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I am a big fan of The Daily Show, particularly of the segments that question WTF is going on (I will save you the #*% spelling that gets used). I have up close and personal experience with that, as I lost my job last week. Yikes, 35 years in the business and involuntary departure for the first time. The economy stinks, but it's difficult to grasp unless it hits close. Now the 35 years of networking starts to pay off a bit differently. The thing is, uncertainty is part of life, and change can be exciting. But, a lot of uncertainty and the accompanying changes, like we have going on right now, can be a bit disorienting. Why? For one thing, we are facing a new administration, which depending on your view is going to be better or worse than what we have had for the last eight years. My first observation is that we all are impacted, whether we know it or not, by global relationships. We collectively cannot continue to operate
Many pundits and economists observe that we are in the midst of the greatest financial crisis since the Great Depression. What they haven’t fully yet processed is that we are in the midst of the greatest wave of government intervention in business since the New Deal. Across massive, diverse industries such as energy, health care and life […]
David Weild and Edward Kim recently produced a report for Grant Thornton, titled IPOs in the ICU. The entire report is available here, but David has permitted us to reprint this conclusion about current and future alternatives to IPOs for private companies: There has been no shortage of effort to find an alternative to an IPO for private U.S. companies. Among these are the NASDAQ Portal Alliance (144A PIPO), InsideVenture and Entrex markets. To date, most of the major U.S. investment banking initiatives have been focused on the 144A PIPO market in efforts to create institutional-only markets for private placements of equity that would be issued to qualified institutional buyers
Everyone in the VC business is looking hard at their fund reserves right now. Very hard. That's because the two key assumptions regarding how much money a portfolio company would require from start to finish (the exit) have changed: (1) The length of time before exit; and (2) The number of portfolio companies that would attract outside capital to lead follow-on financing rounds. The new planning assumption being embraced by VC fund CFOs and senior partners is that each portfolio company's exit forecast should be pushed out two to three years. Moreover, funds should assume that inside rounds will be the prevailing method for raising additional capital within the portfolio. For the strongest portfolio companies, it will be a privilege to close a flat round with an outsider. In other words, "flat is the new up.”
Dear Portfolio Company CEO, Hi, my name’s Chris and I fund the folks who fund your company. I’m the money behind the money. I can’t remember if we’ve met, after all, I’ve got several hundred cats just like you in my portfolio. There’s a chance that we talked at your backer’s last annual meeting; maybe […]
10. Grumpy public market investors actually make VCs almost seem cheerful.   9. Liquidity of your vested shares is now just about equal whether you’re public or private.   8. Admit it – that flat price you got on your last round is looking like your best-performing investment of the year.   7. There’s at least a chance that […]
Yes, companies across all industries are scrambling for capital given current market conditions, but none so desperate for inflows as the life sciences/device sector. There has always been a funding gap in the life sciences sector, proverbially known as The Valley of Death. Basic research in the U.S. is particularly well-funded by the NIH and […]
Adeo Ressi, founder and proprietor of TheFunded.com, made waves this week, after the PowerPoint slides of a private presentation he gave was leaked to bloggers. peHUB has asked Adeo to expand on the presentation, and to give a fuller understanding of what his slides were intended to present. We thank him for the contribution: "The Canary is Dead" presentation was delivered to a group of Harvard Business School professors to encourage classroom dialogue about better models for venture capital, before students graduate and enter the workforce with bad training. The Model is Broken Investing in growing companies has proven to be economically and socially rewarding to a broader society. However, the venture capital model of delivering preferred equity investments in the $1 to $15 MM range is broken for three specific reasons. First, over 90% of companies that require investment in this range do not receive the capital they need, because they are rejected by the model, discouraged by the process or unaware of the rules. Second, the process of raising the capital has anecdotally proven to destroy shareholder value through enormous time commitments, significant legal fees and deteriorated morale. Lastly, the venture investment model, in its current form, does not generate returns for any of the stakeholders when examined in aggregate or on average. Despite this broken framework, the venture capital model has resisted change. More and more money has flowed into venture capital, and partnerships continue to receive the same management fees and economic rewards. The bursting of the Internet bubble eight years ago was an obvious
Alan Blinder (former vice chairman of the Federal Reserve) is one of my favorite economists.  His book, Hard Heads, Soft Hearts, outlines a compelling philosophy in economic policy – whereby a tough-minded, analytical approach is applied to solve difficult social issues. Thus, I read his recent NY Sunday Times article on the central role that […]
The first time I saw a swan we were on a class trip to Central Park (Look, kids!  Nature!)  White and fluffy and graceful, that swan was nothing like the flying rats we had back in Brooklyn.  I remember, too, that our teacher said a pair nested every September over at the 79th Street Boat […]
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