Money Buzz 02/02
It's Not the First Time
In a capital-squeezed market, attracting financing may depend more than ever on whom you know-and what you've done. Investors are increasingly seeking entrepreneurs with multiple start-up credits to their names, says Dan Nova, managing general partner at Highland Capital Partners, a Lexington, Massachusetts-based venture capital firm.
Ideally, such start-up veterans will have innate competitive drive and hands-on experience-but not necessarily an unblemished winning streak. "The lessons learned from failure are sometimes more acute than the lessons learned from success," says Nova.
Ted Briscoe, who helped get search engine Ask Jeeves off the ground and recently won backing for his latest venture, St. Louis-based video communications company GlobalStreams Inc., sees venture capitalists putting greater emphasis on seasoned leadership. "They're investing in people more than business plans," says Briscoe, 39. "They're looking for the gray matter to challenge conventional wisdom and a record of building a business-someone who is a survivor."
Get a Second Opinion
Let's face it, these days you can't be too careful. With so many companies strapped for cash and bankruptcy filings on the rise, checking out potential clients, partners and even suppliers before signing on the bottom line just makes sense.
"You'd be a fool if you didn't," says Rahul Bhandari, managing partner of McLean, Virginia-based Paras Ventures, an investment and management firm that advises companies on business practices. Bhandari recommends scoping out the business dealings of the company as well as running personal credit checks on its principals. "You need to know things like how long the company takes to pay its bills and whether it's been sued by or has sued other companies."
Security comes at a price, with fees for financial investigative services ranging widely, depending largely on how extensive an investigation is necessary. For example, Cleveland-based Research Associates Inc.'s fees run between $350 and $450, while New York City-based Bishops Services Inc. charges between $750 and $3,000. Internationally established firms are even pricier: New York City-based Kroll Inc.'s due diligence research fees range from $5,000 to $10,000. Subscribers to D&B's financial investigative services pay $10 to $20 in addition to their monthly or yearly subscription fees.
"Choose based on your level of involvement," says Bhandari. "If you're considering a major partnership, you might want to hire a big company, but in many cases you can just do a basic credit report. Don't go overboard if it's not warranted."
Straight to Video
Is there ever such a thing as too much information? Serious personal investors and insatiable news hounds may think not, but a free video player application debuted by www.bloomberg.com in November might test their threshold for news absorption.
The New York City-based financial news site's highly intuitive video player not only provides streaming video access and archived news broadcasts but also enables searches for specific content through the use of keywords. A simple pull-down tool lets you view Bloomberg Television's U.S. broadcast live or select any of seven live international feeds (Asia-Pacific, France, Germany, Italy, Japan, Spain or the United Kingdom). And access to the Bloomberg daily features "Moneywise," "Money Flow" and "Sector Plays" comes in handy if you missed the real-time broadcasts.
Most impressive, though, is the keyword-driven search of Bloomberg's vast broadcast archive. Entering a specific keyword brings up a list of relevant broadcasts: "General Motors," for example, produces 119 results, including interviews with analysts. Each choice yields a highlighted transcript that marks each point in the broadcast where your keyword is mentioned. The feature enables speedy maneuvering around the information you don't want to get to the information you need, leaving you with more time to, er, watch Bloomberg TV.
Jennifer Pellet is a freelance writer in New York City specializing in business and finance.
- Bishops Services Inc.
(314) 997-5100, www.globalstreams.com
- Kroll Inc.
(212) 593-1000, www.krollworldwide.com
- Paras Ventures
(703) 234-3955, www.parasventures.com
- Highland Capital Partners
(781) 861-5500, www.hcp.com