1 min read · 19 February 2009
peHUB has learned that Jeff Rich, former CEO of Affiliated Computer Services (NYSE: ACS), and Todd Furniss, former president of the Everest Group, have partnered to form a new private equity firm focused on the IT-enabled business services sector. The Dallas-based effort is named PlumTree Partners, and will formally announce itself next week. PlumTree has not yet decided on whether it will raise a formal fund, operate as a fundless sponsor backed by local family offices or become an investment holding company for a large corporation that has expressed interest. In general, however, is wants to invest between $25 million and $50 million of equity per year, in around four deals. If PlumTree were to pursue the formal fund structure, that would work out to around a $250 million target. I’m pretty skeptical of most new PE firms in today’s environment, but this one certainly has big-name experience on its side. Rich began his career as an LBO banker for Citi in the 1980s, before getting recruited by ACS to be its CFO.
2 min read · 18 February 2009
Brave New Films yesterday released the latest video in its War on Greed series, which previously had focused most of its attention on Henry Kravis and KKR. The new target is federal bailout funds recipient Goldman Sachs, for shoddy treatment of Burger King employees. Goldman, you may remember, teamed up with Bain Capital and TPG Captial to buy the Whopper maker back in 2002. “Wait a minute,” says rhetorical reader. “Didn’t Burger King IPO in 2006, with Goldman Sachs now holding less than 11% of the company’s outstanding shares?” Of course it did, although you won’t hear anything about that in the Brave New Films video. Instead, you’d assume that the private equity consortium still owns Burger King lock, stock and frialator. In fact, the video’s narrator refers to Goldman as being “at the helm of the Burger King Corporation.”
3 min read · 18 February 2009
[Update: Clip after the jump] I’ll be on Jim Braude’s New England Cable News show tonight at around 8:20pm, to discuss the economic stimulus package, TARP II and whether the markets are most troubled by insolvent banks, insolvent automakers or insolvent California. And I'm sure I'll get in some gratuitous shots at Geithner's speech (even though it's now a week-old). All in a quick five-minute segment. Just flip over when American Idol goes to commercial.
1 min read · 17 February 2009
This space hasn’t always been too kind toward Bain Capital, in regards to the extraordinary fees it charges its (submissive) limited partners. Today, however, we need to give some credit where it’s due. The Boston-based buyout firm is proposing an amendment to all of its active private equity funds, which would temporarily waive all of its quarterly management fees. Those funds would instead be available for follow-on investment in existing portfolio companies, with the fees to ultimately be paid back out of the fund’s gross profits (assuming there are some). This strategy won’t matter much for relatively-uncalled Bain funds – like its tenth general PE fund or its third European fund – but is a big deal for a vehicle like Bain Capital IX, which is around 98% invested. Rather than using that final $160 million for fee payments, Bain would use it to inject additional equity into select existing investments.
2 min read · 17 February 2009
Twitter last Friday announced that it had raised $35 million in Series D funding, from Benchmark Capital ($21m) and Institutional Venture Partners ($14m). The micro-blogging service also raised an undisclosed amount of capital from past backers Spark Capital and Union Square Ventures, and could add even more once existing angel shareholders decide whether or not to exercise their pro rata rights at the $230 million-ish valuation. All together, Twitter is expected to have over $50 million in cash on hand (including some old VC money that has not yet been spent). Some additional notes on this deal after the jump, based largely on a conversation with Todd Chaffee of IVP...
2 min read · 17 February 2009
Twitter today announced that it has raised a Series D round of VC funding, from Benchmark Capital and Institutional Venture Partners. It is unclear if existing backers like Spark Capital or Union Square Ventures also participated. No financial information has been disclosed about the round -- per Twitter's obsession with secrecy -- but TechCrunch is reporting that the round came in at $35 million. The site had reported last month that the micro-blogging service was raising at least $20 million at a valuation of approximately $250 million. [Update: Twitter raised the $35 million from Benchmark ($21m) and IVP ($14m). It also secured an undisclosed amount of additional capital from Spark and USV, and is still in talks to raise additional, pro rata funds from angel investors like Jeff Bezos, Mark Andreesen and Ron Conway. Original seed investor Charles River Ventures did not participate in this round, just like it didn't participate in the Series B or C rounds]
1 min read · 13 February 2009
Regular readers know my praise for the Venture Capital Investment Competition (VCIC), in which teams of biz school students form faux VC partnerships and are judged on their due diligence, term sheet negotiation, decision-making and ability to present/defend their choices. In fact, I plan to again help judge the finals down in Chapel Hill this April. The entire process, however, relies upon the participation of entrepreneurs. The “teams” listen to elevator pitches, conduct due diligence and negotiate with real companies in search of funding. Not only is this good for the teams, but can provide great experience for entrepreneurs. Imagine getting grilled by a dozen VC “firms” in a day, and then getting to hobnob with actual VCs later on (the judges). Plus, around 25% of presenting companies ultimately get funded.
1 min read · 13 February 2009
Hey, who put the placement group in my fund-of-funds? That would be Solution Capital Partners, a cleantech-focused fund-of-funds manager that has been formed in partnership with placement agent Far Hills Group. Specifically, Solution will be run day-to-day by Russell Diamond, who previously ran a smaller cleantech-focused fund-of-funds called R&D Capital Partners. Before that, he was a general partner with Saratoga Ventures. Solution’s investment committee, however, will include members of Far Hills Group – who also will provide due diligence assistance on potential investments, and help raise the actual capital. Furthermore, the two firms are sharing office space.
2 min read · 13 February 2009
* Top 7 attention-hungry doomsayers. * Jim Cramer: Defending Tim Geithner * Morning Call: U.S. futures point higher, London up a mid-day, the U.S. mortgage plan and copper lift other European shares, the Nikkei snaps its losing streak and Hong Kong gains 2.5 percent. * We got an IPO this week, but weren't there supposed to be four of them? * The Stimulus: What's in it for Silicon Valley?
1 min read · 13 February 2009
