Private Equity
Reuters is conducting a short survey to help inform the discussion at the World Economic Forum in Davos later this month. Over 30 cleantech VCs have taken the survey so far. A couple of interesting data points: One, most of the respondents expect one or two of their cleantech portfolio companies to go public or get acquired this year. And two, most of the respondents are focusing their current investments on startups that help conserve energy (e.g. makers of LED lighting, energy-efficient building materials, software that tracks and manages energy used in home and electric vehicles) -- as opposed to startups that create energy (e.g. biofuel companies) or startups that store energy (e.g. battery makers). All the survey results will be published later this month on Reuters.com and in an upcoming issue of Venture Capital Journal. Our goal is to get at least 50 respondents. If you’re a cleantech investor and you haven’t taken the survey, we’d love to hear from you. Please shoot me an email to lawrence.aragon@thomsonreuters.com and I’ll send you a link. It’s a really short survey.
1 min read · 09 January 2010
2 min read · 14 December 2009
Looks like it's the beginning of the end of the fight over increasing taxes on carried interest. The House of Representatives today passed "The Tax Extenders Act of 2009," aka HR 4213. The bill contains a provision that would change the tax status of venture capital carried interest from capital gains to ordinary income, with the purpose of paying for year-end tax extensions. "Increasing the taxes of long term investors whose commitment to building companies and creating jobs has been proven for decades is counter productive to the one goal on which our country should be focused – economic recovery," Mark Heesen, president of the National Venture Capital Association, said in a statement. "The President and Congress have made it clear that to emerge from our financial troubles our country needs jobs and innovation. Taxing VCs who are working with fast growing start-up companies so that large corporations can continue to receive tax breaks is ill conceived policy." With the Dems in charge of both the House and Senate, plus a Democratic President, odds are that VCs will soon be paying the ordinary income rate on carried interest instead of the capital gains rate. The irony, of course, is that after a dearth of liquidity events over the past couple of years, we've recently seen some sizable exits that would provide actual carried interest to be taxed. Merry Christmas, venture capitalists! --Love, Your Uncle Sam
4 min read · 10 December 2009
We won’t officially know until early Q1 whether VC investment levels returned to normal in Q4, but I have yet another piece of anecdotal evidence that the market is improving. For the second month in a row, I’ve been surprised by the number of deals on Venture Capital Journal’s list of the Top 10 Most Active VCs. For most of this year, the top deal maker on the list has done about seven or eight deals per month. That changed in October, with New Enterprise Associates going into warp drive and closing 12 deals, up from eight the prior month. For November, I found that not only did NEA do another dozen deals, but it wasn’t even at the top of the list. Intel Capital came in at No. 1 for November with 16 deals, up from just three deals the prior month. I’m not ready to say “Venture Is Back, Baby,” like Jon Callaghan, but these data points at least give us reason to hope.
2 min read · 09 December 2009
As Jeff Bussgang pointed out in his column today, the alleged fraud at VC-backed Canopy Financial is reminiscent of the fraud case at VC-backed Entellium last year. In that case, the former CEO and CFO were sent to prison in March for wire fraud and lying to investors (including Ignition Partners and Intel Captial) about their company’s actual revenue. Former Entellium CEO Paul Johnston was sentenced to three years in prison and a little over $2 million in restitution, while former CFO Parrish Jones was sent away for two years and ordered to make restitution of more than $850,000. Once they get out of prison, the pair also have to serve 80 hours of community service in a homeless shelter or soup kitchen. Venture Capital Journal published a story last year after the Entellium case broke, questioning whether VCs could have done anything to prevent the fraud. Since it’s Friday, dear HUB readers, I’m making the story free today. Read it here.
1 min read · 04 December 2009
Four months of fund-raising helped Mohr Davidow Ventures raise an extra $29.2 million for three annex funds, according to documents filed with the SEC today. MDV’s effort to raise the annex funds first came to light in August, when it filed SEC documents showing that it had raised a combined $98.1 million in annex funds for its seventh, eighth and ninth core funds. Today’s updated filings show that the grand total increased to $127.3 million. The fund IX annex fund faired the best from the additional effort. It boosted its total to $72.1 million, up from $45.3 million on Aug. 7. The Dec. 3 filing indicates that’s a final close, as the line for “total remaining to be sold” says zero. The fund VIII annex fund also got a bit of a boost. It held a final close on $27.9 million, according to the Dec. 3 filing, up from $25.5 in August. The firm’s seventh fund did not (or could not) raise any additional capital since August. It held a final close on $27.3 million.
1 min read · 04 December 2009
Brad Feld and Paul Kedrosky say creating “startup visas” can jump-start the U.S. economy. (WSJ) Digg has a plan to save the news business. (Forbes) First Google offered a skimpy olive branch to disgruntled news publishers. (Reuters). Now it has sweetened the offer. Meh. (TechCrunch) From the nerd department: Intel has produced an experimental 48-core microprocessor for cloud computing. (VentureBeat) From the This Has Nothing to Do With Private Equity, But It’s Interesting Department: The No. 1 “trending topic” on Twitter today is #WhyMenCheat. Must have something to do with a certain No. 1 golfer. (Twitter) Wrapping up one disastrous private equity deal: Sam Zell is out as CEO of the Tribune Co. He’s still chairman. (Yahoo Finance) On the green beat: The World Bank has loaned $1 billion to India to clean up the Ganges River. (Reuters) From the Wow, Now That’s a Big Surprise Department: Robert Finkel of Prism Capital does not like Josh Kosman’s new book, “The Buyout of America.” (TheDeal) Wall Street traders aren't on Wall Street anymore. (Reuters)
1 min read · 03 December 2009
2 min read · 16 November 2009
I was putting together the monthly list of most active U.S.-based VCs for the next issue of Venture Capital Journal and was stunned to see New Enterprise Associates atop the list with 12 deals. (See table below.) That's a much larger number than we typically see for a monthly period. What's it mean? Maybe it's a sign that deal making is finally heating up after a long cool spell. Or maybe NEA just wanted to let loose. To put those numbers into perspective, here's how the prior three months looked: For September, the most active VC was NEA, with eight deals; for August, it was Kleiner Perkins, with five deals; and for July, it was Intel capital, with seven deals.
2 min read · 12 November 2009
It’s not the 16x return that VCs expect to get from the sale of AdMob to Google, but the 4.5x VCs will see from the sale of LifeSize Communications to Logitech International looks pretty good in these gloomy economic times—especially to Redpoint Ventures. Redpoint launched with much fanfare during the Internet bubble, but its first two funds haven’t produced spectacular returns. Still, 2009 is turning into a pretty decent year for Redpoint. LifeSize will be its third acquisition this year. Logitech on Tuesday agreed to pay $405 million for LifeSize, an Austin, Texas-based maker of high-def video communications products. LifeSize had previously raised $90 million from Austin Ventures, Norwest Venture Partners, Pinnacle Ventures, Redpoint Ventures, Sutter Hill Ventures and Tenaya Capital (fka Lehman Brothers Venture Partners), according to Thomson Reuters (publisher of peHUB).
3 min read · 11 November 2009
