peHUB First Read

By Dan Primack — 8 years ago

* Hank Paulson apparently gave Vanity Fair’s Todd Purdum regular interviews throughout his term as Treasury Secretary. Here is the six-page result.

* MC Hammer was at the Harvard Faculty Club yesterday, extolling the virtues of social media.

* William Cohan on Chris Flowers: Checkmate for a Wall Street wizard?

* Big Deals: PE/VC firms buying Skype, KKR kicking TCW’s tires.

* Morning Call: U.S. futures point lower, London deflates, European shares dragged down by banks, the Nikkei edges higher and China and Hong Kong steady after recent slide.

* Leo Hindery (and others) on buying American: “The governments of most major developed countries support their own industries and, in these economic times, it only makes sense for Washington to do likewise.”

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peHUB First Read

By Dan Primack — 8 years ago

* Alan Patricof and Eric Dinallo take to the NYT Op-Ed page, arguing against proposed rules that would require VC firms to register with the SEC. I agree, in general, but also have a nitpick about the P4 lead: “Venture-capital funds deal solely with privately purchased equity securities in start-up companies, which are not traded in public markets.” Not only do some of these companies, if successful, ultimately create public securities that VC firms hold, but more and more VC firms are making investments in already public companies. Just last week, for example, Tallwood Venture Capital agreed to acquire what could become a 45% stake in Ikanos Communications. Again, not saying this negates the authors’ larger point, but I do wonder if Patricof/Dinallo would argue a firm like Tallwood should indeed be required to register…

* Bloomberg: Leverage rising on Wall Street at fastest pace since the credit squeeze began two years ago.

* Morning Call: U.S. futures point lower as commodities retreat, European shares drop, the Nikkei slips on strong yen and Chinese shares dive 6.7 percent.

* Non-profits test out analytics software for social investing.

* Deloitte: Emerging markets private equity is down around 60% between Q3 07 and Q1 09. Around 47% of investors expect the pace to pick back up, while 40% expect a further decrease.

* Dave Shepard of VC-backed Sequoia Communications, which shut down earlier this month: “I think the venture-backed model for semiconductor startups is broken. The complexity of these chips has just gotten so high, it just takes so much money to fund a startup nowadays, that to the VCs, it’s just not worth it.”

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peHUB First Read

By Dan Primack — 8 years ago

* USA Today has an exhaustive list of private equity firm contributions to elected officials.

* Must-read for bosses: What alienates top performers.

* Last week you were able to ask Tim Geithner a question via Digg. This week you can apparently ask Barney Frank a questions via Bravo TV’s website.

* Morning Call: U.S. futures point higher, London rises on revised Q2 GDP, European shares advance, the Nikkei edges up and Hong Kong shares drop.

* Jabil Systems is laying off more than 300 workers via a plant closure in Billerica, Mass., but is a case study in how to help ease the pain.

* Theo Francis: The FDIC’s cushion is bigger than it looks.

* TechCrunch reports that an investor group is forming to make a bid for Skype, including original backer Index Ventures and newbie venture firm Andreessen Horowitz. The last time these rumors came up was back in April, when Skype’s co-founders reportedly teamed up with firms like Warburg Pincus, KKR, Elevation Partners and Providence Equity Partners. eBay quickly nixed that talk by announcing plans for a Skype IPO in the first half of 2010, so we’ll see how they respond this time (perhaps with an S-1?).

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peHUB First Read

By Dan Primack — 8 years ago

* The Economist’s Buttonwood: The Private Equity Puzzle

* Four Boston-area entrepreneurs blog about their own failures.

* Morning Call: U.S. futures point higher, London rises early, European shares climb on banks, the Nikkei falls 1.6% and Hong Kong falls one percent.

* Rasmussen: Most American think a government job is best, followed by self-employment.

* Distressed investor Howard Marks: The biggest bargains are behind us.

* BreakingViews: Big Beer “almost begs for an anti-trust review.”

* Pete Lattman argues that Ted Kennedy was largely responsible for turning public sentiment against private equity, when he bashed Mitt Romney over layoffs at a Bain Capital portfolio company, during their 1994 Senate race. He might be right on that point, but not on a corrolary that the PE issue marked that campaign’s turning point. Instead, the real turning point was when Kennedy rhetorically disemboweled Romney during their first debate.

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peHUB First Read

By Dan Primack — 8 years ago

* The FDIC will vote at 3:30pm today on new rules governing PE investment in banks. An agency spokesman says that the revised rules themselves will be publicly released simultaneous to the vote, as will an effective date (this seems to be typical FDIC policy, but there also are numerous reports that the final language is still being hammered out). In the meantime, the AP suggests that the FDIC’s expected softening on certain provisions has been promoted by pragmatism — banks keep failing and buyers are needed. That’s certainly part of it, but there’s also another factor: Certain parts of the original FDIC proposal were poorly-throught out, and were not written with a comprehensive understanding of how private equity funds are structured.

