Private Equity
1 min read · 27 August 2009
Benchmark Capital’s Bill Gurley yesterday wrote on his blog that the VC industry is going to shrink substantially over the next several years. Specifically, he argues that large institutional investors will decrease their allocations to venture, although not abandon it entirely (due to CAPM and contrarianism). The typical reaction from readers -- including many of you who sent me emails -- was appreciative slobbering. I strongly encourage you to read what Bill wrote. Go ahead, I’ll wait. Ok, now let me tell you why I think he’s wrong. Not on describing the overall environment (he's got it nailed), but on what the end result will be. Specifically, I believe that the number of institutional investors cutting back on VC commitments will be small, compared to the number either maintaining or increasing their allocations. It’s easy for us to get caught up in the doings of big-name, liquidity-challenged endowments like Harvard and Yale, but they really are just a tiny drop in the overall LP bucket. In fact, all the Ivy Leaguers combined probably have less committed to venture capital than does CalPERS alone (and it recently increased its alternatives allocation)…
3 min read · 26 August 2009
Advantage Capital Partners has raised $55 million for a fund that will focus exclusively on companies based in Illinois. The fund's investments will be made in partnership with the llinois New Markets Development program, while limited partners include First Bank, Southwest Bank (an M&I Bank subsidiary) and U.S. Bancorp’s Community Development Corporation.
3 min read · 24 August 2009
1 min read · 21 August 2009
As some of you know, my first real journalism job was helping to launch and manage a youth-focused community newspaper based in Roxbury, Mass., which qualifies as part of Boston’s inner city (both geographically and figuratively). Small operation, which means a lot of my time was spent hustling for advertisers, which typically were local businesses. In all my conversations with these enterprising entrepreneurs, I never heard terms like “venture capital” or “growth capital.” I did, however, often hear the term “bank” with some sort of expletive preceding it. The problem, of course, was on both sides of the proverbial coin: The inner city businesses had no idea how to access the private capital markets, and the private capital markets paid to attention to inner city businesses.
2 min read · 19 August 2009
Over a dozen IBM execs have descended on Sao Paolo this week to spearhead the expansion of Big Blue's venture capital group in Brazil. As part of an open house today for Brazilian venture capitalists, startups, software developers, academics and government officials, IBM is playing matchmaker and is holding an American Idol-style contest, also modeled on Stanford's AlwaysOn program, for companies to pitch themselves for funding, said Drew Clark, director of strategy for IBM's Venture Capital Group.
2 min read · 18 August 2009
Blame the lawyers. It's a universal excuse, working for everything from contentious divorces to securities fraud. Now we can add rescinded fund commitments to the list. At issue is a $10 million commitment from the The San Francisco Employees' Retirement System to Domain Associates, a healthcare-focused VC firm that last week closed its eighth fund with $500 million. San Francisco's money wasn't part of the final stash, because the two sides reached an impasse over fiduciary responsibility language that the pension system insisted be in the final partnership documents. Details are still a bit fuzzy as to what specific fiduciary issues SFERS wanted beefed up, but peHUB has learned that the language was inserted by
1 min read · 17 August 2009
Venture capital performance deteriorated in Q1, according to data released this morning by Cambridge Associates and the NVCA. It was the third-straight quarter of decline, although the rate slowed, and was seen over the quarterly, one-year, three-year, five-year and 10-year horizons (mild improvement for 15-year and 20-year). Get the full report after the jump...
1 min read · 12 August 2009
Venerable San Francisco law firm Heller Ehrman voted to dissolve last September, ending a practice that was nearly 120 years old. Now we're starting to learn more details of why it collapsed. According to a document filed in bankruptcy court last week, what undid Heller Ehrman was an overambitious strategy to expand globally, including its 2003 acquisition of the Venture Law Group, a Silicon Valley law firm that specialized in high-tech startups. (Several of the VLG folks are now at Cooley Godward Kronish in Palo Alto, which calls itself the number 2 firm in the nation for representing venture-backed companies in financings.)
2 min read · 12 August 2009
A few months back, we reported that Mohr Davidow Ventures was looking to raise some "annex" capital for its seventh fund. We also noted the irony of bulking up this particular fund, since it had originally closed in 2002 with $850 million, before slimming down to $450 million via a pair of fund size reductions. Today, we noticed a regulatory filing indicating that MDV seems to have closed the annex (or at least part of it), with $27 million in new capital. So the total is now up to around 57% of what MDV raised in the first place for Fund VII, whose active portfolio includes such companies as Nanosolar, PacketMotion and Proofpoint. What we also noticed was that MDV appears to have added annex capital to its two subsequent funds. One filings shows that MDV has raised $25 million for Fund VIII, a $400 million vehicle raised in 2005, and
1 min read · 10 August 2009
