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I love it when companies I’m an investor in use an acquisition strategy. My good friend and long time co-investor Fred Wilson calls it a "venture rollup." It’s very different than a traditional "rollup" or "consolidation" (which is typically revenue based.) Fred described it really well when talking about NewsGator’s acquisition of FeedDemon in 2005.
When he (Feld) finds a sector where he’s early in the development of the market, he gets in, figures it out, builds a management team, and then gets busy convicing others to join the party. That’s the play book for the venture rollup.
Todd Vernon – Lijit’s CEO – talks about why BigSwerve is important to him. While BigSwerve is a tiny company (the founder Raj Bala and some outsourced developers), they’ve done some very interesting things that address my Dark Matter of the Blogosphere thoughts from last summer.
As a special bonus, if you want to see the magic of Lijit, continue reading. When I started writing this post, I remembered that Fred had coined the phrase "venture rollup" a while ago but I couldn’t remember what post it was on. I went to his site and did a search via Lijit on "venture rollup feld". The first result was the post I wanted. I then went to Google and did "venture rollup feld". No where in sight. I then did "a vc venture rollup feld". Result #4. Lijit wins.
If you have a blog and don’t use Lijit for search, try it and make yourself (and more importantly – your readers – happy. And to those of you out there that want to add to the blogosphere’s dark matter and tell me the period goes inside the quotations, I know – it just looked funny because of the hyperlinks.