Opinion

Investment cycles are predicted to last longer, exits will be tougher and firms will tighten their belts with new fund-raises coming further apart than before. Competition for a place at the table in firms will be greater, so expect compensation to begin cycling downward in this year and throughout 2009. We could very well see firms saying, in effect, this year’s bonus is that you get to keep your job.

Politicians want growth so they allow rates to stay low. (Give the people what they want to get elected) Dad used to pay 10% for his $50,000 mortgage but times have changed and people want things they can’t afford – NOW! They want bigger, nicer houses and they don’t want to pay an arm and a leg. Thanks to low rates times are good – really good. In fact, times haven’t been bad for so long, most young people don’t remember any hardship. Get the biggest house with the cheapest and most flexible mortgage you can get and forget about it. Low interest rates create demand for home-loans. (Money is cheap) Your sophisticated older brother just got his MBA and is now a Wall Street banker. He hatches a pretty nifty scheme. He loans you $5,000 at 2% interest to build a new tree house.

I don’t need to repeat the facts behind last week’s financial turbulence – from Lehman Brothers to Merrill Lynch to AIG and beyond. To paraphrase Jon Stewart, it’s a good thing the audience can’t see me cry during the commercial breaks. Beyond the obvious coverage in the Wall Street Journal, Business Week, The Economist and […]

The following is loosely based on a very good article in today's NYTimes WASHINGTON — After a series of government interventions in the private markets, one seemingly more astonishing than the next, lawmakers found themselves confronted on Wednesday with the question of when and where to draw the line on future aid. But with billions of dollars in financial backing already authorized for Wall Street, and with Election Day fast approaching, Congressional leaders seemed uninterested in denying help to large employers of Americans. Even as lawmakers in both parties unleashed a barrage of questions about the wisdom of a government rescue for the American International Group, support seemed to be growing quickly on Capitol Hill for $532 trillion in venture capital to assist the ailing start-up industry. The chief executives of 172,972 start-ups who have been unable to get VC funding this year met on Wednesday afternoon with House Speaker Nancy Pelosi. When they emerged, they expressed optimism that the investments would be included as part of a budget resolution that is needed to finance

To be successful, drama and fiction rely on what is called a “willing suspension of disbelief.” Perhaps today we need a pause or a willing suspension in an accounting standard that is wreaking havoc. Mark-to market accounting was designed to give a “true” picture of value and thus increased transparency to anyone and everyone who cares. […]

I’m writing this as Lehman Brothers closes its doors and Bank of America rescues Merrill Lynch. Clearly, the news isn’t good on Wall Street. And it’s also far from good on Main Street. The economy has lost jobs for eight months in a row, and the nation’s unemployment rate is now over 6 percent, the […]

Being smart people, we are all aware of the sea change/blip in the financial reporting regulations that is bearing down on corporations. I am referring to the end of the world/no big deal of fair value estimating that has been foisted upon/given to us by the FASB in the forms of FAS 157, FAS 141R […]

The role of a company’s Chief Technology Officer (CTO) is an incredibly critical, but poorly understood, one. Many startups even neglect the position, unless a member of the founding team is a strong technology visionary. Instead, they assume the CIO or VP of Engineering can be responsible for setting technology strategy as well as delivering on it […]

Will the iPhone platform help anyone make money? The underlying questions are 1) What is a platform? 2) Is the iPhone a platform or just a fun piece of hardware? Last year Facebook evolved from an application to a platform enabling a gold rush of investment in application vendors and new venture funds focused on monetizing the new platform. Presumably being a platform is better than being an application, as anybody old enough to remember the Flying Toaster screensaver can attest. After near-ubiquity in the PC era, Wes Boyd and better half Joan Blades (who would later go on to found MoveOn.org) in 1997 sold Berkeley Systems -- including its Flying Toaster application -- for a reported $13.7 million. In 2008 dollars, this would be a Series A. Applications were not a way to make money in the 1990s.