2008 July 12 | money news blog

12 07 2008

Rosarito Beach Hotel Opens New Tower

Posted by: in Real Estate News

Filed under: Estates

I’ve seen a ton of condo-hotel projects in Cabo and even a few in Ensenada, now the next stop on the Baja Peninsula to get a facelift is the Rosarito Beach Hotel. The hotel has a long history. It started out as a 12-room hunting lodge in 1925 and played host to many celebrities including Frank Sinatra, Marilyn Monroe, Orson Wells, Rita Hayworth and John Wayne. Now the hotel will become a 500 room and suite resort with an official grand opening on August 2. They are offering a Sunday through Thursday special room rate of just $79.

New to the compound is the oceanfront 17-story, 271-suite Pacifico Tower. The new tower offers an infinity pool and a rooftop restaurant. The Pacifico Tower has fully furnished suites that are offered for sale and can be placed in the hotel rental program. One bedroom condos start at $190,000, two-bedroom condos start at $362,000 and two-story, three-bedroom penthouses start at $599,000.

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12 07 2008

Challenge gets $4.5 million to play games

Posted by: in Small Business

Filed under: Next huge thing, Small business

Andrew Busey has been a part of some key web technologies over the past 15 years, such as Mosaic (the first web browser) and iChat (one of the first IM apps). He also co-founded Pluck.

Yet, Busey’s passion is gaming. So, a couple years ago, he started a new company in the space: Challenge Games.

In fact, this week the firm raised $4.5 million from Sequoia Capital (keep in mind that the firm has invested in such break-out companies like Atari, Electronic Arts and nVidia). The venture capitalist on the deal, Roelof Botha, learned about the company while playing its popular title, Duels.

Basically, Challenge Games focuses on web-based short-form games, which can be played in three-to-ten minute increments. The goal is to create content that appeals to the casual gaming to the hardcore player.

To this end, it helps to partner with major brands. In fact, Challenge Games has struck a multi-year deal with Major League Baseball Advanced Media to launch a new game, Baseball Boss. This title involves a blend of baseball card collecting and fantasy sports activities. Monetization comes from buying and selling virtual goods.

Actually, with the capital infusion, Challenge plans to launch a new game each quarter, which is a smart strategy. Basically, it looks like casual gaming is getting traction. After all, Duels has snagged 250,000 loyal users in ten months.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Trulia lands $15 million

Posted by: in Small Business

Filed under: Next massive thing, Small business

I’ve been using Zillow for a while. The site allows you to check the value of your home - as well as other people’s homes. It’s a lot of fun and yes, kind of voyeuristic.

But, I recently learned about a similar site: Trulia. Actually, this week, the company raised $15 million in venture capital. The lead investor on the round was Deep Fork Capital. In all, Trulia has raised $33 million.

It’s definitely impressive - especially in light of the terrible real estate industry. Then again, Trulia is attempting to transform an industry - which, if successful, could result in a big payday.

Something else: Trulia has built a division for real estate professionals. That is, with the large amounts of data and traffic (about five million one-of-a-kind visitors per month), there are several opportunities for advertising revenues. Keep in mind that real estate brokers spend $11 billion per year on marketing.

So why raise the $15 million? Actually, Trulia put together a blog post on it:

“We know from our industry partners that they are transitioning their marketing efforts and services online, massive time. We’ve recently launched the Trulia Advertising Network and Trulia Pro and we plan to aggressively expand our advertising opportunities to give the real estate community hyper-targeted and cost effective ways to make the marketing transition on the web.

“Real estate agents are not just spending their dollars on the web, but increasingly they’re working to build their ‘online presence’–answering questions, blogging, participating on forums and building out their web sites. This is happening swiftly and it’s important that we move swiftly to meet the demand.”

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Entrepreneur’s Journal: When raising capital, beware of the ‘advance fee’ scheme

Posted by: in Small Business

Filed under: Small business

I recently talked to a business owner who was in the process of raising capital. To this end, she paid a $20,000 upfront fee to a finder (a person who brokers equity investments and loans).

The result? Nothing. The finder stated that a variety of banks were not interested in the deal.

Oh, and that $20,000 fee? Unfortunately, that was non-refundable.

With the credit crunch — and slowing economy — entrepreneurs are certainly having trouble raising money. But, there also appears to be a rise in so-called “advance fee schemes” (this is according to a current piece in the Wall Street Journal, which is a paid publication).

In fact, the FBI is investigating the matter (and also has some helpful resources on its website). Even though it could actually be pretty tough to prove fraud. Essentially, there must be evidence that the finder had no intention of raising the capital.

So, how can you protect yourself? Here are some tips:

Verify: Do a background check on the finder, such as by using an on the web service. Also, does the finder have a website? A real physical address - not a PO Box? Customer references?
Payment: A small upfront free is OK. However, you should really be paying for performance; that’s, a solid introduction to a financing source.
Contract: Sign one and have an attorney review it.
Be wary of language like “guaranteed”: In the world of finance - especially with small businesses - there are no guarantees. Simply put, raising capital is extremely tough. So, don’t get sucked into grandiose promises.

