San Francisco, 7th October 2008 – Recommind, a leading provider of search, email management and eDiscovery systems for enterprises announced today that it has secured the first institutional funding in the company’s history. Global growth equity firm Kennet Partners led the financing of the business.

Recommind’s solutions enable Fortune 500 enterprises and professional services firms to organize, access and analyze data and expertise across the organization to maximize the value of enterprise information while efficiently mitigating the risks associated with litigation, regulatory compliance and investigations. In particular, Recommind’s eDiscovery platform dramatically improves the accuracy, consistency and speed of document review during litigation and investigations.

In the past year, the company has also launched its email management tool, DecisivTM Email, which automatically tags, files and deduplicates all email-borne information to help firms better meet their records management and litigation preparedness needs.

Recommind has experienced sustained and rapid growth across all product lines and geographies. The company plans to use the new capital to accelerate global sales growth and to acquire additional product and market breadth through acquisition.

“At Kennet Partners, we focus on well run, capital efficient companies with strong franchises that have shown a consistent track record of sustained revenue growth. Recommind is directly in our sweet spot and we are pleased to be the first institutional investors in the company,” said Eric Filipek, Principal at Kennet Partners. “Recommind is following a similar path taken by some of the most successful technology companies to date by becoming a key supplier of strategically critical technology to a rapidly expanding vertical industry. The skill sets required to build and maintain an extremely loyal customer base in legal technology positions the business perfectly to deliver best-of-breed solutions to the broader and rapidly changing document management market. We are excited to be a part of what is a tremendous success story that continues to gain momentum, even in turbulent times such as these.”

“We are very proud of Recommind’s track record of strong, organic growth and profitability. Our high-growth rate is a testament to the dedication, focus and capabilities of our employees – not to mention the strong support of our customers. With the tremendous demand we have experienced, which has only accelerated with the recent financial market crisis, access to significant capital will be a key ingredient of our ability to fulfill demand going forward,” said Robert Tennant, CEO, Recommind. “With a successful track record of investing in well-established, strategically positioned companies experiencing significant growth, Kennet Partners is an ideal partner that shares our vision of making Recommind the leading provider of information risk management solutions to enterprises.”

As part of the investment, Eric Filipek from Kennet Partners will join the board of Recommind.

About Kennet Partners

Kennet Partners is a leading international private equity firm that invests in growth companies in Europe and North America. Kennet invests in the technology and technology-enabled business services sectors, offering expansion capital to businesses that want to accelerate growth and build exceptional shareholder value in partnership with an experienced investor.
Kennet Partners has over $600 million under management and acts as an advisor to Kennet II and Kennet III.

Kennet Partners Limited is authorized and regulated by the Financial Services Authority. For more information: www.kennet.com

About Recommind

Recommind’s enterprise search and categorization platform automatically organizes, manages, and distributes large volumes of information from multiple sources. With faster access to the right information, organizations can save time, enhance the quality of work product, increase the value of information assets, and improve competitiveness and profits. Recommind customers include Bertelsmann, BMW, DLA Piper, Novartis, Lewis Silkin, Shearman & Sterling and Simmons & Simmons. Recommind is headquartered in San Francisco and has offices in New York, Boston, Chicago, Atlanta, Washington DC, London, and Bonn, Germany.

For more information, email info@recommind.com, or go to www.recommind.com.

ALISO VIEJO, Calif., Sept. 12, 2008 – Quest Software, Inc. (Nasdaq: QSFT) today announced that it has acquired NetPro Computing, Inc. in a cash transaction valued at approximately $78.7 million. The acquisition of NetPro, a leading provider of Microsoft infrastructure optimization solutions, allows Quest to further extend its product portfolio to deliver a comprehensive set of products to manage complex Microsoft infrastructures. The combined product offering is expected to provide robust solutions to better migrate, manage and secure Microsoft Active Directory, Exchange, SharePoint and SQL Server environments.

“The Windows infrastructure is mission critical for almost every organization today,” said Vinny Smith, chairman and CEO, Quest Software. “Companies want products that help them get more performance and productivity from their Windows infrastructure. Our acquisition of NetPro, with its award-winning products and talented Microsoft experts, will allow us to deliver solutions our customers need to feel confident in the reliability, availability and security of their Microsoft systems.”

Executive leadership teams from both companies have collaborated on a preliminary plan for the strategic integration of the two companies’ products and employees. Key members of NetPro’s management team will remain with Quest as the two companies work to consolidate operations.

