Private Equity
My weekly video segment with Reuters Insider was about the SEC's proposed rule that would ban private equity placement agents from pitching their clients to public pension funds. The most recent development was a letter from the SEC to FINRA, suggesting a third path whereby FINRA-registered broker-dealers would be allowed to work with public pensions, so long as FINRA set new regulations to discourage pay-to-play activities. Per usual, we filmed from a tiny room just a stone's throw from the home office...
1 min read · 09 March 2010
Carried interest taxation is back on the blogs this week, thanks largely to a piece by The New Yorker's James Surowiecki. It also doesn't hurt that Rep. Sandy Levin (D-MI) -- author of a 2007 bill that proposed changing the treatment of carried interest from capital gains to ordinary income -- was named acting head of the House Ways & Means Committee, in the aftermath of l'affaire Rangel. But, just between us, I'm absolutely sick of discussing carried interest (let alone writing about it). That Levin legislation was submitted nearly three years ago, and the issue has been used as political brickbat ever since. The original impediment was a threatened presidential veto, plus some poison pill dispensing by Chuck Shumer. Then came a new sheriff who promised to change the law, until being saddled with the most hapless Congress in recent memory (those folks couldn't pass the salt). For the repeated record: I favor a change to carried interest tax treatment. So do a lot of VC and PE pros, although very few are willing to discuss it on the record.
2 min read · 09 March 2010
PricewaterhouseCoopers today published a 28-page report that looks back at the past year's IPO market, and suggests that the second half's momentum will be built upon in 2010. Here's the key graphs, in regard to U.S. offerings: While January and February are often quiet, we expect substantial IPO activity prior to the dog days of summer and robust deal flow throughout the atumn. We foresee a continuing contribution of deals from financial sponsors as private equity firms look to harvest investments made during the "heyday" of leveraged M&A activity that preceded the credit crisis. We expect IPOs from the technology sectors, including biotech, as well as financial services, healthcare and retail and consumer deals. Green energy/technology deals may be the "wild card" for 2010, depending upon how policymakers elect to support a low-carbo economy. PwC adds that companies trying to go public in 2010 must pay particular attention to their abilities to meet short-term market expectations. This might sound obvious, but many private companies assume
1 min read · 09 March 2010
On the week that peHUB launched in November 2007, venture capitalist Charley Lax wrote the following: Meaningless paperwork is destroying Canada’s venture capital industry, and if our northern neighbor ever wants significant US venture capital to flow north, they’ll listen when I tell them to eliminate Section 116 certificates immediately. Well, nothing happened "immediately," but Canada last week signaled that Section 116 is headed to the scrapheap. What follows is are some questions about Section 116 for Stephen Hurwitz, an attorney who focuses on cross-border transactions between the U.S. and Canada:
3 min read · 08 March 2010
"Social networks what dreams are made of..."
1 min read · 08 March 2010
Postabon, a website focused on helping users find local retail deals, has secured $1 million of a $1.5 million funding round led by Spark Capital, according to a regulatory filing. Todd Dagres of Spark has joined the Postabon board of directors. The company was founded last year by Harvard students Stu Wall, John Buchanan and Shaneal Manek. Mashable suggested that Postabon is "Foursquare meets shopping" -- based on its use of mobile geolocation technology. Its current offering focuses on the New York market, even though the company is technically headquartered in Cambridge.
1 min read · 08 March 2010
I spent a bunch of time in New York City last month, including extended hobnobbing with local VCs and entrepreneurs. One thing I heard over and over again was how the locals would soon leapfrog Boston in terms of entrepreneurial activity and venture capital funding -- positioning themselves in the coveted runner-up position behind perennial leader Silicon Valley. The sentiment was fueled by a variety of factors, including many discussed in this NY Times story from last Friday. Here they are in no particular order:
3 min read · 08 March 2010
A few weeks back, we asked you to vote on where we should hold the next peHUB Shindig. You picked Boston, which is great because it means I don't need to hop a plane. It will take place on Wednesday, March 31 at the Bell in Hand (yes, it's a bigger room than last time). Tickets are on sale now. Get yours by going here. Per usual, no content – just cocktails & conversation with other members of Boston's venture capital and private equity communities. Investors, entrepreneurs, bankers, lawyers and other assorted hangers-on. Tickets cost just $10 each, with proceeds being donated to a local charity that will be selected by event attendees (you can nominate a charity when you register). I urge you to get yours soon, since the last peHUB Shindig in Boston sold out. A very special thanks to our sponsors: .406 Ventures, Atlas Venture, Capital Dynamics and Velocity Financial Group.
1 min read · 08 March 2010
Covestor, a social networking company focused on personal investing, today told the SEC that it recently raised $360 million in new equity financing. Yes, you read that correctly. No, whoever filled out the form did not do so correctly. Albert Wegner, a partner with Covestor backer Union Square Partners, tells me that while it is true the company recently raised new capital, it was nowhere close to $360 million (which, if true, would have been the largest Web 2.0 ramp-up in history). He declined to say whether the correct figure was $3.6 million, $360,000 or something else entirely.
1 min read · 05 March 2010
Sorry for the light posting so far today, but I've been sidetracked by dozens of emails about my argument that Permira should tell portfolio company Hugo Boss to keep open its Ohio suit-making plant. Specifically, I said that Permira might be making a poor financial decision for itself, in that the resulting loss of future LP commitments could exceed -- or at least offset -- savings generated by outsourcing the Ohio jobs to . In response, the collective you has accused me of "hypocrisy," "populist buffonery" and of being a "raving protectionist." Some of these attacks are accompanied by compelling dissents, so let me try to address them:
4 min read · 05 March 2010
