Private equity and venture capital

Archive for ‘Private equity and venture capital’

Could an online social network deliver a virtual “Silicon valley” to non-US economies?

The key reasons that Europe and other regional economies have not developed a “Silicon valley” is not cultural and not lack of capital. There are enough entrepreneurs and the capital will mobilise. There needs to be predictable risk for involvement in early stage, greater transparency that reduce the costs of involvement and a significant reduction in the time/cost to find opportunities. Entrepreneurs and investors need to know who to call. The recipients of those calls need to be willing to get involved.

Is there a way to achieve transparency, without waiting for decades to pass and relationships to form in the conventional way? There must be a role for an online social network to assist each regional economy, company, advisers and investors with sincere early stage aspirations.

10 July 2006 Category: Capital allocation and remote services, Digital Ecosystems, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks No Comments

Isle of Man – a good home for ebusiness and a new corporate structure

The Isle of Man is a world class financial centre. I recommend the Isle of Man Finance web site for more information. It is a very competitive offshore offering, but may have been less flexible and more expensive than other “offshore” jurisdictions. Amongst other requirements, an Isle of Man company had to have at least one resident director and a resident company secretary. This is about to change. The Isle of Man is about to introduce the “New Manx Vehicle” (“NMV”) company structure. The NMV has many of the attributes of the International Business Companies of the BVI and other offshore jurisdictions. With the NMV, the Isle of Man is a compelling offshore proposition (particularly for European E-Business). The opportunity to use “meeting rooms earmarked for use by Manx companies” in the Isle of Man’s London office is an innovative marketing tactic.

7 July 2006 Category: Capital allocation and remote services, Central Brain assembly, Central Brain building blocks, Economic development, Equity Market 3.0, Private equity and venture capital, Stock exchanges 1.0, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks 2 Comments

Web 3.0, the global brain and the impact on financial markets

“The Semantic Web (or Web 3.0) promises to organize the worldÃ¢â‚¬â„¢s information in a dramatically more logical way than Google can ever achieve with their current engine design.” The lack of metadata around information and closed information systems ensure financial markets remain a highly profitable industry. In Web 2.0, the information could be organised into structured databases from a single location made available over the internet. Web 3.0 must still be organised, but intelligent distributed agents could answer your question – “Which corporate adviser should I use to list my Web 3.0 company in Bermuda?” and “What are my chances of getting liquidity?”. It will be very interesting to see what type of answers Web 3.0 gives us?

5 July 2006 Category: Boom then depression by 2012, Capital allocation and remote services, Central Brain assembly, Central Brain building blocks, Economic development, Equity Market 3.0, Industry collaboration (Central Brain), Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks No Comments

Private equity in 2005: Australian buyouts and European early stage investment activity

Australia has a population of 20m, compared to Europe’s 460m. Per head of population, Australia raised more capital for buy-outs than Europe, but invested an equal amount in early stage companies. Europe offers early stage companies greater opportunities to attract investment and achieve an exit. Europe invested US$4.2b in early stage investments compared to Australia’s approximately USD150m. Acquisitions of startups in Europe amounted to US$7.5b compared to a nominal amount in Australia. Australia has achieved stunning investment returns from buyouts (a 25% IRR over 5 years), exceeding the returns from the same class in Europe. Not surprisingly, buyouts dominate private equity in Australia. Australian buyout industry is liquid, but early stage investing is small with few opportunities for exit.

Europe may offer a greater addressable market for the early stage entrepreneur, more opportunities to raise capital and a greater probabiltiy of achieving an exit. If a country is not an active investor in early stage companies, the entrepreneur may consider moving. Most of the industries currently of interest to investors can be based anywhere.

3 July 2006 Category: Private equity and venture capital No Comments

Are we entering an era of zero (real) investment returns? Is it time to readjust investment portfolios for an era of rising inflation?