A phased integration plan to consolidate the two companies’ Microsoft development, sales, marketing and services organizations to best serve Quest and NetPro customers is being implemented. Products from both companies will continue to be developed, marketed, supported and sold while technology roadmaps and product integration points are further defined. It is expected that the technology roadmap will be disclosed on or around October 15, 2008.

“NetPro is excited to be joining Quest Software,” said Kevin Hickey, CEO of NetPro. “Quest and NetPro share the common goal of helping customers solve complex problems for better Identity Management, as well as Active Directory, Exchange, SharePoint, and SQL Server management, compliance and security. In addition, we look forward to leveraging NetPro’s Gil Kirkpatrick, and other experts from NetPro and Quest, to expand the technology scope and topics of next year’s The Experts Conference, historically produced by NetPro.”

About Quest Software, Inc.

Quest Software, Inc., a leading enterprise systems management vendor, delivers innovative products that help organizations get more performance and productivity from their applications, databases, Windows infrastructure and virtual environments. Through a deep expertise in IT operations and a continued focus on what works best, Quest helps more than 90,000 customers worldwide meet higher expectations for enterprise IT. Quest provides customers with client management as well as server and desktop virtualization solutions through its subsidiaries, ScriptLogic and Vizioncore. Quest Software can be found in offices around the globe and at www.quest.com

Forward Looking Statements

This press release includes predictions, estimates and other information relating to our acquisition of NetPro Computing, Inc. that might be considered forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ from those anticipated as a result of various factors, including: risks that the transaction or related integration activity may disrupt current plans, projects and operations; and our ability to recognize the benefits of the acquisition. Other risks and uncertainties that may affect forward-looking statements include: introducing quality products on a timely basis that satisfy customer requirements and achieve market acceptance; lengthy and variable sales cycles create difficulty in forecasting the timing of revenue; risks associated with significant foreign operations, including fluctuations in foreign currency exchange rates; uncertainties relating to ongoing litigation and government investigations arising from our stock option investigation; competitive conditions in our various product areas; risks that our intellectual property rights may not be adequate to protect our business or that others may claim that we infringe upon their intellectual property rights; risks associated with the ability to retain existing personnel and recruit and retain qualified personnel; reductions or delays in information technology spending; changes in the demand for our products and services; inability to maintain or expand relationships with channel partners, value added resellers and systems integrators; difficulty of improving our infrastructure in order to be able to continue to grow; other risks inherent in software businesses; and other risks described from time to time in Quest’s filings with the SEC. For a discussion of these and other related risks, please refer to our recent SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2007, which are available on the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. We undertake no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

Relying solely on real customer revenues to build a business was not the most common approach in the late nineties, but James Quist saw it as the best way to retain flexibility and grasp the opportunity at hand.

In the series of discussions with entrepreneurs whose capital-efficient businesses are recognized “return leaders,” Kennet Partners Managing Director Javier Rojas sat down with James Quist, founder of MedeFinance, to discuss why bootstrapping the company was so successful, and what advice he has for company founders today.

The acquisition enables FRSGlobal to introduce the first combined risk and regulatory reporting solution for financial services – addressing the need to create a single, reliable data framework to best manage risk and meet increasing global regulatory demands.

The deal is supported by Kennet Partners and The Carlyle Group, the private equity investors in FRSGlobal, and is subject to EU approval. Upon completion, FRSGlobal will become the largest independent software and services supplier providing multi-country risk and regulatory reporting solutions.

David Carratt, Managing Director, Kennet Partners, said:

“FRSGlobal’s acquisition of IRIS creates a powerful platform for the integration of risk measurement, economic performance metrics and regulatory reporting. Kennet is committed to supporting FRSGlobal with our expertise in development of international market opportunities by acquisition as well as through organic growth. Kennet and Carlyle will contribute additional equity financing to enable FRSGlobal to complete this transaction.”

Steve Husk, CEO, FRSGlobal, commented:

“Risk and regulatory solutions have always been vital to the smooth operation of the financial industry and their true value is being highlighted in today’s tough economic climate. Risk and regulatory software have traditionally developed separately – we see this as the ideal time to pursue a strategic acquisition and bring the two together.”

The heightened urgency of Basel II implementation, following the subprime crisis, stresses that risk information presented to regulators, senior management and to the markets must be consistent. FRSGlobal’s acquisition of IRIS means that the market will be able to benefit from an integrated solution on a single platform.

