Silver Fleet Capital Invests in PhaseOne

[Ben Rubinstein]

Actually looks better than the lunar...

[Christoph C. Feldhaim]

Actually looks better than the lunar...

Hah - thanks ...
At least better than my crappy Nikon DF mockup.
Probably that means there's more potential in the 645D for design improvements ...
Cheers
~Chris

[hubell]

There is no way that the owners of a vibrant, sector leading company like Phase One would sell off 60% control of the company in order to raise capital for business expansion. They sold off 60% in order to take part of their chips off the table. The owners, I am sure, are very bright, industrious people who love what they do and make a very nice living, but are not personally wealthy beyond the value of the company they built. It came to the point in the life cycle of their company and the future risks in the marketplace for medium format digital where it made sense to diversify their own economic positions. At a certain point, it becomes crazy as a financial matter to have all of your financial wealth tied up in the stock of any company, never mind one like Phase One that is in an intensely competitive and risky sector. We do not have to reiterate the litany of failures in the photographic marketplace in the last 10 years.
This transaction does not, IMO, change anything (other than the fact the Phase One owners can now afford the prices of Phase One cameras and backs). The people who built Phase One are still there running it and, with a continuing stock ownership stake of 40%, they are still highly motivated to make the company succeed.

[eronald]

Some of these LBOs leave the ex-owners better of, at the price of saddling the company with huge debt ...

Edmund

There is no way that the owners of a vibrant, sector leading company like Phase One would sell off 60% control of the company in order to raise capital for business expansion. They sold off 60% in order to take part of their chips off the table. The owners, I am sure, are very bright, industrious people who love what they do and make a very nice living, but are not personally wealthy beyond the value of the company they built. It came to the point in the life cycle of their company and the future risks in the marketplace for medium format digital where it made sense to diversify their own economic positions. At a certain point, it becomes crazy as a financial matter to have all of your financial wealth tied up in the stock of any company, never mind one like Phase One that is in an intensely competitive and risky sector. We do not have to reiterate the litany of failures in the photographic marketplace in the last 10 years.
This transaction does not, IMO, change anything (other than the fact the Phase One owners can now afford the prices of Phase One cameras and backs). The people who built Phase One are still there running it and, with a continuing stock ownership stake of 40%, they are still highly motivated to make the company succeed.

[RichDesmond]

There is no way that the owners of a vibrant, sector leading company like Phase One would sell off 60% control of the company in order to raise capital for business expansion. They sold off 60% in order to take part of their chips off the table. The owners, I am sure, are very bright, industrious people who love what they do and make a very nice living, but are not personally wealthy beyond the value of the company they built. It came to the point in the life cycle of their company and the future risks in the marketplace for medium format digital where it made sense to diversify their own economic positions. At a certain point, it becomes crazy as a financial matter to have all of your financial wealth tied up in the stock of any company, never mind one like Phase One that is in an intensely competitive and risky sector...

You're describing, and then assigning to the owners of Phase One, a mindset that applies to a lot of (most?) people, but it definitely doesn't apply to everyone.
I've never met or had any dealings with them, so I'd be reluctant to do too much mind reading.

[NickT]

I'd be reluctant to do too much mind reading.

What? On Luminous Landscape??

[Wayne Fox]

There is no way that the owners of a vibrant, sector leading company like Phase One would sell off 60% control of the company in order to raise capital for business expansion. They sold off 60% in order to take part of their chips off the table. The owners, I am sure, are very bright, industrious people who love what they do and make a very nice living, but are not personally wealthy beyond the value of the company they built. It came to the point in the life cycle of their company and the future risks in the marketplace for medium format digital where it made sense to diversify their own economic positions. At a certain point, it becomes crazy as a financial matter to have all of your financial wealth tied up in the stock of any company, never mind one like Phase One that is in an intensely competitive and risky sector. We do not have to reiterate the litany of failures in the photographic marketplace in the last 10 years.
This transaction does not, IMO, change anything (other than the fact the Phase One owners can now afford the prices of Phase One cameras and backs). The people who built Phase One are still there running it and, with a continuing stock ownership stake of 40%, they are still highly motivated to make the company succeed.

Not all VC investments are as you describe.  Certainly some are, but others are mechanism to infuse capital for growth and expansion and are conditioned on most of the money staying with the company ... the owners money comes back in often secured by preferred stock other arrangements.  Reading the press release I get the sense this could be going on.  It specifically states two things which are indicative of this type of investment.

