“The intersection of art and technology,” exclaimed the founder of SoundCloud, Alexander Ljung, when asked about why Berlin is a great place for startups.1 Young people are drawn to Berlin because of its “raw, artsy atmosphere that rivals Brooklyn’s as an icon of global hip.”2 Is Berlin’s startup scene merely a mirage or is Berlin…
Category: Blog Articles
Zombies of the Private Equity Industry Pt. II
A previous blog post discussed the existence of zombie funds in the private equity industry as well as their effect on the investor market. Approximately $116 billion is sitting in almost 1,200 zombie funds and their presence is an impediment to the growth of investor wealth while continuing to accrue management fees for ineffective managers.1…
Legal Necessity or Founder Faux Pas? Why VCs Don’t Like Non-Disclosure Agreements (And Why Startups Shouldn’t Ask for Them)
Every entrepreneur wants to protect their idea. Confidentiality is key to safeguarding intellectual property, and it’s only natural to want to protect your product or service so that you can get it to market before a competitor can. At first glance, when meeting with potential investors, asking them to sign a non-disclosure agreement (NDA) may…
The Impact of Media Portrayals on Private Equity and Venture Capital
Americans love their reality television. So, it is no surprise that ABC would choose to broadcast a reality competition every Friday at 9 PM. What might be more surprising is the show’s subject matter. The judges on ABC’s “Shark Tank,” are not entertainment industry insiders. Instead of looking for America’s next big star, they are…
Entrepreneurs – Have No Fear, The AIA Is Here
As is often discussed, the Jumpstart Our Business Startups Act (JOBS Act) has created a lot of positive buzz with innovators and creators looking to equity crowdfund their ideas to avoid traditional forms of funding. There is no question that the government mandated crowdfunding process will save entrepreneurs the hassle of dealing with complex SEC…
With Single Class of Shares, Twitter’s IPO Breaks Industry Trend
For its Initial Public Offering, Twitter, Inc. hopes to differentiate itself from its competitors.1 It has tried to do this from day one. In its recent S-1 filing, the media and technology company broke a long running industry trend by offering a single class of shares to the public.2 In the past decade, beginning with…
Another Look at JPMorgan’s $13.1 Billion Settlement
Recently, JPMorgan Chase (“JPMorgan”) negotiated a tentative settlement of a record $13.1 billion with the U.S. Justice Department over mortgage lending practices.1 While some news outlets have portrayed this as politicized government overreach or anti-Wall Street zealotry2, others have argued that the government could (or should) have forced JPMorgan to pay “significantly more than thirteen…
Risky Investment for the Fantasy Football Guru
On October 17, 2013, Fantex Holdings launched an “all-new marketplace that allows investors to buy and sell Fantex, Inc. stock linked to the value and performance of the brand of a professional athlete.”1 The Initial Public Offering will be called a “Fantex Series Arian Foster Convertible Tracking Stock.”2 The offering has been subject some confusion….
Is Venture Capital a Tool in Community Development?
In 2003, the Over-the-Rhine district in Cincinnati, OH experienced 90% vacancy, high crime and blight. Enter: the Cincinnati Center City Development Corporation (“3CDC”). As a non-profit organization, the 3CDC has managed two major mostly-private investment funds (the Cincinnati New Markets Fund and the Cincinnati Equity Fund) to land bank properties and redevelop the spaces into…
SEC’s Focus on Broker-Dealer Registration
SEC has recently made broker-dealer registration an area of focus for private fund managers. This is bad news for the private equity industry, as the burdens and costs of registration and on-going compliance with SEC requirements are substantial. The regulatory framework starts with Section 15(a) of the Exchange Act, which requires that persons engaged in…