November 14, 2013 - The immigration debate has been bubbling below the surface for years. Every now and then our esteemed representatives in Washington get serious about rationalizing our chaotic patchwork gauntlet that confronts new arrivals. It is a delicate dance for the two national parties. The key political objective if you are a Republican or Democrat is to ensure that if the millions of illegal immigrants become legal voters, then they will arrive at the polling place with kind thoughts about you and your brethren.
November 14, 2013 - While it may be a surprise to some in the startup community, the last few years have seen record high profit margins for the largest U.S. corporations. In fact, over the last few years, corporate after tax profits accounted for the largest ever share of gross domestic product (GDP). As encouraging as this may seem, a major reason for this stems from the low wages that employees are now earning. In fact, as of 4Q 2012, total wages fell to a record low of 43.5% of GDP. Historically, wages typically account for roughly 50% of GDP. So, in short, corporations have never been more profitable and employees are getting an increasingly smaller share of the pie.
October 30, 2013 - The Federal Government has reopened. National Parks and monuments are available for tourists to visit. The panda-cam at the National Zoo has been turned back on. Whew. So perhaps the government shutdown and debt ceiling debate were sensationalized by the politicians, and the media-frenzy feeding the politicians didn’t help.
October 29, 2013 - There were 1,005 venture capital deals in the US in Q3 2013 totaling $7.8B. This continued a quarter on quarter increase in both deals and dollars and also represents a 2% increase in number of deals and a 4% increase in dollars raised on a rolling four quarters basis. 346 of the deals in Q3 2013 were first time financings, which totaled $1.3B. This represents an increase in both deals and dollars over Q2, but in the same proportion to total deals and dollars raised, at 34% and 16% respectively.
October 29, 2013 - It's no secret that building a company is hard work. While entrepreneurial ventures can be full of excitement and energizing in many respects, they are still work and run the risk that the strain could burn out employees. Well known (and well funded!) startups will experiment with various perks like ping pong tables, catered lunches and flexible work hours in an attempt to keep employees happy while providing attachments above and beyond a paycheck. Happy teams lead to happy customers!
October 16, 2013 - In my prior post, I gave an overview of the theory behind financial covenants in venture debt deals and some basic examples of the types of covenants used by lenders. With this post, we will take a deeper look at what happens when a covenant is violated, and the pros and cons of venture debt deals with covenants.