Private Equity
* Simon Johnson: Who will be the next Carlos Slim? * Paul Kedrosky: Is venture investing like Pascal's wager? * Morning Call: U.S. futures point higher on Apple and TI earnings, London falls early, European shares edge lower, the Nikkei hits 3-week closing high and China stocks gain. * Raj Rajaratnam's Letter To Clients And Employees * Brad Feld: Complexities of venture capital seed investing. * Sovereign wealth funds will be asked to help finance the UK government's efforts to create a £1 billion fund-of-funds that would prop up the nation's ailing venture capital market. Two notes: (1) I hope the designers of this program read Josh Lerner's new book, which focuses on the pitfalls of direct government involvement in venture capital/entrepreneurship; (2) Will the UK's next move be to save its leveraged buyout market, which is fast imploding? (save for Permira's "wall of cash")...
1 min read · 20 October 2009
* Galleon is only the beginning, as federal investigators are working a whole slew of insider trading cases. This first one has plenty of VC/PE ties, but one wonders if future connections will be a bit more direct. * The 50 best places to launch a business. * Microsoft CEO Steve Ballmer last week held an off-the-record breakfast with a group of Boston-area VCs and entrepreneurs. Here's some of what they discussed. * Morning Call: U.S. futures signal rebound, London rises early, European shares rise on banks and commodities, the Nikkei edges lower and both Shanghai and Hong Kong experience gains. * One year later: Warren Buffett's "Buy American" * Cory Doctorow: Why your idea to save journalism won't work (a checklist). * Is there a statistical connection between household debt and television-watching patterns? * Andrew Ross Sorkin's book on the banking meltdown comes out tomorrow, weighing in at 2.15 lbs.
1 min read · 19 October 2009
* Duncan Kerr: Junk bonds are the new leveraged loans. * Bijan Sabet: Paying attention to anti-VC sentiment (part ii) * The Deal says goodbye to founder Bruce Wasserstein. * Morning Call: U.S. futures lower on GE and BoA earnings, London rises early, European shares fall on BoA, the Nikkei edges higher and Hong Kong shares slip on profit-taking. * Lance Knobel: Venture capital harms your wealth. * Eli Noam: Farewell, macroeconomics. * The Epicurian Dealmaker stands up for investment bankers, and the college grads who want to join them.
1 min read · 16 October 2009
* Permira's Kurt Björklund gives good quote. First, he said that his firm would soon return a "wall of cash." Next, he insisted that private equity firms are not just a "herd of LIBOR-grazing leverage buffalos." * Fred Wilson: "I've heard countless VCs utter the words 'we need to own' followed by some number... This 'need' is just greed." * Charlie Gasparino: Wall Street's (continuing) bonus hypocrisy. * Jonathan Weil: Mark-to-make-believe turns junk into gold. * Morning Call: U.S. futures point even higher, London lowers early, European shares keep climbing, the Nikkei hits 3-week closing high and Shanghai closes up 0.3%. * October 14, 2008: Remembering the fear. * Skype's founders ratchet up their legal attacks on former Joost CEO Mike Volpi, who is now a partner with Index Ventures. In other words, Skype's founders are ratcheting up their attack on eBay's proposed sale of Skype to Index and others.
1 min read · 15 October 2009
* Does private equity need a new name? * The carried interest tax debate rears its righteous head. * Is EA going to buy VC-backed gaming darlings Zynga or Playfish? * Morning Call: U.S. futures rise on Intel and J.P. Morgan earnings, London falls early, European shares hit 2009 highs, the Nikkei edges lower and Hong Kong closes up 1.95%. * Joost continues to sink (as collateral damage from the Skype battle?). TechCrunch reports that it has liquidated its UK subsidiary. * New research says that hedge funds misrepresent fund performance during investor due diligence. * Gov. Arnold Schwarzenegger signs a bill that would require the disclosure of fees paid to placement agents who get state pension fund business, plus the disclosure of any gifts or campaign contributions made by agents to pension board officials. Pretty weak stuff, but it's a start...
1 min read · 14 October 2009
Exaggerate Much? WSJ opines that VC firms are being "allowed to live," because Barney Frank has excluded them from proposed registration requirements (although he punted the actual definition of "VC firms" to the SEC). Yes registration would have been a burden, but it wasn't a threat to kill off the asset class. Man bites Wharton: A court rules on just how much the Philly biz school is worth on a resume. He's like Miley: Silicon Valley angel/entrepreneur Jon Fisher samples Twitter. Decides it's a waste of time. Quits. Dodging buses: How much of a blog's value is tied up in its founder? Best is yet to come? Do Conde Nast's closures mark a bottom for magazines? Back to bonuses: Felix Salmon considers Andrew Ross Sorkin's "damned if they do, damned if they don't" piece this morning on Goldman Sachs, and concludes the solution is for Goldman to pay its employees less money. Specifically, put a cap on bonuses. But methinks he's wrong. The real solution is to tie bonuses much more closely to quantifiable -- and reasonable -- metrics, thus making success super, failure punitive and risk-taking more considered. As someone who has worked within both very specific/large and very vague/small bonus structures, I can tell you that the former works far better for everyone.
