Rustic Canyon in the News
SoCalTech.com News with Benjamin Kuo
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Network World
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10/30/2006
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My interview this morning is with Tom Unterman, Managing Partner of Rustic Canyon Ventures (www.rusticcanyon.com). Tom's on the board of Loopnet, a commercial real estate listing service which recently had a successful IPO on the Nasdaq. I caught up with Tom to hear about some of the thoughts behind the IPO, Rustic Canyon's current focus, and some recent investments.
Ben Kuo: Congrats on the recent exit. It looks like the markets are back, what's your opinion on the prospects for an IPO as a exit strategy for your other companies?
Tom Unterman: An IPO is a viable but difficult exit process, no question about it. The markets now are choppy and you have to build a very stable company to just be able to get out. Loopnet is a great example. The company started in 1998, and shows the trend in the market. We invested in PropertyFirst down here, and became a shareholder in Loopnet after PropertyFirst and Loopnet merged in the 2001 and 2002 timeframe. It's operated as one company since. The company became profitable in 2003, and has had three years of profitability. The profits have grown very strongly. I think you need that kind of profile now to be able to have a big enough market cap to be interesting to the IPO market.
BK: What were some of the thoughts behind the decision to go for an IPO?
Was this driven mostly by liquidity or other reasons?
TU: One of the great things about Loopnet, is that the company is very deliberative. A year or two ago, we started to look at an IPO for this year, assuming that operations stayed on track. There were also a large number of individuals who had invested in LoopNet or PropertyFirst looking for liquidity, and this was a way to provide it to them.
Ben Kuo: Congrats on the recent exit. It looks like the markets are back, what's your opinion on the prospects for an IPO as a exit strategy for your other companies?
Tom Unterman: An IPO is a viable but difficult exit process, no question about it. The markets now are choppy and you have to build a very stable company to just be able to get out. Loopnet is a great example. The company started in 1998, and shows the trend in the market. We invested in PropertyFirst down here, and became a shareholder in Loopnet after PropertyFirst and Loopnet merged in the 2001 and 2002 timeframe. It's operated as one company since. The company became profitable in 2003, and has had three years of profitability. The profits have grown very strongly. I think you need that kind of profile now to be able to have a big enough market cap to be interesting to the IPO market.
BK: What were some of the thoughts behind the decision to go for an IPO?
Was this driven mostly by liquidity or other reasons?
TU: One of the great things about Loopnet, is that the company is very deliberative. A year or two ago, we started to look at an IPO for this year, assuming that operations stayed on track. There were also a large number of individuals who had invested in LoopNet or PropertyFirst looking for liquidity, and this was a way to provide it to them.