IRIS is a privately-held, self-funded Swiss company, founded in 1992 by Dr. Jurg Winter and Dr Willi Brammertz. IRIS’ investment in research and development remains amongst the highest of its peers, with over half of employees working in R&D.

IRIS’ riskpro™ is a worldwide leading solution for financial analysis – used by more than 230 financial institutions in over 20 countries – and covers all functionalities related to risk, ALM, IFRS, capital requirements and capital planning within a single integrated solution.

Dr. Jurg B Winter, CEO and founder, IRIS, added:

“We welcome the acquisition by FRSGlobal and expect clients to benefit from a powerful combination of market-leading technologies, enabling them to take full advantage of this integrated solution. It is very much a natural fit for our business, significantly increasing the global reach of our solutions, and we look forward to working with FRSGlobal.”

About Kennet Partners

Kennet Partners is a leading international private equity firm that invests in growth companies providing information technology products and business services that leverage technology. Kennet offers expansion capital to businesses that want to accelerate growth and build exceptional shareholder value in partnership with an experienced investor. Kennet Partners acts as an advisor to Kennet I, a Jersey-based fund and to Kennet II and Kennet III, both Guernsey-based funds. Kennet Partners is authorized and regulated by the Financial Services Authority. For more information: www.kennet.com

About FRSGlobal

FRSGlobal is the only provider of global risk and regulatory compliance reporting solutions with coverage for 30+ countries. The firm is dedicated to risk and regulatory reporting and supplies over 1500 financial organisations worldwide with an independent and cost-effective multi-country regulatory reporting platform. Subscribing clients benefit from the FRSGlobal Guarantee – “to keep the reports up-to-date with regulators’ requirements”.

FRSGlobal is headquartered in Brussels and has 19 other offices in North America (Boston, New York and Toronto), Europe (Amsterdam, Brussels, Dublin, Lisbon, London, Luxembourg, Madrid, Paris, Zurich, Lausanne, Warsaw and Cluj-Napoca (Romania)), Dubai and Asia Pacific and Japan (Hong Kong, Pune and Singapore).

About IRIS

Information about IRIS is available at www.irisunified.com

For further information please contact:
Su Johnston
Kennet Partners
+44 (0) 20 7839 8020
sjohnston@kennet.com

Rebecca Bond
FRSGlobal
+44 (0) 20 7539 6548
rebecca.bond@frsglobal.com

Theresa Maloney
Accelent Marketing for Kennet US
+1 (925) 287-1509
theresa@accelentmarketing.com

Kennet, with offices in London and Silicon Valley, invests in technology segments including software, IT services, semiconductors, and new media.

Kennet III will continue the current strategy of investing in later-stage technology businesses in Europe and the US. The emphasis has long been on growth equity financings and recapitalizations of businesses which are founder-managed and have been developed without significant external capital.

Kennet invests in the US and Europe from a single fund, providing its portfolio companies with unparalleled support as they expand across borders.

“High-growth European technology companies often need to succeed in the US to become global market leaders. Our fund structure and US team can be a significant competitive advantage for our portfolio companies,” said Michael Elias, Kennet Managing Director.

The Kennet investment portfolio has included some of the most successful growth companies and some of the highest-value private company exits in the technology industry. These have included Paragon Software (acquired by Openwave), Altitun (acquired by ADC for approximately $1 billion), Cramer Systems (acquired by Amdocs), Chipidea (acquired by MIPS), Consul (acquired by IBM), and Adviva Media (acquired by Specific Media).

Two investments from the Kennet III fund have already been announced. The first was a €7 million financing of Telemedicine Clinic, the market leader in the provision of sub-specialized teleradiology services to public and private healthcare providers across Europe.

The second, announced in June, was a €22 million recapitalization and investment led by Kennet into NTRglobal, a leading provider of on-demand systems management software. These companies join Kennet’s extensive portfolio of businesses with recurring revenue models in a range of high-growth vertical markets.

“Kennet’s growth equity strategy is well-timed for the US market, where bootstrapped, founder-led businesses are underserved, since the majority of investment capital is targeted at early-stage venture deals or large buyouts,” adds Javier Rojas, Kennet Managing Director, Silicon Valley.

“We are delighted to support Kennet Partners in their third and largest fund to date.” said Mark Regal, a Director in Credit Suisse’s Customized Fund Investment Group. “Kennet’s focus on growth equity in both Europe and US resonates well with Credit Suisse and we believe that this focus on later- stage, capital-efficient businesses is particularly interesting in the current market environment.”