“Of course, it’s been a 20-year bull market because of the victory of the world’s central banks over inflation following the Paul Volcker, post oil shock recession of 1982. The previous 20 years produced a long-term sharemarket return of about 7.5%, which was a real return after inflation of zero (the real return of past 20 years has been about 8%): Alan Kohler”. I believe the recent correction is a “Tipping point” that will usher in an era of investing in a rising inflation environment. This will have a dramatic effect on portfolio weightings, share price valuations and drive greater interest in private equity. “The best strategy is to build a small portfolio of high-quality, 20-year stocks and not try to time the market”: Alan Kohler

30 June 2006 Category: Boom then depression by 2012, Capital allocation and remote services, Equity Market 3.0, Private equity and venture capital No Comments

Increasing regulation and competition driving US companies to non-US capital markets

The United States also driving companies away from their home market. Sarbanes-Oxley Act, increased regulation and complexity have increased the cost of raising capital and the risk of non-compliance. Offshore centres are attracting companies away from the United States. “23 of the 24 firms recently looking to raise more than a billion dollars in capital chose to list overseas rather than in the U.S.”

25 June 2006 Category: Capital allocation and remote services, Declining markets, Economic development, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0 No Comments

What will financial markets look like in 2015?: A perspective from Bearingpoint

“A true sea change is taking place in the capital markets industry worldwide. Driven by sociological, regulatory and technological developments, this wave will completely alter the face of the industry and the roles of current market participants over the next 10 years.”: Bearingpoint. Stock exchanges will move beyond order execution, to providing investment banking services and enhanced clearing and settlement. Smaller firms will follow Google’s IPO example and approach the public directly rather than through intermediaries.

20 June 2006 Category: Capital allocation and remote services, Digital Ecosystems, Economic development, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 Intellectual property vs. Web 3.0 Community knowledge, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks 1 Comment

Why your software isn’t selling? You don’t need a world class management team? (from onstartup.com)

I found a great blog for startups – onstartups.com . It contains some interesting perspectives from an experienced entrepreneur. I have extracted the key points from two of his articles below and then provided brief comments of how I have applied similar principles to my current startup. I encourage you to read the original articles and subscribe to the RSS feed.

15 June 2006 Category: Central Brain assembly, Central Brain building blocks, Private equity and venture capital No Comments

Financial forecast model: A Microsoft Excel template could become an ‘Open source’ project

Financial modelling is highly specialised. A template is useless unless the skills are available to customise it for a specific need. The skills required include Microsoft Excel, a knowledge of accounting standards and being able to communicate the business model by using a financial model. I was reluctant to provide this model, but it does represent a “start” for many people. If you improve the spreadsheet, I would also welcome the opportunity to include those improvements here. Perhaps, we will create an “Open source” financial forecast model for the world. Maybe, the world only needs one and this can be our contribution to the world.

12 June 2006 Category: A Personal Central Brain, Central Brain assembly, Private equity and venture capital, Templates (business planning) No Comments

Are offshore stock exchanges becoming more competitive in the internet era?

The internet would appear to facilitate greater participation in the “listed company” market by the offshore stock exchanges. Offshore centres can list companies at a fraction of the cost of onshore exchanges. Onshore equity markets are expensive and can only be used by large companies. Does the current standard of compliance and regulation mean that small companies can not get capital for growth so that they become large? What does society gain from ensuring effective capital allocation to early stage companies? In the internet era, the offshore stock exchange may ultimately have a greater role.

9 June 2006 Category: Capital allocation and remote services, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks 2 Comments

Offshore: What? Who? How? Where? Why? Onshore reaction? Tax competition? Pitfalls? The collapse of income tax systems?

Approximately, 33-40% of the worlds financial assets and 50% of financial market transactions occur in offshore jurisdictions. In recent years, onshore countries have collaborated to stamp out “harmful tax competition”. The offshore jurisdictions are, and will remain, a critical part of the financial system. The internet and standardisation of offshore “products” has made offshore accessible to all. The onshore economies may continue “enforce” existing laws which seek to tax residents on world wide income. They may engage in “tax competition” or restructure misunderstood and unworkable tax systems. Whatever happens, the internet is likely to play a significant role in facilitating change.

