By: Admin

Salt Lake City, UT—April 23, 2014—Utah venture firm 42 Ventures, founded in 2006 by successful tech entrepreneur Ned Stringham, has pioneered a new formula for venture investing. It’s almost the opposite of traditional Silicon Valley firms.  Rather than pursuing bets in multi-billion dollar markets with the idea of hitting a home-run 1 in 10 to 20 times, 42v concentrates on narrower, industry-specific markets where the upside is lower, but the potential to dominate that market means less risk and more winners, albeit singles and doubles.

Rather than investing other people’s money, which creates incentives that are often in conflict with the entrepreneur (think management fees, raising the next fund, exit timing), Stringham invests primarily his own capital.  He makes his money the same way the entrepreneur does and that creates better alignment and a more productive relationship.  And finally, Stringham and his team are all entrepreneurs in their own right.  They have plenty of deal experience like traditional VC’s, but their real impact comes from actively using their background, relationships and even the technology they already own to help their companies make smarter decisions and move faster.

42v invests up to $1.5 million per deal but may start with as little as $100k.  The companies they work with have to use their capital wisely.  The premise: Capital constraints lead to more focused and faster moving companies.  Until a business has clearly found the sweet spot for customer demand, funding needs to be sufficient to drive rapid innovation only.  Once the product and value proposition is validated, funding for building the support teams, sales force and broad infrastructure is a no-brainer.

While Stringham’s formula is delivering very attractive returns, the proposition isn’t right for everyone. “42v is not a fit for companies that simply need capital.  When entrepreneurs are looking for a partner that can help make the business grow and they really value what we bring beyond the capital, that’s when the model makes sense,” said Stringham.

Ned Stringham started 42 Ventures after successfully selling SBI Group, a digital marketing and technology consulting firm that he co-founded in 1998 and grew to nearly 1,000 employees with 13 offices across the U.S. and Europe. He guided SBI through the dot-com bust, acquiring several well-known public firms including Lante, MarchFirst, Scient, and Razorfish. SBI was acquired by Aquantive where Stringham joined the board.

For more information, please visit www.42ventures.com.


February Venture Capital Deals

By: Admin

February saw many new funding deals for cloud, tech, mobile, SaaS and social media. Here’s the summary of new deals for February. More

What is Venture Capital? Making Sense of the Funding Process

By: Admin

We regularly get questions from entrepreneur’s seeking funding about the process, stages and jargon they read and hear in the market. Here is a quick table that will help explain “what is venture capital” and how the funding process works. Hope it’s helpful! More

Best State for Business…Utah?

By: Admin

If you polled 100 residents of Utah as to why they live in this state, less than 5 would say because it’s the best place in the country to start a business or build a career. San Francisco, New York, Chicago and maybe Dallas or LA are the more likely answers for that. Despite this dated perception,located in Salt Lake City has surpassed MIT as the most prolific creator of new businesses to become the top University in the country in this category. Even more recently, Forbes rated Utah as the number one state in the country for business after examining factors like business costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.
Then, just in the last few weeks the State of Utah revealed that it anticipates a $400 million budget surplus, yes surplus. Despite the sometimes crazy things that come out of the Utah legislature, they must be congratulated on keeping Utah’s fiscal house in order. California has some lessons to learn from Utah. More

Kickanotch Fueled for Mobile

By: Admin

Today 42 Ventures announced the addition of it’s newest portfolio company, Kickanotch Mobile, a Kansas City upstart that provides a mobile software platform for broadcasters and publishers to reach and extend their audience through native mobile apps that provide new ways to engage and delight. Download and usage rates of the applications are soaring and Kickanotch’s easy to use analytics dashboard and control panel, make it simple to understand and target users with tailored features, promotions, advertising and offers. The company is led by a young, high-energy executive, Andy Lynn who’s passion for mobile has driven the business into the forefront of its target market in just over 1 year. It should be exciting to follow this dynamic enterprise over the coming months and years.

Turning an Offer on It’s Head

By: Ned Stringham

A very clever deal guy taught me a simple mental trick when evaluating an offer to sell part or all of your company. He told me, “if you say no to this offer to sell, it’s the same as you buying the business for that price.” The price you turn down is the price you effectively ‘paid.’ It is now your new baseline. You now have to create value above and beyond that baseline. Can you still grow the value of your business at a rate and to a size above that level which justifies saying no to the offer? More