"High-end medium format digital camera business Phase One has closed an undisclosed funding round so that it can finance new product launches as well as further marketing and possible acquisitions."

and

"Joining Silverfleet in the deal are the existing management team, who are forfeiting a majority stake in the business but also reinvesting their own money for a 'substantial' minority stake."

this implies the money is being left in the company.  I would assume the PhaseOne team thinks they have something which would be worthwhile to them, owning 40% of a larger company is better than 100% of the current company.

I'm sure it's a combination, surely they were able to pull some of the money out for themselves, but it could be deal revolved around their willingness to reinvest in their own company by leaving most of the money in to " finance new product launches as well as further marketing and possible acquisitions."

However, who knows ... could be all spin by whoever wrote the press release.  Even the owners probably aren't willing to divulge the details and indeed it could be either scenario.  We'll know in the future, if we see no real changes at PhaseOne then maybe they are just diversifying and reducing risk.  Not necessarily bad but if it is leveraged the debt the company gets saddled with can devour it over time.

Hoping for the best ...

[hubell]

"Joining Silverfleet in the deal are the existing management team, who are forfeiting a majority stake in the business but also reinvesting their own money for a 'substantial' minority stake."

This is Euroworld private equity double talk for a transaction in which the founders/management sell part of their stock and keep the rest. They did not put one dime of their own money into the company in this transaction.

[EricWHiss]

Just FYI
The plans to bring out Hasselblad products like the Stellar were made well before VC got involved.

Nick-T

For real?!  Wow, I never would have guessed that.

[Wayne Fox]

This is Euroworld private equity double talk for a transaction in which the founders/management sell part of their stock and keep the rest. They did not put one dime of their own money into the company in this transaction.

And you know that is absolutely true in this case because? I don't think anyone at this point really knows except the parties involved.  It may come out later, and certainly the way the business operates will definitely reveal the truth (If they actually acquire anything, develop new stuff faster or change the pricing/marketing plan to increase market share ... whatever they have in mind that required "funding"),.

If you are correct the introductory statement I quoted earlier would be an outright lie, having nothing to do with obtaining funding for purposes of furthering the business.  At this point I'm not willing to call anyone a liar ...

I've been somewhat acquainted with several VC deals, one personally and others because I became good friends with several of the managing partners of the firm I sold to and discussed their deals playing golf or at lunches.  I saw them invest and divest of many deals, some like mine (I wanted out so I could move on to other things), and others like I described where the money was used to fund R&D or some other purpose - with a broad and creative combination often being the result.  Not sure European firms would operate differently.

[Steve Hendrix]

For real?!  Wow, I never would have guessed that.

I don't think the base idea of the Lunar thing was bad, just the actual implementation. If the "objects" were a few tasteful variations that more strongly employed and evoked Hasselblad tradition rather than Sony innovation, no reason not to do it. People were expecting the X-Pan II, they got something so radically, shockingly different, the result was an understandable backlash.

But this is somewhat off topic and already well documented.


Steve Hendrix
Capture Integration

[eronald]

Sony realizes their products are notorious for being small and hard to hold, then falling out of the hands of westerners onto western stone floors, and subsequently breaking. This is an unavoidable result of their established inhouse design culture.

So their partnering with an outside western firm to create a tough-cased, grippy version of their delicate electronics is *laudable*. Nikon do their design work for the pro bodies partly in Italy for the same reason.

I for one like the idea of a titanium-cased RX100 and would be prepared to pay 50% premium for that option.

Where something went wrong in the product positioning was when they turned "tough-hi-tech" into  "bling luxury" rather than upper-range lifestyle. Reminds me of the whole Vertu phone story, which I never understood either.

Steve is of course someone who sells $40K cameras every day, so I guess he hands out mini-Hassies to the customer's wife and kids as door prizes ... vastly enhances the Wife Acceptance Factor - what would be even better of course would be if every Hassy came with a 2 carat removable diamond

Edmund

I don't think the base idea of the Lunar thing was bad, just the actual implementation. If the "objects" were a few tasteful variations that more strongly employed and evoked Hasselblad tradition rather than Sony innovation, no reason not to do it. People were expecting the X-Pan II, they got something so radically, shockingly different, the result was an understandable backlash.

But this is somewhat off topic and already well documented.


Steve Hendrix
Capture Integration

[Paul2660]

Problem with both the lunar and the latest example is the old fairy tale of the "King has no clothes on".  There was not a thing different or added to the Lunar to make it shoot any different from the already limited use Nex-7.  The people it appealed to I guess are the same ones that believe that you can "really" get 41MP out of Cell phone.    The newer version is no different than the A99 (inside) and that's what counts to me.  If Hassi had added some new controller card or something else to improve an already excellent camera, then it might be 4x the cost of the A99.  I wonder what happens when it breaks, but I guess the people considering it at 10K or what ever it is, would just throw it away and buy a new one.

