The size of the US VC industry in terms of active funds continues to contract - to just over 300 firms in 2011 compared to over 700 in 2000. According to E&Y, the primary reason is that less capital is being targetted for VC investment. Despite strong deal flow for venture capital firms, market volatility has had an impact on the ability of even the best firms to raise new funds. As a result, firms are beginning to increasingly look overseas.
A recent study by Pitchbook and Grant Thornton has discovered that Private Equity groups are holding on to their investments for longer, 4.8 years is the median "hold" time as discussed in "Private Equity Exits Report: 2012 Annual Edition".
Entrepreneurs are passionate about their business. Sometimes overly so. Read this terrific article on how to avoid several common mistakes that will ruin an otherwise successful pitch meeting. From FastCompany, by FC Expert Blogger Josh Linkner, 12/6/11
Venture capital performance continued an upward trajectory as of the first quarter of 2011, the improvements were seen across all time horizons, with the exception of the 15-year numbers, and were driven by the strong one-year venture capital return of 18.5 percent.
Over a six-month period, Mr. Andreessen tapped his formidable network of Silicon Valley connections to snag stakes in Facebook Inc., micro-blogging service Twitter Inc. and deals-site Groupon Inc. Other investments include social-game developer Zynga Inc. and Internet-telephone company Skype SA. In the process, he helped to ignite Silicon Valley's latest Web boom and the burgeoning market for private-company shares.
This is an insightful blog post by Chris Dixon (www.cdixon.org)... "Having raised a number of VC rounds personally and observed many more as an investor or friend, I’ve come to think there are a set of dominant best practices that entrepreneurs should follow..."
From Jesse Eisinger at ProPublica: "Investors are punishing funds that have engaged in questionable behavior and balking at ever-escalating fees. Regulators are showing uncharacteristic backbone, insisting that they will not merely fight the last war when it comes to new rules."
In March, U.S. companies raised more money through stock offerings than any month since March 2000. And it's not just tech companies these days. Bond offerings are also occurring at a record pace thanks to low interest rates.
From WSJ: "The stock market's strong gains since its 2009 meltdown low have buoyed investor demand for stocks, helping global common-stock underwriting surge 16% to $174.4 billion in the first quarter, Dealogic said. Investors who had previously sought more-stable bond funds have grown "steadily more confident" about stock mutual funds this year, said Alastair Borthwick, co-head of global capital markets at Bank of America Corp.'s Bank of America Merrill Lynch. "
Banks have again started to provide large bridge financings for deals, and in some case keep all of the lending business for themselves rather than spread the risk over a syndicate, an indication of just how competitive the world of corporate and commercial lending is becoming. Take for example the JPMorganChase $20 billion unsecured bridge loan to fund AT&T's $39 billion purchase of T-Mobile USA from Deutsche Telekom.
April 9, 2012
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