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.
-
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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