Some of the world's best known brands have begun embracing social networking in hopes of reaching a young, Internet-savvy audience, says Peter Friedman, CEO of LiveWorld, which creates and manages private-label social networks for large companies including A&E Television Networks, Campbell Soup Co. [CPB] and Kraft Foods Inc. [KFT]. "Many companies are adding more social networking activities," Friedman tells Tech Confidential in our Behind the Money video interview. "Our business is all about helping major brands market through the use of social networking." LiveWorld recently released LiveBar, a new product that provides commenting capabilities reminiscent of Twitter Inc.'s microblogging service. Tulane University is one of the first to use LiveBar. Friedman has been developing social networking services since the mid-1980s when he was the general manager of Apple Inc.'s [AAPL] online business unit. He founded LiveWorld [LVWD.PK] in 1996. He's seen a lot of changes during the past 20-plus ...
Events over the last couple weeks have caused stress in dealmaking and had taken their toll on middle-market dealflow. In this edition of Inside The Deal, Gregg Smith, senior managing director of investment banking services at CIT, speaks to The Deal's Nathaniel Baker about how the economy has impacted middle market deal making and provides some predictions for the upcoming months.
Robert Duffy, general manager, global business development of GE attended The Deal's M&A Outlook 2009 to accept the Best Corporate Dealmaker Award in the industrial sector. In this edition of Inside The Deal Suzanne Steven speaks with Duffy about GE's acquisition strategy in 2009.
Deal volume has declined by 38% in the United States in 2008 due to a liquidity crunch. However, it's an opportune time for buyers to find strategic deals in the middle market, according to Howard Lanser, director of mergers & acquisitions at Robert W. Baird & Co. In this episode of Inside The Deal, The Deal's Suzanne Stevens speaks to Lanser about dealmaking opportunities in 2009.
Crystal Capital's Edward Siskin and The Heico Companies LLC's Michael Heisley says that 90% of the private equity funds' managers are "clueless" as to how to implement a turnaround plans to distressed investments, and many are not familiar with bankruptcy codes either
At its annual meeting, the National Venture Capital Association is expected to announce Wednesday morning an initiative designed to help reinvigorate the exit market amidst the most challenging environment VCs have faced in years. Exits are the number one concern for venture capitalists, NVCA president Mark Heesen tells The Deal in Part 1 of our Behind the Money video conversation. Only seven venture-backed companies have gone public in the last five quarters, according to Heesen. "At the end of the day, venture capital is all about returns," says Heesen. "VCs haven't been able to deliver returns to their LPs." The latest numbers coming from the NVCA show that the closed IPO market wreaked havoc on VC performance in the fourth quarter of last year, when returns declined across most time horizons. The trade group's data on the first quarter has also been disappointing: VC investment plunged to a 12-year low, and fewer VC funds were raised in the quarter than in any quarter over the last five-plus years. ...
Blackboard Inc. (NASDAQ:BBBB) CEO Michael Chasen talks about the latest deal activity in online education in this episode of The Deal's Behind the Money video show. Blackboard announced it is buying privately-held Angel Learning for $95 million. The news came late Wednesday, when the company reported its earnings, which beat analysts' predictions slightly. Other recent deals that demonstrate just how hot the education market is include successful IPOs of private equity-backed Rosetta Stone Inc. (NYSE:RST) and venture capital-backed Bridgepoint Education Inc. (NYSE:BPI) in April and Grand Canyon Education Inc. (NASDAQ:LOPE) in November.
The number of distressed M&A transactions doubled between 2007 and 2008 and will continue to increase, says Frank Aquila a partner in the M&A group at Sullivan & Cromwell LLP. In this edition of Inside the Deal, Aquila, says there is a "staggering amount" of high yield debt coming due in 2010 to 2015, and for corporations that can't refinance, a sale of assets or the company may be the only option to avoid bankruptcy.
Arvind Sodhani, who heads up Intel Capital, the computer chipmaker's venture capital arm, reports that fewer companies are seeking venture capital in the recession in this episode of The Deal's Behind the Money online video show. VCs are willing to invest, says Sodhani, but at lower valuations than many startups are willing to accept. Sodhani also discusses the effect that the until-recently nonexistent IPO market has had on Intel Capital's portfolio and on how recent innovations, such as SecondMarket's Private Company Market, may help investors get some liquidity from pre-IPO companies.
The Securities and Exchange Commission voted on July 1 to eliminate broker discretionary voting in uncontested board elections. Under the new rule, which goes into effect in January, brokers will no longer be able to cast votes for shareholders who don't return voting material unless instructed to do so. The change is part of an SEC initiative to make board elections more transparent. The agency is also considering new rules that would make it easier and less expensive for shareholders to add board nominees to a company's proxy voting materials. (See this video for details on proxy access.) As for eliminating the broker non-vote, O'Melveny & Meyers partner Steve Epstein says considering brokers hold up to 80% of shares in U.S. corporations, the change could have a dramatic effect on companies that require a majority vote for board nominees.
