was up another 28% closing at $25.16 today (a 94% gain from its IPO price).  For more information behind the Infinera IPO, check out GigaOm’s recent post: From Zepton to Infinera, a start-up story.

NeurogesX Relational Map (Active companies only).  Notes: (1) Alta-Walden co-investments: Plexxikon, Terawave Comm., Metabolix, & Corcept Thera.; (2) Alta-Global Life Science Ventures co-investment: Coapt Systems; (3) Alta-Arch Ventures co-investments: R2 Tech.; (4) Alta-Walden public company tie: Corcept; and (5) Alix Marduel (Alta Ventures) board interlock: Metabolix & Corcept ties.  Below is the Relational Map for Active & Inactive companies.

NeurogesX Relational Map (Inactive companies included). Alta-Walden Inactive co-investments: (a) Acquired: Premisys Comm., Elantec Semi., TSquare, & Fibex Systems; (b) Private: AuraVision, Stylus Assets, & JTS; and (c) Public: Biocircuits.  

Cavium Networks is the latest among recent successful IPOs.  An earlier post examines the Relational network of Cavium Networks, highlighting its predominant Active Acquired company connections.  One of its connected companies also recently went public, Mellanox Technologies.  In light of their recent IPOs, I decided to examine the capital links between Cavium and Mellanox Technologies.  First I illustrate using their combined Relational Map.  Because of their multiple connections, I filtered out pendants and increased the MinLink to 3 (including only those companies with 3 ties in the network) in their below Investment Map.

Cavium & Mellanox Investment Relational Map (MinLink=3, Pendants dropped). Note the tie to Ikanos Communications, which went public in late 2005.  Here we see a multitude of investors and related companies because both Cavium (10) and Mellanox (14) each had a large number of investors.  To simplify the map, let’s remove the investors from the map using the Investor Filter.

Cavium & Mellanox Investment Relational Map (MinLink=3, Pendants dropped, Investors filtered out). Here we see only the direct connections between Cavium and Mellanox.  This visualizes only the common investor connections between the two: Saints Capital and China Development Industrial Bank.  Let’s examine this relationship in further detail by mapping these investors together, dropping pendants, and filtering out companies from their investment map.

Saints Capital & China Development Industrial Bank Investment Relational Map (Pendants dropped). Notes: (1) They have no inactive common portfolio companies; and (2) Of their 8 co-investments: 2 recently went public (Cavium & Mellanox); 3 were recently acquired (IXI Mobile, Tropian, & Silverback Systems); and 3 are private (InnoPath Software, Atrica, & Pixim).  Over the past year, 5 of the 8 companies co-invested by Saints & CDIB had exits.  Following this trend, the co-invested private companies of InnoPath, Atrica, & Pixim deserve close watch, especially since they all received recent round fundings.

Quark Biotech filed for its IPO on March 30.  The Quark Biotech Relational Map provides some insight into the relations between its current and former management team and board members.  Along the way, I would like to point out some key transition points that will help LinkSViewer users to navigate from simple to complex maps (the opposite of the previous post which demonstrated navigating from complex to simple maps).  First I started with a relatively simple relational map - I searched for Quark Biotech and then filtered in former people.

Quark Biotech Relational Map (Former People Included).  Notes: (1) Board Interlock Ties: Joseph Rubinfeld & Daniel Zurr (Former SuperGen Board Members); (2) Key People Ties: Larry Ellison (Oracle CEO, previous Quark board member).

I clicked on Larry Ellison in LinkSViewer, Add to Map (Under Pink banner in Information Window) to incorporate all of his current and former boards on the below map, and dropped pendants

Quark Biotech Relational Map (Ellison as Person Added to Map). Notes: (1) Ellison Previous Boards (Active Cos.): NetSuite, Pillar Data Systems, Liberate Technologies, Oracle, Apple; (2) Ellison Board Interlocks: Steven Fink (Lawrence Investments) & Jeffrey Henley (Oracle Former Board Chairman).

I clicked on Add to Map under Larry Ellison as Individual Investor (Yellow banner in Information Window) to incorporate all of his current and active individual investments on the below map and dropped pendants.

