Venture capitalist Pascal Levensohn this morning gave a keynote speech at the Cybersecurity Applications and Technologies Conference for Homeland Security (CATCH), delivering the message that U.S. innovation and entrepreneurship, the crucial growth engines of the U.S. economy, are at risk of stalling out. What follows is the text of his prepared remarks: I’d like to thank Doug Maughan and DHS for their gracious invitation to address this gathering of distinguished technology entrepreneurs who are focusing their talents on protecting the security of our nation’s critical infrastructure. “Crisis” seems to be the common thread in everything we see on television or read in the popular media. I do not use the words “American Innovation in Crisis” lightly. As a venture capitalist, an entrepreneur, and an American, I am very concerned about the state of innovation in our country today. I believe that we need to be proactive in addressing the innovation crisis because the consequences for the future of our country are simply unacceptable if we don’t.
We have all seen the recent headlines: US M&A volume dropped 38% in 2008 and transaction values are down 24% from 2007. Other statistics and headlines are equally gloomy. By nature, I am an optimist so I look for the silver lining in things. Perhaps this is why I have chosen to focus more on […]
What’s with the Tom Friedman bashing? In 24 short hours from prime-time glorious mention of venture capital in Sunday’s New York Times op-ed pages, to opinionated humiliation at peHUB. Easy boys, he’s just a writer. He doesn’t make the rules, he just reports them. Or tries to. And yes, sometimes he can be wrong, just […]
I love Thomas Friedman. I was first exposed to him when he was the NY Times Jerusalem bureau chief and wrote a terrific book on the Middle East, From Beirut To Jerusalem. Since then, he's become more famous and influential in economic matters through his book, The World is Flat. So I was perplexed and dismayed when I read his editorial in today's NY Times: Start Up The Risk-Takers. In it, he suggests a silly stimulus idea - "Call up the top 20 venture capital firms in America, which are short of cash today... and make them this offer: The US Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way." There are numerous reasons this is a dumb and impractical idea. Friedman threw out another dumb idea a few weeks ago in an editorial titled The Open Door Bailout. In this article he opines: "I would have loved to have seen the stimulus package include a government-funded venture capital bank to help finance all the start-ups that are clearly not starting up today — in the clean-energy space they’re dying like flies — because of a lack of liquidity from traditional lending sources."
A few weeks back, a friend mentioned an idea he had heard suggesting that the government consider entering the VC (venture capital) business as part of the overall stimulus plan. Specifically, the argument was made for the government to provide excess venture capital funding to the green sector. At first, I assumed this was just one individual’s idea, but the noise level has risen to the point where it is reasonable to assume there is a group pushing or lobbying for this outcome. Last week, Thomas Friedman jumped on the bandwagon in a New York Times article titled Open Door Bailout. Friedman noted: “I would have loved to have seen the stimulus package include a government-funded venture capital bank to help finance all the start-ups that are clearly not starting up today — in the clean-energy space they’re dying like flies — because of a lack of liquidity from traditional lending sources.” Clearly, there is a group of individuals that believes the government should enter the venture business. With all due respect to Mr. Friedman – and by the way I am a huge fan of The World Is Flat – this is a remarkably flawed idea. Startups and VCs simply do NOT need bailout dollars. Allow me to provide more detail:
This is an unprecedented time, and most companies are rowing upstream against the corrective economic currents. But it’s not the first time that we’ve been confronted by a significant, broad-based correction and the accompanying uncertainty. Indeed, many of us can recall the gas lines, 12 percent inflation and 9 percent unemployment of the 1970’s; interest rates nearing 20 percent in the 1980’s; and, more recently, the bursting of the Internet bubble and “irrational exuberance.” The important point to remember is that notable and sustainable business success stories – Apple Computer, ExxonMobil, Cisco, Amazon, Target and Google – emerged from each of these challenging periods.
“For all those whose cares have been our concern, the work goes on, the cause endures, the hope still lives, and the dream shall never die.” Funny I’d remember that line – the closing stanza of Teddy Kennedy’s 1980 Democratic National Convention speech. It came to me as I was thinking about how I’m feeling […]
Recently, my husband and I were at a dinner party when someone suggested a trivia game called “Six Degrees of Separation.” The game originated from an offhand remark Kevin Bacon made in an interview years ago that he had been in so many films that he either knew everyone in Hollywood or was no more than 6 degrees of separation from everyone in the industry. It’s evolved over time into a joking kind of reference that everyone in the world is only 6 degrees of separation away from Kevin Bacon. As the night unfolded, we learned that the chef who was catering the dinner party (Chef Matteo www.4coursevegan.com) regularly serves as chef for Kevin Bacon and his family – putting all of us at the table in the “2nd degree” category. I was dreaming of getting my closet-screenplay writing career off the ground! It got me thinking about how this parlor game might apply in our industry. Certainly, websites like LinkedIn, FaceBook, Doostang and Plaxo have all capitalized on the social networking scene. Like me, each of you probably receives dozens of invitations each week to get “linked” or otherwise connect to other people through social networking sites. But, is it really enough to network online? And is networking online really “networking” that can make a difference in your job search?
There has been a lot of recent coverage in peHUB about rising interest in the secondary market, and a rising interest of bankers looking to become secondary market intermediaries. Some have argued that what the market needs is more buyers and not more intermediaries, but there hasn’t been a lot of discussion of what intermediaries […]
The Hedge Fund Transparency Act sponsored by Senators Charles Grassley and Carl Levin reportedly contains a provision that would require private equity firms to publicly disclose the fair market value of their investment funds. Together with the recently adopted FAS 157 mark-to-market accounting standard, the general trend toward fair value reporting and public disclosure is […]