There is a nice story in the Austin Business Journal today about Boundless Network. They announced an additional $4M in capital from existing investors Silverton Partners (Bill Woods investment company) and Austin Ventures. This brings the total investment to $8M.

Boundless is bringing technology and infrastructure to a typically fax based business to enable professionals in the promotional products business to be more effective. I would equate the business model to being like the Mary Kay, Excel Telecom, or Herbalife of the promotional products businesses (promotional products are the branded polo shirts, pens, koosh balls, and trinkets).

Venture investors like to throw good new money and good and growing things, so this can only be a sign that the capital will be used to continue to growh the business. Just a few days ago I wrote about BazaarVoice turning the corner of profitability after just 17 months with $4M. Now these are two very different businesses with different investment models and capital requirements, but hopefully it gives you some perspective on the accomplishments of BazaarVoice.

In the long run if Boundless can be a major player in a $19B market by having a better supply chain, and giving their associates better tools and technology there will be no limit to the upside of this businesses.

*In the interest of full disclosure, several Boundless Network executives and investors are personal friends.

So I’m scanning the news and see this item about Power Technology, a publicly traded company based in Austin. But their phone number is in Houston and their press release comes from Houston. Totally confusing. I did a little homework and here is what I came up with.

The company seems to be in an interesting area, more efficient battery technology. They have a technology that can make lighter weight, longer lasting batteries. We’re talking bigger sizes of batteries, not consumer AAA – D size. With the green revolution, what’s not to love?

First of all the company posts a business plan on it’s website. I don’t think I’ve ever seen that before. In mid-2005 everything was good, and they had a commitment for $5M in private funding. They do have some revenues, but it’s not from product sales. It comes from "other income."

• April of 2006 they sign an agreement to purchase Sentry Power for $960,000 in common stock and the assumption of $235,000 in debt
• February 1, 2007 they hire Tim Connolly to provide strategic advisory services and they pay him $6,100 for 3 days of work per month
• May 1st they disclose that they’re not going to file timely reports with the SEC (usually not a good sign)
• May 3, 2007 they announce that they’re exploring strategic alternatives (which is business speak that means we don’t have enough cash to keep the doors open)
• May 22nd suddenly a white knight appears to buy the previous Sentry Power unit for $1M in publicly traded acquirors stock (identity undisclosed). How amazing that management can pull a deal together just 19 days after the announcement!

So how has the stock performed? Well, it’s over the counter to begin with. Most days the stock doesn’t trade any shares. That means that any buying or selling activity can lead to drastic swings of 100% quite easily. Daytraders don’t get your hopes up though as those swings can be from $0.03/share to $0.06/share in a very thinly traded stock. The high price I could find is $1.80 back in 2000. The 365 day low is today at $0.03.

I’m still struggling to find the Austin connection here, other than an address. The CTO lives in Vancouver, and the deal makers are in Houston. As Gordon Gecko would say, it’s not just a dog, it’s a dog with fleas. Lets hope they can turn these publicly traded shares from the acquiror into cash to support the manufacturing of their product line. They’ve spent about $13M in pursuit of that goal so far.

You can’t run the 100 yard dash and give up on the last 10 yards.

BazaarVoice recently announced that they have achieved profitability, and company executive Sam Decker expanded on this fact in his personal blog. This is a huge milestone for the company, it’s management, and investors. So what is Bazaarvoice all about?

At the heart of the value proposition behind BazaarVoice‘s product is the fact that consumers are more likely to buy when they can interact with a community of existing buyers (ratings, reviews, feedback). To build that functionality, like Amazon.com, can cost millions. To buy it as a service is much less, and you can get it more quickly. BazaarVoice is quickly signing up the top internet retailers in the country, such as the screenshot from PETCO.com above. Even the customer advocate experts are steering their customers to Bazaarvoice.

Bazaarvoice announced Series A funding of $4M from Austin Ventures, First Round Capital, Eric Simone, and other investors back in January of 2006. When I met First Round partners Chris Fralic and Howard Morgan I told them I was from Austin, Texas and the first thing out of their mouth was praise for BazaarVoice. In the short time of roughly 16 months BazaarVoice has turned the corner and announced profitability.

And nobody noticed. I would imagine the champagne corks were popping at company headquarters, and the venture investors were proud. What is impressive to me is the small amount of money invested, and the speed to profitability. Shortly after the funding, company founder Brett Hurt told me it was the first and only money they would take. I have to say I was skeptical.

One huge advantage that I think BazaarVoice has over other Austin software and technology companies is their revenue model. Customers pay a monthly or annual fee to have the BazaarVoice functionality seamlessly plugged into their website for a fraction of the cost of building it themselves. There is also a new pay-for-performance pricing model that is apparently gaining more acceptance. Compare this to a software license model where I purchase the software once, plus pay 15% – 21% of that license cost annually for support and maintenance. If you’re an internet retailer you can’t stop paying your bill and lose all your customer ratings and reviews, can you? This functionality is sticky.

As BazaarVoice adds customers, revenues will continue to increase steadily. If they don’t add customers, revenue will simply level off. For enterprise software vendors they have to close new deals every quarter to survive. There aren’t many companies that can enjoy this kind of revenue model, which places BazaarVoice in a unique position.

The deal guy in me says it’s time to hit the eject button and punch out to a strategic buyer that can leverage this technology cost effectively to the mid-tier internet retailers and non-US companies. Who would be a likely buyer?

• Amazon. They pioneered this area, plus are offering more innovative services like S3 and Mechanical Turk (which could help moderate comments). $750M in cash is just burning a hole in their pocket.
• Salesforce.com. These guys get the monthly service fee model. Although BazaarVoice is not as off-the-shelf configurable. They only have $86M in the bank, but could float some stock with that $5B market cap.
• aQuantive. They get marketing, enjoy a $5B market cap and have $130M in the bank. But with Microsoft buying them for $6B they’re going to be busy integrating that deal.
• Google/DoubleClick. Wow, more buyouts in the internet advertising space. Even ValueClick’s stock is shooting up on the activity. Didn’t Google just dump Google Answers? They don’t like community but do like advertising. That’s a tough call.

*In the interest of full disclosure Brett Hurt, Sam Decker, and Eric Simone are personal friends.

Austin, Texas headquartered BSG Alliance announced yesterday the acquisition of The Concours Group, based in the Houston area. Wasn’t it only yesterday that BSG announced $20M in funding from Hummer Winblad and Foundation Capital? It was two weeks ago, but it seems like just yesterday.

The Concours Group is a strategic consulting company. James Champy (co-author of the seminal book Reengineering the Corporation) was a key player in the formation of Concours after he sold his Index consulting group to CSC Corporation in 1988. Company founder Dr. Ron Christman will preside over the BSG Concours division. If BSG is going to be providing strategic consulting around Enterprise 2.0, then this acquisition is certainly a great way to get into the executive suite at 300 of the Fortune 1000.

In the interest of full disclosure, I sold a consulting company to BSG back in 1996 and worked for the company for a year and a half. So I’m very familiar with the rapid pace of company founder Steve Papermaster. Steve also recently spoke at the Austin Clean Energy Venture Summit that I wrote about here.

I’m sure the company will achieve incredible success.