Private Equity
RMB funds are all the rage among big buyout firms wanting to do business in China. The latest to join the party is expected to be Bain Capital, based on comments made yesterday by managing director Mark Nunnelly at the Reuters Private Equity and Hedge Fund Summit. This was the topic of my weekly video spot with Reuters. Watch it below:
1 min read · 02 March 2010
Expect that Battery Ventures will announce a final close on its ninth fund within a week or two. I spoke to several of its LPs yesterday, who say they believe it’s effectively closed, but have not yet received formal notification. Another LP emails this morning to say that a second, and final, close is slated for this week. He adds that the firm appears to have stuck to its $750 million target, rather than succomb to the temptations borne of oversubscription.
1 min read · 02 March 2010
1 min read · 02 March 2010
In late 2008, CCMP Capital was hired by J.P. Morgan to manage the legacy portfolio of Bear Growth Capital Partners. Today, CCMP announced that it had acquired one of those portfolio companies: Francesca’s Collections Inc., a Houston-based women's fashion retailer that had sold a minority stake to BGCP for around $57 million three years ago. The all-equity deal was valued at between $200 million and $400 million, with a percentage of the proceeds being used to buy out BGCP and certain company founders. "We could have put debt on this, but chose not to," says CCMP chairman Greg Brenneman, who will join Francesca’s board of directors. "The most natural exit, eventually, would be an IPO, because Francesca’s numbers are better than anything comparable on the public markets."
2 min read · 01 March 2010
Correlation Ventures, a San Diego-based firm that wants to use algorithms to passively invest in VC deals led by other firms. Basically a quant approach to venture capital. Someone was kind enough to send over one of the firm’s recent decks, and we’ve learned a bit more information:
1 min read · 01 March 2010
There’s been some vigorous – and at times vitriolic – debate here over the issue of pay-to-pitch VC conferences and prepayment to VC “finders." I just wanted to briefly address one line of misguided argument: Those charging entrepreneurs to pitch their wares are no different from VCs charging management fees to make investments.
1 min read · 01 March 2010
Law firm Weil, Gotshal & Manges has issued its monthly private equity alert, this time discussing how recent changes to the UK Takeover Code will affect management incentives: On January 25, 201 0 changes to the UK Takeover Code came into effect which affect the treatment and disclosure of management incentive arrangements on UK take privates, increasing the need for disclosure of management arrangements and requiring private equity houses to take greater care over any early stage discussions with incumbent management teams. The new rules introduced a new requirement into take privates: disclosure/approval of arrangements where discussions have reached an advanced stage, not only of concluded arrangements. Download the entire article here
1 min read · 28 February 2010
Stage1 Ventures is raising $250 million for a new platform that will invest in hybrid venture deals, with a first close is expected to occur by the end of June. Hybrid venture deals typically include both a primary and secondary investment. The former is used for working capital and other corporate purposes, while the latter is used to provide liquidity to early company employees and/or shareholders. Such transactions have been dubbed "DST deals," after Digital Sky Technologies, the Russian investment house that has used the model for later-stage investments in Facebook and Zynga. Earlier practitioners included Advanced Equities and Technology Crossover Ventures, while Elevation Partners recently got in on the action with its $100 million deal for Yelp ($25m primary, $75m secondary). David Baum, who co-founded Stage1 four years ago as an early-stage investor, says that the past year's liquidity crunch caused his firm to become inundated with direct secondary dealflow. Its $25 million debut fund, however, had neither the capital nor strategic flexibility to pursue such deals. The result was a new barbell strategy, in which Stage1 Ventures will be complimented by the platform, called S1 Capital Partners (yes, the "S1" is supposed to reference an IPO filing).
2 min read · 28 February 2010
Did you catch some of yesterday's headlines: * NY Times: "A $3.5 billion effort aims to help tech startups" * SF Chronicle: "Alliance to boost startups, hire more grads" * WSJ: "Intel, Venture-Capital Firms To Make $3.5B In US Investments" peHUB: "Puh-leeze" Tuesday's announcement that Intel Capital and 24 venture capital firms would invest billions into U.S. startups is akin to me announcing that I'm going to write about private equity. It's what they do. The only "news" here is that Intel managed to sucker so many news organizations into giving them accolades.
1 min read · 25 February 2010
Last December, we published a post titled Whoever Buys Yelp Will Inherit the Lawsuits. At the time, Yelp was in talks to be acquired by Google, although it later opted for a $100 million investment from Elevation Partners (including $75m in secondary liquidity). It also was the subject of several defamation-related lawsuits from local business owners. As we wrote: Yelp generates extremely strong feelings among business owners, especially in San Francisco where it started. Some love the review service. But, for awhile, there was a steady drumbeat of negative media stories about Yelp that were usually generated by disgruntled business owners who would call reporters and complain, often anonymously because, they said, they feared backlash from Yelp. Accusations that Yelp would allow business owners to pay Yelp to manipulate their reviews and put the good ones on top were never proven, but some business owners were convinced that it was happening, and it was never clear from the outside exactly how Yelp operated. The company has an algorithm to sort and cull reviews that it says it is constantly working to improve. Well, now there is a class action lawsuit directly addressing the "extortion" complaint. It was filed yesterday in Los Angeles, by law firms Beck & Lee (Miami) and The Weston Firm (San Diego). The plaintiff is a Long Beach, Calif.-based veterinary hospital that claims
2 min read · 24 February 2010