* How long does it take to build a technology empire?

* A bigtime Democratic fundraiser has been charged with trying to defraud Citigroup. He also happens to run a little-known private equity shop.

* Morning Call: U.S. futures move higher, London flattens early, European shares sag on commodities, the Nikkei hits 10-month closing high and China shares ride earnings momentum.

* MG Siegler on Twitter’s Golden Ratio (which no one likes to tak about).

* Mohamed El-Erian: Ben Bernanke’s four-point to-do list.

* Sam Diaz: RSS is a Web 1.0 application whose time has come and gone.

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peHUB First Read

By Dan Primack — 8 years ago

* President Obama wants to privatize certain aspects of space travel, which could be a major boon for VC-backed companies like SpaceX.

* It’s still early, but TARP so far has been very successful in terms of ROI.

* GI Partners is accused of lying to HBOS, when convincing HBOS to finance GI’s £440 million acquisition of Park Resorts. The accuser is ex-Park Resorts CEO Martin Grant, who also is suing for wrongful termination.

* Morning Call: U.S. futures point to mixed open, London falls early, European shares fall back, the Nikkei drifts lower and profit-taking on the China and Hong Kong exchanges.

* Seed funding is the new Series A.

* Big Ben is going to get that second term.

* Wishy-washy WSJ editorial on tomorrow’s FDIC vote, which will determine rules governing private equity investments in banks. The lede is about how the FDIC needs to hold its ground in order to protect the taxpayer, while most of what follows is about how PE critics have justifiable gripes. And then it concludes with protecting the taxpayer. I guess the takeaway is that the WSJ is looking for middle ground, just like the FDIC.

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peHUB First Read

By Dan Primack — 8 years ago

* Scott Kirsner: Why Waltham doesn’t matter.

* A primetime television drama about M&A?

* Drs. Doom: Nouriel Roubini says the threat of a double-dip recession is increasing, while Dick Bove claims 150-200 more U.S. banks will fail.

* Morning Call: U.S. futures point higher, London rises early, European shares climb on banks and commodities, the Nikkei gains 3.4% and slight growth for both China and Hong Kong exchanges.

* Betfair, a UK-based online gambling site, reportedly is considering a £1.5 billion flotation. It would easily be the largest British IPO of the year, and the largest global offering from a VC-backed company (Index Ventures still has a piece, based on its original investment in 2001).

* Gretchen Morgenson: What stress tests didn’t predict.

* Bill Frezza of Adams Capital Management: What is the foundation of your economic belief system?

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peHUB First Read

By Dan Primack — 8 years ago

* Private equity has not been good lately to big state pension funds (Bloomberg hyped this story most of yesterday, keeping it atop the homepage).

* Mark Cuban: What entrepreneurs should not do when making a deal pitch.

* Morning Call: U.S. futures rise ahead of Bernanke speech, London rises early, European shares climb on banks and utilities, the Nikkei drops 1.4% on automakers and China shares finish a down week up.

* Q&A on emerging markets private equity, with Paul Fletcher of Actis.

* In Memoriam: Brett Allsop, founder of VC-backed online travel site Yapta, was killed in an auto accident at the age of 38.

* Biz Stone tells VentureBeat that Twitter was in talks to acquire FriendFeed, but that the company ultimately opted for Facebook (for around the same price). Story points out interesting conflict, in that FriendFeed investor Peter Fenton (Benchmark Capital) is also on the board of Twitter. Doesn’t mention that Fenton’s prior firm, Accel Partners, is the lead investor in Facebook.

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peHUB First Read

By Dan Primack — 8 years ago

* Road to recovery: 1929 vs 1974 vs 2002 vs today.

* The BBC is prepping a made-for-TV movie about the last days of Lehman Brothers. I hope it beats viewers over the head with an obvious and saccahrine message, in the vein of afterschool specials.

* Morning Call: U.S. futures point higher, London rises early, European shares rise on banks and energy, the Nikkei climbs 1.8% and Chinese shares rebound with a 4.5% gain.

* No “tweet” trademark for Twitter.

* Missionary CEOs vs. mercenary CEOs.

* Alex Salkever writes that Facebook is planning to go public later this year, but that the results could be disappointingly weak. It’s the first part that surprises me more than the record. If Facebook really plans to price in the next four months, wouldn’t it need to file its S-1 right about now (at the latest)? For context, Google filed for its IPO on 4/29/04 and priced on 8/19/04. And that was in a much better IPO market with a much stronger company.

