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Archive for the ‘Board Of Intellectual Capital’ Category

Crisis provide opportunity for “Angels”

Posted in Board Of Intellectual Capital, Investments, Venture Capital, tagged , , , , , , , on May 11, 2009| Leave a Comment »

Here is a excerpt from San fernando Business Journal, that provides som good news.

“We’re seeing at least a 50 percent increase in deals choosing us over VCs for various reasons,” says John Dilts, founder and president of Maverick Angels in Westlake Village. The group has 25 members who screen and invest in companies monthly.

The economy has forced many VCs to slow their investment pace and focus on existing companies that are not able to exit their portfolios because of the shuttered IPO window and weak acquisitions market, said Mark Heesen, president of the National Venture Capital Association, in the MoneyTree Report.

While many angels remain cautious, the downturn has resulted in higher quality entrepreneurs looking for early stage capital, says Dilts. Some have raised previous rounds of capital and developed their companies to the point of generating revenue.

Company valuations have also dropped, which is an appealing point of entry for angels. “As angels we’re seeing higher quality deals and lower valuations,” says Dilts. “We fill a unique void in the emerging growth finance universe. We provide speculative capital.”

Read the full article here.

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The real problem with the stress tests and the bailout programs

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Economy, Investments, Market research, Strategy, tagged , , , , , , , , , , , , , , on May 8, 2009| Leave a Comment »

We wrote about this topic yesterday, the bailout was just a bandaid – the real issue is the fundamentals. The recent stress tests uncovered some uncomfortable truths in regards of cash, GMAC among others might need bailout or face bankruptcy!

The ever so humble (not) Paul Krugman today wrote a good Op-Ed in NY Times. Here are some selected quotes explaining the situation very clearly.

“I won’t weigh in on the debate over the quality of the stress tests themselves, except to repeat what many observers have noted: the regulators didn’t have the resources to make a really careful assessment of the banks’ assets, and in any case they allowed the banks to bargain over what the results would say. A rigorous audit it wasn’t.

But focusing on the process can distract from the larger picture. What we’re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health.”

He continues;

“After all, right now the banks are lending at high interest rates, while paying virtually no interest on their (government-insured) deposits. Given enough time, the banks could be flush again.

But it’s important to see the strategy for what it is and to understand the risks.

Remember, it was the markets, not the government, that in effect declared the banks undercapitalized. And while market indicators of distrust in banks, like the interest rates on bank bonds and the prices of bank credit-default swaps, have fallen somewhat in recent weeks, they’re still at levels that would have been considered inconceivable before the crisis.

As a result, the odds are that the financial system won’t function normally until the crucial players get much stronger financially than they are now. Yet the Obama administration has decided not to do anything dramatic to recapitalize the banks.

Can the economy recover even with weak banks? Maybe. Banks won’t be expanding credit any time soon, but government-backed lenders have stepped in to fill the gap. The Federal Reserve has expanded its credit by $1.2 trillion over the past year; Fannie Mae and Freddie Mac have become the principal sources of mortgage finance. So maybe we can let the economy fix the banks instead of the other way around.”

Read the full article here.

Others covering this article can be found here: Economists View, Brooks and Krugman, NewsTrust, One Penny Street, Relevant Science.

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“Bailout” in need of more bailout!

Posted in Board Of Intellectual Capital, boic, Economy, Investments, Market research, Strategy, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , on May 7, 2009| Leave a Comment »

Putting cash into unhealthy business has long been understood as a bad deal. With the Bailout programs and the TARP initiative, some might have thought that the problem was solved – think again. Poor business remain poor business.

Here are some good quotes taken from NY Times.

“The results of the bank stress tests have been trickling out for days, from Washington and from Wall Street, and the leaks seem to confirm what many bankers feel in their bones: despite all those bailouts, some of the nation’s largest banks still need more money.

But that does not necessarily mean the banks will get that money from the government. The findings, to be released Thursday by the Obama administration, suggest that the rescue money that Congress has already approved will be enough to fill the gaps. If so, the big bailouts for the banks may be over.But hopes that the tests will be a turning point in this financial crisis electrified Wall Street on Wednesday and some overseas markets the next day. Financial shares soared, lifting the broader American stock market to its highest level in four months. The Dow Jones industrial average rose 101.63, or 1.2 percent, to close at 8,512.28 Wednesday, while Japan’s Nikkei index rose more than 4 percent by midday Thursday.”

