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Feb27
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Bill Burhnham made a great point in his post today about the size of venture funds and the respective size of their investments.
 He points out correctly that the size of the fund drives the size of the investment. A billion dollar fund simply can't afford to make $1 or $2 million investments. A $5 million would be small, maybe too small. This pushes funds to invest too much, he says, in companies that aren't ready or may never need to deploy that much money in order to achieve a successful exit.
Consider the economics, if a company can effectively use $2 million to create a business worth $50 million, that doesn't mean that the same company could use $5 million to grow to $100 or $150 million in the same time frame, meaning that returns on the larger investment would be lower!
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Feb27
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Hal Halladay writes today about examples of leadership from the 2006 Winter Olympics in Torino. There is much an entrepreneur can draw from the examples of great Olympians that can be applied in both life and entrepreneurship. Hal talks especially...
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I love reading Seth's blog. His logo is apt. Reading his blog is like getting into his head. Today Seth is talking about the need for repetition. From my standpoint as an investment banker, I have seen this over and...
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Know More Media recently issued a press release about my joining their blog network. They also arranged for the production of a short podcast. Both can be accessed here. Let me just add that I am proud to be part...
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Investment Bank: As an investment banker, I've learned that most people in the middle market world don't have a clear understanding about what an investment bank does. Most people do understand that large investment banks help take companies public, but...
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How an entrepreneur chooses an intermediary to help with a transaction depends on a variety of factors. There is not a bright line between what makes a middle market financial adviser a business broker or an investment bank. Those monikers...
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Feb25
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Business Broker: A business broker is a business intermediary who facilitates transactions between buyers and sellers of small and middle-market businesses. Most frequently, business brokers are retained by the sellers. The traditional model operates much like a real estate brokerage, with...
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Feb24
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Venture Capital: venture capital refers to a subset of the private equity market focused on investing in growing businesses, typically receiving minority interests in their portfolio companies. The venture capital market can be segmented across a spectrum of stages of...
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Feb23
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Ryan Money, the CEO and founder of HireVue just sent this over. What HireVue does is to faciliate video capture of employment candidates for prospective employers to use. It allows the employer to get a much better sense of potential...
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Private Equity: The monicker private equity, as used in the middle market arena, typically refers to private investment funds, managed by very well qualified management teams. These funds invest in leveraged buyouts (LBOs) and management buyouts (MBOs), providing management teams...
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Dave Schappell, whom I met in January, of Unitus posted this video on YouTube with the following description. It is worth your time! Watch this 14-minute video to learn how Unitus works to alleviate global poverty through microfinance. Microfinance products such...
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Feb22
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I've been trying to figure out the best way to work this out and it is becoming crystal clear quickly. I'll be happy to post a link to your YouTube video about your business if you send me the link...
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Mark Giangrande of Tech Law Prof Blog Netowwork made a note of this today. A major peer to peer file sharing server known as Razorback 2 was shut down by Swiss police. The Motion Picture Association is celebrating the progress...
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Management Buyout: Management buyouts (MBOs) typically refer to leveraged buyouts led by the management of the company to be acquired. There are all sorts of circumstances that lead to this situation, including corporate sellers that are divesting a division or...
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Feb21
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The blog Carried Interest, a private equity focused site talks today about venture returns and the "J" curve. The key thing to take away from the post is that in the short run, returns are typically negative--that's the "J" curve.
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Leveraged Buyout: A leveraged buyout (LBO) refers to the purchase of a business using debt (often referred to as leverage). The notion of leverage as debt comes from the buying power the debt gives a relatively small amount of equity. ...
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Feb20
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Buzz is growing about another Web 2.0 property, YouTube, a video file sharing site (watch a sample here). Fred Wilson posts a great defense of the business concept today. Like so many web properties, there are questions being raised about copyright...
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I just read on Mark Evans blog that Six Apart, the company that produces the Movable Type software that I'm using to post this blog, just raised $12 million at a pre-money valuation of $80 million.
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Asset Based Lender: Asset Based Lenders, frequently abbreviated ABL, specialize in making loans to companies that may not be able to qualify for the loans based on their income and cash flow. In contrast to traditional commercial banks (though many...