Whatever it takes I guess.

Paul C.

[jjj]

(FWIW, right now I'm sat at my computer and Lightroom is processing 46432 images from a single shoot that comprises less than 0.1% of a much, much larger project that I'm working on. I'll be sure to come back and share it with you when it goes live (hopefully sometime later in the year) so that I can validate my existence, because of course it is extremely important to me what your perspective on my work is.)

In a discussion that has a lot to do with numbers of a financial nature, this set of figures really stood out.
"46,432 photos from a single shoot, which is less than 0.1% of project"!! Forget Phase, I'm buying some shares in hard drive manufacturers, as 46 million photos will take up a heck of a lot of space. 

[gerald.d]

Be sure to get back to us with a link to those 46 million images.

*sigh*

Non sequitur.

Those images (STILL processing BTW - I'm going to have to go into work on my weekend to kick off the next stage in the workflow, much to my annoyance and poor planning) are for a single piece of content. One piece of content out of over a thousand. Not all pieces of content require that many shots. Most, a lot less, thank goodness. Some, more.

But hey, don't let that hold you back from having a cheap shot. I can take them just as well as I can hand them out.

[jjj]

*sigh*

Non sequitur.

Those images (STILL processing BTW - I'm going to have to go into work on my weekend to kick off the next stage in the workflow, much to my annoyance and poor planning) are for a single piece of content. One piece of content out of over a thousand. Not all pieces of content require that many shots. Most, a lot less, thank goodness. Some, more.

But hey, don't let that hold you back from having a cheap shot. I can take them just as well as I can hand them out.

I wouldn't call that a cheap shot, merely a response to your post that basically indicated you were doing a project that contained 46 million photos.
So I'm intrigued what is that major project? And what on Earth needs 46k shots on a single shoot. I've got a project folder of 47k shots, but that took me 13 weeks of shooting over several years and I usually shot 15+ hours a day and at times 24 hrs straight.

[ErikKaffehr]

Hi,

Well, my opinion, the Lunar looks horrible but the Stellar looks OK and the new one is quite nice. I obviously woldn't buy either.

Best regards
Erik

I don't think the base idea of the Lunar thing was bad, just the actual implementation. If the "objects" were a few tasteful variations that more strongly employed and evoked Hasselblad tradition rather than Sony innovation, no reason not to do it. People were expecting the X-Pan II, they got something so radically, shockingly different, the result was an understandable backlash.

But this is somewhat off topic and already well documented.


Steve Hendrix
Capture Integration

[jjj]

Well, my opinion, the Lunar looks horrible but the Stellar looks OK and the new one is quite nice. I obviously woldn't buy either.

Both look like objects randomly assembled from the production lines of two very different products. Ghastly.
But then there's a long tradition of taking an something fairly mundane, making it look incredibly tasteless usually by sticking shiny things on it and then selling it to idiots with money to burn. But then you stick a red dot on a Panasonic, people will pay 30% more for the identical product. My local camera shop points out there is no difference bar the name and many if not most people still pony up for the Leica version.

[JV]

I don't think the base idea of the Lunar thing was bad, just the actual implementation. If the "objects" were a few tasteful variations that more strongly employed and evoked Hasselblad tradition rather than Sony innovation, no reason not to do it. People were expecting the X-Pan II, they got something so radically, shockingly different, the result was an understandable backlash.

But this is somewhat off topic and already well documented.


Steve Hendrix
Capture Integration

I agree with Steve that the idea itself of the Lunar actually was not that bad, just the actual implementation.

For what is is worth, Leica recently sold a limited Monochrome Ralph Gibson edition (35 bodies with lens) for 21,000 Euros (around $28,000) each.  It has its signature engraved on the top plate.

That is a pretty ridiculous mark-up as well but to Leica's defense it is still a Leica and it is not as ugly as the Lunar…

A digital X-Pan would still go a long way IMO.  I wonder whether there ever was any truth to that rumor.

[bcooter]

For what it's worth, there was a London reporter a few weeks ago that tried to go a week and not buy or use any service that was funded or owned by venture capitalists.

It came down to a few home made pieces of bread and an old sweater, virtually no cosmetics, movies, clothes, food or stores that sold virtually all goods.

That's just the way the capitalist world is funded.

Without knowing specifics, obviously Phase management sold for the money, whether that goes into their pockets or R+D is something we will all find out, but whatever number it was, it wasn't anywhere close to 19 billion facebook just paid  for what amounts to a free texting service, (though I bet Phase One would have loved to received those numbers).

IMO

BC