Quark Biotech Relational Map (Ellison as Investor Added to Map).  Notes: (1) Ellison Investments (Active Cos.): SalesForce.com, SuperGen; (2) Ellison Investment Ties: Igor Sill (Oracle & Salesforce); Daniel Zurr & Joseph Rubinfeld (SuperGen/Quark).

Thus, we see how Larry Ellison connects to Quark as a former board member, but also as an investor in SuperGen.  In this way, we used LinkSViewer to expand existing networks to identify interesting relationships.

Data Domain filed for its IPO on April 4.  The Data Domain Relational Map provides some insight into the co-investment relations between its three investors: Greylock Partners, Sutter Hill Ventures, and NEA.  Along the way, I would like to point out some key transition points that will help LinkSViewer users to navigate from complex to simple maps.  First I started with a relatively complex relational map - I searched for Data Domain and then filtered in current and former people and dropped pendants.

Data Domain Relational Map (Pendants dropped).  Notes (1) Co-Investment Ties: Sutter Hill-Greylock (Trusted Data); NEA-Sutter Hill (QuickLogic, Kovair); and NEA-Greylock (PortAuthority, SiTime, PolyServe, Tabula); (2) People Ties: Geoff Barrall (Trusted Data CEO); Reed Hundt (Former FCC Chair); Aneel Bhusri (Greylock); Scott Sandell (NEA); Ron Codd (PeopleSoft Former CFO); and Michael O’ Donnell (Network Appliance Former Director of Federal Sales); (3) Strong Company Ties: Trusted Data (Geoff Barrall, Greylock, & Sutter Hill); Kovair (Scott Sandell of NEA & Sutter Hill). 

Network Commentary: The active company ties include 4 public companies (QuickLogic, Network Appliance, Adept, & Openwave), 3 active acquired companies (Kovair, PortAuthority, & PolyServe), and 4 private companies (Trusted Data, SiTime, Tabula, & SymphoniQ).  Of particular interest are the 4 public company ties.  There are also three main clusters centered around each VC with seven companies connecting these clusters. These clusters are amplified by Excluding the Target Node in the below map.

Data Domain Relational Map (Exclude Target Node, Pendants dropped).  Notes (1) Here we clearly see the links between investors (PolyServe, SiTime, Tabula, PortAuthority, Kovair, QuickLogic, & Trusted Data); and (2) We can also see the strong relationship between former FCC chairman Reed Hundt with Greylock Partners.

Network Commentary: By removing the target node we are in effect demonstrating how the companies, people, and investors were related to one another before considering Data Domain - are there preexisting ties that bind?  This map illustrates investor clusters on the map by removing the influence of Data Domain on its capital relations.  Moreover, we can now focus in on only the strong-tie companies.  This is performed by increasing the MinLink to 3 from the first map.  The below map only includes those companies with at least 3 ties:

Data Domain Relational Map (Pendants dropped, MinLink=3).  Notes (1) Here we see the strong links between investors: (1) Greylock & NEA are linked by PolyServe via Reed Hundt & Aneel Bhusri; (2) Sutter Hill & NEA are linked by Kovair via Scott Sandell; and (3) Greylock & Sutter Hill are linked by Trusted data via Geoff Barrall.

Network Commentary: By increasing the MinLink to 3 we are in effect illustrating multiple ties between investors and companies on the map - what are the strongest ties that bind?  This map shows only the strongest relationships from the previous maps.  Here we demonstrate the process of taking a complex map and simplifying it to detect only the strongest of relationships (as denoted by the most common ties). 

Data Domain Relational Map (Exclude Target Node, Pendants dropped, MinLink=3).  Here we see a strong-tie circle investors (i.e., each investor has a strong-tie connection to one another).  The fact that each investor has a pre-existing strong tie relation may bode well for Data Domain - relational ties could pave the way for a smooth IPO. 

Veraz Networks Relational Map. Notes: (1) Related IPO companies: Extreme Networks, Chordiant Software, & Infinera (Recent IPO Filing); (2) Investor Outside Board Members: Giora Bitan (ECI Telecom), Promod Haque (Norwest VP), Pascal Levensohn (Levensohn VP), Morgan Jones (Battery VP); (3) Company Interlocks: Promod Haque & Bob Corey (Amber Point); Bob Corey, Norwest, & Kleiner Perkins (Extreme Networks).

