The hits just keep on coming for Elevation Partners, the one-time digital media, private equity dream team that has reconfigured itself as an investor in late stage Web 2.0 treasures. Earlier this summer, Elevation requested an extension on investing its $1.9 billion fund, and TechCrunch has learned that that request was denied—a move that came as surprise to us and to Elevation, we hear.
So what does that mean? Clearly, LPs are sending a strong message that has to do with Elevation, but also has a lot to do with the broader market: They want to see some returns before they pony up more money. But the news isn’t nearly as bad as it sounds.
For one thing, we’re only talking about $100 million or so of the $1.9 billion fund. At most, this would have represented one more deal in the portfolio. What’s more Elevation can still call up that $100 million to invest in a follow-on round in existing portfolio companies, so it’s not like the fund size has necessarily been reduced to $1.8 billion. There is just a new restriction on how they can spend that last $100 million.
What does this mean for that Pandora deal? It doesn’t kill it, because Elevation signed an agreement to invest before the original five-year investment period elapsed. But that deal isn’t done and it’s unclear if there’s a snag or the deal is just taking some time. In our earlier story, Pandora confirmed that Elevation had expressed interest and sources close to Elevation say an agreement to invest was already signed.
Either way, the fund will hinge on Elevation’s investments in Yelp and Facebook. As we reported before, if you average together Elevation’s investment in Facebook it holds its shares at a valuation of $29 per share and Facebook has been trading as high as $70 a share on the secondary market. It’s hard to imagine a scenario where Elevation loses money on this, but the concern is when and how do they cash out?
Facebook founder and CEO Mark Zuckerberg has repeatedly telegraphed that he’s in no hurry to do an IPO, and his use of late stage and secondary deals has alleviated the pressure to do one. Typically companies go public because early employees want liquidity, the company wants a hoard of cash to grow or the company wants a stock currency to do acquisitions. Facebook has checked most of those off. Early shareholders can (and many have already) exit on the secondary market or through one-time deals like the one with DST. The company has raised a whopping $836 million in capital according to CrunchBase and is reported by some to be doing revenues in the $2 billion range. And, again, thanks to the secondary market, Facebook has an externally validated price, making it easier to do any stock transactions than it would have been for a private company ten years ago. On paper, Elevation’s investment in Facebook is soaring. But LPs are going to want to see more than paper if they’re going to invest in a second fund.
That brings us to Yelp. Yelp’s ascendancy is far less of a sure thing than Facebook’s, but Elevation owns a much bigger chunk of the company. It bought shares at a price that valued Yelp at $475 million, just shy of the price it reportedly turned down from Google. Few (rational) people think Yelp will be worth nothing. The question is: Does it wind up somewhere around the price of Slide or does it become one of the few $1 billion winners of the Web 2.0 era? For Elevation to make the kind of return it’s hoping for, Yelp needs to make sure upstarts like Groupon and FourSquare don’t steal its opportunities for micro-local monetization. Personally, I’m still bullish on Yelp’s odds, and the early results of its first San Francisco deal look promising. But a sure thing it is not.
Pandora could be the last deal Elevation does in this fund, or if Yelp goes south, it could be the last deal Elevation does ever. Even though the firm can call that last $100 million for a follow-on, odds are Elevation won’t. Facebook valuations are soaring out of control on the secondary market and the company already owns one of the largest stakes in Yelp. The Palm-batross is gone, and Forbes is what it is. It’s a near-certainty no more money is going towards saving Forbes, especially given Elevation’s re-tooled team and investment approach. The firm has learned the lesson about putting too much into one company the Palm-way.
The bets have been made and Elevation’s partners will have to wait for the roulette wheel to stop spinning, doing what they can in the mean time to help make their companies stronger. I talked to one small limited partner this week who said he personally wouldn’t invest in a second fund, and another who said he loved the new team, but worried the change in strategy just came too late.
Like Yelp, I think Elevation has a decent chance of pulling the second fund off. There is clearly a market for these mega, late-stage transactions, and there aren’t a ton of Valley teams who have experience doing them and few Wall Street teams that have the contacts here. But don’t expect them to hit the fundraising trail until Yelp and Facebook exits look more certain.
According to a new Experian Marketing Services report, transactional emails that include relevant and related products and services have 20% higher transaction rates than those without.
Blown away, aren’t you? Okay, probably not. It’s no big marketing secret that suggestive selling and cross-promotions work, so why doesn’t everybody do it?
Let’s go back to basics. A transactional email is one that a customer expects. Could be an order confirmation, a shipping notice or information on returns and exchanges. Experian analyzed more than 1,800 emails of this type that were sent through their CheetahMail system and found that more than 100% of the time (how is that possible?) these emails are opened by the recipient. You won’t find anywhere near that kind of open rate on bulk emails.