“We are delighted to be working with the quality of investors that have joined us in Kennet III. Technology growth equity was virtually unheard of in Europe when we started, and the support we have received from investors is a result of the recognition of the potential of this asset class,” said Michael Elias.

Investors in Kennet III include Access Capital Partners, Adveq, Alpha Associates, BNP Paribas Private Equity, Capital Dynamics, Crédit Agricole Asset Management Capital Investors, Credit Suisse, European Investment Fund, Finama, LGT Capital Partners and Siemens.

About Kennet Partners

Kennet Partners is a leading international private equity firm that invests in growth companies providing information technology products and business services that leverage technology. Kennet offers expansion capital to businesses that want to accelerate growth and build exceptional shareholder value in partnership with an experienced investor. Kennet Partners acts as an advisor to Kennet I, a Jersey-based fund and to Kennet II and Kennet III, both Guernsey-based funds. Kennet Partners is authorized and regulated by the Financial Services Authority. For more information: www.kennet.com

Barcelona (Spain), June 19th, 2008.- NTRglobal, Europe’s largest pure-play vendor of software-as-a-service (SaaS) solutions to enterprise, today announced a €22 million investment round led by Kennet Partners, joined by Atlas Venture and existing investors Debaeque and Elaia Partners.

NTRglobal will use the new funding to fuel sales growth among the Global 2000 and small and midsized businesses (SME) in Europe, North America, the UK, Japan and China, as well as to accelerate the roll-out of a new generation of SaaS IT automation solutions to be launched later this year.

NTRglobal provides enterprise-grade, on-demand solutions for remote support, IT collaboration and IT administration. Enterprises of all sizes use NTRglobal to support employees, customers and partners over the Internet. This allows businesses to reduce IT maintenance costs significantly, and enables service providers to extend their reach and improve customer service.

According to market research firm IDC, clientless remote support software and remote access solutions are among the fastest-growing segments of the infrastructure software market, with CAGRs of 20% and 34% respectively.

Accelerating growth drivers in this market include the increased mobilisation of workforces, the growing popularity of outsourcing IT functions, the proliferation of devices that require remote support and security, and the desire by corporations to reduce their energy consumption and carbon footprint.

“This investment is important to NTRglobal, not only as a vote of confidence in the way we do business, but because the additional capital solidifies our ability to serve corporate and institutional clients around the world,” said Luis Font, CEO and co-founder of NTRglobal.

“We are very excited about the prospects of NTRglobal. The company has established an exceptional market position, and has assembled one of the strongest management teams we have seen,” said Maximilian Bleyleben, Managing Director of Kennet Partners.

“NTRglobal is a classic growth equity investment for Kennet – an established business, fast-growing and capital-efficient, with a global market opportunity. As such it is a prime example of the new breed of top-quality, home-grown technology companies to emerge from Europe.”

As part of the investment, Maximilian Bleyleben from Kennet and Fred Destin from Atlas Venture will join the Board of NTRglobal.

About Kennet Partners

Kennet Partners is a leading international private equity firm that invests in growth companies providing information technology products and business services that leverage technology. Kennet provides expansion capital to businesses that want to accelerate growth and build exceptional shareholder value in partnership with an experienced investor. With approximately $600 million in funds under management, and working from offices in London and Silicon Valley, the Kennet team actively supports its portfolio companies as they expand their operations internationally. Kennet Partners acts as an advisor to Kennet I, a Jersey-based fund and to Kennet II and Kennet III, both Guernsey-based funds. Kennet Partners is authorised and regulated by the Financial Services Authority.

For more information, visit http://www.kennet.com

About Atlas Venture

Atlas Venture is a leading early-stage international venture capital firm that invests in technology and life sciences businesses in the U.S., Europe and Asia. Since inception in 1980, its partners have helped build over 300 companies in more than 16 different countries. In the past decade, 44 portfolio companies have been acquired and 47 are now public companies with an aggregate market capitalization of over $15 billion. Atlas Venture manages over $2.5 billion in capital through offices in Boston, London, Munich, and Paris.

