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In the private equity market, who owns you helps determine your success

October 9, 2006

Analysis of:Intel Happy To Be No. 1 Venture | www.investors.com

As this article points out, Intel has invested a large amount of money into the private equity market and has completed over 85 deals in private companies this year. What this article seems to have missed is the amount of control these hi-tech companies like to structured into their investments

The reason behind expanding into new investment fields

October 2, 2006

Analysis of:Morgan Rejoins Private Equity | www.thestreet.com

Morgan Stanley is re-entering into the private equity business.  Why?  Is it because this field suddenly offers more great investment opportunities?  Is it because the IPO market is slow and Morgan needs a new place to put their time and attention?  Possibly because this market is becoming a great market to invest your money while having some control over the company's performance and outcome.  The answer, unfortunately missed by this article, is "yes" to all three.

E-Commerce isn’t a new ballgame, but the limits and rules are now understood

September 19, 2006

Analysis of:Whole New Ball Game | www.cfo.com

Ten years ago, VC’s were falling over themselves pumping huge amounts of money into e-commerce.  Regardless of the business model, the Internet was viewed as this whole new market that was going to make the quickest the richest.  Now that we’ve re-gathered our thoughts and put the puzzle pieces back together, we finally understand what is going to make a successful e-commerce company.

Trying to Quantify Psychology

September 18, 2006

Analysis of:What Lies Behind Those "Rational" Decisions? | www.cfo.com

This interesting article touches on a topic that has been debated for decades- quantifying judgment.  I’ve taken executive pricing courses at the University of Chicago, negotiation courses at Harvard, and have read countless books on reading the unsaid- from posturing to overconfidence.  They all hold one thing in common, they make a good debate.  In the world of M&A and financial decisions, there is only one way to know how the executive thinks, get inside the company for a few years and work for the financial leader.

The length of Investment can determine the peak in gains

September 11, 2006

Analysis of:Riverside Closes First Micro-Cap Fund; Firm Plans to Magnify Investments with New Initiative | www.vcaonline.com

Over the past five or six years, more and more VC firms have been focusing in on smaller, pre-acquisition companies for investment. The length of the investment period, however, determines the profit potential in this arena, as acquiring companies look for candidates with upside to a purchase.

 

Energy inflation is dramatically increasing VC interest

September 11, 2006

Analysis of:Branson joins Arnie’s crusade as Virgin goes green | www.timesonline.co.uk

British billionaire darling, Richard Branson, just invested $60M in an alternative fuel start-up along with other well-known firms such as Khosla Ventures and Yucaipa. But these people/firms are not alone, as this market has gotten a great deal of attention over the past 18 months.

Signs of a healthy, VC-owned company

September 5, 2006

Analysis of:SunRocket Announces $33 Million Funding Round | www.vcaonline.com

Recently SunRocket completed a C round funding, adding to an already impressive $80M in A & B rounds. Looking at the press release, several items jump out that this company is aggressively and successfully pursuing its business plan.

Occasionally the strategy calls for additional funding requirements

September 5, 2006

Analysis of:OmniGuide, Inc. to Expand Medical Product Offerings and Manufacturing Capacity Following Series D Funding | www.vcaonline.com

OmniGuide recently announced a Series D round of funding closing $20M which is added to nearly $30M of previous funding collected since 2000. In today’s VC market, most private companies do not go beyond the C round of funding due to either the company’s exit strategy, the product development expectation, or overall market risk caused by the timing of the exit. This article delves into OmniGuide’s history, product development phase, and investment partners, but does not explain if the additional funding was included in the company’s original strategy.

Other exit strategies besides IPO

August 30, 2006

Analysis of:Lack Of IPOs Keeps Venture Cash, Staff Trapped In Startups | www.investors.com

While its true, the IPO market is the ultimate goal for venture capital investment; this article fails to see other avenues young companies have been pursuing over the past several years. The article also fails to accurately point-out the main reason most VC-backed companies do not exclusively support an IPO strategy.

This discussion attempts to pinpoint the areas as to why these companies are pursuing other avenues and what exit strategies are becoming commonplace.

Why exit strategies don't always work as planned

August 28, 2006

Analysis of:Aborted Sale leaves Jones in a tough spot / Buy my company please; why some companies go unsold in merger boom | www.wsj.com

This article implies that a company who does not successfully finish their exit strategy as planned is in trouble.  This discussion points out the contrary, that if a company does not complete their exit strategy on their first attempt and reconsiders their options, could be much more savvy in their strategy.

