1. What degree is most popular for Harvard alumni on the list?
A. BA/BS
B. MBA
C. MA/MS
D. Ph.D.

2. What degree is most popular for Yale alumni on the list?
A. BA/BS
B. MBA
C. MA/MS
D. Ph.D.

3. In which state do most Yale alumni on the list currently reside?
A. Connecticut
B. New York
C. California
D. Texas

4. What two Universities have the most co-alumni?
A. Harvard and Princeton
B. Harvard and Yale
C. Harvard and Stanford
D. Princeton and Stanford

5. What company has the most Investments (>5% Stake) from list member alumni in the Top 4 Universities?
A. Microsoft
B. Google
C. Gap
D. Berkshire Hathaway

6. What University has the most co-alumni with Harvard University?
A. Columbia
B. Stanford
C. Yale
D. University of Pennsylvania

7. Which University has the most Self made list members in the Finance industry?
A. Harvard
B. Stanford
C. Princeton
D. Yale

8. Which University has the most Inherited and Growing list members in the Oil/Gas industry?
A. Harvard
B. Stanford
C. Princeton
D. Yale

9. What is the state residence for the most Top 4 University list members under the age of 60?
A. New York
B. California
C. Texas
D. Florida

10. What University has the most Self made list members with Wealth over $2 Billion under the age of 50?
A. Harvard
B. Stanford
C. Princeton
D. Yale

Answers:

1. B (Let’s start off easy…still nothing quite like a Harvard MBA - by a large margin)

2. A (Yale is probably less known for its graduate programs than its undergraduate program)

3. D (Don’t mess with Texas; for questions 1-3 considering George W. Bush would have been quite useful)

4. D. (Surprisingly, this is mainly because of Robert, John, & William Fisher (Gap) who all are all alumni of both Princeton and Stanford)

5. C. (See #4, but note that both Charles Schwab and Meg Whitman (eBay) are major investors in Gap - this may be because Gap was started in SF and they all reside in the Bay area)

6. D. (This was a tough one, U Penn had 3 co-alumni (Jamie Dinan, Charles Butt, and Joshua Harris) vs. 2 each for Columbia (Dirk Ziff & Robert Kraft), Stanford (Steve Ballmer & Penny Pritzger), and Yale (Wilbur Ross Jr. & Stephen Schwartzman))

7. A. (This should be of no surprise, given the propensity of Harvard MBAs on Wall Street).

8. D. (All four ties are from the Bass family; again, considering George W. Bush would have helped here)

9. B. (More young people/surfers in California…and the real estate is most expensive)

10. B. (An end of quiz tap in, Stanford by a 5-3 margin over Harvard - Google alone ties with Harvard (Sergey Brin, Larry Page, & Omid Kordestani))

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. 

Om Malik references a Wired.com post (Fred Vogelstein) on next week’s expected alliance between Google & Apple (cloud computing partnership).  This post reminds us of the extent of the board ties between Apple and Google:

Apple + Google People Relational Map. Notes: (1) Direct Board Ties of Eric Schmidt (Google CEO), Arthur Levinson (Genentech CEO), & Al Gore (Advisor on Google); (2) Indirect Board Ties between John Doerr (KPCB, Apple Board) & Bill Campbell (Intuit Past CEO, Google Board); and (3) Sequoia Capital invested in both companies (albeit Apple went public in 1980). (Source: LinkSV.com).

Thus it should not be a surprise that Apple and Google are teaming up on anything.  While they may have a mutual enemy in Microsoft (although Jobs recent appearance with Gates tempers this a bit), they actually have similar board leadership.  Behind the scenes, there may be more collaboration than we know.  For example, take the Google Maps integration on the upcoming iPhone.  For previous CapitalBLOG commentary on the Google/Apple connection check out Apple and Google - Network Clusters and Interlocks (9/16/06).

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.

Scribd + Geoffrey Yang Relational Map: Notes (1) Redpoint/Yang connection to BigBand Networks (recent IPO); (2) Yang’s board presence on Tivo and Ask.com (purchased by IAC in 2005 for $1.9B).  In general, Yang’s presence on the Scribd board provides an additional source of relational capital for the company.