Good news indeed, but…

“After news this week that Bank of America and Citigroup would be required to bolster their finances again, word came Wednesday that regulators had determined that Wells Fargo and GMAC, the deeply troubled financial arm of General Motors, would need to do so as well. But regulators decided that American Express, Capital One, Bank of New York Mellon, Goldman Sachs, JPMorgan Chase and MetLife would not need to take action. The official word is due at 5 p.m. Thursday.

The results so far seem to suggest that the 19 institutions that underwent these exams will need less than $100 billion in additional equity to cope with a deep recession, far less than some investors had feared. The question now is, where will banks get that capital?”

Read the full article here.

Other helpful sources on this issue can be found here: Huffington Post, Barrons Blogs, Wall Street Journal, Seeking Alpha, 24/7 WallStreet

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Few IPO candidates makes VC´s worried

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , , , , on May 6, 2009| Leave a Comment »

A giant investment dilemma is coming into play as of late – the market, Silicon Valley especially, is running short on IPO candidates. The jackpots including Intel, Apple, Netscape, eBay, Yahoo and Google are all history by now. With few candidates, the payoffs look smaller and the real problem shows – where will the money come from for new investments?

Here are a good analysis taken from Silicon Valley.com.

“So how might a Facebook or LinkedIn IPO perform when the time is right? Or what will Skype’s IPO look like, assuming eBay proceeds with plans to spin it out in 2010 as a separate company?

“We’re seeing a rebuilding and stabilization of the IPO market, so that Silicon Valley firms will be able to participate.” said Jeff Grabow of the accounting firm Ernst & Young’s San Jose office, which issued its quarterly U.S. IPO Pipeline report Tuesday.”

It continues…

“The IPO is vital to the valley’s economy, promising a potential jackpot for VCs that compensates for investments that don’t pan out. Not so long ago, the valley seemed to pop out an IPO every few weeks. But since early 2008, the pipeline has been more like a sieve. The venture industry is now pushing for tax breaks and regulatory relief from Washington to revive the market.

Ernst & Young’s report offers a snapshot of the situation. Privately held companies get in the IPO pipeline by filing S-1 forms with the Securities and Exchange Commission that signal their plans to sell stock on public markets. There were 57 companies in the pipeline Dec. 31, but only 44 on March 30.

In the first quarter, 16 companies exited the pipeline — only two made Wall Street debuts. Among the others, 10 registrations had surpassed the one-year expiration for inclusion in the study, which suggests they may just be biding their time in a chilly market. Three registrants withdrew their S-1s, and one postponed. Three companies filed S-1s, including San Francisco-based OpenTable, the online restaurant reservation service.

When OpenTable filed in January, it seemed like wishful thinking in such a dreadful economy. Because SEC rules require “a quiet period” for companies that file for IPO, I couldn’t ask CEO Jeff Jordan why OpenTable was making such a move. How good could the restaurant business be with credit crunched and people pinching pennies?”

Read the full article here.

Other covering the issue: Techmeme, TechSheep, Congoo

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M&A Strategies

Posted in Board Of Intellectual Capital, boic, Business models, Investments, Strategy, Venture Capital, tagged , , , , , , , , on May 5, 2009| Leave a Comment »

Here is some interesting viewpoints from Venture Capital Dispatch – a WSJ Online blog written by Scott Austin.

“Last August, Hewlett-Packard Co. signed a letter of intent to pay $360 million cash for LeftHand Networks Inc., a venture-backed provider of storage systems. A few weeks later, Wall Street’s collapse sent the economy in a tailspin and threatened to knock the screws out of the deal.

But after a two-week pause the two sides got back together and in November closed the acquisition on the same terms.”

The article continues…

“LeftHand was able to hold its ground because it had proven itself valuable well before Hewlett-Packard offered to buy it. H-P had been reselling LeftHand’s software on some of its servers for nearly three years, and realized it couldn’t do without it.

The deal signifies the importance of setting up strategic relationships with possible acquirers, especially in this environment, said the aforementioned investor, Matthew McCall, a managing director with Draper Fisher Jurvetson Portage Venture Partners.

“When your hair’s on fire as a corporation, you’ll try anything to make the pain go away,” he said. “Now’s a great opportunity [for start-ups] to enter partnerships, distribution agreements, and dialogues with larger corporations.”

Matthew McCall´s advice continues:

  • Form a strategic relationship with a potential buyer,
  • Look at it from the acquirer’s perspective,
  • Identify the alternatives,
  • Finally, make sure at least two mortal enemies are bidding on your start-up.

Read the full article here.

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