If you sell your company, you’d assume the lawyers who helped you with the deal would still be able to assist you with any issues that might come up after closing, right? Not so fast. The reality may surprise you. In most mergers, the law firm technically represents the target company rather than the selling stockholders. […]
I swore I would go offline for much of Memorial Day Weekend. But I cheated and peeked at my email late Saturday afternoon and discovered an email from a friend saying, "I'm surprised to see you take such a public stance on the capital gains tax rates," with a link to a New York Times article on the topic. I read the article in The New York Times on the carried interest debate and was shocked to see my name and a reference to me that read:
"As the Senate Democrats sent signs that they were open to a tax increase, investors and their lobbyists mobilized quickly, warning that the proposal could stifle investments that create jobs. A group of 80 venture capitalists traveled to Boston to urge Senator John Kerry and Representative Barney Frank, Democrats of Massachusetts, to exclude their business from the tax change, according to Jeffrey Bussgang, a partner at the Boston venture capital firm Flybridge Capital Partners."
Um...here's the problem. I never spoke to the reporter, David Kocieniewski, who wrote the article (although I later found a voice mail from him). Other than the fact that my name and firm name are accurate, nothing else in that sentence is correct.
Ok, so we’re all doing social TV now. Geolocation is so 2009. Haven’t you heard? Kinda seems like that sometimes, right—that the venture capital community seems to chase after the bright shiny object of the moment in droves and then just as quickly moves on to the next new new thing. I can be frustrating […]
No, this post isn’t about winning an NBA playoff series. It’s about a historical anomaly in start-up compensation that I’m struggling with. Although I know this risks being an unpopular post with entrepreneurs, I confess that I no longer get why we have four year vesting schedules for stock option grants at start-ups. Let me explain. […]
In the tech world there was of course Sergey and that little pet project of his (and Larry’s) at Stanford we came to know as Google. Then there was Max and his partners- unfurling the behemoth of PayPal and then Slide. In the fight game Andrei Arlovski appeared suddenly out of nowhere, shaking-up the heavyweight […]
Washington is talking again about increasing taxes on private equity firms, including VC firms, and this could easily be a catastrophe in the making. Such a policy may be OK for hedge funds, but not for VC funds, which are already struggling and which, more importantly, might close shop if they had to fork over […]
Unless you have been living under a rock, you’ve no doubt read about the debate in Congress going on regarding carried interests for venture capitalists. Many in Congress, in order to continue to fund their agenda, are looking to change the tax classification of VC profits from capital gains to ordinary income. It looks like […]
Having gotten used to the NVCA claiming responsibility for a dizzying percentage of jobs in America, plus most of the market capitalization on the major U.S. exchanges, as well as it arguing that teensy amounts of money allow it to claim a company as venture-backed, I had more or less decided there was nothing it […]
For some time now, I’ve enjoyed the back and forth between venture practitioners and entrepreneurs about what constitutes the elements of best practices and cogent thinking in venture decision-making. Codifying a venture process or methodology has stymied many a well-meaning firm over the years. While there are certain processes and approaches that most firms would recognize as well-reasoned, there still exists wide disagreement among venture investors and the firms they helm about what should drive investment decisions, how much rigor and analysis should play into investment decision-making versus old-fashioned gut instinct and momentum-style approaches and what ideal blend of background, experience and temperament makes for a successful venture capitalist. The answers aren’t so obvious.
Silicon Valley Bank came out with a report today, called Dialing Down, that puts some data around the commonly held belief that better returns come from smaller funds. In this case – conventional wisdom is clearly true. Their fundamental conclusion is that venture capital funds are getting smaller – and that’s a good thing because it’s the small funds that generate outsized returns. The most compelling statistic compared the returns of large funds versus small funds (large funds being defined as above the median size for their vintage year). The result: