A handful of deal professionals have left TPG Capital over the past few weeks, peHUB has learned. We hear the moves were all one-off situations, rather than part of firm-wide layoffs (TPG has over 200 investment pros). In one case, it was just an individual's desire to relocate. In other words, the dreaded "mutual decision." Perhaps the most notable departee is Justin Chang, a Hong Kong-based partner who had been with TPG since 1993. Chang focused on technology deals, and had sat on the boards of such TPG portfolio companies as Lenovo Group, Crystal Decisions and ON Semiconductor.
1 min read · 23 January 2009
Last month, I moderated a panel discussion about reinventing the venture capital model. I’ll be doing the same next Friday in New York. In both cases, the underlying thesis was that the venture capital model is broken at worst, and dysfunctional at best. It’s a thesis with which I won’t argue, given that median fund returns since 2002 are underwater. When most LPs would have been better served by putting their money in the mattress, it’s clear that something must be done. Unfortunately, almost all of the discussion to date has been around the edges. Very reminiscent of the 2002-2003 “back to basics” era, which focused on things like reduced fund sizes, more conservative valuations and fewer investments into saturated spaces. Those were necessary steps, but in many cases slowed the bleeding rather than stemmed it. What we may need is something far more radical. The trouble with radical proposals is that they’re tough to come by. Luckily, a Boston-area VC has come up with one such suggestion, which I lay out below. For reasons that should become obvious, he asked not to be identified. There are obviously a lot of moving parts here – both pragmatic and philosophical – and I’ve already gotten feedback from some prominent LPs and GPs. I hope you’ll also contribute either via email or comments. And if you have a different concept for reinventing venture capital, please be sure to pass it on:
4 min read · 23 January 2009
When we last heard from Brad Garlinghouse, he was stepping down as Yahoo's senior VP in charge of such massive properties as Mail, Messenger, Groups and Flickr. That was around six months ago -- 20 months after his infamous memo -- and it seems that he's finally working on a new project. Garlinghouse has founded a Menlo Park-based software startup called WithoutStripes, according to a regulatory filing. Details are so thin as to be virtually nonexistent, although it's perhaps notable that www.WithoutStripes.com redirects to the homepage of Zimbra -- a provider of open-source email server software that Garlinghouse helped Yahoo buy in late 2007 (Update: Garlinghouse is simply using Zimbra to host WithoutStripes' email -- the two companies are not related). Garlinghouse is listed on the filing as the company's president, and only executive. Listed as a director is Michael Rolnick, a Bay Area venture capitalist whose last fulltime gig was with ComVentures.
1 min read · 22 January 2009
We've got a new President and a new Congress. We've also got 5 Questions for Mark Heesen, head of of the National Venture Capital Association. 1. What is the NVCA’s top legislative priority for this session? First of all you have to look at the stimulus package. I think Obama understands very clearly the importance of cleantech and the importance of technology in general. Infrastructure is not just bridges and roads, but it’s also things like a new energy grid and greater broadband access. So, at the end of the day, what we want is to make sure those words during the campaign and inaugural address become legislative language. It’s a short-term priority, but also a top priority. 2. What is your general viewpoint toward what the federal government has done over the past few months, vis-à-vis the economy? We look at it from an entrepreneur’s viewpoint. After the bubble burst in 2000, Silicon Valley and its companies didn’t run to the government to bail them out. Entrepreneurial companies that fail, fail. So that’s our basic instinct. But I think that’s been tempered by the fact of a worldwide economic slump. And government is an integral part of venture capital, because we don’t do
4 min read · 22 January 2009
Washington Mutual has agreed to sell its LP interests in three VC funds managed by FT Ventures, according to a filing with the U.S. Bankruptcy Court in Delaware. Industry Ventures will buy the positions for $3.46 million, plus the assumption of $6.9 million in unfunded commitments. This one is a bit interesting, if only because it’s unusual for us outsiders to have visibility into a secondary sale’s pricing. WaMu reports that it had already funded $13.1 million, which means the deal has a discount in excess of 70 percent. Of course, WaMu is a particularly motivated seller, and still has some inventory to move. You can download WaMu's filing and sale agreement after the jump.
1 min read · 22 January 2009
Updated after jump Weekend reports suggested that Cerberus Capital Management was prepping layoffs of up to 10% of its staff, and now there are indications that the axeman has cometh. Emails sent today to three members of Dymas Capital, a Cerberus lending affiliate, bounced back with the following message: You have reached a non-working email address at Dymas Capital Management Company, LLC. If you need additional assistance, please call our Main Number at 212-891-2100. Please be advised that this email has not been received by your intended recipient. Among the bouncebacks were senior director Daniel Lee, senior director Tim Davitt and director Douglas Goodwillie. I want to emphasize that these departures may be totally unrelated to the Cerberus layoff reports, but that would be one heck of a coincidence. Moreover, I've also
1 min read · 21 January 2009
Bain Capital has been sued for gender discrimination, by a former research librarian who claims she was mistreated after getting pregnant. The complaint was filed last Friday, and can be downloaded here. I always get a bit squeamish reporting on recently-filed lawsuits, because unrebutted allegations have a habit of sounding both factual and damning. For its part, Bain has released the following statement: "We believe these claims are entirely without merit. We strongly contest the plaintiff’s assertions, and will defend our position vigorously." I'll post Bain's legal response once it has been filed. In the meantime, onto the allegations:
3 min read · 21 January 2009
A trio of former Aldus Equity executives, including firm co-founder Marcellus Taylor, have formed a new Dallas-based firm called LEA Advisors. None of the principals are talking yet, but word is that the firm will be a fund-of-funds and co-investment platform focused on emerging managers. Kind of a catch-22 strategy. On the one hand, there is an abundance of emerging managers trying to raise first-time funds (as Erin noted here), which means LEA would have great "dealflow." On the other hand, however, LEA itself is an emerging manager, which means it could have serious difficulty getting its cash together.
1 min read · 21 January 2009
Jon Moulton of Alchemy Partners got PE tongues wagging earlier today, by saying that "it really would not be surprising in this recession if 30% of portfolio companies in the mid-market buyout firms actually failed.” He then softened it a bit, by adding that mid-market funds would "still come out better than mega-funds, because they had less debt going in." The first part of Moulton's comment is obviously sobering, but the second part is a conventional wisdom that began forming while the good times were still rolling. Specifically, this notion of mid-market responsibility vs. mega-market irresponsibility -- as if mid-market firms were putting down 20% on 30-year fixed mortgages, while mega-market firms were buying up McMansions with no-money down option ARMs. There's some truth to it, but much less than you might think. Specifically, let's take a look at Standard & Poor's data for 2007, which played host to a record-busting $765 billion in private equity transactions. It shows that purchase price multiples for
2 min read · 20 January 2009
peHUB will resume regularly-scheduled blogging later this afternoon. In the meantime: .msnbcLinks {font-size:11px; font-family:Arial, Helvetica, sans-serif; color: #999; margin-top: 5px; background: transparent; text-align: center; width: 425px;} .msnbcLinks a {text-decoration:none !important; border-bottom: 1px dotted #999 !important; font-weight:normal !important; height: 13px;} .msnbcLinks a:link, .msnbcLinks a:visited {color: #5799db !important;} .msnbcLinks a:hover, .msnbcLinks a:active {color:#CC0000 !important;} Visit msnbc.com for Breaking News, World News, and News about the Economy
1 min read · 20 January 2009
