The sun is shining, the minimum wage is (hopefully) about to be raised and I’ve got to pack up the uncharismatic VW for a weekend in New Hampshire. In other words, it’s time for Friday Feedback.
*** First up is a question from David on the HCA deal: “Would KKR take a piece of it into their publicly-traded vehicle, in order to soak up some of the cash?” I would assume the answer is a resounding yes, as the listed KKR vehicle is designed for just that very purpose. On a related note: I spent some time on the phone yesterday with John LeClaire, who runs the private equity law practice at Goodwin Proctor. He has never before seen an LBO agreement that includes a defined list of “approved” private equity syndication partners. He’s seen lists of approved debt providers and lists of approved buyers for management/founder equity, but not for LBO firm equity. It does seem to artificially reduce options for the KKR/Bain/Merrill consortium (maybe it was a Frist family demand), although there might be some deep-pocketed hedge funds on the approved list.
*** Next is a Top Secret button user, who contributes darts instead of scoops: “First, you ‘reported’ unconfirmed rumors about Worldview Technology Partners. Perhaps standard practice – but I would think a real journalist would look to report the real story. Then, to reference the Silicon Beat site and the comments that were posted is just tabloid journalism… even you admitted that they are ‘catty.’ I think you need to elevate the level of professionalism of PE Week Wire.”
Oh, where to begin? The report in question was actually by my colleague Constance Loizos, but the salient point is that her reporting was accurate. It is true that Worldview did not formally confirm the news, which is why she got independent confirmation from other sources. That is professional journalism. If we always waited for official confirmation, we would basically become a carbon copy of PRNewswire. Last week’s column on the Motorola/Broadbus deal is a good example. As for the SiliconBeat.com link: I included it for the same reason that I include your email, dear tipster. Reader response – even of the catty variety – should be released into the public domain.
Now let me confuse my previous point: At least one SiliconBeat commenter (JeffG) was off base, in his assertion that Crescendo Ventures would soon close. It is common knowledge that Crescendo pulled its Fund V offering a few years back, which coincided with some major investment strategy and personnel changes. Now, however, both GP and LP sources tell me that Crescendo plans to begin re-raising the fund in early 2007.
*** Finally, a few reader thoughts on the
U.S. vs. Iran proxy Israel vs. Lebanon/Hezbollah war. Robert begins: “I think these events will be little more than a minor disruption to the venture community. Aside from some army reserves being called to active duty, VCs are located primarily in central Israel, and are hardly affected by the war at the borders. Furthermore, the typical strategy for these venture-backed companies is to relocate to the U.S. as soon as possible.”
Adam chimes in from Israel: “This war is necessary to protect my country, which includes the protection of many companies supported by U.S. and European investors. Hezbollah today is firing on Haifa, but soon could expand its rocket range to Tel Aviv or other more VC-heavy areas. Not only are our livelihoods at stake, but so are our very lives.”
Mike, an American citizen living in Lebanon, writes: “Investment in Lebanon is at a stand-still as a result of Israel’s use of collective punishment on the country of Lebanon, which did not have the resources to address Hezbollah during the single year since Syria has withdrawn. The stock market remains closed, and we are now faced with at least two years of investors backing off from real estate, technology, and manufacturing — if they choose to look at Lebanon at all. By contrast, when the fighting subsides, Israel’s economy will have taken a hiatus but be back to ‘normal.’”
*** Finally, a sad note to report from the VC community: Mark Brooks, a managing director with Hudson Venture Partners, has passed away after a long battle with cancer. He joined HVP just last October, having previously spent several years with Dolphin Equity Partners. Mark is survived by his wife Kim and his three-year-old son Luke. A trust has been set up for Luke, and those wishing to donate can send checks to: Luke Brooks’ Trust Fund; c/o Collins-Calhoun Funeral Home; 19 Lincoln Ave; Rutherford, N.J. 07070.