Private Equity
This is kind of old news, but since no one else seems to have written it... Vestar Capital Partners has closed its Japanese affiliate, which originally launched in the summer of 2006. In a letter sent to LPs on October, the firm said: “We have decided to discontinue our efforts in Japan following a three year period. Notwithstanding the hard work and diligent efforts by our Tokyo team, the Japanese market continues to be challenging for private equity, and our ability to find attractive investments did not meet our expectations. As a result, we have closed our Tokyo office and are no longer looking to make direct investments in Japanese buyouts."
1 min read · 26 January 2010
Last Friday, I learned that Vistaprint had acquired custom embroidery company Soft Sight (dba Threadsmith.com). Not the world's largest deal, but notable because Vistaprint is better known for M&A cold feet than for consummation. My sourcing was impeccable, but I followed journo protocol in calling Vistaprint for confirmation and comment. At the very least, I was hoping to learn what made Soft Scan different from all the acquisition targets that had come before. After a few hours, a spokesman emailed me the following: "It is our policy not to comment on market rumors or speculation." The email I wanted to send back was even shorter. Just two words, and the second one was "you."
2 min read · 25 January 2010
Nearly two years ago, I conducted an on-stage interview with Carl Icahn at an industry conference. We mostly discussed economic conditions and shareholder activisim, but I also asked about his minority investment in a young mobile content management company called Motricity. The company was an unusual target for Icahn -- privately-held, VC-backed -- and had just recently announced plans to cut up to 350 workers and move its headquarters out of North Carolina. Icahn's explanation, in short, was to blame his son. "My son liked it and talked me into it... I said okay, and I'm not sure it was the right decision." You can watch video of the exchange after the jump. Today, however, Icahn might be giving his son a pat on the back instead of a hard time. Motricity has filed for a $250 million IPO, and reports strong year-over-year revenue growth between 2006 and 2008. It also had an 18.6% revenue increase between the first nine months of 2008 and the first nine months of 2009
2 min read · 25 January 2010
Web-based printshop Vistaprint has made what appears to be its first-ever acquisition, quietly scooping up custom embroidery and apparel embellishment company Threadsmith.com. A company spokesman declined to confirm or deny the deal, which is schedule to be formally disclosed as part of a quarterly earnings release next Thursday. Threadsmith.com (a.k.a. Soft Sight Inc.) has raised around $2.4 million in VC funding from High Peaks Venture Partners and Advantage Partners. High Peaks recently announced that the company had been sold, but did not name the buyer. It also did not announce a sale price, except to say that the deal generated "a high double digits annualized return rate."
2 min read · 22 January 2010
My weekly video spot for Reuters was about the 2009 VC investment figures, which were released this morning by PwC, the NVCA and Thomson Reuters. Per usual, filming just a few doors down from the home office:
1 min read · 22 January 2010
The 2009 MoneyTree Report was released this morning, showing a fairly dismal view of 2009 venture capital investment. The data comes from PwC, the NVCA and Thomson Reuters. Here's copy of the MoneyTree press release, and here's a detailed data spreadsheet. You also can download regional data, the year's top deals (Zynga excluded, natch), and Q4's top deals.
1 min read · 22 January 2010
Venture capitalists invested $17.7 billion into 2,795 deals for U.S.-based companies in 2009, according to data released today by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters (publisher of peHUB). That's a 37% dollar decrease and 30% deal decrease from 2008, and represents the lowest volumes since 1997. It actually gets a bit worse. All but one industry sector experienced double-digit dollar declines (including some particularly sluggish stats for cleantech). And the one exception -- chips and networking -- still dropped by five percent. So why my headline optimism? Three reasons: 1. Low investment totals might concern entrepreneurs and fee-driven investors, but they don't correlate to low investment returns. Far more venture capital was invested in 2001 or 2003 than in 1997, but which year's median returns would you prefer?
2 min read · 22 January 2010
Earlier today, President Obama outlined some proposals designed to limit risk-taking on Wall Street. For our purposes, here is the operative section: "We should no longer allow banks to stray too far from their central mission of serving their customers. In recent years, too many financial firms have put taxpayer money at risk by operating hedge funds and private equity funds and making riskier investments to reap a quick reward. And these firms have taken these risks while benefiting from special financial privileges that are reserved only for banks. Our government provides deposit insurance and other safeguards and guarantees to firms that operate things. We do so because a stable and reliable banking system promotes sustained growth, and because we learned how dangerous the failure of that system can be during the Great Depression. But these privileges were not created to bestow banks operating hedge funds or private equity funds with an unfair advantage. When banks benefit from the safety net that taxpayers provide, which includes lower cost capital, it is not appropriate for them to turn around and use that cheap money to trade for profit. And that is especially true when this kind of trading often puts banks in direct conflict with their customers' interests." It's good political populism, and may even make for good policy (so argues Felix). The fact that Obama made the statement in the midst of Goldman's earnings call is just theatrical one-upsmanship. What it means for private equity, however, is extremely unclear.
4 min read · 21 January 2010
Rhode Island already has a private equity pro running for Governor (Rory Smith of Nautic Partners), so why not a venture capitalist running for Treasurer? That venture capitalist is Gina Raimondo, a general partner of Point Judith Capital. She helped found Providence-based Point Judith in 2002, after having spent three years running fund development and leading a handful healthcare deals for Village Ventures (Point Judith is part of the Village Ventures network). Her Point Judith portfolio companies include GetWellNetwork, NABsys, Novare Surgical and Spirus Medical. "I can think of no one I would rather have as the steward of the public's capital," says Matt Harris, a managing general partner of Village Ventures.
2 min read · 21 January 2010
In October, I wrote the following after returning from the Quebec City Conference: “Terry McGuire of Polaris Venture Partners said in Quebec that the future of venture capital would be smaller funds and smaller partnerships. He declined to say if that applied to Polaris itself – methinks it does, as the firm is expected to fundraise next year.” Yup, it does. Polaris is targeting $500 million for its sixth fund, after raising $1 billion for its fifth fund in 2006. I know of at least one current partner who isn’t part of the new effort, but will
1 min read · 20 January 2010
