It’s special election day here in Massachusetts, which means that we’re just hours away from learning if private equity will place one of its own in the U.S. Senate (yes, it’s just the party primaries, but did I mention this was Massachusetts?).I won’t disclose my personal vote, but would like to tardily announce that peHUB officially endorses Steve Pagliuca. Not because he is or isn’t the most qualified candidate, but because his private equity pedigree could provide plenty of grist for future columns.For example, how would Pagliuca vote when the latest carried interest tax bill (introduced yesterday) comes to the floor? He’s seemed disinclined to support such a thing, but perhaps he’s hedging his bets for a return to Bain Capital.
1 min read · 08 December 2009
Back in April, venture capitalist Joanna Rees told VentureBeat that she was considering a run to succeed Gavin Newsom as mayor of San Francisco. We were more than a bit surprised, given that a Rees candidacy would result in all sorts of dirty laundry being re-aired.Connie even wondered if it was "largely a publicity stunt intended to clear her name in Silicon Valley."Well, it seems that Rees is serious. She recently launched a website that includes a blog (latest post is about post-divorce family), a biography (no mention of her VC firm's implosion), photos (including ones w/ Bill Clinton and Quincy Jones), nonprofit affiliations (e.g., New Schools, World Economic Forum) and select past investments.
2 min read · 07 December 2009
Very saddened to learn that Dick McGlinchey, a Boston-area marketing pro focused on VC firms and early-stage companies, passed away last Wednesday night from a heart attack. Dick also had been suffering from a progressive neurological disease called Multiple System Atrophy.I first got to know Dick when he was in charge of marketing for Battery Ventures (1999-2004). He later continued to work with various VC firms and early-stage companies. Extremely generous with his time, expertise and advice. He also didn’t mind swapping industry gossip, which is a great way to make sure reporters pick up the phone when you’ve got something to pitch. Really just a wonderful guy, and someone I was honored to be able to call a friend.
1 min read · 07 December 2009
Six weeks ago, I asked you to participate in our bi-annual survey of dealmaker attitudes and predictions, which is done in partnership with the Association for Corporate Growth. We got over 900 respondents, and official results will be released tomorrow morning. But since I’d hate for you to have to wait… Eighty-two percent of respondents expect M&A volume to increase over the next six months, with 72% percent predicting “moderate” growth and another 10% predicting “significant” growth. Only 1% expects any sort of decline.Such optimism is stronger than in a similar survey six months ago, but also may reflect negative feelings toward current conditions. Fifty-six percent of respondents said that current M&A conditions were “fair,” while 31% said “fair” and just 12% said “good.” The “excellent” option garnered just 1% of the vote.
2 min read · 07 December 2009
New York AG Andrew Cuomo just sent word of significant developments in the pay-to-play investigation, which involves private equity fund investments by the state's pension fund. Seems important enough for me to take a break from my regularly scheduled vacation: Pension Scandal Update
1 min read · 03 December 2009
2 min read · 02 December 2009
My weekly video spot with Reuters was focused on the situation at Canopy Financial, which yesterday filed for fraud-induced bankruptcy protection. Per usual, I'm taping just a few paces away from the home office:
1 min read · 01 December 2009
On its website, private equity firm Olympus Partners used to boast about how it had "never executed a leveraged recapitalization of an existing portfolio company." You won't find that claim there today, however, after the firm announced a $110 million leveraged recap of Taco Bell franchisee K-Mac Enterprises Inc. The deal included a $59 million dividend for existing shareholders (i.e., Olympus), $2.7 million in bonuses to 25 K-Mac employees and a bunch of left over working capital that K-Mac can use to buy and build new restaurants. So what happened? "The company had leverage of less than 1x EBITDA before the recap, which wasn't sensible from a tax perspective" explains Rob Morris, managing partner of Olympus. "We increased leverage by doing the recap, but it's effectively less than it was after the original deal -- 2.5x versus 3.5x -- which is also a heck of a lot less leverage than your typical LBO and is a much more efficient balance sheet than no debt at all."
2 min read · 01 December 2009
Next Wednesday, Chip Hazard of Boston-based Flybridge Capital Partners will hold office hours for local entrepreneurs. His partner David Aranoff will follow suit the following week, after all of Hazard's available slots got scooped up. In the interim, three Boston-based partners with Siemens Venture Capital will hold office hours of their own. So will Rob Go, a senior associate with Spark Capital. Even local tech journalist Scott Kirsner has gotten in on the act, "selling out" a series of recent one-on-ones at a Cambridge sandwich shop. In each case, the idea is to meet with local entrepreneurs that may be otherwise unable to get facetime with professional VCs. The investor typically schedules the meetings (thus leading to some pre-screening), but the subject matter is at the entrepreneur's choosing.
2 min read · 01 December 2009
1 min read · 01 December 2009