Then again, you must ask yourself: why do you need a finder anyway? After all, if your business is credit-worthy, why can’t you go directly to the bank? Hey, many business owners do this successfully, right?

Perhaps a better approach is to hire an expert to help fill out the loan documents and prepare a business plan. For such services, the fees can range from $1,000 to $10,000 or so (again, make sure you do a background check and don’t pay the full amount upfront).

Or, on the other hand, you can craft your own business plan. And the good news is that there are lots of books on the topic - such as Mike McKeever’s How to Write a Business Plan - as well as software, like Palo Alto’s Business Plan Pro.

12 07 2008

Parascale makes rain from the ‘cloud’

Posted by: in Small Business

Filed under: Google (GOOG), Amazon.com (AMZN), Small business

Over the past couple years, major players like Google (NASDAQ: GOOG) and Amazon.com (NASDAQ: AMZN) have invested in the so-called “cloud.” Basically, they’re leveraging their big infrastructures to provision services - like web hosting, storage and so on - to other companies. Actually, I know many startups that have such deals (helping to cut costs and get to market faster).

But what if you don’t want to outsource this? Well, there is an alternative: Parascale. The company sells cloud software that you can install on your own servers.

As an indication of its power, Parascale has raised $11.37 million in a Series A round. The investors include Charles River Ventures and Menlo Ventures (both firms have extensive backgrounds in the storage area).

Parascale got its begin four years ago. Interestingly enough, it hasn’t been an simple journey. The original team had to get second mortgages and lines of credit to support operations.

But now, it looks like the timing is right. “With the explosion of digital content,” said Sajai Krishnan, who is the CEO of Parascale CEO, “there is a need for more efficient storage systems.”

The Parascale Cloud Storage (PCS) is built on widely followed standards as well as Linux servers. This makes it easier for customers to adapt the technology to their needs (which is not an simple thing to do with Google and Amazon.com).

No doubt, the storage marketplace has gone through several major shifts over the past twenty years. So, with cloud storage, it looks like we might be seeing another shift - and Parascale will now have the resources to become a leader in the space.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Entrepreneur’s Journal: Virtualizing your business

Posted by: in Small Business

Filed under: Cisco Systems (CSCO), Small business

Darren Shafae operates Paper-Check.Com, which is a proofreading business. Without web-based technologies, his business would probably be far smaller.

“I have taken the best of ideas I have seen, and refined them to meet our needs and improve work flow and customer and employee satisfaction,” stated Shafae.

So, what kinds of applications does Shafae use to improve his business? Well, let’s take a look:

GotVMail: Basically, this is a virtual PBX system. In other words, there’s no need to manage hardware or pay for consultants. Instead, Shafae pays for the service on a subscription basis.

Some of the features include custom greetings, multiple extensions, music-on-hold, toll-free numbers, Dial-By-Name Directory and so on. According to Shafae: “GotVMail offers professional voice talent that gives the impression that there are thousands of operators standing by to address client needs and concerns.”

WebEx: This grants for remote presentations, including PowerPoint slides. The technology, which is now owned by Cisco (NASDAQ: CSCO), is fairly inexpensive for smaller businesses. No doubt, it’s quite useful for Shafae. He uses WebEx for things like customer demos, training and customer support.

Rackspace: This company provides premium managed web hosting services. Basically, as Shafae’s business started to grow, there was a need to allow for custom components - which is only possible in a dedicated server environment.

By using Rackspace, Shafae was able to save the potential costs of hiring an IT expert as well as purchasing high-priced hardware. “Rackspace has saved our business five to seven times this year already,” stated Shafae. “The company continually monitors our server and, if there is a problem, they let us know, after they fix the problem.”

Some advice: Of course, there are always perils when buying web- based applications. To help out, Shafae has some advice:

o. Read the fine print: What if the applications don’t perform according to specifications? Make sure you read the contract and you’ve a way to terminate things without causing much trouble.
o. Do some research: Before making a purchase decision, Shafae checks on the internet venues, such as blogs, message boards and even Twitter. “Most Twitter users are more than happy to give you their two cents,” he said.
o. Buying too much: Because of the low price points, it’s simple to buy too many web-based applications. In other words, focus only on those that’ll make a difference.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Mailbag: Conspiracy Theory…Gold Style

Posted by: in Small Business

Filed under: Commodities, Oil, Stocks to Buy, Small business

Minyanville’s Lance Lewis dares to share the kind of keen insight and actionable information you won’t find in any prospectus. Here he answers a reader’s burning question about gold miners stocks. For more original thought, visit www.minyanville.com or see some more thoughts on gold here.

