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Insights

Sophia in Absentia (Absence of Wisdom)

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October 4, 2013 - The fiscal tragedy playing out in our nation's capital will have real consequences, both intended and unintended, in the days, weeks, and months to come.  At issue are two critical elements: the federal budget and the debt ceiling.  While these are two distinct and separate concerns, the political climate is such that neither topic will likely be resolved before their respective deadlines. 
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What Went Wrong? Expectations Matter.

// Jim Anderson

October 2, 2013 - Five years ago we found out who was not too big to fail. Lehman Brothers went down on September 15, 2008, with over $600 billion in assets, setting off a remarkable chain of events. A few days later John McCain suspended his presidential campaign and flew to Washington, D.C. where he generally made a fool of himself, thus removing any doubt about the outcome of the election in November.
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The Top Five BAD Reasons to Take on Venture Debt

// Mike Berrier

October 1, 2013 - At Square 1 Bank, we’re dedicated to the start-up marketplace. As lenders, we focus on working with institutional venture capital firms and the companies they fund.  Lots of those companies are still developing their product or service. Others have reached the point where they’re figuring out how to attack the market, and still others are working to maximize profitability.
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Venture Debt: Let's Talk Covenants

// Zack Mansfield

October 1, 2013 - There is no way to talk about venture debt without bringing up the notion of financial covenants.  The simple mention of the word “covenant” evokes a connotation of doom and fear in the hearts of many entrepreneurs and equity investors alike.  This dread is perhaps caused in part by horror stories of overzealous lenders using a covenant trip to invoke remedies (read: sweep cash or foreclose on assets), which led to the demise of a company.
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Q3 2013 Venture Exits Update

// Wiley Becker

October 1, 2013 - In Q3 2013, there were 107 venture backed M&A transactions with $4.9B in disclosed deal value. While up quarter on quarter, number of transactions remains down 4% on a rolling four quarter basis and disclosed value is down 22% over the same time period. However, disclosed deal value is highly dependent on the mix of M&A deals disclosed and the number of deals disclosed is also down 6% on a rolling four quarter basis.
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Market Update: Wednesday's FOMC Announcement Surprises Markets

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September 19, 2013 - The Federal Reserve surprised investors on Wednesday, choosing to maintain its aggressive asset purchase program. While the immediate response is enthusiastic, longer term implications are uncertain.
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