By the time this latest After Nines Inc. blog goes live (daily, 9:01 a.m. ET), I'll be seated in a Shark Tank of sorts -- listening to a range of entrepreneurs pitch their businesses to angel investors in New York City. But before I dive into that conversation, here are five tech distractions, rumors and gossip to start your day (or pull you from work) for Sept. 18, 2014.
5. Oracle Cloud Revenues: Oracle (ORCL) investors are eager to know how much revenue Larry Ellison's cloud strategy is generating. We'll get our latest clues later today when Oracle announces its latest quarterly results. In addition to hearing about (A) new software license revenue, (B) engineered systems revenue and (C) overall cloud revenue, I hope Ellison and his lieutenants cover the company's service provider licensing revenues.
My reasoning: Even if Oracle's cloud loses business to rivals like Amazon Web Services and Microsoft Azure, there's a chance Oracle could still profit since its software is increasingly available in third-party clouds. Oracle, please tell me more. And leak a little news ahead of the massive Oracle OpenWorld 2014 conference (Sept. 28-Oct. 2) in San Francisco.
4. Small IT Business IPOs: In a blog earlier this week, I mentioned that investors who participate in smaller business IPOs (under $1 billion in annual revenues) could run into trouble over the long haul. But that doesn't mean I dislike smaller initial public offerings. In fact, I'm aware of at least three sub-$1 billion software and cloud companies that are getting their story in order for a potential IPO run...
3. OpenStack Companies Are Buyout Targets: Cisco Systems' (CSCO) buyout of MetaCloud could help the networking company to more effectively connect third-party clouds together -- using OpenStack, the open source cloud platform. I like the deal. A lot. Don't forget, Red Hat (RHT) acquired OpenStack pioneer eNovance back in July. And Rackspace (RAX), the first poster child for OpenStack -- has been shopping itself in recent months, though no buyer emerged.
What other OpenStack companies are up and coming... and potentially attracting attention from investors or buyers? Keep your eyes on BlueBox and Mirantis. Both are generating positive buzz in the market.
2. My Location Thursday: As I mentioned, I'm hanging out at an angel investor meeting today (Thursday) in Manhattan. It's hosted by Golden Seeds, the leading angel firm for women-led startups. While I can't describe specific companies that attend the meetings, I can share the following few observations from recent gatherings I've attended:
- Financials: You'd be surprised to learn that many entrepreneurs can't describe their current monthly revenues, quarterly bookings, EBITDA, profit margins, etc. The basic dollars and cents stuff often falls through the cracks.
- Truly All-in?: A few (but not many) of the entrepreneurs hold multiple jobs... one to pay the bills and the other (non-paying) at their startup. That always makes me nervous. Entrepreneurs who want funding have to be all-in.
- Annual Salary: Generally speaking, the C-level entrepreneurs I hear from pay themselves about $80,000 to $100,000 annually -- far below market value in New York and San Francisco -- during the first few years of business. And that assumes the start-up has revenues. I've seen some angel investment deals die because, in rare cases, the entrepreneurs had larger salaries ($150,000 to $250,000 annually) that would potentially consume too much of the angel investment.
- A Meeting Isn't A Contract: Lots of entrepreneurs mention flashy names when seeking funding. (Examples: "We're meeting with Google Ventures" or "Marc Andreessen has our app on his tablet.") That's wonderful. But there's a difference between meetings, endorsements... and paying customers.
- Why I Attend: I rather enjoy the angel investor conversations. To be clear, I've yet to open my own wallet. And I suspect my net worth ranks among the lowest in the room. But it's still fun to have a seat at the table.
1. On the Road Next Week: If you want to potentially catch up with me, I'll be on the road next week (Oct. 22-26, 2014) in Orlando, Fla., working remote at After Nines South. Yes, I'll have time for meetings. Feel free to email me (joe@AfterNines.com). You can also catch my business partner Amy Katz (amy@AfterNines.com) up in Boston, Mass.
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That's all for now. Thanks for stopping by. And remember: We publish our blog each business day at 9:01 a.m. ET.