It’s the end of April, which means that a bunch of first-year MBA candidates are freaking out about not having summer internships lined up yet. But we’re here to help, with our annual Desperate Interns Drive. This is a lot like the Internship Rodeo from November, except that it’s later in the game for both employers and employees. So if your firm or one of your portfolio companies is looking to hire summer interns from the current crop of first-year MBA candidates, please drop me a note at daniel.primack@thomsonreuters.com. All postings will be put into peHUB's password-protected MBA Forum section, and can include as much or little information as you’d like to provide. Minimums are firm type (VC, LBO, I-Bank, etc.) and job location. If you’d like to keep your firm identity anonymous, just be sure to let me know. There is no fee for this service. For context, MBA Forum currently has over 2,000 verified members.
1 min read · 21 April 2009
Netscape co-founder Marc Andreessen and former Opsware exec Ben Horowitz are hoping to raise around $250 million for their debut venture capital fund, peHUB has learned. If you just heard a choking sound, it's probably coming from your own throat (or that of your closest LP). What I mean is that $250 million is an extraordinary amount of capital for a first-time, early-stage fund. Andreessen said in February that initial investments would average just $500,000 (a fivefold increase from the $100k that he and Horowitz currently invest out of their own pockets). That would work out to more than 100 portfolio companies, even if you assume that the fund would quadruple-down on every investment (which it won't). Andreesen and Horowitz plan to thin the bloated portfolio size by complimenting their seed deals with a handful of $5 million-ish Series A plays, but I'd think the firm would really need to average $10 million per company to make things manageable.
2 min read · 20 April 2009
I am pleased to welcome Parish Capital as a co-sponsor of The LP Congress, which is taking place on June 9 at Bond Street in New York City. Our other co-sponsor is secondaries firm Coller Capital, and we're not planning on adding another. Looks like a strong attendee group so far, with registrants from public pensions, funds-of-funds, private foundations, endowments, family offices, etc. We're also adding some top-notch moderators for the working groups -- in addition to myself and Erin -- and I'll have details on that later this week. Remember, it's invite-only, but you can request an invite by emailing me with your name, place of work and job title.
1 min read · 20 April 2009
Advertising behemouth WPP Group has filed suit against some of its fellow VC investors in Spot Runner, accusing them of running a "pump and dump" scheme that netted $54 million at the expense of WPP and other Spot Runner shareholders. Among the defendants are Battery Ventures and Index Ventures, plus Spot Runner's co-founders and former AOL president Bob Pittman. I haven't read through the entire complaint yet (it's posted after the jump), but here is an operative paragraph: "The defendants operated the company from its inception for their own benefit instead of the best interests of the company and its stockholders. Rather than working to make Spot Runner a successful and profitable venture, they perpetuated a "pump and dump" scheme in which they aggressively promoted the company to new investors (often by promoting that WPP was an investor in and supporter of the company) and then sold new investors large quantities of their own secondary shares at ever-increasing valuations. Such secondary sales were accomplished surreptitiously and without the disclosures to investors required by the controlling investor agreeemnts or the federal and state securities laws." Spot Runner is a Los Angeles-based Internet ad agency for local businesses. It has raised over $110 million
2 min read · 20 April 2009
As we warned a few days back, the first quarter was not kind to venture capitalists. Actually, it's more that venture capitalists weren't kind to entrepreneurs. Or perhaps the economy wasn't kind to limited partners, which caused venture capitalists to hoard their (still-considerable) cash. No matter how you pick your posit, the end result is that venture capital investments were shockingly low over the first three months of 2009. Venture capitalists invested just $3 billion into 549 companies last quarter, according to data released this morning by the MoneyTree three (PwC, NVCA & Thomson Reuters). That's a 47% dollar drop from the $5.7 billion disbursed in Q4, and a 61% drop from the $7.74 billion disbursed in Q1 2008. The number of companies funded didn't decrease quite as dramatically -- suggesting that lowered valuations partially helped drive down the dollar numbers -- but still were off 36% and 43.8%, respectively. Every major industry sector experienced double-digit declines, while the percentage of first-time fundings stayed constant at around 20% (although the value of such deals fell by 48%).