Once you’ve got customers opening the email, it’s time to convert them and this is where many companies fail. Experian says that’s a lot of money left on the table. Here are the numbers:
“Compared with standard bulk mailings, the average revenue per email is two to five times greater and can be up to six times greater than the all-industry average of $0.13. Experian CheetahMail’s analysis showed an average revenue per email for order confirmations of $0.75, while shipping confirmations and returns/exchanges pulled $0.53 and $0.80, respectively.”
Making the most of your transactional emails doesn’t have to mean promoting another product. Experian says that transactional emails that included links to social media sites had 55% higher click rates than emails with no click-through opportunities.
The only place that failed in the study was in the area of incentivizing future purchases. Oddly, emails without this kind of incentive did better than those that had them. Looking at my own behavior, I’d say this is because a “future purchase” email would either get filed away in my coupon folder or deleted if I had no intention of buying again.
The takeaway here is that companies must optimize every opportunity they have to engage with a customer. Emails need to branded to match the company website. Social media links should be prominent in all emails, especially transactional ones and ideally, personalized services and add-ons should be included in every order or shipping email.
This may sound like marketing 101, but I can’t tell you how many transactional emails I receive in a week that miss out on all of these points. On the other hand, there is one company I buy from that has a transactional email so memorable, I actually tell people about it and that’s CD Baby. Their order confirmation includes a wild story about how my CD has been taken off the shelf by a person wearing sterilized gloves, it was polished and inspected by 50 employees then everyone gathered around, lit a candle and watched in awe as it was packed, then they had a parade while delivering it to the post office where the entire town of Portland waved and said “Bon Voyage!” Silly, yes. But everyone who gets that confirmation remembers it and it effects their decision to buy from CD Baby again.
Lastly, don’t forget to say thank you to your customers when you confirm their order. It’s a simple thing but it makes a big difference.
Click here to get the full report free from Experian Marketing Services.
Social Media Monitoring in Just 60-Seconds. Guaranteed!
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The hits just keep on coming for Elevation Partners, the one-time digital media, private equity dream team that has reconfigured itself as an investor in late stage Web 2.0 treasures. Earlier this summer, Elevation requested an extension on investing its $1.9 billion fund, and TechCrunch has learned that that request was denied—a move that came as surprise to us and to Elevation, we hear.
So what does that mean? Clearly, LPs are sending a strong message that has to do with Elevation, but also has a lot to do with the broader market: They want to see some returns before they pony up more money. But the news isn’t nearly as bad as it sounds.
For one thing, we’re only talking about $100 million or so of the $1.9 billion fund. At most, this would have represented one more deal in the portfolio. What’s more Elevation can still call up that $100 million to invest in a follow-on round in existing portfolio companies, so it’s not like the fund size has necessarily been reduced to $1.8 billion. There is just a new restriction on how they can spend that last $100 million.
What does this mean for that Pandora deal? It doesn’t kill it, because Elevation signed an agreement to invest before the original five-year investment period elapsed. But that deal isn’t done and it’s unclear if there’s a snag or the deal is just taking some time. In our earlier story, Pandora confirmed that Elevation had expressed interest and sources close to Elevation say an agreement to invest was already signed.
Either way, the fund will hinge on Elevation’s investments in Yelp and Facebook. As we reported before, if you average together Elevation’s investment in Facebook it holds its shares at a valuation of $29 per share and Facebook has been trading as high as $70 a share on the secondary market. It’s hard to imagine a scenario where Elevation loses money on this, but the concern is when and how do they cash out?
Facebook founder and CEO Mark Zuckerberg has repeatedly telegraphed that he’s in no hurry to do an IPO, and his use of late stage and secondary deals has alleviated the pressure to do one. Typically companies go public because early employees want liquidity, the company wants a hoard of cash to grow or the company wants a stock currency to do acquisitions. Facebook has checked most of those off. Early shareholders can (and many have already) exit on the secondary market or through one-time deals like the one with DST. The company has raised a whopping $836 million in capital according to CrunchBase and is reported by some to be doing revenues in the $2 billion range. And, again, thanks to the secondary market, Facebook has an externally validated price, making it easier to do any stock transactions than it would have been for a private company ten years ago. On paper, Elevation’s investment in Facebook is soaring. But LPs are going to want to see more than paper if they’re going to invest in a second fund.
That brings us to Yelp. Yelp’s ascendancy is far less of a sure thing than Facebook’s, but Elevation owns a much bigger chunk of the company. It bought shares at a price that valued Yelp at $475 million, just shy of the price it reportedly turned down from Google. Few (rational) people think Yelp will be worth nothing. The question is: Does it wind up somewhere around the price of Slide or does it become one of the few $1 billion winners of the Web 2.0 era? For Elevation to make the kind of return it’s hoping for, Yelp needs to make sure upstarts like Groupon and FourSquare don’t steal its opportunities for micro-local monetization. Personally, I’m still bullish on Yelp’s odds, and the early results of its first San Francisco deal look promising. But a sure thing it is not.
