Archive for March 21st, 2017

Thousands of mall-based stores are shutting down in what's fast becoming one of the biggest waves of retail closures in decades.

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Payless Inc., the struggling discount shoe chain, is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter.

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Sears acknowledged “substantial doubt” about its ability to keep operating, raising fresh concerns about a company that has lost more than $10 billion in recent years.

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In the end, the Dow Jones lost 1.1%, the S&P gave back 1.2%, the Nasdaq dropped 1.8% and the Russell 2000 ended the day 2.7% lower.

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The U.S. Constitution, it is fair to say, is normally thought of as a political document. It lays out the American system of government and the relationships among the various institutions. But in a powerful new book The Crisis of the Middle-Class Constitution, the Vanderbilt legal scholar Ganesh Sitaraman argues that the Constitution doesn’t merely require a particular political system but also a particular economic one, one characterized by a strong …

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<p>The steepest pullback in stocks since the U.S. presidential election reveals investor angst about President Donald Trump's ability to push through major reforms, leaving stocks vulnerable to a long-anticipated correction.</p>

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<p>Stocks posted their worst day of the year Tuesday as banks faced pressure from falling yields and traders turned their eyes to a key House vote.</p><p></p>

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<p>Stocks fell sharply Tuesday as banks faced pressure from falling yields and traders turned their eyes to a key House vote.</p>

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On the 30th anniversary of Forbes' guide to the world's richest, we found a record 2,043 billionaires - 233 more than a year ago. In total, they are worth $7.7 trillion.

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By reversing the Medicaid expansion and leaving millions unable to pay for coverage, the bill would be a landmark retreat in American social welfare.

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While helping my daughter run her first lemonade stand, a nice neighbor approached and asked what charity we were raising money for. But, we werent raising money for anything. My daughter had just started her first business, and I was proud of her for that. So, I looked at the neighbor and said that we were working for profit, not charity. Given the recent controversies surrounding Unilevers CEO, Paul Polman, maybe they should consider consulting my daughter about the value of profit seeking as the company conducts its comprehensive review.
The value of profit is often overlooked by the…

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<p>Stocks fell sharply Tuesday as financials faced pressure from falling yields and traders turned their eyes to a key House vote.</p>

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<p>Stocks turned lower Tuesday, with financials lagging, while investors also focused on whipsawing oil prices.</p><p></p>

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It’s fashionable in certain quarters now to slate some of the billion dollar startups that have been created recently and the investors that helped them get there. Zebras Fix What Unicorns Break is a good example. The piece makes three criticisms of the status quo:

  • Pursuit of extreme growth results in companies with unpleasant characteristics and a negative impact on society – e.g. Facebook (fake news) and Uber (where do I start…)
  • Companies with pure for-profit motives aren’t well equipped to solve many of society’s most pressing problems – e.g. homelessness in San Francisco, education, healthcare
  • Companies that aren’t chasing unicorn status find it hard to raise money

There’s some merit in these arguments, but they need to be put into context.

  • There is clearly dysfunction in chasing growth at all costs – inherently unprofitable companies grow to employ thousands of people before going bust, resulting in much personal anguish and not a little wasted capital. However, that’s a cyclical dysfunction which hit notable peaks in 2000 and 2015 and which needs to be understood as an unfortunate part of a larger system which overall has been an incredibly positive force for good. Five of the six largest companies in the world today were venture backed startups and just about all net new job creation comes from young companies.
  • It’s also true that many of society’s deepest problems aren’t likely to be solved by for-profit companies. That’s because there’s no money in solving them (otherwise the market would have been solved already). What we need here is government intervention.
  • The startup community has taken the ‘go big or go home’ mantra so much to heart that good mid-level outcomes – including exits in the hundreds of millions – aren’t seen as sufficiently ambitious. There are structural reasons why we’ve ended up here. As Fred Destin explained in his recent post Why VC’s are obsessed with large outcomes, investors with large funds have to chase unicorns to make their numbers work. Those large funds are often the ones everyone wants on their cap table and so almost everyone in the food chain, from smaller funds to angel investors and entrepreneurs alike, orientates themselves around giving those larger investors what they want, with the result that companies without unicorn potential find it disproportionately harder to raise money. That’s not a good thing.

So what should we do?

  1. Recognise that the system is imperfect, but not broken. We need massively successful companies like Facebook, and even Uber to generate growth, employment and the profits needed in the venture industry to finance the next generation of companies. Some unicorns are bad, but lots are good. Some investors back unsustainable growth in pursuit of short term profit (often unknowingly) but most are sensible.
  2. Celebrate mid-level outcomes as much as massive outcomes. Or at least almost as much. For me companies that exit for $200m are as noteworthy as many of the companies that raise money with a $1bn valuation, and often the lessons they’ve learned are more widely applicable than lessons from companies in the unicorn club. Talking about their stories more would help shift some of the dialogue and mindset in the startup community away from the needs of larger funds, towards the middle of the bell curve where most founders exist.

 



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Saudi Arabia is losing its grip on big oil markets it once dominated amid a deep production cut that has reshaped global petroleum trade routes and benefited rivals like Iran, Russia and the U.S.

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