1 min read · 13 March 2009
Sen. Carl Levin (D-MI) earlier this month proposed legislation designed to crack down on foreign tax havens, like the Cayman Islands. The bill -- called the “Stop Tax Haven Abuse Act" -- has the Obama Administration's support, with Treasury Secretary Geithner saying the following during a recent House Ways & Means Committee hearing: "We fully support the legislation... on offshore tax centers, and we look forward to working with you as part of the broader effort to address international tax evasion." I don't pretend to know much about this, so I spent some time on the phone with Arnold May, a partner in the tax department of law firm Proskauer Rose. He told me that the legislation, as currently written, would affect both hedge fund and private equity managers, but the former far more than the latter.
2 min read · 13 March 2009
Today may be Friday the 13th, but the Small Business Administration is facing a real horror next Friday. That’s when the Small Business Innovation Research (SBIR) grant program is scheduled to expire. I know what you’re probably thinking: Why on earth does this matter to the peHUB audience? VC-backed startups are, you know, backed by VCs. If $100k is going to make or break them, then there are bigger issues to deal with. My answer is twofold: First, VC-backed companies could use SBIR grants to fund experimental research outside of their primary product plans. This is particularly true if a company could develop an application specific to DoE or DoD. After all, part of SBIR’s mission is to stimulate Moreover, SBIR grants could be used by seed-stage life sciences companies to pursue alternate applications for their developing therapies. Second, you’re right. This has no impact on VC-backed companies. Since the program’s inception, it has stated that qualifying companies must be 51%-owned by individual U.S. citizens. SBA’s initial interpretation
3 min read · 13 March 2009
* If you haven't seen the Stewart vs. Cramer vids yet, we've got them here. Also, James Hibberd offers up a tepid defense of CNBC. * James Surowiecki: What the hell is Richard Shelby talking about, when he says it's time to begin "burying" banks? * Morning Call: U.S. futures point higher, London up 2.8% at mid-day, European shares keep rising and Hong Kong shares jump 4.4%. * VCs Mike Moritz and Arthur Rock lose their billionaire status. A tear... * Mercury News: Biotech industry is bracing for a wave of massive M&A. * David Swensen gets bullish.
1 min read · 13 March 2009
Jon Stewart didn't bring the funny, but Jim Cramer didn't bring the Cramer. Where was the spirited defense? The bombast? Is it an overstatement to say that the Mad Money host looked to be on the verge of tears? Stewart obviously had good ammo, but Cramer didn't offer up some very obvious rebuttals. Anyway, vids after the jump. You be the judge.
1 min read · 13 March 2009
On Tuesday, I mused about the exit troubles facing mega-buyout firms: Isn’t an IPO the only viable exit option for a market leader that was taken private (Clear Channel, SunGard, HCA, etc.)? The only way to get a trade sale would be to run the company into the ground (buy the best company, make it second-best), while sponsor-to-sponsor deals are unlikely due to both high leverage loads on the original deal and the likelihood of an original consortium (i.e., fewer firms left to sell to). As some commenters noted, it seems that I forgot an obvious answer: The strip and flip.
2 min read · 12 March 2009
Michael Beckwith has left Sequoia Capital, one year after coming aboard to launch a public equities program. No word yet on why he left, or where he may be going. As peHUB reported last April, Beckwith was charged to lead what many considered to be Sequoia's forray into hedge funds. Sources said that he was putting together a public equities team that would be tech-focused, but not tech-exclusive. Among his hires was Chris Lyle, who is still featured on the Sequoia Capital website. It was, and remains, unclear if Beckwith's group was related to an outsourced endowment manager program that Sequoia also launched at around the same time. That effort is called
1 min read · 12 March 2009
2 min read · 11 March 2009
1 min read · 11 March 2009
The Ohio Bureau of Workers’ Compensation has finally sold off its private equity investment portfolio, according to minutes from its November 2008 board meeting (and first uncovered by Dow Jones). UBS had been running the process, which netted nearly $400 million for 67 funds. For anachronistic context, we reported in April 2007 that UBS had pitched the fund’s NAV at $685 million, including around $271 million in unfunded commitments. If this is all new to you, here’s a graph from that same 2007 piece:
1 min read · 11 March 2009
