Finance Geek

This week in Durban, South Africa, delegates from 194 countries are meeting at the UN-sponsored World Climate Change Conference to discuss, again, combating climate change by reduction of carbon emissions, which may be a cause of global warming.
One topic on their agenda is the fate of the 1997 Kyoto Protocol, which was meant to curb our carbon emissions and which expires in 2012.
Their object: to persuade America and other industrialized countries to sign up for another round of greenhouse gas reductions, and to set up a $100 billion fund to help developing countries reduce their emissions….

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It’s often said that help comes to those who help themselves. But Europe can’t seem to help itself. So on Wednesday, the U.S. Fed came to the rescue. And that rescue triggered a global stock market rally, including a near 500-point gain in the United States.
Basically, the Fed is making it cheaper for Europe to borrow dollars. And this dollar backstop symbolically shows that the Fed, the European Central Bank, and other big central banks are not going to permit a 2008-type credit freeze and financial meltdown.
But in terms of Europe’s overall problems, with governments unable…

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Provided by the Business Insider: Central banks around the world to the rescue? First, the scoreboard: Dow: +488.9 pts, +4.2% S&P 500: +51.7 pts, +4.3% NASDAQ: +104.8 pts, +4.2% And now, the top stories: Global coordinated intervention. The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Bank of [...]

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Follow Yahoo!’s The Daily Ticker on Facebook here! Three big stories this week say a lot about the sorry state of American capitalism. Each development is deeply troubling but the revelations by some enterprising journalists and one Federal Judge’s decision do offer some hope that rampant cronyism will no longer be tolerated. I encourage all [...]

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Follow Yahoo!’s The Daily Ticker on Facebook here! President Obama heads to Pennsylvania today to push for the extension of the temporary payroll tax cut that is set to expire at the end of the year. Enacted last year as part of a larger tax compromise between President Obama and Congressional Republicans, the cut reduces [...]

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If Google hasn’t fully convinced you that the future is in the cloud, other smaller online storage services are erasing all doubt whatsoever. Take, for example, Box.net, a cloud-based storage and file-sharing site. The company has partnered with electronics manufacturer LG to offer a whopping 50GB of free storage for anyone who purchases LG Android smartphones. The storage giveaway begins this Wednesday, and continues through the end of March 2012.

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NEW YORK (TheStreet) — The stock market is surging and relieved investors are cheering on the news that a group of central banks is trying to stabilize the world economy and save European banks from going belly-up. But this party may not be able to last.
The Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank today announced a joint plan to enhance their ability to provide liquidity to the global financial system. They agreed to lower the pricing on existing temporary U.S. dollar liquidity swap agreements by 50…

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On Tuesday evening, Standard & Poor’s downgraded the long-term debt ratings of some of the largest banks in the world.
By Wednesday morning, the Federal Reserve, the European Central Bank and central banks from Canada, England, Japan and Switzerland announced coordinated action to support liquidity in financial markets that mirrors the 2008 financial crisis.
Mere coincidence? Likely not.
Once banks saw their ratings downgraded, it raised the specter that they would have to post billions in additional collateral on trades just as market pressures make it hard for them to replace…

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Follow Yahoo!’s The Daily Ticker on Facebook here! After multiple sexual harassment allegations and now the revelation of a 13-year affair with a Georgia business woman, Herman Cain is “reassessing” his campaign. But this reexamination has nothing to do with his alleged indiscretions and all to do with the strategy for his election bid, so [...]

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Follow Yahoo!’s The Daily Ticker on Facebook here! If you’re in the market to buy a home, Tuesday’s housing report may be good news. But if you’re a homeowner trying to sell, it’s hard not to get discouraged by Tuesday’s numbers. According to Standard & Poor’s Case-Shiller home-price index, September prices fell 0.6% from August [...]

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Thirty-ninth in a series of weekly posts by myself and Nicholas Lovell of Gamesbrief which answer the fifty questions you should ask before raising venture capital.  We expect the series to run for a year after which we will collate the posts into a book.  You can find the rationale behind the series here, and the list of questions here.  We welcome your comments on any and every aspect of what we are doing.