David S. Rose, chairman of early-stage investment group New York Angels Inc., gave Tech Confidential a behind-the-scenes tour of his new incubator, or "naturally occurring startup community," as he describes it. For more check out www.thedeal.com/blogs
05:40
Inside The Deal: Paul, Hastings' Vince Pisano on accounting standards
The International Accounting Industry is re-examining its principals in order to make financial statements more useful to investors and to improve disclosure. The SEC is trying to strike a deal with the US GAAP to adopt international standards in an effort to create clarity in accounting . In this edition of Inside The Deal, Vince Pisano, partner at Paul, Hastings, Janofsky & Walker LLP speaks with The Deal's Ken Klee discusses why convergence of accounting rules only emphasizes the need for the use of "plain English" within financial statements. Watch the video after the break. - Maria Woehr
"We're taking the burden of schlepping to a sample sale at odd hours of the day, and we're bringing the phenomenon online, not just to New Yorkers but to all of America," explains Alexandra Wilkis Wilson, co-founder and chief merchandising officer of Gilt Groupe, which secured $5 million from Matrix Partners last year. The invitation-only site features limited-time sales of clothing and accessories created by a wide range of designers, from the established Ralph Lauren to Band of Outsiders' hip newcomer Scott Sternberg. The company buys all the merchandise it sells and photographs it all especially for the site. For more see www.thedeal.com.
Jamie Gorelick, a partner at Wilmer Hale spoke about prospects for the regulatory structure over the next year.
04:44
Inside The Deal: Axinn's Keeley on antitrust lawsuits and President-elect Obama
Expect more antitrust lawsuits as the economy seeks bottom. So says Michael L. Keeley, a partner in the antitrust group of Axinn, Veltrop & Harkrider LLP. In this edition of Inside The Deal, Keeley tells Suzanne Stevens that two factors are in play: the likelihood of companies in a recession to more aggressively protect their turf, and an increased willingness among struggling companies to dedicate resources to litigation. Keeley, who also addressed the topic in a recent issue of The Deal newsweekly, says the number of antitrust lawsuits already filed this year exceeds those filed in all of 2007. Add that to President-elect Obama's stated intention to more actively pursue monopolistic conduct, and the courts should see plenty of antitrust activity in 2009.
04:23
Inside the Deal: Nixon Peabody¹s Dom DeChiara on alternative deal structures
While overall deal volume may have fallen of a cliff, transactions are getting done. In this edition of Inside the Deal, Dominick DeChiara, chair of the private equity practice at Nixon Peabody LLP, says some PE firms are using alternative deal structures in the absence of credit. He tells The Deal¹s Suzanne Stevens that he¹s seen an increase in the use of seller notes, earnouts and rollover percentages.
06:42
M&A Outlook 2009: Linklaters' Rees and Grant Thorton's Beecy on cross-border M&A
At The Deal's M&A Outlook 2009 conference, Nick Rees, co-managing partner of the corporate M&A group at Linklaters LLP, and Paul Beecy, a tax partner at Grant Thornton LLP, discussed cross-border dealmaking and investments by BRIC countries -- Brazil, Russia, India and China -- in U.S. businesses.
Drew Lipsher, a partner at early-stage venture capital firm Greycroft Partners LLC, says the continued pressure on traditional media companies means opportunities for startups. "It is a great time for a lot of young companies focusing on digital media," says Lipsher in this episode of The Deal's Behind the Money show. "The biggest challenge is, How do you build a company that's a large enough scale so that it's attractive to the major media companies?" The startups that have the best opportunities fall into two categories: those that have the ability to scale in consumption, audience or revenues; and those that are building "pieces of the services side of the media business that are going to help drive the scale," says Lipsher. In the latter camp, there are opportunities for new businesses to develop advertising metrics, such as measuring brand lift and consumer engagement. Before becoming a venture capitalist, Lipsher, 42, had a long career in media, serving in executive roles at IGA, BMG ...
Saybrook Capital LLC's Jonathan Rosenthal, who was a panelist at The Deal's Distressed Investing Conference says that investors buying distressed debt at the moment are taking a long-term view and not betting on valuations of those returning to what they might have been prior to the credit crunch.
Dave Hills, general partner of KPG Ventures, talks about the fund raising climate for venture capital firms and startups in this episode of The Deal's Behind the Money video show. The San Francisco VC firm, which backs seed-stage consumer Internet companies, closed its second fund in November. In March, KPG announced it had invested $6 million in four companies. New to KPG's portfolio are Lexy, Wowd and National Payment Card Association. The firm also invested in a new round of funding for Cake Financial, already in its portfolio. Hills joined KPG in October. Previously, he was CEO of LookSmart, Ltd. (NASDAQ:LOOK). Past positions include president of Media Solutions for 24/7 Real Media and CEO About, Inc., which owned About.com and the pay-per-click service, Sprinks. Hills lived in New York City for many years but now lives in the San Francisco, where KPG is based. We asked him to compare and contrast the tech startup cultures in the two towns
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