Pandora could be the last deal Elevation does in this fund, or if Yelp goes south, it could be the last deal Elevation does ever. Even though the firm can call that last $100 million for a follow-on, odds are Elevation won’t. Facebook valuations are soaring out of control on the secondary market and the company already owns one of the largest stakes in Yelp. The Palm-batross is gone, and Forbes is what it is. It’s a near-certainty no more money is going towards saving Forbes, especially given Elevation’s re-tooled team and investment approach. The firm has learned the lesson about putting too much into one company the Palm-way.
The bets have been made and Elevation’s partners will have to wait for the roulette wheel to stop spinning, doing what they can in the mean time to help make their companies stronger. I talked to one small limited partner this week who said he personally wouldn’t invest in a second fund, and another who said he loved the new team, but worried the change in strategy just came too late.
Like Yelp, I think Elevation has a decent chance of pulling the second fund off. There is clearly a market for these mega, late-stage transactions, and there aren’t a ton of Valley teams who have experience doing them and few Wall Street teams that have the contacts here. But don’t expect them to hit the fundraising trail until Yelp and Facebook exits look more certain.
According to a new Experian Marketing Services report, transactional emails that include relevant and related products and services have 20% higher transaction rates than those without.
Blown away, aren’t you? Okay, probably not. It’s no big marketing secret that suggestive selling and cross-promotions work, so why doesn’t everybody do it?
Let’s go back to basics. A transactional email is one that a customer expects. Could be an order confirmation, a shipping notice or information on returns and exchanges. Experian analyzed more than 1,800 emails of this type that were sent through their CheetahMail system and found that more than 100% of the time (how is that possible?) these emails are opened by the recipient. You won’t find anywhere near that kind of open rate on bulk emails.
Once you’ve got customers opening the email, it’s time to convert them and this is where many companies fail. Experian says that’s a lot of money left on the table. Here are the numbers:
“Compared with standard bulk mailings, the average revenue per email is two to five times greater and can be up to six times greater than the all-industry average of $0.13. Experian CheetahMail’s analysis showed an average revenue per email for order confirmations of $0.75, while shipping confirmations and returns/exchanges pulled $0.53 and $0.80, respectively.”
Making the most of your transactional emails doesn’t have to mean promoting another product. Experian says that transactional emails that included links to social media sites had 55% higher click rates than emails with no click-through opportunities.
The only place that failed in the study was in the area of incentivizing future purchases. Oddly, emails without this kind of incentive did better than those that had them. Looking at my own behavior, I’d say this is because a “future purchase” email would either get filed away in my coupon folder or deleted if I had no intention of buying again.
The takeaway here is that companies must optimize every opportunity they have to engage with a customer. Emails need to branded to match the company website. Social media links should be prominent in all emails, especially transactional ones and ideally, personalized services and add-ons should be included in every order or shipping email.
This may sound like marketing 101, but I can’t tell you how many transactional emails I receive in a week that miss out on all of these points. On the other hand, there is one company I buy from that has a transactional email so memorable, I actually tell people about it and that’s CD Baby. Their order confirmation includes a wild story about how my CD has been taken off the shelf by a person wearing sterilized gloves, it was polished and inspected by 50 employees then everyone gathered around, lit a candle and watched in awe as it was packed, then they had a parade while delivering it to the post office where the entire town of Portland waved and said “Bon Voyage!” Silly, yes. But everyone who gets that confirmation remembers it and it effects their decision to buy from CD Baby again.
Lastly, don’t forget to say thank you to your customers when you confirm their order. It’s a simple thing but it makes a big difference.
Click here to get the full report free from Experian Marketing Services.
Social Media Monitoring in Just 60-Seconds. Guaranteed!
robert shumake
Facebook claims 200 million gamers <b>News</b> - Page 1 | Eurogamer.net
Read our news of Facebook claims 200 million gamers.
Google <b>News</b> Now Eight Years Old
google-news-screenshot-old Google today announced on the official Google blog the eighth birthday of Google News. It's a huge milestone for the California-based search company, which launched the Google News service on the 22nd of ...
Google reports 19 acquisitions in 2010 - and more planned | <b>News</b>
Google has confirmed 19 acquisitions since the start of this year, making 2010 its biggest ever in terms of buy-outs. 28...
robert shumake
Facebook claims 200 million gamers <b>News</b> - Page 1 | Eurogamer.net
Read our news of Facebook claims 200 million gamers.
Google <b>News</b> Now Eight Years Old
google-news-screenshot-old Google today announced on the official Google blog the eighth birthday of Google News. It's a huge milestone for the California-based search company, which launched the Google News service on the 22nd of ...
Google reports 19 acquisitions in 2010 - and more planned | <b>News</b>
Google has confirmed 19 acquisitions since the start of this year, making 2010 its biggest ever in terms of buy-outs. 28...
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