For more information, visit http://www.atlasventure.com

About NTRglobal

More than 12,000 companies in 60 countries rely on NTRglobal’s enterprise-grade software-as-a-service (SaaS) and self-hosted solutions to make IT simpler™ and more cost-effective to manage the mobile workforce and extended enterprise. NTRglobal’s growing portfolio of enterprise-grade SaaS now includes: NTRadmin™ for secure remote systems management, NTRadmin BOTS™ for simplifying IT task automation and NTRsupport™ for on-demand help desk and instant remote technical support.

SaaS from NTRglobal combines award-winning functionality, proven integration with Salesforce.com and other major CRM systems, point-and-click administration and scalability, global capabilities, customization and robust reporting for 360-degree visibility and compliance management. Offering a superior customer experience with dedicated regional and global support, NTRglobal applications are offered in 15 languages, including those with double-byte characters. All NTRglobal applications are hosted from 11 secure data centers around the world which operate with fail-over capabilities to ensure speed of service and reliability.

More information can be found on the NTRglobal website: http://www.ntrglobal.com

Press Contacts

KENNET PARTNERS
Maximilian Bleyleben, Managing Director +44 (0)20 7839 8020
Su Johnston, PR contact - sjohnston@kennet.com

ATLAS VENTURE
Fred Destin - +44 (0)20 7529 4467 ymechtouf@atlasventure.com

NTR GLOBAL
Heidi Wieland, PR Manager +1 805 722 7413 pr@ntrglobal.com
Luis Font, CEO +34 93 445 07 00

MedeFinance was a fast-growing, bootstrapped business, whose founder decided that he could achieve far more with the right investment partner.

When Kennet’s US team came across MedeFinance in 2004, it was a near-perfect fit with our investment focus. The company was bootstrapped and had a strong, ambitious founder at the helm.

MedeFinance’s software is used to analyse hospital invoice and remittance data to improve collections and shorten the healthcare payment cycle. This managed service addresses a huge source of lost revenue for hospitals - the gap between the fees they book from patients and what they actually collect from insurance companies.

At the time of Kennet’s initial discussions with the company in 2004, MedeFinance had just completed a year with $5 million in revenue.

Kennet US partner Javier Rojas understood that MedeFinance was operating at the confluence of several exciting market trends. The company was using analytic software to identify operational inefficiencies, which customers perceived as having very rapid payback on investment. MedeFinance was delivering its software as a managed service which kept barriers to customer adoption low and increased revenue visibility. Finally, the company was addressing a key pain point in a healthcare market that was seeing rapid increases in overall spend levels.

While the market drivers pointed to strong potential growth, MedeFinance also faced the typical challenges of a bootstrapped business:

• While the existing management was already stretched, the company did not have the capital or the market profile to recruit a professional management team and board who would be able to lead it through the next phase of growth.
• The company had a top-notch product offering, but its investment in the technology platform was limited to the excess cash generated from customer contracts.
• Founder Jim Quist was seeking some liquidity for his shares so that he could feel confident in re-doubling his efforts to drive growth.

These factors created the perfect timing for a Kennet investment. MedeFinance’s founder knew that smart money was key: “We selected Kennet because they knew how bootstrapped businesses operate, and they understood our motivations and desires for partnership and growth. We also trusted that they would spend time advising and helping us to scale the company, providing resources even beyond capital. These resources have been essential to our growth.”

During the relationship-building process, Kennet partner Javier Rojas demonstrated an understanding of how the needs of a bootstrapped business differ from traditional VC-backed companies. He also complemented the founder’s level of ambition with an expansive view of how the business could increase its market opportunity by broadening its product portfolio. In addition, Javier showed how MedeFinance could raise its profile with potential acquirers and the public markets.

In April 2004, Kennet invested $7 million, of which a portion was used to purchase ordinary shares from the founder and the remainder was used to fund growth. Javier joined the board and quickly set about working with the founder to improve the scalability of the business. Since then, Kennet has led board debate on key topics:

• Improving sales force productivity - Javier is working closely with the founder to ensure that the company’s sales force is productive and can scale to multiple territories across the US;
• Strengthening the executive team - including the hiring of a VP Sales, a head of business development, and a head of finance & strategic planning;
• Building a strong board of directors - including help in the recruitment of three non-executive directors with relevant industry and operational experience; and,
• Keeping the entrepreneurial focus exclusively on healthcare - despite temptations to develop an products for adjacent markets.

Since Kennet’s investment MedeFinance has become the market leader in revenue analytics for healthcare providers, and is leading innovation in financial analytics for health insurance companies. The company has increased its revenues by a factor of more than 10x and has successfully entered the European market.