Prof. Lewis,

Any thoughts on the theory being advanced by Jim Sinclair and James Puplava that naked shorts are responsible for beating down the junior gold stocks? Seems like the market is willing to give anyone more benefit of the doubt than Minefinders Corporation (NYSE: MFN) or similar new producers. Thanks in advance.

-Minyan Scott

MS,

Some people like to look for a conspiracy every time market prices don’t do what they “believe” they should. However, I don’t find that attitude very helpful or conducive to making money.

The juniors are cheap, and they “should” be acting superior than they’ve been given where gold is. I agree with that, as do most gold bulls. But is that because there’s a conspiracy of naked shorts that have decided to single out gold stocks in the one space (resources) that happens to be in a bull market equity-wise? That seems about as far-fetched as the theory that a conspiracy of “speculators” are to blame for the rise in oil and other commodity prices. (Again notice how the camp that believes oil’s rise is a conspiracy similarly don’t think it should be where it is and are forced to blame “conspiracy X” when oil doesn’t do what they think it should, namely: “go down”)

The gold shares (and the juniors in particular) have underperformed for a variety of reasons since last November. In my humble opinion, the most likely causes for this are (1) the illiquid conditions that existed in the stock market from November until March and (2) the sharp drop in the gold/oil ratio since March, which replaced illiquidity fears with fears of rising costs eating up gold mining margins.

The liquidity problem ended in March when the Fed began basically monetizing (depending on how you look at it) bad debt on the balance sheets of banks and primary dealers. However, the gold/oil ratio then began to collapse in March and provided a second headwind. That ratio “appears” to have bottomed a tiny over a week ago near the prior 2005 all-time low. If so, the shares (including the juniors) should be free to rally, assuming gold has another leg up to new highs like I expect. And it will have nothing to do with “running in naked shorts in juniors”, no matter how emotionally entertaining such an image might be.

-Prof. Lewis

Position in gold.

12 07 2008

HP imparts some marketing wisdom - for free

Posted by: in Small Business

Filed under: Hewlett-Packard (HPQ), Small business

Hewlett-Packard Co. (NYSE: HPQ) certainly has a major footprint in the small business space with such things as Computers, servers and, of course, printers.

But HP is expanding its offerings. For example, last year the company purchased Logoworks and is now putting out some useful eBooks.

One is called the 9 Steps to Outstanding Market Success.

No doubt, it is colorful with many useful checklists, tips, examples and worksheets. Some of the topics include: social media, branding, search engine marketing, on the web marketing and so on. Ultimately, it’s a good way to spark ideas to enhance your business.

Each month HP will release a new chapter (so far, it’s on chapter five). The last chapter will be on October 15.

All in all, its helpful information - and not too overwhelming. And you can check it out at the small biz section of HP.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Entrepreneur’s Journal: Bringing Google magic to your company

Posted by: in Small Business

Filed under: Management, Google (GOOG), Employees, Entrepreneurs, Small business

I recently read an excellent book, Gary Hamel’s The Future of Management. Essentially, he believes that corporate management approaches are antiquated. As a result, many companies are failing to innovate and grow.

But, Hamel has found a variety of companies that are building new management models. Of course, one is Google (NASDAQ: GOOG).

According to Hamel: “What makes Google unique is less its Web-centric business model, but rather its brink-of-chaos management model. Key components include a wafer-thin hierarchy, a dense network of lateral communication, a policy of giving outsized rewards to people who come up with outsized ideas, a team-focused approach to product development, and a corporate credo that challenges each employee to put the user first.”

That’s a lot, but it’s working quite well so far.

So how can your company get some Google magic?

Let’s take a look:

A great place to hang out: Do your employees really want to come to work? If not, there are some ways to improve the environment.

Take a look at GotVMail, which is a provider of voice mail services to small businesses. The company subsidizes lunch for employees. Not only is this a nice perk, but it keeps employees focused on their projects, provides convenience and, yes, means spending less on gas.

Another interesting case is Seventh Generation, which is the largest seller of green cleaning products. At Seventh Generation dogs are allowed at work, for example. Oh, and all employees get one massage every week.

Outsized Rewards: Several years ago, Google established its “Founders Awards” program. That’s, if a group of employees pull off an astonishing accomplishment, there is a chance to receive millions in stock rewards. No doubt, it’s led to some great innovations.

Actually, it’s probably a good idea to provide your key employees some level of stock options or grants. “My key programmer has lots of stock,” said Bobby Kalili, who is a serial entrepreneur/investor and operates Yellowpages.travel. “When we are working on a project, he often comes up with new features. This is something he probably wouldn’t do if he didn’t have an equity stake.”

Very special Titles: Metropark, which is hip retail chain, knows that its managers and store sales people need to have passion and motivation. To this end, they are actually called “Style Consultants.” There’s also an extensive training program to improve customer relationships (called “clienteling”). In addition, for the top “Style Consultants,” there are annual rewards, such as the Chairman’s Club, which involves a three-day offsite.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements.