Above the Crowd

Mr. Geithner: In the late 1990’s, in response to the obvious financial shenanigans of large companies like Enron, Tyco, and WorldCom, Washington handed us the Sarbanes-Oxley Act.  I have no idea how effective Sarbanes has been at reducing fraud (it obviously did not prevent our current economic malaise), but I do know one thing.  Sarbox created a significant burden and tax on small companies that desired to tap into America’s public capital markets, and one that could have long-lasting negative impact on the long-term success of startups and innovation in America.  It’s pretty simple, Sarbanes-Oxley can costs $2-3mm to implement, and also is a huge burden […]

While I attempted to bury this issue last week , this Sunday, Thomas Friedman again used his pulpit in the New York Times Opinion section to beg for a VC Bailout.  Last week he merely suggested that the government invest along side venture firms.  This week, he went even further astray and suggested that the government “Call up the top 20 venture capital firms in America, which are short of cash today because their partners — university endowments and pension funds — are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way.”  As a practicing venture […]

[Note: Update to this post, posted 2/22/09] A few weeks back, a friend mentioned an idea he had heard suggesting that the government consider entering the VC (venture capital) business as part of the overall stimulus plan.  Specifically, the argument was made for the government to provide excess venture capital funding to the green sector.  At first, I assumed this was just one individual’s idea, but the noise level has risen to the point where it is reasonable to assume there is a group pushing or lobbying for this outcome.  Last week, Thomas Friedman jumped on the bandwagon in a New York Times article titled Open Door Bailout .  Friedman […]

“People see you having fun Just a-lying in the sun Tell them that you like it this way”      – BTO, Takin’ Care of Business The seemingly chronic state of our economy, combined with the thundering sound of dire financial news has left many in a state of shock.  This unprecedented moment in time has resulted in unprecedented questions, such as, “Do you think California Municipal bonds are safe investments?”  Hard to imagine in the past, but with the country’s richest state begging for a federal bail-out, who knows?  There have been similar questions raised about the VC industry, and […]