Network Commentary: Extreme Networks has a strong relation to Veraz because of the common ties to two investors (Norwest & KPCB) and one Board Member (Bob Corey, CFO & Exec. VP at Thor Technologies).  If we look at the performance of Extreme Networks at IPO (EXTR), it had a large upswing in its first year (from $27.50 at its IPO on April on April 8, 1999 to $124.00 on Sept. 22, 2000).  Realize that these were certainly different market conditions and the EXTR share price has steadily declined to $4.40, as of today.     

Data: Given the details of the IPO, Veraz was seeking a $10-12/share valuation for 9M shares, but priced at $8/share.  This results in a reduction of $3/share from the mid range valuation, or $27M less operating capital.  From Veraz’ Form S-1 (Prospectus), the majority shareholders in Veraz (% before IPO) were as follows: ECI Telecom (40.9%), Norwest VP (13%), Battery Ventures (10.8%), Argonaut Holdings (10.3%), Liberty Mutual Insurance (7.6%), and Levensohn VP (7.1%).  Note how Kleiner Perkins is no longer listed as a shareholder (although they did not play a major connecting role in the Veraz network). 

Expert Speculation: From the Renaissance Capital Featured IPO Report (much of this was reported in the originally cited Reuters article above), Veraz is looking to apply their VoIP technology to emerging markets such as Russia, India, and Africa.  The Renaissance report indicated that the company is unlikely to turn the corner on profitability until late 2007 or early 2008.  Veraz lost $17M on $84M in revenue for the 12 months ending 6/30/06 and consider that they will have $27M less capital from their proposed mid-range valuation. 

Outsider Observations: Given the promise of VoIP in emerging markets, there is an upside to the business of Veraz - I recall the predominance of cell phones on a trip to India.  Someone has to provide the network to such places and VoIP is a paradigm-shift technology that skips traditional land lines.  The problem is how their competition responds, but given Veraz’ Indian roots and recent strong alliance with Israel’s ECI Telecom, Veraz may have a strategic geographical and Tier II advantage over its rivals.  Their market may not have the upside of their competitors, but Veraz seems to have a head start given their international focus. 

Outsider Investment Speculation: The Veraz First Day Opening and Closing price is worth noting.  Most of the recent Silicon Valley Hi-Tech IPOs have opened/closed above their mid-range valuation.  Veraz priced 27.3% below the mid range, so it is important to note where it starts and finishes tomorrow.  This means that there may be value in the Veraz IPO for everyday investors who get in at the right time/price.  My goal is to add unique IPO information based on network analysis.  In this case, I discovered that Veraz had similarly high relational capital statistics compared to three recent SV hi-tech company IPOs: Novacea (NOVC), Thermage (THRM), and Techwell (TWLL).  All three of these companies were priced below their expected IPO ranges (granted, these are different companies in different industries).  My main point is that each of these 3 companies were devalued prior to IPO with similar (high) IPO Relational Capital Indices - and have evidenced double-digit gains since inception (NOVC=+16%, THRM=+34%, TWLL=+42%). 

Thus, I repeat my previous post observation of Veraz as a potential sleeper IPO - it may be a bargain tomorrow.  Realize that I am not an investment expert (please consult with one before investing), my advice is to keep a watch on Veraz and get in on an early downturn.  We’ll see what happens…I’ll post updates. 

Aruba Networks People Map (Companies filtered out) = Happy campers?  This is Aruba’s current management team = inside board (blue links), outside board (red links), and investors (green links) (Source: LinkSV.com) 

I have been keeping an eye on Aruba Networks’ IPO based on bullish predictions on the CapitalBLOG (2/7/07; 3/25/07).  This was based on the relational capital of their investment network - related investor public company connections.  Far from it for a trained electrical engineer to be self-aggrandizing, but I Called It (in deference to Stephen Colbert).  Then again, I did not invest in Aruba - too bad, it is already on of the top IPOs for this year (after only 1 day).  This being stated, I use this post to describe my experiences in following the Aruba IPO.  The goal is to explore the anatomy of an IPO from an outsider’s perspective - I consider myself a network analyst, not a financial analyst.   