The founders of many software companies want to make the transition to becoming a SaaS vendor. The operational challenges of making this shift are significant, impacting every part of the company: technology, sales, services and pricing. Not least, the transition can have a dramatic impact on cash collection which, if not managed appropriately, can sink the business.

We have worked with a number of software vendors that have made the transition to SaaS and have found some useful lessons to ensure success. In several cases we have been able to complete the shift fairly quickly, migrating to a recurring revenue model for the majority of the business in as little as two quarters. Here are some key lessons learned that have worked well for these companies.

This article was originally published at SandHill.com – Business Strategy for Software Executives

Irvine, Calif. and London – March 12, 2008 – Specific Media, the largest independent online advertising network, today announced a definitive agreement to acquire all the assets of Adviva, a leading display advertising network in the United Kingdom. The combination of Specific Media and Adviva in the UK gives brand advertisers an opportunity to combine massive reach with every method of targeting to produce the results they are looking to achieve. The Adviva acquisition marks Specific Media’s entry into the European market, giving the company a strong start on global expansion. The deal closed this week for an undisclosed amount.

With $5 billion in online advertising revenues in 2007 according to eMarketer, the UK is the largest European advertising market. Adviva’s broad network of brand-friendly content driven websites reaches more than 21.3 million unique UK internet users. Post-acquisition the combined companies will become the fourth largest ad network in the UK reaching 25.9 million unique UK users.

“Specific Media has anonymous data on 365 million consumers globally and the acquisition of Adviva gives us the opportunity to utilize the European portion of that data,” said Tim Vanderhook, co-founder and CEO of Specific Media. “Specific Media chose to partner with Adviva because it had a compelling value proposition of brand advertisers, quality publishers and a tremendous team that are enthusiastic about the opportunities in front of us.”

Specific Media is the only advertising network offering brand advertisers a complete targeting solution that combines demographic, behavioral, contextual, and geographic methods. The company currently works with more than 300 of Fortune 500 brands including seven of the top 10. Following the acquisition, Adviva’s London office will become Specific Media’s European headquarters. The acquisition of Adviva brings the total employee count for Specific Media to close to 200.

“Specific Media and Adviva have a great deal in common already and the new synergies will further benefit our advertisers and publishers,” said Todd Treusdell, co-founder and CEO of Adviva, who will stay onboard as Specific Media’s Managing Director, European Operations. “Now reaching nearly 80 percent of consumers in the US and the UK, Specific Media gives publishers and advertisers an attractive alternative to the large, publicly-held players in the industry.”

About Specific Media

Specific Media, the advertising industry’s fastest-growing interactive media company, enables advertisers to target consumers based on demographics, behaviors, geographic locations and/or the contextual relevance of websites visited. Specific Media works with many of the Fortune 500 brands including seven of the top 10 companies. Specific Media’s network reaches more than 140 million U.S. monthly unique users and includes more than 450 premier brands such as: ABC, NBC, CBS, FOX, ESPN, Major League Baseball, Sportsline.com, USA Today and VIACOM.

For additional information, visit http://www.specificmedia.com

Bootstrapping happens when a company develops with little or no outside funding. The company opts to fund its primary development and growth through internal cash flow using real customer revenues. The founders and a restricted set of early employees often forgo salary payments for equity in the company.

Bootstrapped companies find ways to generate revenue and sustain growth through consulting engagements, non-recurring engineering (NRE) engagements, value-added reseller (VAR) agreements, customer retainer fees, divestitures or protected supplier contracts with a parent company for a defined period of time, the classic “moonlighting,” and even waived compensation. They learn to generate revenue that funds growth and expansion until reaching a level of growth where it no longer makes sense to go it alone.

In this white paper we explain why bootstrapping creates better companies and explore the key issues around bootstrapping, including how to choose the right time to raise capital.

It is a well kept secret that some of the leading companies arrived at the top without taking early venture capital funding. Today’s market may call on companies to be more prudent in how they apply capital to generate returns.

In the second in a series of discussions with entrepreneurs whose capital-efficient businesses are recognized “return leaders,” Kennet Partners Managing Director Javier Rojas sat down with Jon Craton, founder of Cramer Systems, to discuss how the company was able to achieve an exit value of $425 million or 47 times the amount of external funding used.

Chipidea is a prime example of an established business that used external financing intelligently to manage a careful geographic and business line expansion plan.

