Private Equity
Back in April, I wrote that Polaris Venture Partners was steaming toward a final close on $500 million for its sixth fund. It was a big cut from the $1 billion Polaris raised for its last fund, but its process seemed smoother than that of local rival Highland Capital Partners (which also halved the target of its new fund, but took quite a while to get there). Well, it seems Polaris is having troubles too (which means I was wrong). A regulatory filing indicates that the $500 million target has been cut to $400 million, and that the firm only had $233 million banked as of May 26. An LP source says that the revised timeline is to hit a final close sometime in Q3, but that Q4 remained a possibility.
1 min read · 16 June 2010
There's another angel group out there looking for early-stage IT entrepreneurs. This one is called Hacker Angels, and consists of Joshua Schachter (Delicious), Jeff Miller (Punchfork), Gabriel Weinberg (Duck Duck Go) and Roy Rodenstein (Going.com). I spent a few minutes on the phone with Rodenstein, to understand what they're planning: How do you define "hacker?" Well, a couple of us are from MIT, so we definitely define it in a positive sense. Specifically, it's entrepreneurs that can program and are taking the lead in developing the first prototype or whole product themselves... a lean startup model.
2 min read · 14 June 2010
Ah, the cognitive dissonance of limited partners... A few months back, I moderated a Columbia University panel at which LPs said: (a) The best returns come from investments made during economic trouble; and (b) We're not going to invest much until 2011. No, it wasn't an argument in support of a double-dip recession. It was cowardice trumping intellect. Today we have a new example, courtesy of the Private Equity Barometer, a bi-annual survey of limited partners conducted by Coller Capital (download full study here). It finds that more than half of all limited partners have lifetime returns from private equity of 10% or less. At the same time, more LPs plan to increase their exposure to private equity (20%) than plan to decrease their exposure (13%).
2 min read · 14 June 2010
Europe is trying to destroy the global private equity market. Actually, that's a bit hyperbolic. Let's go with this instead: European Union regulators are trying to destroy the global private equity market. At issue is the EU's Directive on Alternative Investment Fund Managers, which could effectively prevent European institutions and individuals from investing in non-European funds. No more raising fund capital from that Dutch pension system or that British corporation or that wealthy family in Germany. Buh and bye. You know all that talk about how the Volcker Role could kick U.S. banks out of the limited partner biz? Well, in terms of fundraising impact, Volcker is Lamar Odom and the EU is Kevin Garnett.
3 min read · 14 June 2010
This one comes from John Dougery, managing director of Menlo Park-based Inventus Capital Partners: My partner, Kanwal Rekhi, gave a keynote at a Bangalore event last summer and one of the founders of Vivu.tv approached him - we ended up leading their financing. This is also how the CEO of Exodus got Kanwal’s attention back in 1995. We’ve found burning some shoe leather to get out there among entrepreneurs quite productive. If you have no idea what this post was about, go here.
1 min read · 11 June 2010
Kaazing, a Silicon Valley startup that helps "webscale" legacy middleware applications, has raised $4 million in VC funding, peHUB has learned. Participants on the Series B round included Thematic Capital (London), Peer Venture Partners (Menlo Park) and individual angels like Dave Amoroso. Kaazing basically applies a new HTML 5 standard called Websockets to existing enterprise applications, which then helps massively scale the app at a relatively low cost. It also has begun hosting HTML 5 user groups for the developer community.
1 min read · 10 June 2010
Fred Wilson today blogged about the "panel pile-up," in which a dozen or so entrepreneurs line up to pitch him after speaking at a conference. Not surprisingly, Fred doesn't believe such situations are ideal for in-depth interactions (he suggests folks just take 60 seconds to give name, rank, serial number and why you want to meet with him). Anyway, it got me to wondering if any VCs have done a deal in which the initial point of contact was made as part of a "panel pile-up." I threw out the question in this morning's peHUB Wire, and received two positive replies. Get them after the jump...
2 min read · 10 June 2010
Text of the financial reform conference report was posted online earlier today, including the Volcker Rule provisions that would prevent banks from sponsoring or investing in private equity funds. The 1,974-page document will essentially serve as a draft to be edited over the next few days by a bicameral committee (opening statements this afternoon, real work begins tomorrow). We here at peHUB take the term "private equity" quite literally, which results in a broad interpretation that includes seed-stage angel investments all the way through leveraged mega-buyouts. Congress, however, implictly claims to have a more nuanced understanding. The bill makes reference to private equity in two different sections. The first is in regards to registration exemptions, in which "private equity" funds and "venture capital" funds each receive their own subsections. The second is in the Volcker Rule area, when only "private equity" funds are referenced. In other words, it would appear that banks would still be allowed to sponsor and invest in venture capital funds, were the current language to stand. What remains entirely unclear, however, is how "private equity" and "venture capital" would be distinguished from one another. You'd think Congress might have included some parameters, like investment holding periods or portfolio company size or the use of leverage. Instead, it simply punts -- telling the SEC to come up with definitions within a year from the bill's (expected) passage.
2 min read · 10 June 2010
1 min read · 10 June 2010
The Carlyle Group has lots of different private equity fund strategies, but none would be described as turnaround or special situations. That may be about to change. peHUB has learned that the firm is in talks to hire Rodney Cohen, co-managing partner of Pegasus Capital Advisors. The two sides have not yet reached a final agreement, but sources tell peHUB that they are close. Were Cohen to join, the most likely scenario would be that he'd help Carlyle launch a special situations fund later this year. The firm does have a pair of "Strategic Partners" vehicles, but both of them focus more on debt than on equity.
1 min read · 09 June 2010
