Playfish sells to EA for $275 million. So it turns out that there's a lot of money in virtual goods. Playfish, a London company that makes Facebook's Restaurant City, just sold itself to video game giant Electronic Arts for $275 million in cash, with the prospect of an additional $100 million in earn-outs. Techcrunch says, "Social games are increasingly popular and Electronic Arts needed to buy one of the top players: Zynga, Playfish, or Playdom." Playfish has revenue of $75 million a year.
How to save Detroit. This month's issue of Inc. spotlights one good idea: An entrepreneurial ecosystem built around the electric car. Of course, if that doesn't work out, we can always turn the city into farmland. That's the nutty plan floated by a group of architects and reported in the New York Times. "[T]he sheer size of Detroit — a largely vacant urban prairie bigger than Manhattan, Boston and San Francisco combined — makes it a prime test case for the 'shrinking cities' movement. And so an American Institute of Architects study imagines Detroit reduced into a metro core surrounded by green belts, 'urban villages' and banked land," the Times says. It gets weirder: "Even raccoon- and pheasant-hunting is not unheard of within the protein-poor city's limits. Yes, a retired truck driver reportedly shoots raccoons and sells them as food, at $12 per carcass to feed a family of four."
The Netflix model hits the runway. According to a story by the New York Times, it will soon be as easy to rent couture dresses as it is to rent Netflix DVDs. Fledgling start-up Rent the Runway, founded by Jennifer Hyman and Jennifer Carter Fleiss, plans to allow customers to rent, via mail, thousand-dollar dresses for less than $200 each. Hyman came up with the idea after watching her sister shell out cash for a dress she'd only wear once to a wedding. After solidifying a business plan with Fleiss, the duo secured seed financing from Bain Capital Ventures to build its inventory of 160 styles. Although the article questions the long-term viability of the company -- "No one wants to rent last season's dress," quipped one fashion blogger -- Rent the Runway's current customers seem pleased with the service.
Small business owners play Scrooge with holiday bonuses. Small-business employees expecting a holiday bonus may end up feeling a bit like Bob Cratchit this season. The Atlanta Journal-Constitution reports on a recent American Express survey that reveals a significant drop in the number of business owners who are planning on giving their workers gifts or cash. This year, only 31 percent of owners will dole out an end-of-year bonus. That's much worse than last year when 44 percent of owners planned on giving bonuses. Even worse, of the owners who still plan on giving bonuses or gifts, 42 percent said they'll give fewer or cheaper gifts to their employees. As an American Express adviser explained, "Business owners are still feeling pinched cash wise." In other words, "Bah humbug." For a look at how some businesses deal with having to cut employee bonuses, check out this story from the Inc. archives.
Fred Wilson on Valuations and Option Pools. Fred Wilson breaks down one of the trickiest negotiations in early stage financing: Whether to put aside stock to issue to employees at a later date. Although setting aside an option pool is about nominally about compensating employees, it's also a negotiation tactic, or, as Wilson concedes, a way for the venture capitalist to lower the price. Wilson advises VCs to be upfront about that and for entrepreneurs to research the market value of their business with and without an option pool. Spark Capital's Bijan Sabet follows-up on Wilson's post with recommendations on how to structure terms and rights associated with option pools, including vesting and change of control.
How to get more from your LinkedIn account. Although there are many professional social networks, LinkedIn is still one of the biggest and most useful. Mashable writer Sharlyn Lauby offers advice, about seven ways you can get more from your account. For instance, she recommends including a photo in your profile, asking for recommendations, and using groups to expand your reach.
Succession planning for your small business. One of the most difficult decisions any family business owner has to make is who to pass the baton to when it's time to move on. The Wall Street Journal provides some tips, starting with planning a retreat away from the office to discuss the idea with all family members. You can also get some advice straight from successful family business owners featured in Inc., here.
Can you patent an idea? Business method patents have been around for decades--Clarence Saunders was granted a patent for the idea of the "self-serving store" in 1917 for his chain of Piggly Wigglys--but in 1998 a Supreme court decision produced a flurry of new patents for business methods, especially new types of software. Now the court plans to reevaluate that decision, and companies such as Google, Yahoo, and Symantec are weighing in, reports the Wall Street Journal. "Certainly, some of the more extreme positions that are being urged before the court could eliminate patents with hundreds of millions, if not billions, of dollars in value," says Andrew Pincus, a lawyer who filed a brief on behalf of a software trade group. Check out Inc.'s article on filing a patent or guarding against infringement on one you already have.
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