It seems lately like every new deal announcement that comes across the wire somehow involves a healthcare company. Perhaps it is just one out of every ten transactions that actually does involve a healthcare industry business; nevertheless, I cannot get over the fact that there just seems to be an influx in activity within this segment of the markets lately. Just within the past month, we’ve practically seen every kind of possible transaction that we can imagine involving medical companies, from buyouts of UK-based home health companies to HCA’s $1.75 billion special dividend, for which it received a significant amount of criticism from the financial media. And it seems like everyone is trying to get a seat on the healthcare value train, including Richard Branson’s Virgin Media and The Kroger Company, both of which have announced recent deals acquiring healthcare services companies.
I mentioned in my last post that I decided to write a book about venture capital and entrepreneurship, which is coming out next month (see http://bit.ly/mstrVC). In this post, I wanted to answer the question: "Who did you interview?" Selecting interviewees was a tricky process. The purpose of the book is to be a helpful guide for entrepreneurs as they navigate the process of building their companies in partnership with VCs, so I wanted to capture the voices and insights of both entrepreneurs and VCs. In particular, I wanted to capture a diverse group - diversity in terms of geography, industry focus, gender and age.
I’ve been working on a blog post called the Epistemology of Investing for about the past year. Now, epistemology is a ten-dollar word that those — like me — with five dollar brains rarely sling around, but sometimes I think investing could be called applied epistemology. As investors — specifically, investors in opaque, illiquid markets — […]
Since the Great Equity Meltdown, Landmark Partners has noticed an increasing focus on liquidity among leading institutional investors. In the past, most investors used a variety of asset allocation models to optimize their risk-adjusted returns. For some investors with successful alternative investment programs, this led to substantial commitments to illiquid assets. Although the asset allocations […]
The Colorado legislature recently passed a bill (Colorado Bill HB 10-1193) that basically seeks to improve the state’s ability to collect use tax on internet sales. This is a tax that most buyers of the covered products technically should be paying anyway but are rarely collected. Most people think those things they buy online are […]
"I've decided to write a book," I told my wife over a year ago. She gave me that what-the-bleep-are-you-talking-about look. You may be familiar with your spouse. "You've what?" "I've decided to write a book," I repeated, slightly less confidently. "On what?" "Venture capital and entreneurship." "Why?" "Well, when I was an entrepreneur, I couldn't find any good books on how this mysterious capital-raising process worked and how to harness the resources and knowledge of the VC industry to help build my start-up. Now that I've seen it from the other side, I want to explain to entrepreneurs how it all works to help them be successful. There are good blogs out there, but no good books that pull it all together."
Recently an entrepreneur extraordinaire I admire by the name of Chris Dixon touched on the two general paradigms people/institutions can adopt towards one another when conducting business. He first referenced the transactional/legalistic approach wherein labor is exchanged for money in the form of a contract that is enforced by organizations, (especially the legal system). The other approach is one based on trust, verbal agreements, reputation and is "enforced" (so to speak) by the community. As Dixon points out, the world of startups is overwhelmingly governed by the trust/reputation/community approach. Let's just juxtapose these very different paradigms against the backdrop of the modern American university. As we've established in earlier posts in this series, it has now become fashionable and accepted for universities and their tech transfer offices to engage in the practice of spinning-off companies based on their intellectual property and know-how. In fact, according to AUTM statistics, over 600 university startups are created every year based on federally funded R&D.
I'll never forget my first marketing class at business school. Our professor peered at us with an intense glare as he pushed back on our standard, "chip shot" comments. At one point he asked the guy next to me to opine on the case we were discussing, which involved launching a new consumer product. "Well," my neighbor answered confidently, "I think it will be a hit because I can see my mother-in-law buying it." "I see," replied my professor dryly and then turned to the class with a withering look on his face, "Steve appears to have fallen into that fatal trap of 'Mother In Law Market Research' - believing this new product will be a hit just because his mother-in-law likes it. Instead, let's look at the data, shall we?"
Apparently, our work to weed out unscrupulous venture events is not done. Today, I learned that Boston entrepreneurs will be fleeced in order to have the opportunity to pitch to VCs. To quote my partner Seth: “THERE IS NO CIRCUMSTANCE IN WHICH ENTREPRENEURS SHOULD PAY TO PITCH THEIR BUSINESS TO PROSPECTIVE INVESTORS. PERIOD. END OF STORY.” […]
If you’re in the mood for a really enjoyable film, I recommend Guy Ritchie's Sherlock Holmes. In it he uses the latest movie-making technologies to animate 19th century London in all its dark immensity and brooding menace- from the elegant halls of parliament to the ornate rooms of masonic temples to the labyrinthine sewers beneath the city. The sets and staging in and of themselves are a masterpiece and are simply breathtaking. I think the production designer should be nominated for yet another Academy Award. I also came to this film with a sensibility that I did not have when I first encountered Holmes as a young boy reading Conan Doyle. I was of course neither an entrepreneur nor an early-stage investor. Not surprisingly, this time, soon after leaving the theater something I had never considered before really hit me. I was struck by the realization that Sherlock would have made an amazing venture capitalist! "What a perfectly silly notion my dear Watson!", he would no doubt have replied. But I would have to insist and say that VC's and Angel Investors young and old would do well to emulate some of Sherlock’s best qualities. Here they are as I see them: