In the late 1950’s and early 1960’s, the modern technology sector began its life. Unfortunately, the innovation was there, but the capital market funding wasn’t. So, in 1961, Arthur Rock raised $3.5 million from 25 limited partners and formed a venture capital fund. The rest is history. A similar void and opportunity exists today in the world of project finance. To put it simply: there’s very little financing available for projects that employ new technology in the fast-moving and fast-growing renewable energy sector. It’s true that the government is helping to fund projects in this area, but public-sector money, on its own, is hardly a long-term solution. To supplement and solidify these efforts, I believe we need to create the equivalent of a junk bond or venture capital market for renewable energy project finance.
Excessive Wall Street compensation illustrates the law of unintended consequences. To stabilize the global financial system, the Federal Reserve, Treasury, independent agencies and Congress acted to bail out banks and securities firms, guarantee deposits and commercial paper, and allow institutions still standing to convert to bank holding company status, thus opening the Fed window and […]
Even though I am a vegetarian, I love Thanksgiving. For me, it’s not about the turkey, it’s an opportunity to reflect upon my life and to recognize that for which I am truly thankful. It also presents an opportunity to focus on the communities of which I am a part and to think about ways […]
Nothing is more frustrating than expecting a check and then not getting it, and no one knows that better than the former shareholders of PayQuik.com. In a complaint filed in Delaware federal court recently, the representative of the former stockholders of PayQuik sued Citibank )PayQuik’s acquirer) and U.S. Bank (the escrow agent) to compel the release of the balance of the escrow. At the closing of the transaction, Citibank placed 10% of the merger consideration in an escrow account with U.S. Bank. Near the end of the escrow period, Citibank brought an indemnification claim, but the stockholder representative asserted that Citibank submitted this claim one day after the escrow period had expired. As is typical, the escrow bank took no position on the dispute, so the stockholder representative decided to seek a court order directing release of the funds. This raises an interesting question that we have come across on other transactions: What options do the former stockholders of an acquired company have if the acquirer brings a claim near the end of an escrow period that the stockholders believe is either invalid or of little merit?
Skimming the recent spate of somewhat rosy articles touting the resurgence and benefits of angel investing, I was persuaded to dig through some of my older posts to examine whether my somewhat caveat emptor position on raising angel capital had been swayed. With a few exceptions, it hadn’t.
A few weeks ago, Fred Wilson posted a presentation he delivered on What Makes the NYC StartUp Scene Special. I was inspired to deliver a similar presentation today to a group of Harvard Business School students who are interested in entrepreneurship in Boston. There's been alot of chatter in the community about a startup renaissance in Boston. Don Dodge of Microsoft had a great post listing out all the amazing startup resources in the Boston community that's worth reviewing as well. I'll post the video as well in the coming days so folks can hear the voice over. Yahoo's ex-president (and fellow HBS EIR) Susan Decker was there to serve as a good foil for my Boston vs. Silicon Valley quips. Slideshow after the jump...
As the Obama administration starts to talk about propping up small businesses with the next phase of the bailout, I’ve begun hearing noise from some venture capitalists and angel investors that the government should provide financial support to startups, early-stage venture capitalists and angel investors. All I can say to this is “vomit.”
What’s the difference between strategy and tactics? Age-old question. Usually, strategy is what you said was your plan after you blundered and lucked your way to a win. I was never more aware of this truism than at the recent IPO for A123 Systems, a new-age battery company that a few of us backed seven-and-a-half […]
Much has been written recently about whether venture capital and/or private equity funds should be regulated. The general idea behind proposed regulation is that any entity that could pose a risk to the nation’s financial network should be regulated to try to ensure that we avoid the messes that got us into this current recession. So the question then is, “Who presents a possible threat?” The arguments coming out of the VC world are essentially “Not us for a bunch of reasons.” Congress seems to agree. The proposed regulations have new language that would exempt venture capitalists. It says:
I find the preponderance of males in VC an annoying and stubborn phenomenon. When I first entered the start-up game as an entrepreneur in the mid 1990s, I didn’t think much of the “VC gender gap” as there were plenty of women executives around. In fact, between one third and one half of the executive […]