Private Equity
Flipping through the regulatory filings yesterday, and spotted one for ModCloth – an innovative online retailer that previously had raised a few million dollars from First Round Capital, Mike Maples and lots of individual angels. Looked huge by comparison -- $19.82m called of a $32.62m offer – so figured it was worth a closer look. Turns out the deal is effectively a recap, in which new investors bought Series B stock and the company bought back Series A and Series A-1 shares from many of the smaller angels. No official word on the lead, but rumor is that it’s a big Silicon Valley firm whose name sounds a bit like ---- Foley or --- Rose.
2 min read · 25 May 2010
Angel investor and geek Renaissance man Chris Sacca appeared on stage earlier today at TechCrunch Disrupt, and decided to play around with a new music composing/publishing platform called UJam. More specifically, he sang part of a Sinatra tune. Not as original as The Riskmaster, but still ballsy in front of such a large crowd. Thanks to @Scobleizer for taping (go to the 0:43 mark):
1 min read · 24 May 2010
Marc Poirier last week sent out an email announcing that he had left @Ventures after a dozen years, in order to become a managing director with Spinnaker Capital. Not the kind of thing that garnered Techmeme headlines -- or headlines anywhere, for that matter -- but it would have were the blogosphere around during that dotcom boom. @Ventures -- then known as CMGI @Ventures -- was one of the most active and (theoreticaly) most well-capitalized VC firms in the world. Shortly after I began covering the market, it boasted three $1 billion funds -- although company executives would later try walking those numbers back as CMGI's stock price plunged. @Ventures has since morphed into a sleepy cleantech investment firm, and Poirier's departure leaves just one remaining team member from the good ole' days -- managing partner Pete Mills. But it got me to wondering about what happened to all those other folks. So, take a look after the jump...
4 min read · 24 May 2010
Several months ago, I promised not to write again about carried interest taxation until relevant legislation either passed or was formally buried. Let me be the first to call me a liar (although perhaps that’s a bit harsh, as I was sincere at the time). But don’t worry: My goal this morning is not to relitigate the underlying issues. You know where I stand on those. Rather, what follows is to look at where things are at and what might happen once a bill does, indeed, pass. Where things stand: Last night, Senate and House Democrats said they would new legislation on carried interest taxation, as part of the “American Jobs and Closing Tax Loopholes Act of 2010.” Here is the relevant language, from a bill summary posted online: The bill would prevent investment fund managers from paying taxes at capital gains rates on investment management services income received as carried interest in an investment fund. To the extent that carried interest reflects a return on invested capital, the bill would continue to tax carried interest at capital gain tax rates. However, to the extent that carried interest does not reflect a return on invested capital, the bill would require investment fund managers to treat seventy-five percent (75%) of the remaining carried interest as ordinary income. A transition rule would apply prior to January 1, 2013. This proposal is currently being estimated by the Joint Committee on Taxation. So, 25% of carried interest would continue to be taxed as capital gains, while the remaining 75% would be treated as ordinary income. This would go into effect beginning 2013. The aforementioned “transition rule” for 2011 and 2012 is not spelled out, but I’ve heard that it may be a 50/50 split (i.e., 50% cap gains, 50% ordinary income). 2010 taxes would not be affected.
5 min read · 21 May 2010
BrightSource Energy today announced $150 million in new VC funding, which it will use to develop utility-scale solar thermal power plants. A couple of readers emailed to ask if it was the largest venture financing of 2010, or even if it should count as a VC deal (as opposed, say, to project finance). The answer to the first question is "no" (it's number four) and the answer to the second question is "yes" (it's equity being contributed by, among others, traditional venture firms). But it reminded me that it's been a while since we updated our list of the year's top VC recipients (so far). Fairly liberal with the term "venture capital," but that's why this is an interim list rather than an official/final list. Get it after the jump...
4 min read · 20 May 2010
I had promised not to post again about carried interest taxation until an actual bill passes (or fails to pass), but Reuters asked me to discuss it for our weekly small biz video hit. Sorry. Suffice to say, my position is still against the status quo. But if it makes (most of) you feel better, anchor Jen Rogers takes a nifty dig at me near the end...
1 min read · 19 May 2010
LinkedIn is adding another independent director to its board, but CEO Jeff Weiner kept shrugging off IPO questions during a video interview earlier today with Reuters. Actually, he first said "no" when asked if the company is preparing to take LinkedIn public, but then walked it back a bit by simply repeating that the company is "focused on building the business." He also talks a bit about valuation, privacy and future acquisitions. See below:
1 min read · 19 May 2010
It’s become reflexive: Whenever a take-private buyout is announced, class-action law firms begin “investigating” whether the company’s board breached fiduciary duty to shareholders. Never mind if it was a competitive process that produced a 60% premium – suggest bad faith first and ask questions later. But at least these vultures typically wait until the deal is actually announced. Not so with a law firm called Bower Piven, which yesterday announced that it has “commenced an investigation into potential breaches of fiduciary duty and other violations of state law by the Board of Directors of Pactiv Corp. in connection with the possible sale of Pactiv Corp. to Apollo Global Management LLC.” Note the operative word is “possible.” Neither Apollo nor Pactiv have announced anything! All we've got is a WSJ article saying that Apollo has offered to buy the company – at a price higher than where Pactiv has traded for the past several years. And today there are reports that strategic players are jumping into the fray.
1 min read · 19 May 2010
Manhattan Growth Partners has launched as a new growth equity firm led by Dean Bosacki (former managing director with Friend Skoler) and Patrick McBride (former partner with The Walnut Group). Bosaki says that MGP is utilizing a fundless sponsor model with several family office investors, although he "hates" the term fundless sponsor: "I just think the traditional private equity fund model is kind of broken, and LPs love the transparency and shorter investment cycle that comes with what we're doing," he explains. A typical MGP deal will involve between $10 million and $15 million of equity, in exchange for control positions in growth-stage companies. No official industry focus, although the partners’ backgrounds would suggest consumer products, lifestyle brands and services.
1 min read · 19 May 2010
Silver Spring Networks has delayed its much-anticipated IPO until Q4 of this year, peHUB has learned. The smart grid company had been expected to file its S-1 last month and price sometime this summer. A WSJ article suggested that the offering would value Silver Spring at around $3 billion, with Jefferies and Morgan Stanley serving as co-lead underwriters. So what happened? The most likely explanation is that Silver Springs had to recover from fallout of some bad smart meters sold to PG&E in California. Not so much the tech hiccup itself -- Silver Springs quickly corrected the problem -- but rather from the PR mess that resulted from so many customers being over-billed (including some customers who were unaware that smart meters even had been installed).
2 min read · 19 May 2010
