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January’s Five Best Blogs

Among the best pieces we've read recently (and yes, this is a pretty liberal use of "recent") are: Dan Primack on Unicorns and the market for seed funding; a cogent Voxplainer on microgrids that should be read in conjunction with Foundry's Seth Levine explanation on why the Boulder Muncipal initiative to create a local utility is bad for renewable energy, as well as this longer piece on the Doomsday preparations of the uber wealthy. You are only in a bubble when you deny…

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ClearCreek Transaction: Music to the ears

We were fortunate to provide advisory services to Mike Barsch, founder of Soda Jerk Presents, on his transaction with Live Nation Entertainment.  There is an engaging story behind every deal -- this was no exception with the basics well captured in the accompanying Denver Post article. As is often the case in successful exits, the challenges, accomplishments and pitfalls of Mike's 22-year journey can be too easily obscured -- both in building Soda Jerk into Colorado's largest independent music producer and…

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VC Offramp Backup

An insightful and numbers-full piece in, of all places, Pensions and Investments, discusses the traffic jam developing in Venture Capital. As with any other backup, there is an excess at the beginning and less near than the end: as total capital invested continues to rise (more dollars but a smaller number of deals), however there are fewer exits, as market reluctance remains intact and IPOs sit perpetually on the horizon with liquidity always a destination, but too rarely an visit. The piece points out…

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M&A Appetite and Indigestion

We facilitate acquisitions. So it's good for us if M&A activity pays off for everyone involved. But too often it does not. The Economist has an excellent post on the difficulty with many M&A deals, focusing on a new study on acquisitions by public companies that, pretty simply,   concludes that the shares of acquirers underperform their less acquisitive peers. Profit margins also fall, as do returns on capital. The good news (for us at least, since we swim in the smaller end…

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Angel Investing and the Devil in Gil

We've been lucky enough to have heard Gil Penchina opine a lot. Unfortunately, most of this was well before he became known for angel investing and his Angel List syndicate, and was usually about his failed romantic exploits. Whatever -- truth is we usually didn't listen anyway. But now we do, and gladly. Burnished to a brighter shine as one of the guys democratizing venture capital, Gil had a recent spot at TechCrunch Disrupt where he gave his candid thoughts…

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Six Economic Ideas that Changed the World

Over the summer, The Economist magazine published independent pieces on six big economic ideas that changed the world (or at least modern finance). These have now been collected into a a single brief. Economic students will recognize many, but these should be read by anyone interested in why markets work (or don't work) in unexpected ways. Among the best are the classic essay on Information Asymmetry, of special interest to anyone buying a used car (the "Market for Lemons"), as well…

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Heads: do it. Tails: do it!

We're big fans of behavioral economics, so the idea that you can make better decisions by flipping a coin naturally caught our eye. The author of a working paper that makes this claim is none other than Steven Levitt, of Freakonomist fame. Levitt recruited people who were struggling to make a big decision and were willing to allow their choice to be governed by a coin toss. When he followed up, what he found was telling: For important decisions (e.g. quitting a job…

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PE Partnership Transitions: Greed vs. Legacy

Leadership transitions within private equity firms are icebergs: sometimes the tips are spotted in the distance, but the vast majority are usually out of sight and only significant in a catastrophe. Large crashes became well-known, but even then information is largely anecdotal -- stories passed around with cocktail glasses. Most leadership transitions float past, largely hidden from view. However a working paper from researchers at Harvard Business School (aptly subtitled The Economics within the Private Equity Partnership) has quantified the inputs and impact of the mechanics…

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Five Best Blogs: July, 2016

This month what's caught our eye includes: a brief from consultancy McKinsey on where machines can replace humans (with accompanying visualization) -- not to give it away, but about 60 percent of occupations could see just under one-third of their activities automated. And perhaps related is a thoughtful essay by Tyler Cowen on the political anger of generally prosperous Americans, which has at its genesis insufficient savings for many people on the cusp of retirement (which should be of concern regardless of the political…

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Venture Capital: Variance, Speed and Volume

Looking at venture capital investment during the first half of 2016, Redpoint's Tomasz Tunguz has a nice piece (and several graphs) on the flux in the fundraising market -- early stage deals (Series A) have nosedived by a whopping one-third, as have later stage financings, while expansion stage financings (Series B) are up substantially. This view is a little bit more light than heat, as even with this data Series A investment is still higher than at any point since…

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