8 June 2006 Category: Capital allocation and remote services, Central Brain assembly, Central Brain building blocks, Declining markets, Economic development, Equity Market 3.0, Private equity and venture capital, Specialist financial centres No Comments

Crash 2.0: an early chapter in the .NET boom?

Web 2.0 was a phrase to describe new web companies that emerged over the last year. I could not understand how many of them were going to make money. Crash 2.0 may become the reference to the failure of these companies over the coming year. Companies will always fail as a result of poor execution. Investors that fund companies with bad ideas, non-existant revenue strategies or in unattractive markets may also fail. It is all part of the capitalist system which ultimately moves capital from those that pick losers, to those that can pick winners. The coming .NET, or Nextnet, boom is likely to based upon greater substance than the .COM boom. Crash 2.0 may be one of the early chapters in the .NET boom, or could it be the final chapter?

6 June 2006 Category: Boom then depression by 2012, Economic development, Private equity and venture capital, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks No Comments

Promoting access to primary equity markets: a legal and regulatory perspective from the World Bank

On the 1st April 2006, the World Bank released a policy paper titled "Promoting access to primary equity markets : a legal and regulatory approach". The report is available from here. "Abstract: This paper examines legal and regulatory measures that can be taken to promote access to the primary market in emerging market economies. While capital market development depends on many factors including, primarily, a favorable macroeconomic environment, an appropriately designed and effective legal and regulatory framework can help to encourage market growth and to increase access to finance for all companies, including small- and medium-sized enterprises. In this paper we identify the basic necessities that underpin a regulatory regime that ... Read More

15 May 2006 Category: Capital allocation and remote services, Central Brain assembly, Economic development, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks No Comments

Financial markets are about to enter a transformational phase

“Power will shift from the traders who have benefited from merely facilitating transactions to the buyers and sellers who take positions on either end of the trade, and that which is most highly prized in financial markets Ã¢â‚¬â€œ the ability to create value Ã¢â‚¬â€œ is likely to experience a renaissance as transformational as anything the industry has ever witnessed.” – IBM report. The opportunity for online social networks in financial markets is becoming clear.

17 April 2006 Category: Boom then depression by 2012, Capital allocation and remote services, Economic development, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 Intellectual property vs. Web 3.0 Community knowledge, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks 2 Comments

Taking Stock of the World’s Capital markets: McKinsey Global Institute

The McKinsey Global Institute (MGI) examined the financial assets of more than 100 countries since 1980. The result is a comprehensive profile of the global capital market (GCM) and an in-depth analysis of its evolution across geographies and asset classes.

15 March 2006 Category: Capital allocation and remote services, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, The rise of Asia, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks Comments Off

Offshore financial centres were never worthy of their reputation as havens of criminal activity

Offshore financial centres had a reputation for being havens of criminal activity. The following five year old articles show this reputation is undeserved.They suggest that the “persecution of tax havens is not the fight against money laundering but the fight against low taxes”. The persecution of “tax havens” was simply an instrument of the nation state to protect domestic tax revenues from foreign tax competition.

Today, the majority of financial centres are well regulated and well respected. The also offer companies and investors the opportunity to reduce compliance costs and take advantage of countries dedicated to servicing their needs. Some countries are focussed on attracting a specific type of company. They enact legislation that is necessary to provide a respectable base for specific types of business. For example, the Isle of Man is focussed upon attracting EBusiness. These smaller financial centres are likely to be significant beneficiaries of the globalisation of financial markets. Business owners and entrepreneurs may choose to incorporate in these centres and derive significant benefits. They will need to pay taxes on any foreign income they derive or is attributed to them by their tax laws. The majority of financial centres are havens for business, rather than a means to reduce taxes.

21 January 2006 Category: Capital allocation and remote services, Central Brain assembly, Central Brain building blocks, Climate stability 4.0, Critical path to Web 4.0, Declining markets, Democracy 3.0 and global governance 4.0, Equity Market 3.0, Peak oil water food resources and leadership, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 Intellectual property vs. Web 3.0 Community knowledge No Comments