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April 17, 2001

Alsop Says Reality Returning To Venture Capital World

Stewart Alsop, a general partner at Menlo Park (CA) venture firm New Enterprise Associates, says that start-up companies aren't worth what they used to be, and that reality is returning to the marketplace.

According to Alsop it wasn't until January that investors woke up to the cold truth that the heady days (when stock market investors would give multi-billion dollar valuations for new, often profitless, companies) were over.

He points out that so far this year valuations for companies raising their first venture money have fallen about in half. Although, it will take some time for entrepreneurs to concede that they're going to have to sell a big stake in their company, in order to raise the money they need...and that learning process is just starting to happen.

The drop in valuations both in public and private markets means the days are over when venture capitalists could give investors a return of 10-times on their money. Returns are expected to fall to historical levels in which venture capitalists quadruple the money they manage.


Advertising In Trade Publications Generates Huge Returns

According to an independent study conducted by Fairfield Research, some 18 million workers regularly made corporate purchases based on seeing an ad run in a trade publication.

Gordon T. Hughes II, President/CEO of American Business Media, said, "This study goes a long way to answer the media buyers' question of, 'What do I get for advertising in trade publications?' We now have a national benchmark of ad-driven sales and can track that for our members just as we track other industry vital signs.

"As well, advertising executives at our members' clients can readily justify their buys with hard figures. Based on this study, their average cost-of-sale is only eight percent."

To advertise in the barter industry's only trade publication, BarterNews, see www.barternews.com, click through "Advertising." Closing date for the next available issue is July 15th.


Here And There. . .

  • Lucent Technologies shored up its balance sheet by bartering $519 million of stock from their Agere micro electronics spin-off, in exchange for a debt repayment held by Morgan Stanley.

  • April 26-28 in Milan, Italy, three International Reciprocal Trade Association bodies--IRTA Global, IRTA North America, and IRTA Europe will convene to discuss the growth and development of the commercial barter industry.

    The meeting will also enable further opportunities for everyone in attendance (from IRTA Global & IRTA North America) to meet and interact with IRTA Europe members. A "spread" in the coming IRTA newsletter will report on the Milan meeting.

  • The Investment Recovery Association is celebrating its 20th anniversary this year at their May 14-16 conference in Saint Louis. The pro's and con's of the various disposition options available to the investment recovery professional will be covered.

    Included will be such topics as internet sales, negotiated sales, sealed bids, consignment sales, auctions, donations, barter arrangements, and scrap sales. The Investment Recovery Association is based in Mission, Kansas. Phone: 913-262-4597.

  • Cuban sports trainers, some of the best in the world, are going to be whipping Venezuelan athletes into shape in exchange for cheap oil. Cuba is a perennial sports powerhouse at the Olympics, despite the country's size.

    (In Sydney they won 29 medals--with 11 gold.)

    In exchange for Cuban trainers spending 18 months in Venezuela focusing on baseball, boxing, wrestling, karate, weightlifting, volleyball, track and field, Cuba will be able to purchase 53,000 barrels of oil a day, worth $500 million a year. Cuba has 15 years to pay, with a 2% interest rate.

  • Editor-in-Chief Adrian Mello of Line56, a new technology magazine, says the success of b2b e-commerce ultimately depends on whether ordinary brick-and-mortar companies buy it, use it, make it work, and get significant returns on their investment.

    "If you want to understand b2b e-commerce, you have to pay attention to what brick-and-mortar companies are saying and doing about it. These companies are the ultimate reality test.

    "In the real world there are all sorts of problems that don't show up on the white boards of software companies, service providers, and consultants," Mello concluded.

  • Global mergers and acquisitions (announced between January 1 and March 30) totaled only $443 billion, down 63% from the record $1.2 trillion in deals for the same period a year earlier, according to figures released by Thomson Financial Securities Data.

    Last year nearly 50% of the M&As were concluded without the use of cash, but rather by a pooling of interests--a very dramatic jump from the only 10% non-cash deals in the late '80s during the Milken Junk Bond era.

  • A new study, "Who should shoulder the blame for the downturn roiling the technology industry?," concludes it was greedy investors combined with ignorant executives who are to blame for the dot.com demise...the blistering study was made by the Washington-based Pew Internet and American Life Project.

 

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Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.