1 min read · 06 November 2009
eBay announced this morning that it has reached a settlement with Skype founders Niklas Zennstrom and Janus Friis, whose legal actions were complicating eBay's sale of a majority stake in Skype to a private equity consortium. Under terms of the deal, Zennstrom and Friis will receive a 14% stake in Sykpe (still valued at $2.75 billion), with eBay holding 30% and the remainder going to Silver Lake Partners, the Canada Pension Plan Investment Board and VC firm Andreessen Horowitz. Original consortium partner Index Ventures is out. So we've got 5 questions for Marc Andreessen, the eBay board member who is half of Andreessen Horowitz's eponymous founding duo: 1. You told TechCrunch this morning that the money for this deal was in escrow, and would have gotten done even without a settlement with the founders. Why would you have gone forward with all of those troubles hanging over your head? Because there was another route to take, and a whole other side to this in terms of legal arguments we could have pursued. We were following those routes simultaneous to talking with the founders, and as it turns out we never had to file any lawsuits. These were known issues going into the deal. One reason Skype was even available was because of these issues. Our view was that a settlement would be the preferred outcome, and we’re very happy with how it turned out. We were pretty sure this is what was going to happen, because it made the most sense.
3 min read · 06 November 2009
The Blackstone Group this morning will announce its quarterly earnings, and is holding a media call at 9:30am. I'll be live-blogging it below: Blackstone Earnings Call
1 min read · 06 November 2009
Frazier Technology Ventures yesterday said that it would no longer make new investments, nor raise another fund. As part of that announcement, general partner Len Jordan said that he would be joining fellow Seattle-based venture firm Madrona. So we’ve got 5 Questions for Len: 1. When did you guys formally decide that Fund III just wasn’t going to happen? Earlier, in the first half of this year. The fund-raising environment was just very difficult, and I don’t think we foresaw it getting much better anytime soon. We’re a relatively new group, so we drew the conclusion that we should suspend. I want to emphasize, though, that it had nothing to do with our portfolio, which we feel very good about. I think we have a lot of value inside our 11 active portfolio companies, and had a very good exit last year when SNAPin was acquired by Nuance.
2 min read · 05 November 2009
It’s that time of year, when MBA candidates’ thoughts turn to flights of summer internships. So let’s help them out, through our 7th Annual Internship Rodeo. Today I am asking firms to contact me via email if you’re looking for a summer intern from the current crop of first-year MBA candidates. All types of firms need apply — VC, LBO, Growth Equity, I-banks, Mezzanine, Consulting, Funds-of-Funds, LPs, etc. Same diversity goes for geography. In your emails, please include your firm name, job location and type of business (i.e., VC/LBO/etc.). You also may include any additional information you would like posted, including a contact email address for applicants. If you would prefer me to create an email account for you, just let me know. Your firm name will be disclosed, unless you specifically request it to be kept anonymous (which about 30% of firms requested last year). Once compiled, the listings will be posted in the peHUB MBA Forum, an online message-board for MBA candidates. It currently has over 2,000 members, and that’s sure to grow once word of the Rodeo gets around.
2 min read · 05 November 2009
Earlier this afternoon, we reported that Cheng Tang was still employed as a financial consultant to 5AM Ventures, despite having recently been charged by the SEC with insider trading. 5AM general counsel Paul Stone just called to say that the firm has now terminated its contract with Tang, after apprising its LPs of the situation....
1 min read · 04 November 2009
Weil, Gotshal & Manges today released their monthly private equity alert, which "reports on a recent Delaware Chancery Court decision that serves as a reminder to private equity sponsors that portfolio company investments need to be carefully structured and documented to reduce the risk that unhappy co-investors could sue them or their board designees in connection with a less than wholly successful sales transaction." Download it here
1 min read · 04 November 2009
Update: 5AM Ventures has terminated Chen Tang In April 2008, buyout firm Friedman Fleischer & Lowe learned that chief financial officer Chen Tang was under investigation for insider trading. The firm immediately suspended Tang, cooperated with the SEC and fired him two months later. What a contrast between FFL and 5AM Ventures, where Tang has been working for at least the past six months as a back-office consultant. 5AM has neither suspended nor terminated its agreement with Tang, even though he was formally charged last Friday with helping to reap more than $8 million in illicit profits via an insider trading scheme. 5AM has declined to say exactly when Tang began work, but we know that he's essentially been manning the books since VP of finance Amy Berliner left in early August to join Andreessen Horowitz. He also was with 5AM while Berliner was still at 5AM, but on maternity leave.
2 min read · 04 November 2009
A couple months ago, we reported that turnaround firm KPS Capital Partners had raised $800 million in “top-off” capital for a $1.2 billion third fund that originally closed in 2007. The new effort was oversubscribed, even though KPS retained its 2007-vintage 25% carried interest structure and 50/50 fee split. Why would LPs pile back into a fund with such gaudy terms? Doesn’t this contradict what I wrote yesterday about Greylock’s success partially deriving from generous LP treatment? I would have thought so, until reading an item in this morning’s Private Equity Insider (which peHUB has since confirmed independently): Alameda County Employees (not an existing Fund III investor) approved up to $30 million in commitments for the top-off fund, but ultimately got shut out because of existing LP demand. Alameda was displeased, and asked KPS to reimburse the pension system for legal costs related to
1 min read · 04 November 2009
My weekly Reuters video spot, this time focused on insider trading allegations related to private equity transactions:
1 min read · 03 November 2009