To begin, I cite my sources - there are several free resources on the Internet to help explore IPOs.  First, I found a valuable resource on IPOs, Renaissance Capital’s IPO Home, which provides articles, basic fundamentals, featured IPO reports, chat, and (most importantly) links to the prospectus.  There are certainly other resources out there, but this was certainly a good start point.  Second, there are ways to track IPO performance and news using one of the myriad of finance portals or Websites - I used Yahoo! Finance - but there are certainly others that can suit user needs.  Finally, keeping a watch on news can help gauge rationale behind the company offering.  As a result, I offer some lessons learned summarizing my experiences (take these with a grain of salt) using four sections to recount my journey: (1) IPO fundamentals; (2) IPO Timeline; (3) IPO summary; and (4) Beyond the IPO.

IPO Fundamentals: 

Aruba Networks (ARUN, NASDAQ)

IPO Date: 3/27/07 

Expected price range: $8-10; Initial valuation = $11; IPO close = $14.15.  

Number of shares offered at IPO: 8M

Total common stock shares as of 1/31/07: 67.140198M

Underwriters (Shares): Goldman Sachs (3.4M), Lehman Bros. (2.6M), JP Morgan Securities (1.4M), RBC Capital (0.6M)

Largest Shareholders: Matrix (15M), Sequoia (13.6M), Trinity (10.2M), Dominic Orr (7.4M), WK Technology Fund (5.1M)

Additional Shareholders: Microsoft purchased 388,888 shares from the company in a private placement upon completion of the offering.

Key Customers: Google, Microsoft, The Ohio State University, US Air Force, Dartmouth College. 

Pre-existing Capital: $96M (5 rounds)

Capital Raised by IPO: $81.84M (less underwriter fees)

IPO Timeline:

11:20AM (EST).  Aruba opened up at $14 due to increased demand

11:30AM. Price drops to $13.01 after peaking at $14.19

11:40AM. Price steadies to around $13.60.  Over 4M shares traded in the first 20 minutes. 

11:40-3PM: Price maintains at around $13.60 with volume relatively flat (to about 6M)

3PM-4PM: Rally mounts to closing price of $14.15. Peak of $14.39 right before close.  Total volume = 8.3M shares (NASDAQ = -0.74%; Aruba = +28.64%).

7PM: Price drops to $13.70 in aftermarket trading

8AM (3/28): Price rises to $14.00 in aftermarket trading

9:30AM (3/28): Price opens at $14.04

10:30AM (3/28): Price rises to $14.50

11:30AM (3/28): Price rises to $15.20

12PM (3/28): Price drops to $15.00 (Total Vol. = appx. 1M, Aruba = +6%, NASDAQ=-0.5%). Peak = $15.88.  Total increase for Aruba (as of Noon, 3/28) = 36%.

IPO Summary (An outsider’s perspective)

Because the initial IPO price was higher than the initial valuation, the general public did not realize the 29% IPO date bump - the increase from the median value of $13.60 was about 3%.  This may help explain larger (6%) increase the day after IPO.  For those fortunate to be in on the IPO (reserved for institutions and qualified investors), there should be some celebrations in order.  Perhaps the greatest winner, however, is Aruba.  The company came into their IPO with uncertain market conditions, a net operating loss, and much speculation (although they had seen some positive in similar company recent IPOs such as BigBand Networks).  If Aruba received their mid-range valuation of $9/share, then this would have generated around $67M (less underwriter fees) for key operational expenses necessary for a network provider.  As is, the $11.00 share price generated around $81.84M in capital (less underwriter fees).  This resulted in an extra $14.8M above the mid-range valuation (+22%).  Not bad for a day’s work.

Aruba: Beyond the IPO (An outsider’s analysis)

Consider the warm reception from the general public as a positive indicator toward future growth - the number of shares traded (8.3M) exceeded the initial number of shares offered (8.0M).  In comparison, BigBand Networks’ recent first day IPO volume of 1.24M shares was much less than its initial shares offered (10.7M).  Thus there was major market activity for Aruba.  And the positive second day pricing and volume numbers indicate sustained investor interest. 