While there was some speculation as to the reasons why eBay made this deal, the capital network shows some indirect ties between StumbleUpon and eBay.  This is noted in the below relational map of eBay (as investor and company) and StumbleUpon: 

Relational Map for eBay/StumbleUpon.  Notes: There are two capital paths between eBay and StumbleUpon: (1) eBay as an investor (orange oval): eBay as investor in Feedster –> Josh Kopelman (Board Advisor to Feedster) –> StumbleUpon (Kopelman as Board Member); (2) eBay as a company (green box): Benchmark Capital (eBay investor) ties to Ram Shriram (via Friendster), Mitch Kapor (via Linden Lab), & Ron Conway (via OpenTable & oDesk) as angel investors in StumbleUpon; and Bob Kagle (Benchmark) board interlock tie to Ram Shriram (via Friendster) as angel investor in StumbleUpon. (Source: LinkSV.com) 

Venture Beat posted a poll on the top 5 Silicon Valley VCs under 40, in reference to a San Jose Mercury article.  I figured it would be interesting to answer this question using their SV capital relations with one another.  For this post, I mapped together their relational networks with each other - this illustrates the common SV company ties of Roelof Botha, Kevin Efrusy, Peter Fenton, Danny Rimer, and Peter Thiel (LinkSViewer registered users can see each individual VC’s capital networks by clicking on each user in the map and then displaying their relational map from the information window).   First, I mapped their current and former company direct ties (as board/management team members & investors) by filtering out all other people and investors: 

Top 5 VCs Under 40 Relational Map (Investors & People Excluded).  Notes: (1) Peter Thiel is the only VC that is also listed as an individual investor (yellow oval); (2) Direct Ties: (a) Peter Thiel & Roelof Botha (PayPal former management team; Xoom current/former board interlock); (b) Peter Fenton & Kevin Efrusy (Hyperic & Terracotta board interlocks); (3) Of the 28 SV companies affiliated with the VCs, 10 were acquired and 18 are currently private; (4) 4 of Danny Rimer’s SV boards were acquired (MyCFO.com, Ofoto, Neoteris, & TellMe Networks). (Source: LinkSV.com)

While the above map illustrates how these top young VCs were directly related to one another, I next examined how they were indirectly related to one another.  For this, I examined their People Map and dropped pendants (one-tie links) to underscore relations:

People Relational Map for Botha, Efrusy, Fenton, Rimer, & Thiel (Former Ties & Inactive Companies included + Pendants dropped).  Notes: Indirect People Ties: (a) Thiel-Botha: Reid Hoffman (PayPal, Tagged, & LinkedIn); and Keith Rabois (Xoom & LinkedIn); (b) Thiel-Fenton: Josh Hannah (Friendster & Benchmark); Jim Breyer (Apexon & Facebook); (c) Fenton-Efrusy: Peter Levine (Mendocino & XenSource); (d) Efrusy-Rimer: Larry Augustin (Zend &  Hyperic/XenSource); (e) Rimer-Fenton: Larry Augustin (Zend & Hyperic); Kevin Harvey (TellMe & Terracotta); (f) Rimer-Thiel: Charles Moldow (TellMe & Powerset); John Doerr (TellMe & Friendster); and James Joaquin (Ofoto & Xoom); and (g) Rimer-Botha: Mark Andreessen (Zend & Meebo); and James Joaquin (Ofoto & Xoom); Multiple Other People Ties: (a) Rimer: Jim Clark (Neoteris & MyCFO); Jim Barksdale (Ofoto, MyCFO, & TellMe); (b) Thiel: Matt Cohler (Facebook & LinkedIn); and David Sze (Wink & Facebook); (c) Fenton: Li Ping (Reactivity & Mendocino).

Next, I decided to examine the investor relations for the Top Young VCs to see how they were related to VC firms.  I used the Person-Investor Map to illustrate cluster relations.  Users should look for groupings and key links (i.e., cliques & boundary spanners from a network perspective). 