In 2002, Kennet initiated a project to identify European technology companies focusing on the problem of power management. We believed that the increasing adoption of more powerful wireless devices would create high demand for power-efficient technologies at multiple levels - including batteries, semiconductor chips, and displays.

Portugal-based company Chipidea had a range of power management semiconductor Intellectual Property (IP), which it licensed to chipmakers. Although power management represented only a small part of Chipidea’s business, Kennet became interested in the company for several reasons:

• Chipidea’s area of expertise was analog and mixed-signal semiconductor IP. Analog and mixed-signal engineers are a scarce resource within the semiconductor industry. Chipidea had established a critical mass of engineers in this area.
• The explosive growth in markets for portable digital media devices of all kinds, including mobile phones, digital music players, digital cameras, portable video players and digital radio players, was driving sustained demand for analog semiconductor functionality
• Semiconductor IP is a European strength. Several of the most important providers of semiconductor IP are headquartered in Europe, including the worlds’ largest vendor, ARM Holdings.
• Chipidea’s founder and CEO, Jose France, had successfully grown the business with very little external capital.

Kennet’s Michael Elias began to develop a relationship with Jose Franca and, in mid-2004, began discussing an investment from Kennet to finance continued expansion of the business.

In May 2005, Kennet led a €12 million financing alongside co-investor Vision Capital and Portuguese Banks BCP and BPI. Michael Elias joined Chipidea’s board of directors.

As with most Kennet investments, a portion of the funding was invested in the company, while the remainder was used to purchase existing shares from the company’s founders. This rewarded the founders for value created in the business to date, and enabled them to feel comfortable with the risks of pushing for further growth.

Following Kennet’s investment, Chipidea expanded its business considerably, building the world’s largest group of analog and mixed signal engineers in a private company. In February 2007, Chipidea acquired the assets of Nordic Semiconductor’s Data Converter IP Business Unit, adding a significant catalog of IP to its analog and mixed-signal portfolio. By June 2007, Chipidea had 312 employees and had operations in Portugal, Belgium, France, Poland, China, and Macau.

During the summer of 2007, Michael was instrumental in leading the board’s discussions with potential acquirers that had approached the company. In August 2007, Chipidea was acquired by MIPS Technologies (NASDAQ: MIPS), for consideration of up to $153.6 million.

This acquisition was one of the two largest European semiconductor M&A exits in the past six years, and represents yet another example of a home-grown European technology company that was able to achieve global market leadership.

It is a well kept secret that some of the leading companies arrived at the top without taking early venture capital funding. Today’s market may call on companies to be more prudent in how they apply capital to generate returns.

Leading off a series of discussions with entrepreneurs whose capital-efficient businesses are recognized “return leaders,” Kennet Partners Managing Director Javier Rojas sat down with Greg Gianforte of RightNow Technologies to learn how he created a $200 million IPO from a bootstrapped venture.

RightNow (NASDAQ: RNOW) delivers the high-impact technology solutions and services organizations need to cost-efficiently deliver a consistently superior customer experience across their frontline service, sales and marketing touch-points. Approximately 1,800 corporations and government agencies worldwide depend on RightNow to achieve their strategic objectives and better meet the needs of those they serve.

Evan joined Kennet as an Associate in the London office in 2005. At Kennet he has focused on European deal origination and transaction development in the technology services, software and digital media industries. Prior to joining Kennet, Evan worked at Jefferies Broadview in New York. During his time at Jefferies Broadview, he worked extensively in the technology services and software industries, assisting with several public and private M&A and capital markets transactions. Evan holds a BBA degree from the University of Michigan’s Ross School of Business.

Michael Elias, Managing Director at Kennet Partners said: “Evan has contributed significantly to Kennet over the last two years and he was closely involved in our recently completed investment in Telemedicine Clinic in Spain. Evan’s strong experience in the technology sector in Europe and the US makes him a natural fit for the Kennet investment team.”

Evan will continue to be based in the firm’s London office. As Kennet commences the investment of its third fund, Kennet III, it has also hired two new Associates, one in London and one based in the firm’s Silicon Valley office.

Kennet Partners Ltd

Kennet Partners is a leading international private equity firm that invests in growth companies providing information technology products and business services that leverage technology. Kennet provides expansion capital to businesses that want to accelerate growth and build exceptional shareholder value in partnership with an experienced investor. Kennet Partners acts as an advisor to Kennet I, a Jersey-based fund and to Kennet II and Kennet III, both Guernsey-based funds. Kennet Partners is authorised and regulated by the Financial Services Authority.