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1. Have a great company!  I almost put this point as a footnote rather than a member of the list because it is so obvious, but when I thought it through I figured that a lot of people go out to raise money when they are still working out for themselves whether they have a great company or not.  That is ok, up to a point, but only up to a point.  Most VCs understand that the product will iterate and the plan will change over time, and like to back entrepreneurs who will absorb and act on market feedback.  But, they also want a Plan A which is exciting, and raising money before Plan A has been worked on enough to be compelling is always going to be tough.  It is still possible (and I would say advisable if you can) to have discussions with VCs before Plan A is baked, but they should be couched as ‘getting to know you’, or ‘advice’ meetings as opposed to fundraising meetings.
2. Make sure a large pool of investors are familiar with your company before you start the process.  VCs find it much easier to invest in companies and people they have known for a while, Mark Suster explained why in his post Invest in lines, not dots “The first time I meet you, you are a single data point.  A dot.  I have no reference point from which to judge whether you were higher on the y-axis 3 months ago or lower.  Because I have no observation points from the past, I have no sense for where you will be in the future.  Thus, it is very hard to make a commitment to fund you.”
3. Have a clear plan.  It is almost impossible to spend too much time honing and clarifying key messages.  Make them simple, easy to remember, and easy to pass on.  Use stories and soundbites.  Try them out on friends and colleagues, including non-techies.  The VC partner proposing a deal has to explain it to their partners, so make it easy for them!  This advice holds for all aspects of the business plan, including the financial model.
4. Create a sense of competition.  Making a decision to invest in a startup is a big deal for the VC partner proposing the deal.  We typically make 1-2 investments each year and we bet a piece of our career on each one.  On top of that we are busy people.  Without competition in a deal it can be difficult to create the urgency needed to overcome the natural desire to do more due diligence, and to get to the top of the priority list so a decision is made.  Plus the fact that other VCs are looking at the deal provides some validation.
5. Be prepared, organised, and courteous to investors.  Fundraising should be treated in many ways as a sales process, where the product is equity in the company and the investor is the customer.  Companies who prepare well with the information that investors will need, are organised with meeting times and follow-ups, and are generally courteous to investors have a much higher chance of success.

I have picked out five individual factors here, but in reality they are all highly interdependent – getting to know investors before fundraising helps improve the quality of the business and clarity of the plan and will also help create a sense of competition, and having a clear plan and being organised is the best way to pique the interest of a number of investors simultaneously.  Similarly, whilst these are the top five there are many other elements that are critical for a successful fundraising.  Unfortunately for most people there are no tricks that will short circuit the fundraising process.  I say ‘most people’ because the one exception to all of this is entrepreneurs who have previously had a lot of success.  They are often able to raise money based solely on their reputation and a good idea – i.e. without (yet having) a great company, clear plan, sense of competition or a lot of preparation.

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Earlier this month the Harrisburg, Pa., city council threw itself on the mercy of federal bankruptcy court, hoping to find a less onerous solution to its debt woes than the workout plans proposed by the state of Pennsylvania and by the city’s own mayor. Last week, a bankruptcy judge mercifully threw the case right back out of court after finding that the filing by a majority of council members was illegal. “For Chapter 9 bankruptcy to work, all of the branches of a municipality must be on the same page,” the judge explained.
The faith that council members put in the court for a…

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There are some ideas that, no matter how often they rise and how spectacularly they fail, just won’t go away. Perpetual motion machines, for example. Passive exercise machines. Diets that work. These technologies sound great in theory, but don’t seem to pan out in practice. Add to the list, electric (or largely electric) cars.
People who have looked into the history of automobiles have noted that while electric cars have never managed to rival internal combustion cars for their performance, comfort, reliability, or customer-attractiveness, they persist in inspiring a small segment…

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Follow Yahoo!’s The Daily Ticker on Facebook here! It was a struggle but stocks managed to build on Monday’s big gains. While down from morning highs, blue-chip averages were higher heading into the close with the Dow up 65 points. To get a check on the market’s pulse, I sat down with two of the [...]

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Follow Yahoo!’s The Daily Ticker on Facebook here! The reports are in and both Black Friday and Cyber Monday sales are up — way up over 2010 estimates. Retail sales for Thanksgiving weekend jumped 16% to a record $52.4 billion, according to the National Retail Federation (NRF). And Cyber Monday online sales were up 33% [...]

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