Person-Investor Map for Botha, Efrusy, Fenton, Rimer, & Thiel (Former Ties, Inactive Companies included + Pendants Dropped).  Notes: (1) The most (thickest) ties are between Accel Partners & Efrusy/Fenton (no surprise here); (2) Benchmark Capital provides a key link between Rimer & Fenton/Efrusy; (3) Greylock Partners provides a key link between Thiel & Efrusy/Fenton (Accel); (4) Three main clusters form: (a) Thiel/Botha (PayPal cluster); (b) Efrusy/Fenton (Accel cluster); and (c) Rimer (Solo cluster). 

Summary, Network Analysis, & My Vote

The purpose of these maps is to show how the top young VCs are related to one another.  Several interesting tidbits can be gained from the network analysis of their Silicon Valley connections: 

From the first map, we noted the direct ties between Botha & Thiel (PayPal) & Efrusy & Fenton (former Accel).  Rimer was direct-tie isolated from the other four (perhaps in large part due to his living abroad), but had the highest acquisition rate for his outside-board SV companies.  Thiel is the only investor of the five and it is important to note that he has management team, board, and investment ties (not to mention his role as a Managing Partner at the Founders Fund).  From a network perspective, his diversity of ties increases the reachability of his network. 

The second map demonstrated key people linkages and is perhaps the most informative of the three.  Some examples: (1) the Netscape connection of Jim Barksdale and Marc Andreessen aligns with Rimer; (2) John Doerr (Sequoia) provides a link between Thiel & Rimer; (3) the LinkedIn connection of Reid Hoffmann and Keith Rabois aligns with Thiel (as an investor and board member) and Botha; (4) Jim Breyer (Accel) forms a tie to Peter Fenton and Peter Thiel; and (5) Larry Augustin (Azure Capital/VA Software) forms multiple ties to Kevin Efrusy.  While these ties mostly reflect current and former board memberships, it is interesting to note how more experienced VCs and managers can help foster the development of and/or share innovation experiences with younger VCs.  From a network perspective, such “cosmopolites”   (generally associated with innovation and early adoption in network diffusion studies) can be found near the center of the map (betweenness centrality) or via multiple-connection ties (degree centrality).

The third map locates the VC connections of the previous maps (note how this could also have been gleaned from the Investment Map), but also provides some key linkage and clustering information.  Three clusters classified as PayPal (Thiel & Botha), Accel (Efrusy & Fenton), & Solo (Rimer) differentiated the network based on boundary spanning links between Benchmark-Accel-Greylock.  The ties between Benchmark and Accel can be associated with Fenton (who moved to Benchmark from Accel in 2006) and Efrusy.  From a network perspective, the betweenness centrality of Accel is the highest in this network (this is to be expected).  But the Greylock link is significant because they have no direct affiliation with any of the five VCs - from a network perspective their alignment with Thiel ties a boundary-spanning VC firm to an individual liaison with multiple affiliations.  There were also other VC alliances internally connecting each cluster: Sequoia Capital (Botha & Thiel); Foundation & Focus Ventures (Fenton); and Kleiner Perkins & Barksdale Group (Rimer).   

From a network perspective, I would cast my vote for Peter Thiel (not that I’m a VC expert, and yes, I’m a network junkie).  I base this on his diverse ties (as a board/management team member & angel/VC experience), relative centrality in the preceding networks, and PayPal connections.  Pragmatically, I would couch this in the requisite success of his Web 2.0-ish companies, but they seem as up-and-comers.  And I certainly can see arguments for each of the other candidates (Botha: Sequoia as prolific & PayPal + YouTube ties); Fenton for his former tie to Accel as THE key VC firm in the last network and current tie to Benchmark as a linking VC firm; Efrusy for his current tie to Accel as THE key VC firm in the last network; and Rimer for his exit success and soloability as an outsider.  Hopefully, this post has yielded some insight into the top young VCs in the Valley.  I encourage readers to cast a vote on the Venture Beat post.  May you make your own informed choice, but pay heed to the networks!     

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.