A Financial Poise column dedicated to the belief that most things in life are not that complicated, even though some people have a vested interest in trying to make you think they are.
My take: This may be right in the short-term, but it’s dead wrong in the medium-term and beyond. Let me explain why. 1. Rising Default Rates On Auto Subprime Loans First, a bit of context: the quote above comes from an article about rising default rates on auto subprime loans. If you are […]
Most banks serve their customers well. But some are just trying to use you. Find out how Bank of America tried to squeeze more interest out of a client by ignoring him.
Pebble raised more than $10 million on Kickstarter in 2012—a record at the time—far exceeding its $100,000 goal. Early on, Pebble seemed like a classic success story. The watch did what the company said it would: it worked well with both the iPhone and Android smartphones, it had a long battery life, and it had customizable watch faces. It was inexpensive, to boot. Intel, at one point, reportedly offered to buy Pebble for $70 million; Citizen offered $740 million.
A Financial Poise column with an entertaining take on the history of private equity and venture capital.
I believe, in fact, that someone heavily invested in the public equity markets (whether directly through stocks or through stock mutual funds) and other widely traded or held asset classes may be irresponsible for not investing in startups. This is because the concept of diversification is commonly misunderstood to mean that as long as you invest in a broad array of stocks you will be well diversified.
My point here is simple: when stupid idea after stupid idea attracts investors, it’s a forward indication that a market is too frothy. When a market sees repeated examples of industry participants making things up, it’s a forward indication that a market has become dangerous.
As a startup progresses and gets closer and closer to becoming profitable, it can look to different types of investors; younger startups have tended to look for money from angel investors whereas VC funds tend to invest in slightly more proven startups.
You should like your entrepreneurs to be a bit more seasoned, at least in their chosen space. The statistics don’t lie: most startups fail. Indeed, most VC-backed businesses also fail. Today’s startup scene has jumped the shark.
Welcome to the first installment of this column. My guiding principle will be to write about things I want my children and my parents to understand about the world of business, investing, finance and law.
For this first installment, I explain the difference between “VC” and “PE.”
There is no universally accepted definition of “venture capital” but the U.S. Small Business Administration’s definition works well:
Is a university degree a good investment? The Economist Magazine asked this question last year and while the article concludes that statistics support the proposition that a college education generally makes good financial sense, it also concludes that, “like so much else in economics, [it] boils down to supply and demand.” In other words, a college education does not always make sense from a strictly financial perspective.