From a business perspective, the enterprise wireless LAN’s market has been projected to double over the next four years.  It is interesting that Aruba lists several major universities as its clientele - because universities are generally ahead of the technological curve and exhibit concentrated volumes of wireless activity, this bodes well for general enterprise adoption.   It is interesting from their amendment that Microsoft (an existing customer) pumped in $4M as a private placement investment - so they must be fairly well satisfied in Aruba as a client and this also speaks to Aruba’s growth potential based on Microsoft backing. 

The main concern for Aruba is in their net operating loss.  While their total reported loss was $12M 2006, it was $32.6M in 2005.  This was the result of an increase in revenue from 2005-6 from $12M to $72.5M, yet also indicates higher incurred expenses for 2006.  Of course, the competition from Cisco plays a major role here.  My sense is that key for Aruba is how they use the increased operating capital to leverage their already growing niche market.  If market conditions persist, then there should be enough to go around.  As is, a key milestone is Aruba’s 1st quarter report - scheduled around the beginning of April (if I recall correctly).  Stay tuned… 

Felicis Ventures Relational Map.  Notes: (1) Investment ties to Web 2.0 companies Dogster, BuzzLogic, RapLeaf, & Feedster; (2) Co-Investor Ties to Web 2.0 Top Angels Gil Penchina, Ron Conway, & Jeff Clavier.  The above map references the last map on our CapitalBLOG post combining Top Web 2.0 Angels w/ VC Firms.

Aruba Networks to test appetite for risky bets (Reuters)

Relational Map of Aruba Networks.  Notes: (1) Public company ties to Sequoia and Matrix (Apple & SanDisk); (2) Public company tie to Daniel Warmenhoven (Network Appliance CEO).  Reference CapitalBLOG post (2/7/07) comparing Aruba to BigBand and GluMobile (recent IPOs).

Commentary: I remain bullish on Aruba upon their IPO (realize that I am no expert on stock speculation).  Given the initial high value of IPOs for BigBand and GluMobile (despite having posted similar losses), Aruba seems in better position based on their investment pedigree - irrational markets call for irrational methods.  Certainly, I do not suggest that Aruba will perform well over the long haul, but trends indicate that it should perform well at IPO.  We’ll see what happens on Monday.

Update: Aruba raised $88M on $8M shares for $11/share. compared with the estimated forecast range of $8-$10/share. 

Veraz Network Investment Relational Map. Notes: (1) VC co-investment ties between Argonaut, Battery, KPCB, Levensohn, & Norwest; (2) Link to public companies Chordiant Software (Battery/Norwest), Extreme Networks (KPCB/Norwest), & Infinera (Argonaut/KPCB, recent IPO filing); and (3) Link to private companies Friendster & IP Unity (Battery/KPCB), KnowNow (KPCB/Levensohn), and Reconnex (Levensohn/Norwest).

Veraz Networks People Map. Notes: (1) Promod Haque (Norwest) tie to Bob Corey (Thor Technologies CFO) via AmberPoint & Extreme Networks; (2) Pascal Levensohn (Levensohn VP) tie to Matthew Howard (Norwest, former board observer to Veraz) via Reconnex; and (3) Ties to Midas List: Promod Haque (#51) & Matthew Howard (#59)

Network Commentary: I have noted before that Veraz as a future star based on its relational ties to the Midas List members and multiple public companies.  It should be noted that while Veraz’ co-investors have IPO experience together, both Chordiant Software and Extreme Networks (Battery/Norwest ties) did not have successful pricings over the long haul.  In Veraz’ case, however, they add in the experience of KPCB, Argonaut, and Levensohn VP - this should add to their investment capital.  Veraz was also listed on Always On’s Top 100 Innovative Private Companies for 2006 (one of 15 Network & Infrastructure Companies, including their brethren Infinera & IP Unity).  In summary, the IPO for Veraz has an upside based on both their investment and board member relational capital.  I call it a sleeper IPO because their network relationships provide a hidden strategic advantage that could result in favorable initial public opinion.  We’ll see what happens at the upcoming IPO.