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peHUB First Read

By Dan Primack — 8 years ago

* David Pakman: VCs should not confuse traction with value.

* Sequoia Capital reduces its website to a search bar?

* Jeff Korzenik: Forget “L” or “V” shaped recoveries, and get ready for the “Q” recovery.

* Morning Call: U.S. futures point lower, London falls early, European shares dragged down by China and financials, the Nikkei skids to 3-week low (despite Sanyo surge) and Chinese shares keep sliding.

* Dan Frommer can’t understand why 65% of all music sold in the U.S. is via compact disc. I would assume the answer is “car stereos.” Pretty sure I was still buying cassettes until 1994, for that very same reason.

* Sarah Lacy: Will Rosetta Stone’s stumbles bleed into the IPO euphoria?

* Time Mag notices the flood of PE firms that have filed for REIT IPOs, in order to take advantage of the distressed housing market.

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peHUB First Read

By Dan Primack — 8 years ago

* Steve Place: College is a bubble.

* Requests for Startups: YCombinator will provide the big idea (and the seed funding), if you provide the right group.

* Howard Gold finds new research supporting the meme that Yale and Harvard’s endowments were too illiquid for a rainy day. Most cogent counterargument still comes from Felix Salmon, citing Peter Conti-Brown.

* Morning Call: U.S. futures point lower, London falls early, European shares drop sharply on banks and commodities, the Nikkei slides (even though Japan officially emerged from recession) and Chinese stocks tumble 5.8 percent.

* Blackstone Group disputes study that finds Stephen Schwarzman is the nation’s highest-paid CEO. Firm spokesman Peter Rose:

“To call this compensation is to stretch the definition of the word beyond all recognition. At the time of the IPO, Mr. Schwarzman exchanged his interest in the partnership that he’d held for decades for stock. He agreed that the stock would vest over four years so investors would be assured that he was committed to the firm.”

* Peace, love & profits: On Woodstock’s 40th anniversary, the music industry is a mess.

* Chris Dixon lays out his ideal first-round funding terms. (h/t Fred Wilson)

* The San Diego County Employees Retirement Association has abandonned plans to hire a new CIO, due to salary constraints (sub req).

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peHUB First Read

By Dan Primack — 8 years ago

* Bernie Madoff: Loathsome lothario?

* Browser War Redux? Marc Andreessen’s new fund backs RockMelt, a quasi-independent desktop client for Facebook.

* Remember that story about the college grad suing her alma matter because she couldn’t find work? And remember how you shook your head at what sounded like entitled litigiousness? Well, Mark Gimein has some details that might make you reconsider.

* Morning Call: U.S. futures point to mixed open, London rises early on commodities, European shares climb as oil gains, the Nikkei hits 10-month closing high and China shares skid on IPO worries.

* Siicon Valley Bank says startups are having an easier time paying their bills.

* Benchmark invests in Facebook via the backdoor, taking “almost all equity” in its sale of FriendFeed.

* Citidel plans to unload up to two-thirds of its stake in eTrade. Don’t be surprised to see a certain tech-focused PE firm take a major piece.

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peHUB First Read

By Dan Primack — 8 years ago

* Elizabeth Warren keeps sounding the alarms, particularly on how the mark-to-market tweak has simply obfuscated the toxic asset problem (not eliminated it).

* If you saw the 60 Minutes rerun this past Sunday, you watched paralyzed patients move a computer cursor with nothing more than their thoughts. Freaky cool. Well, it seems that the company trying to commercialize the technology has failed from a lack of financing, but it’s now getting a second lease on life.

* Morning Call: U.S. futures point higher, London rises early, European shares climb, the Nikkei looks to regain its 10-month high and Hong Kong shares partially recover. * Tim Zagat reveals the world’s top power lunch spots.

* It was right there in the contract: Some hedge fund managers are suing a man who they gave $4.2 million to build “an integrated global community of trading partners.” Apparently the hedgies thought the phrase was biz jargon, but the money actually went to build a swingers ranch.

* Platinum Equity takes the axe (again) to The San Diego Union-Tribune, cutting another 112 employees. That means that about 30% of the paper’s staff has been cut since Platinum took over just three months ago. The nervous finger-tapping you hear is coming from Boston Globe HQ newsroom in Dorchester…

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peHUB First Read

By Dan Primack — 8 years ago

* Paul Kedrosky: Why don’t more entrepreneurs want to be entrepreneurs?

* Huh?!?! A judge rules that Microsoft can no longer sell Microsoft Word.