2 min read · 18 April 2009
Judging by the number of voicemails and emails I've gotten this morning (including from my own colleagues), it seems that the New York kickback scandal has finally broken through as a mainstream media story. All it took was for Steve Rattner to be specifically tied to the scummery, which the New York Times did this morning. We already knew that Rattner had at least a tangential relationship to the mess, given that Quadrangle Group -- the firm he ran before joining the Obama Administration -- was among the private equity firms to have used Hank Morris as a "placement agent." Moreover, we noted that: (a) Quadrangle also had retained the reputable Monument Group as a placement agent, raising questions as to why it also paid Morris, and (b) Quadrangle was completely left out of a New York AG office press release announcing the original indictments. Our initial speculation was that the omission was political -- Andrew Cuomo not wanting to annoy either Obama or Michael Bloomberg (who tapped Quadrangle to manage his billions) -- but perhaps it was simply about not drawing too much attention to the next shoe to drop.
2 min read · 17 April 2009
The New York kickback scandal made new headlines yesterday, after state Attorney General Andrew Cuomo filed a criminal complaint against Raymond Harding, former chair of New York's Liberal Party, for scheming with the already-indicted David Loglisci and Hank Morris. Cuomo also coaxed a guilty plea and financial remuneration out of Barrett Wissman, a crooked former hedge fund manager. You can read more here, including the Harding complaint. All of this got me to thinking more about the issue of raising fund capital from public pension systems, a process that often is just begging to be corrupted. Inexperienced and smaller GPs can have real difficulty getting in front of a pension system’s investment staff, because there is rarely a transparent or streamlined process. The result is that many of these GPs hire a “finder,” which is typically a politically-connected individual who can gain access from the top-down. Most of these finders aren’t splitting their fees with the pension system’s investment staff – a quid pro quo that allegedly occurred in New York – but even the most above-board of these relationships boils down to influence peddling.
3 min read · 16 April 2009
Dataxu, an online advertising startup run by former Enpocket and Nokia Interactive chief Michael Baker, has raised just over $6 million in first-round funding, according to a regulatory filing. Backers include Atlas Venture and Flybridge Capital Partners, with Jeff Fagnan (Atlas) and Jeff Bussgang (Flybridge and prolific peHUB contributor) joining the company's board of directors. Dataxu (pronounced data-zoo) was founded in 2007 by MIT professor Ed Crawley. Its first CEO was Bruce Journey, who had spent the prior decade as publisher of the MIT Technology Review. It's not exactly clear when he turned the reins over to Baker, as their LinkedIn profiles have conflicting dates (Journey claims to have been CEO though last month, while Baker's says he took over in September 2008). I tried leaving a voicemail for Baker, but was instead (repeatedly) directed to Journey's recording.
2 min read · 15 April 2009
First quarter Moneytree figures aren't being released until this weekend, but here's a sneak peak of what our headline will read: Oh, The Horror. According to preliminary data viewed by peHUB (via the VentureXpert database), U.S. venture capitalists disbursed fewer dollars in Q1 2009 than in any other quarter since at least 2003. It might actually be a bit worse than that, but I'm building in a few hundred million dollars worth of last-minute data entry. If the numbers were to remain completely static (which they won't), then you'd have to reach all the way back to 1997. VentureSource -- the VC data group owned by Dow Jones -- is showing something similar. More specifics when the numbers become official, but I figured you'd want to know that it's gonna be ugly. Real ugly.
1 min read · 15 April 2009
There are new charges this morning in the New York pension kickback case, but not against any of the private equity firms that paid (perhaps unwittingly) for access. Instead, state Attorney General Andrew Cuomo filed a criminal complaint against Raymond Harding, former chair of New York's Liberal Party, for partering on the scheme with already-indicted David Loglisci and Hank Morris. According to a statement from Cuomo's office, Harding allegedly "obtained over $800,000 in illegal fees on State pension fund investments as a reward for opening up a State Assembly seat for then Comptroller Alan Hevesi's son and for over 30 years of prior political endorsements." Harding is charged with multiple violations of the Martin Act. Cuomo also announced that Barrett Wissman, a former manager of hedge fund Hunt Financial Ventures, has pled guilty to his participation in the scam. As part of his plea, Wissman has agreed to repay $12 million to the state. Read the complaint after the jump:
2 min read · 15 April 2009