For more information: www.kennet.com

Kennet Partners, a leading international growth equity investor focused on the technology sector, is pleased to announce the first investment from its new fund, Kennet III L.P. Kennet has led a €7m financing of European Telemedicine Clinic (‘TMC’), the European market leader in the provision of sub-specialized teleradiology services to public and private healthcare providers.

Teleradiology involves the transmission of digitised diagnostic images - such as x-rays, MRI (Magnetic Resonance Imaging) scans and CT/PET scans - to a remote location for interpretation by certified radiologists. In recent years, demand for advanced diagnostic scans has increased significantly, leading to long waiting times for patients and highlighting a shortage of specialized radiologists in many countries.

As a result, hospitals are looking to teleradiology to provide access to sub-specialty diagnostic services, and to achieve their objective of reducing patient waiting times. TMC was one of the first European providers of teleradiology services and is currently the leader in the UK and Europe.

According to Frost & Sullivan, some 91 million digital radiography exams took place in Europe in 2006, a figure that is expected to grow to 198 million by 2010, with most of the increase coming from the so-called complex modalities - MRI and CT/PET. It is estimated that in the most advanced European markets for teleradiology - the UK, Spain and Scandinavia - less than 4% of these exams are currently being interpreted remotely. Evidence from more mature markets, such as the US, indicates that up to 20% of diagnostic exams will eventually be reported remotely.

TMC was founded in 2001 by David Backstom and Henrik Agrell in Barcelona, Spain. Today, more than 80 experienced radiologists work for TMC. From the company’s centralized reading facility in Barcelona, a large base of UK radiologists serve the UK market. The company also provides European hospitals with on-call (‘nighthawking’) services from Sydney, Australia. TMC pioneered the establishment of new quality and control processes for remote reading centers, and as a result the company is considered a quality leader in this market.

“What impressed us about TMC’s management was the speed with which they established the company as both the quality and volume leader in the market. TMC is setting the standard for sub-specialty radiology services in Europe today. We are delighted to support the TMC team as they cement their position in the global market for telemedicine services,” said Maximilian Bleyleben of Kennet Partners.

“The timing of Kennet’s investment could not be better for TMC. With Kennet on board, TMC will further accelerate its growth and presence in the UK and other geographic markets and to develop new service offerings. Our growing sub-specialty expertise with the most advanced imaging modalities, such as CT/PET, will enable us to remain a pioneering provider of telemedicine services to hospitals worldwide,” said David Backstom of TMC.

Maximilian Bleyleben of Kennet will join the board of directors of TMC. The company was advised in this financing round by GBS Finanzas of Madrid.

As part of this financing, earlier investors Active Capital Partners (ACP) and Inversions en Innovacio a Catalunya, F.C.R. (Invernova) achieved a partial exit for their shareholdings. Invernova was the first institutional investor in TMC in 2004.

Telemedicine Clinic (TMC)

Telemedicine Clinic is based in Barcelona and provides diagnostic services in radiology for public hospitals and private healthcare providers in the United Kingdom and Scandinavia. The diagnostics are provided in the native language of the hospital and are always double-read by two specialists. Today Telemedicine Clinic is the largest centre in teleradiology and the largest diagnostic centre in MRI in Europe with 80 specialist radiologists working from seven European countries.
For more information, visit www.telemedicineclinic.com

Kennet Partners Ltd

Kennet Partners is a leading international private equity firm that invests in growth companies providing information technology products and business services that leverage technology. Kennet provides expansion capital to businesses that want to accelerate growth and build exceptional shareholder value in partnership with an experienced investor. Kennet Partners acts as an advisor to Kennet I, a Jersey-based fund and to Kennet II and Kennet III, both Guernsey-based funds. Kennet Partners is authorised and regulated by the Financial Services Authority.
For more information, visit www.kennet.com

ACP Active Capital Partners

ACP, advisor to MCI (Molins Capital inversion S.C.R. S.A.), makes minority investments in companies requiring startup or expansion capital. ACP invests between €500,000 and €3,000,000 per transaction and also co-invests in larger opportunities. ACP’s investment style is characterised by its independence, how its partners complement the management teams they back, its entrepreneurial shareholder base and its network of advisers, consultants and specialists, who enable ACP to add value to its investments.

For more information, visit www.acpvc.com