Other avenues besides Nasdaq to consider

August 28, 2006

Analysis of:London's Junior Market Becomes Haven For IPOs | www.investors.com

In this article, London’s junior market is considered as a viable option for startup companies as an IPO exit strategy.  While this is a viable avenue to pursue for some companies, as this article points outs, there are other avenues to consider.  This discussion attempts to point out why a VC-backed company may not consider this avenue.

M&A pitfalls, the title is correct but story misses the point

August 21, 2006

Analysis of:Managing M&A Risk: The Devil's in the Details | www.businessfinancemag.com

The shortfall with an article written around interviewing people is that you get short responses to in-depth question and miss the true story. In this article the author asks several questions to find the reason for M&A failures. The responses range from inadequate attention to working capital and unfounded pension plans. Approximately 80% of all acquisition fail primarily due to one reason; this article does not go deep enough into this point and fails to spell-out a meaningful resolution.

 

Reasons for outsourcing depends on the company's needs

August 21, 2006

Analysis of:What's Wrong With Outsourcing (And How To Fix It) | www.businessfinancemag.com

Outsourcing responsibilities and departments depends largely on what the company is looking for. In this article, the author points towards a few areas companies commonly outsource due to abundance of expertise and lower costs. Depending on the company and its history, the reasons for outsourcing swings in several directions as to what they are looking for and the controls the company has with their new business partner.

 

A change in strategy or mismanagement with investor money

August 8, 2006

Analysis of:Blackbaud Early Warning | www.auditintegrity.com

As the investment world changes with big swings in valuations, so does some companies' strategies.  This article highlights some very interesting points that do not put Blackbaud in a positive position...points that very well could be with merit.

Share Repurchase usually doesn't signal economic opportunity

July 26, 2006

Analysis of:Microsoft Reports Fourth Quarter Results and Announces Share Repurchase Program | biz.yahoo.com

From the company view, share repurchase programs are decided for several reasons, the least being economic factors.

Changing lease accounting effects

July 21, 2006

Analysis of:FACTBOX-Retailers seen taking biggest hit from lease accounting | today.reuters.com

Over the years, corporate America has jumped on the bandwagon of (legitimate) off balance sheet accounting practices.  I, for one, structured several millions of dollars in operating leases under current GAAP requirements with conservative assumptions.  While these guidelines may be heartburn for external auditors and SEC regulators, this has been a strong market over the past 10 years for finance companies.  With the proposed changes in the works, this could cause companies to rethink their big ticket spending

Hitting the 404 enhancement nail on the head

July 20, 2006

Analysis of:What's Next for Section 404 Enforcement? | www.businessfinancemag.com

Over the past few weeks, I've read several articles discussing the rumbling coming out of public companies about 404 certification.  Few authors seem to understand the frustration CFO's and Auditors are building from the confusion and lack of clear guidance these requirements are causing.  This article pin-points the changes and what the end results could be.

   

Clarification to 404 could spell better guidance and cost control for companies

July 18, 2006

Analysis of:SEC: More Questions than Answers on 404 | www.cfo.com

As the author of this article mentions, public companies are concerned with the lack of guidance for 404 compliance and the high level of spending that is being realized to get certified.  Note that the roundtable contributors include corporate executives and, not mentioned in this article, that the SEC Commissioner would be reviewing requirements in an effort to possible curb some of the spending for smaller companies.

Double edged sword for SOX and small companies

July 14, 2006

Analysis of:SEC Seeks Ideas on Sarbanes-Oxley Controls | www.eweek.com

With the SEC’s promise to review SOX & 404 compliance requirements, several smaller companies are keeping their fingers crossed for a reprieve that this spells smaller costs when setting policies and procedures.  If the reform goes through, many conservatives may start sending up the warning flag on the effectiveness of SOX.  This commentary explains both sides of the argument and what the consequences could be.

High increases in tech spending does not mean uptick for all tech companies

July 12, 2006

Analysis of:IT Operational Budgets at Highest Levels Since 1997 | www.eweek.com

It seems that every year, industry experts point to a flat-to-better year in technology spending.  In this article, the author predicts the best year in IT spending since 1997.  The shortfall is that IT is divided into numerous industries and this article does not attempt to breakdown this prognostication.  This commentary points out the short sightedness of relying on data and surveys that hide the details.

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