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Feb18
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Today, I begin a new routine of posting short definitions of key words and phrases that represent jargon or industry-speak. Generally speaking, these are my own explanations of a word or phrase, rather than a formal definition. Middle Market: Middle...
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Feb17
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I just read that a little company in Boston, MA called Insulet has developed what I'll call an artificial pancreas, a device, the OmniPod, that automatically and simultaneously monitors blood glucose and delivers an appropriate dose of insulin. For diabetes sufferers, this...
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Feb16
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There are two groups of people reading this post; I apologize to both of you because I'll try to take the time to write this post so as to be relevant to both groups. One group knows what a reverse...
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Feb15
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During 2005 and leading into this year, we've seen valuation multiples in M&A transactions increase, especially in transactions by financial sponsors like private equity groups. Hedge funds have increasingly become involved in making full on acquisitions, especially in the large...
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In a political context, we talk about liberal and conservative, Democrat and Republican, Bush and Clinton. In accounting, we talk about aggressive and conservative. The traditional notion was that accounting entries that resulted in understating actual earnings were “conservative” and...
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"What's your reason?" Seth asks, after explaining that the reason so many things are done the way they are is determined by archaic patterns (my favorite being that the QWERTY keyboard pattern was driven by the need to put frequently...
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Feb14
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What are the key traits of a successful entrepreneur?
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Investment bankers are frequently young. Why? I postulate that the opportunities for young people are as great as the effort required--a good mix for young, ambitious professionals.
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New Microsoft technology may make mobile e-mail devices ubiquitous, eliminating the preeminence of the Blackberry.
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Feb13
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Monica Flores, a graduate of Cornell University, writes a blog on the Know More Media Network about "women of color in business...African-Americans, Asian Pacific Islanders, Latinas, and Native Americans."
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What a great time to borrow money! Just remember, the credit loss bankers may be talking about in a few years, could be yours.
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John Gratton (an experienced entrepreneur), writes on ethics in a blog he calls CoreCharacter. I commend it to you.
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Feb12
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Fairness opinions provide a board of directors with additional comfort during the inherently risky and complex process of selling or even buying a business.
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Feb10
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After a thoughtful discussion a the University of Utah this morning, when people suggest that ethics are easy, I'll presume they're either naive or disingenuous.
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Feb 9
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This afternoon I had the privilege of leading a panel discussion on future trends in venture capital, as part of Brad Bertoch's Investors Choice Conference hosted by the Wayne Brown Institute (read Tim Stay's extensive coverage of the event on VCSmart). ...
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Feb 8
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Entrpreneurs and venture capitalists gathered at the Investors Choice conference bobsled run before the venture conference on Thursday.
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Feb 7
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Brad Feld confirms a widely observed but not well understood practice in the market regarding when NDAs are typically executed--and when they're not.
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Feb 6
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Hal Halladay at Leader Notes made a great observation about Seth Godin's commentary on leadership in an entrepreneurial setting. The point seems to be that even a great entrepreneur may not be the right person to lead the business as...
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On Thursday, I will be moderating a panel of venture experts on trends in venture capital for the Investors Choice Conference for the Wayne Brown Institute. I'll post the key observations no later than Friday. Just to get you ready,...
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Feb 5
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Seth's hard to find ethernet jack is nothing more than an ethernet cable tethered weakly to the front face of the desk, just out of sight.
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Larry Stay at GrowYourFunds kindly answered a question for me. I have a sense of my risk tolerance--and it doesn't include much option trading--but I know people who are option traders. I'd asked Larry to consider writing about gauging your...
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Feb 4
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The end of 162 years of the telepgraph was marked last Friday. What insights can we draw from its end as regards "modern" technologies?
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Feb 3
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Today marks an important landmark for my family. Almost seven months ago, my wife, Gail, and I were just finishing a 300 mile motorcycle ride through Idaho, Wyoming and back home to Utah, when we got cut off in traffic...
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Feb 2
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I apologize to all of my blonde friends, but couldn't pass up the opportunity to share it with you. Click HERE to read it! Enjoy! ddt...
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LoveSac filed for bankruptcy. My friends expressed encouragement to founder, Shawn Nelson, that I pass along.
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Feb 1
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Watch for reports next week on my bobsled run and participation in the Wayne Brown Institute's Investors Choice Conference.
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