AGSM alumni reveal their strategy in the sale of an Internet start-up during the peak of last year’ s tech stock volatility. by Cameron Tomes *
COVER STORY
AGSM alumni reveal their strategy in the sale of an Internet start-up during the peak of last year’ s tech stock volatility. by Cameron Tomes *
The anatomy of a dot com deal
Just another dot com they said. Pretty hot technology, world’ s at their feet. But, like most Internet start-ups in today’ s volatile economic climate, it takes more than just flash technology and the interest of venture capitalists to turn expansionist dreams into reality.
Through no fault of their own these technologists lack arguably the two most important ingredients needed to grow any business venture: commercial expertise and marketing muscle. Without these, no start-up could hope to cut the mustard in the global marketplace.
Enter Australian Internet start-up: Active Concepts. The brainchild of software engineer and now its CEO, Darren Williams, Active Concepts develops Web site traffic analysis and competitive profiling software tools. Its key product is Funnel Web, an Internet application that provides Web site traffic and online consumer behaviour analysis.
Active was last year acquired by a NASDAQ-listed US software vendor with a market capitalisation of $ A10 billion. The multimillion-dollar price that Quest Software paid for Active was negotiated by two AGSM alumni who successfully brokered the deal amid last year’ s stock market‘ correction’.
Michael Bowles( EMBA’ 98) tossed in a lucrative 10-year career as an executive at Lend Lease to accept an approach by Campbell Olsen, an investment manager at Active’ s venture capital backer Jafco Investments( formally Nomura Jafco Investments) to join Active as its COO. Shortly after, Cameron McLean( ADP’ 98) and now director of business development at Com Tech Central, joined as nonexecutive director.
What they first encountered was a startup with great technology, but with little marketing or commercial acumen to take it forward. Jafco had just given the green light to a multimillion-dollar investment packet with growth criteria strings attached.
Jafco had already identified a lack of commercial sales and marketing expertise typical in start-up companies. When Bowles arrived he found that the company was spending hundreds of thousands of dollars on US consultants without really knowing what it wanted the consultants to achieve.“ There was little experience in appointing or managing consultants, and Active first
PHOTOGRAPHY: KAREN MORK
8 | AGSM ISSUE1 • 2001