2 min read · 13 October 2009
* European private equity is a mess. Blog post leads with Alchemy, but that's really a small fish in the hotly-burning pond. In fact, the rapid demise of London-based, pan-European firms might ultimately be the year's most important -- and lasting -- private equity story. * Corrine Ball, co-head of restructuring at Jones Day: Looking at Chrysler's rebound. * Academic paper suggests that having more independent directors leads to more cronyism in top management positions (h/t @footnoted). * Morning Call: U.S. futures point higher, London gains on oil, European shares rise on banks, the Nikkei closes above 10k and profit-taking fells Hong Kong and Shanghai. * Will Google's biotech investments help improve its core search product? * George Soros plans to invest $1 billion into the cleantech space, plus donate $100 million to an environmental advisory group. * Bilal Zuberi, a principal with VC firm General Catalyst Partners, isn't speaking to 1,000 techies at MIT anytime soon. But if he were, this is what he'd tell them.
1 min read · 12 October 2009
* David Sorkin: A sense of investment ownership can improve accountability. * Swine Flu Inc: How companies are cashing in on the upcoming epidemic. * Morning Call: U.S. futures point to further gains, London inches higher, European shares edge lower, the Nikkei breaks 10k and Chinese shares rise 4.8%. * The Boston Globe profiles its final two bidders: Platinum Equity (the accompanying photo of Tom Gores is priceless) and Stephen Taylor. * World Economic Forum study: The U.S. has lost its ranking as the world's most developed financial center. The new leader is Britain. Apparently stability of a nation's private equity firms is not among the criteria. * Chadwick Matlin: Obama is seeding his education agenda through stimulus cash and venture capital semantics. * Jason says that the Private Equity Council threw venture capitalists under the bus, by supporting proposed SEC registration for all alternative asset managers. True, but venture capitalists started it years ago -- by arguing that VC firms should be taxed differently than LBO firms, when it comes to carry. Isn't turnabout fair play?
2 min read · 09 October 2009
* Charles Davi: How do bubbles create and kill jobs? * Paul Kedrosky: Venture model makeover. * Attorney Roger Glovsky is writing a series of posts on how to wind down your startup. * Each Yankees home playoff game is worth $6.7 million to New York businesses. In other words, New York businesses can now pool their money to buy a pair of field box seats. * Morning Call: U.S. futures point higher, European shares boosted by Alcoa results, Japan rises on shippers and Hong Kong closes up 1.2%. * The forgotten man of Moneyball. * Striking it rich: Is there an app for that? * Could Modern/Elegant Bridge-killing Conde Nast have married The Knot? Kind of reminds me of how The Boston Globe could have married Monster.com (a long, long time ago)... * H. Rodgin Cohen on the state of M&A involving U.S. banks: “Dismal and nonexistent.” First Niagra CEO John Koelmel dissents.
1 min read · 08 October 2009
* Yesterday was the final day for comments on the SEC's proposed rule to ban public pension funds from investing in funds that use placement agents (the proposal also would restrict investments in firms whose staffs -- albeit not their staffs' relatives -- make certain types of political contributions). You can read them all here. General consensus (with lots of exception) is that the placement agent ban is far too broad, while the contribution ban is acceptible. My feelings exactly. * Is royalty-based financing the next evolution of venture capital? * To avoid cratering, take a lesson from the dead deals of 2008. * Morning Call: U.S. futures point higher, London opens flat, European shares gain early, the Nikkei climbs 1.1% and Hong Kong jumps 2.1%. * Ryan Lizza's must-read on Larry Summers. * One-third of bankers expect their bonuses to rise in 2009. * It's been one year since Sequoia Capital scared the crap out of its portfolio company CEOs -- and many others in the startup community -- with its RIP presentation. Mike Arrington says that either the firm's outlook was too dour, or the cost-cutting moves proved effective. Either way, no armageddon. One addendum: The guy at Sequoia who prompted the presentation -- Eric Upin -- left the firm earlier this year, after failing to get an asset management unit off the ground.
2 min read · 07 October 2009