* As Atticus shuts down with flair, Dennis Berman takes a look at the five most memorable hedge fund farewell letters.

* Morning Call: U.S. futures point lower ahead of the Fed, London falls early, European shares rise on utilities, the Nikkei slips and Chinese shares dip to four-week low.

* CalPERS commits to Vinod Khosla’s new seed-stage fund, and provides some details in this .pdf document (beginning on page 22). Guess this means we’ll finally get some insight into Khosla’s post-Kleiner performance.

* Could CIT become a blown save?

* Good overview: The origins of Islamic private equity in the Gulf.

* 10 cities primed for a real estate recovery, and 10 cities facing the next real estate bust.

* Bob Kuttner is the latest to rail against private equity ownership of banks. His main argument is against self-dealing (i.e., a PE firm using bank capital to fund its other activities), but that just calls for codifying a prohibition that has been added

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peHUB First Read

By Dan Primack — 8 years ago

* U.S. bailout panel: Toxic assets may need more Treasury support.

* VC-backed company valuations continue to fall in Silicon Valley.

* Print media isn’t the only industry suffering from online cannibalization. It’s also hurting porn.

* Morning Call: U.S. futures point higher, London slips early, European shares fall on banks, the Nikkei keeps climbing and Hong Kong closes at a one-year high.

* Brad Feld: How to run a great board meeting.

* Jaime Dimon takes a page out of Allan Mullaly’s playbook.

* Lots of champagne corks popping yesterday at Benchmark Capital, which agreed to sell portfolio companies SpringSource (to VMWare) and FriendFeed (to Facebook). Most of the navel-gazing Twittersphere has focused on the latter (after all, there were photos), but investors who care about big distribution checks probably are more excited about the former.

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peHUB First Read

By Dan Primack — 8 years ago

* Louise Story’s post-mortem on Cerberus’ Chrysler adventure.

* Wal-Mart vs. Girl Scouts

* Morning Call: U.S. futures point lower, London falls early, Europe down on banks and commodities, the Nikkei hits a 10-month closing high and Chinese shares slip.

* Stupid is as stupid does: Wall Street returns to guaranteed bonuses.

* Venture capitalist Fred Wilson on doubling-down:

“It is also important to recognize that some investments cannot be fixed. And in those cases, painful as it is, the right thing to do is shut the company down or sell it if a buyer can be found. I prefer the latter outcome, even if getting it is more costly to the investors. Finding a ‘home’ for a company and a team has reputation benefits that accrue to the VC investors over a hard shutdown.”

* Another week, another PE-backed IPO on tap. This time it’s Emdeon Inc., which is backed by General Atlantic and Hellman & Friedman.

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peHUB First Read

By Dan Primack — 8 years ago

* “Toxic bonus” bankers clean up good.

* Energy Future Holdings (aka TXU) lenders resist loan amendment plan. Apparently it’s not always so easy to rewrite history…

* Last October, I wrote a post called Buyout Firm Behaving Badly. The subject was The Cypress Group, which was calling down all $120 million of its remaining fund capital to prop up existing portfolio companies, just before the (extended) investment period was set to expire. In other words, hold LP money hostage in the vague hope of reducing a potential $50m clawback. Today, the NY Post reports that investors may vote to liquidate the fund.

* Morning Call: U.S. futures mixed ahead of jobs data, London falls early, European shares slump, the Nikkei keeps climbing and policy worries drag down China and Hong Kong shares.

* Was the DOS attack on Twitter and Facebook actually targeted at just a single user?

* Mike Hammill, econ policy analyst at the Atlanta Fed: Each recovery is the same, each recovery is different.

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peHUB First Read

By Dan Primack — 8 years ago

* Court kills Chrysler conspiracy theories. The big takaways: “If you’re a debt holder, you need to offer solutions of your own – otherwise a company can sell its assets free and clear to a white-knight buyer. And if you’re part of a group of secured lenders, the lead agent holds sway on whether to cut deals with whomever it chooses.”

* The Blackstone Group will report Q2 earnings shortly, and I’ll be live-blogging a 9:30am media call here. Hope you join in with questions and comments. I’d bet they plan to keep close tabs on Hyatt Hotels’ IPO quest.

* Morning Call: U.S. futures point higher, London rises early, European shares rise on financials, the Nikkei climbs on autos and Hong Kong splits with Shanghai.

* Mary Shapiro wants the SEC to self-fund.

* The AIG bailout has been a fee bonanza for Wall Street lawyers, accountants and the rest.

* Changing of the guard at MIT’s Entrepreneurship Center. Morse out, Auelet in.

* CalSTRS discloses its 10-year investment plan (.pdf). The private equity info is on pages 29-32.

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