Private Equity
3 min read · 28 June 2010
2 min read · 25 June 2010
VCs need to invest in more capital-light Internet companies. No, VCs should be investing larger sums in capital-heavy cleantech companies. Wait, VCs need to evolve and re-invent themselves. Scratch that—VCs need to get “back to basics,” working their craft at a wooden hobby bench like Santa’s little helpers. Thin the herd: Ship half of the VCs to Algeria to ensure success for the rest... Popular prescriptions to cure such VC market schizophrenia almost always include at least one glaring omission: Context. So many discussions of venture's ails consider the industry in isolation, exclusively from the practitioner’s perspective. It’s as if an individual investor reviewed their brokerage statements over the past two decades and concluded: “I sure was a better stock picker in the late 1990s.” The truth is VC’s success is connected and correlated to global financial markets and flows of institutional capital.
5 min read · 24 June 2010
Facebook COO Sheryl Sandberg gave a speech recently at the Nielson Consumer 360 Conference, arguing that the dominance of email was under threat by the explosion of both competing and complementary technologies likes SMS and social networking communications tools. This challenge to email’s pre-eminence, Ms. Sandberg added, was most apparent among the young. Now, the occasion of the COO of a leading social networking company sounding the death knell of email should be a shock to no one, but a closer examination of her comments brings into relief some concerns I have long had about how some in the tech community overplay the implications of tech trends and shifting user behavior, particularly among the young.
4 min read · 23 June 2010
As Congress battles over the shape of financial reform, will it address the lack of a properly functioning market structure? The market for underwritten IPOs, given its current structure, is closed to 80% of the companies that need it. In fact, since 2001 the U.S. has averaged only 126 IPOs per year, with only 38 in 2008 and 61 in 2009 — this compared to the headiness of 1991–2000 with averages of 530 IPOs per year. Companies can no longer rely on the U.S. capital markets for an infusion of capital, nor can they turn to credit-strapped banks. The result? Companies are unable to expand and grow — they are unable to innovate and compete — so they are left to wither and die, contributing to today’s high unemployment rate. During the time since our first studies were released, Grant Thornton has received a number of intriguing questions. This post (and the report posted after the jump) addresses them and presents updated data through December 2009, while examining the continued lack of a properly functioning IPO and small cap stock market. The systemic failure of the U.S. capital markets to support healthy IPO and robust small cap markets inhibits our economy’s ability to innovate, create jobs and grow. At a time when America is struggling with double-digit unemployment, the failure of the U.S. capital markets structure can no longer be ignored.
4 min read · 21 June 2010
In one of the many memorable lines from Caddyshack, Chevy Chase’s character instructs his caddy, “Danny, see your future, be your future.” This quote helped inspire me to start my own business, seek out my wife, purchase my dream log home in the woods of the Poconos and, on a micro level, to write this column. It has been said that we are the sum of all of our thoughts and, consequently, all of our successes start in our imaginations. This meme also is the underlying theme in every successful VC-backed company. It can be found in every investment banking pitchbook. It is in the private placement memoranda of every PE and VC firm looking to raise investment capital. It drives the corporate culture of firms like Apple, Google, Cisco, Microsoft and GE as they strive to create a better world. It lives in the hearts and minds of every NBA champion and World Cup soccer player.
4 min read · 21 June 2010
In the wake of the financial crisis that began in 2008, nearly every developed country has discussed and proposed heightened regulation for managers of pooled investment vehicles—primarily hedge funds, but also private equity funds, venture funds and real estate funds. Notwithstanding that there is ample room for debate as to whether the activities of those managers contributed to or exacerbated the crisis and whether more stringent regulation could have prevented it, legislators and regulators are capitalizing on current popular support for governments to “do something.” Perhaps the most aggressive proposals have come from the European Union, in the form of the EU Alternative Investment Fund Managers Directive. The Directive’s professed objectives are investor protection, market integrity and stability, the prevention of systemic risk, the elimination of “social externalities” (whatever that means), domestication of non-EU based funds and taxation of such funds’ revenues—quite a tall order. The Directive is filled with references to “orderly markets,” with not one use of the phrase “efficient markets.”
7 min read · 18 June 2010
7 min read · 14 June 2010
2 min read · 11 June 2010
4 min read · 08 June 2010
