I’ve been working on a blog post called the Epistemology of Investing for about the past year. Now, epistemology is a ten-dollar word that those — like me — with five dollar brains rarely sling around, but sometimes I think investing could be called applied epistemology.

As investors — specifically, investors in opaque, illiquid markets — we spend our days asking the epistemological questions: What do we know about our investments, companies, markets, people? How do we come to know what we know? What are the sources and limits of our knowledge? How are our beliefs different from The Truth? 

Said another way: What investing hypotheses do we form? How do we form them? And how do we seek out, analyze, and integrate the data we use to test th...

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Since the Great Equity Meltdown, Landmark Partners has noticed an increasing focus on liquidity among leading institutional investors. In the past, most investors used a variety of asset allocation models to optimize their risk-adjusted returns. For some investors with successful alternative investment programs, this led to substantial commitments to illiquid assets.

Although the asset allocations were viewed as a fraction of the overall portfolio, the commitments were made in absolute dollars. When the markets fell in late 2008 and early 2009, these commitments came to represent an unexpectedly large fraction of the overall portfolio value. In some cases, investors faced a real risk that they would not have sufficient liquidity to pay their capital calls and still generate portf...

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The Colorado legislature recently passed a bill (Colorado Bill HB 10-1193) that basically seeks to improve the state’s ability to collect use tax on internet sales. This is a tax that most buyers of the covered products technically should be paying anyway but are rarely collected. Most people think those things they buy online are tax-free when really they were supposed to have paid the tax on their own rather than having it collected by the retailer. As we all know, people rarely do.

Colorado and other states have tried to fix this for a couple primary reasons. The first is simply money. They’d like to collect more revenue. The second is to level the playing field for in-state companies. It’s not fair competition if local companies effectively have to charge buyers more fo...

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"I've decided to write a book," I told my wife over a year ago.

She gave me that what-the-bleep-are-you-talking-about look. You may be familiar with your spouse.

"You've what?"

"I've decided to write a book," I repeated, slightly less confidently.

"On what?"

"Venture capital and entreneurship."

"Why?"

"Well, when I was an entrepreneur, I couldn't find any good books on how this mysterious capital-raising process worked and how to harness the resources and knowledge of the VC industry to help build my start-up. Now that I've seen it from the other side, I want to explain to entrepreneurs how it all works to help them be successful. There are good blogs out there, but no good books that pull it all together."

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Recently an entrepreneur extraordinaire I admire by the name of Chris Dixon touched on the two general paradigms people/institutions can adopt towards one another when conducting business. He first referenced the transactional/legalistic approach wherein labor is exchanged for money in the form of a contract that is enforced by organizations, (especially the legal system). The other approach is one based on trust, verbal agreements, reputation and is "enforced" (so to speak) by the community. As Dixon points out, the world of startups is overwhelmingly governed by the trust/reputation/community approach.

Let's just juxtapose these very different paradigms against the backdrop of the modern American university. As we've established in earlier posts in this series, it has now become fashionable and accepted for universities and their tech transfer offices to engage in the practice of spinning-off companies based on their intellectual property and know-how. In fact, according to AUTM statistics, over 600 university startups are created every year based on federally funded R&D.

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* Happy National Green Shoots Day

* Nick DiUlio: What economists are learning from cyber economies

* The Greek tragedy of Wind Hellas: "Private equity and banking can be very constructive functions of the economy, but they will destroy this industry if the leading players do not regulate themselves."

* Morning Call: U.S. futures point lower, London falls early, European shares slip, the Nikkei rises and China shares hit 5-week low.

* Recent MBA grads head (far) east

* Is another bankruptcy wave on the horizon?

* Roger Ehrenberg: It's time to end the FASB (and shake up the SEC)

* NYC taxi drivers overcharged riders by more than $8.3 million last year.

* NPR's Ian Chillag uses all 119 of Tribune Co's banned words in a single sentence.

* More than 370 tickets already sold for our Boston Shindig, which is taking place on March 31. Get yours today.

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* Janet Takavoli takes on Michael Lewis

* Bob Metcalfe: The day dotcoms were invented

* The next blockbuster Silicon Valley IPO will be Facebook Skype

* Morning Call: U.S. futures point higher, London rises early, European shares climb, the Nikkei slips and China shares bounce back.

* Carl Icahn's six biggest busts (is Genzyme next?)

* Eric Schmidt: A broadband catapult for America

* Rob Go: Why VC is like poker and stinks for new players

* The effects of employment on influenza rates: Are pink slips better than flu shots?

* Q&A with Wilbur Ross, who is looking to buy in the insurance, TIPS, RMBS and regional banking markets.

* Tickets are now on sale for our upcoming peHUB Shindigs in Boston (3/31) and San Francisco (4/14). Get yours today...

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Senator Chris Dodd today unveiled the latest version of his financial regulatory reform bill which, if passed, would have some implications for the venture capital and private equity markets (despite some media suggestions that PE/VC escape scrutiny).

It's a lot like the original bill from last fall, but with exactly 200 more pages (we'll consider this the unabridged version). Here are the relevant highlights:

1. Dodd retains the original Senate bill's registration exemption for venture capital and private equity funds. He also retains the original bill's edict that the SEC is responsible for constructing a definition for "venture capital" funds and "private equity" funds -- so as to differentiate them from "hedge funds" (which will be required to register).

As a reminder, an earlier House bill had only exempted venture capital funds of $150 million or less. Industry trade groups had insisted that any registration would be unwarrented, given that neither VC nor PE firms helped contribute to the financial meltdown. They're right, but hedge fund reps could have made the same argument...

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Financial Engines priced its IPO above range last night, and just closed its first day of trading up nearly 44 percent. It was the fifth VC-backed IPO to price in 2010, and the third to do so since we last looked at the VC-backed IPO pipeline (the others were pharma companies AVEO and Anthera).

There also have been four new additions to the pipeline in the past month, including the recent filing from Broadsoft. That works out to a net total of 38 VC-backed companies in registration to go public on U.S. exchanges, representing more than $4.5 billion in targeted raise.

View the entire pipeline after the jump...

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Avista Capital Partners yesterday closed its second fund with $1.8 billion in commitments, after more than 15 months in market, peHUB has learned.

Following a first close on around $1 billion in August 2008, Avista basically sat on the sidelines while the financial world -- and PE fundraising environment -- collapsed around it. After gaining a fundraising extension in August 2009, the firm decided to tap the market again with a lowered target of around $2 billion (it had originally sought between $2.5 billion and $3 billion).

Thompson Dean, Avista's co-CEO and co-managing partner, said the firm did not lower its target to merely appease LPs, but as a result of the dramatic changes in the market. “It was a reflection of reality,” he explained.

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