Bringing Together Geeks and Jocks to Make Millions
The huge divide in high school between the geeks and the jocks is a canyon that often lasts for a lifetime. A new venture capital fund, however, is betting that bringing together the brightest scientists and the most successful businesspeople can create millions of dollars for both sides.
T2 Venture Capital (http://www.t2vc.com) announced the initial close of its inaugural venture fund, T2 Venture Partners, L.L.C. T2VC will invest in startup companies with breakthrough technology spinning out of government and academia. T2VC is the first venture capital fund that is connected to several key federal programs, 28 universities, and a global network of technology organizations in 20 countries. According to Victor W. Hwang, one of the co-founders, "The translational gap between science and business is a major bottleneck in the economy. We lose out because our brightest minds on both sides are not working together. We aim to change the world for the better and to create wealth at the same time."
T2VC itself is a spinout. Larta Institute, one of the nation's leading organizations that work with government agencies and universities to grow new companies, gave birth to the Fund and is a partner in T2VC. Larta Institute manages programs for key institutions like the National Institutes of Health, DARPA (the Department of Defense's research arm), and the Advanced Technology Program (of the National Institute for Standards and Technology). Larta Institute also manages a consortium that has involved 28 universities around the world. Co-Founder Victor W. Hwang is the immediate past President of Larta Institute.
T2VC will also have special access to a vast global network of technologies and expertise. The fund's other co-founder, Greg Horowitt, is the Executive Director of Global CONNECT, the world's leading network of organizations that grow technology startups. Says Horowitt, "Breakthrough technology is located around the world, but the capital and resources to grow that technology is clustered in just a few places. We finally have a fund to connect the best technologies with the smartest money and the sharpest talent, wherever they are in the world."
Unlike other brand new venture capital firms, T2VC starts out immediately with enormous access to deal flow and talent. T2VC builds from a strong network of over 50 top-tier venture capital firms and corporations that work with both Larta Institute and Global CONNECT in cities such as Los Angeles, San Diego, Chicago, Washington D.C., Boston, New York, and London. Investors in T2VC's inaugural fund consist of leading venture capitalists, CEOs, and other professionals. The size of the inaugural fund is undisclosed.
DBA International and Association Management Group Execute Contract for Full-Service Management
Santa Fe Springs, Calif.-based DBA International, a financial services trade association, has selected of one of the top five association management firms in the country, Association Management Group (AMG), citing the firm's ability to take the organization to new levels of success. The transition of management will begin immediately with a contract start date of June 2007, during which time AMG will lead a strategic planning session for the DBA Board to map the future of the association.
DBA International will also officially change its headquarters address to AMG's office in the Washington, D.C. metropolitan. AMG will provide their experience and expertise to achieve effective meetings management, strategic direction and planning, member relations services, and leverage all management aspects to help DBA International fulfill its objectives.
"Our main priority is helping our clients achieve success based on the shared vision of the Board of Directors and their membership," said AMG President and CEO J. Bruce Wardle, CAE, CMP. "We will strive to exceed the expectations of DBA International as we do with all clients by providing exceptional service and managing the association using industry best practices and the highest of standards."
"AMG stood out as the association management firm best equipped to expand our membership, create new marketing opportunities, and add value to membership and our industry," said Stuart Blatt, Secretary of the Board of DBA International and chairman of the association management search committee. "We believe AMG's highly trained and credentialed professional staff will offer unsurpassed counsel, leadership and innovation to build, leverage and manage all aspects of our association. The expertise and experience of AMG's associates will allow DBA International leaders to focus on the business of organizational growth while AMG manages the day-to-day operation."
DBA International joined AMG the same week that the company entered its 25th year of managing associations. Founded in 1982 by industry veteran, Charles D. (Chuck) Rumbarger, CAE, J. Bruce Wardle, CAE, acquired the firm in 1999. Today, Association Management Group (www.amg-inc.com) boasts the most diverse clientele and workforce of any association management firm.
The DBA International is the premiere association to a billion dollar industry, and extends throughout all fifty states, as well as Puerto Rico and Guam. DBA International's members and partners include major banks and financial institutions, respected law firms, major credit bureaus, accounting firms, investment bankers, and high profile Wall Street institutional investors.
SEIU: Buyout Industry Should Ensure Workers, Nation Share in Economic Opportunities
"AMG stood out as the association management firm best equipped to expand our membership, create new marketing opportunities, and add value to membership and our industry," said Stuart Blatt, Secretary of the Board of DBA International and chairman of the association management search committee. "We believe AMG's highly trained and credentialed professional staff will offer unsurpassed counsel, leadership and innovation to build, leverage and manage all aspects of our association. The expertise and experience of AMG's associates will allow DBA International leaders to focus on the business of organizational growth while AMG manages the day-to-day operation."
"The new economy is leaving millions of Americans squeezed out of the middle class, without opportunities, while a very small number of people grow incredibly wealthy," said SEIU Assistant to the President, Stephen Lerner. "The wealth being built in the buyout industry can be put to work to create new opportunities for the millions of people shut out of the American Dream."
During a hearing on "Private Equity's Impact on Workers and Companies" in the U.S. House of Representatives Committee on Financial Services, SEIU President Andy Stern said that the private equity industry should make changes to work better for working people.
"But if private equity firms will not take steps to change, Mr. Chairman, Congress should legislate," said Stern in his testimony.
Stern raised concerns about certain private equity practices and their impact on workers, companies, and the financial markets: Deals that put workers and companies at risk; Private equity "exuberance"; Quick flips and sell-offs; Conflicts of interest; Transparency and disclosure issues; and Missed opportunities for workers.
In his testimony, Stern focused on the importance of private equity working to create opportunities for a larger group of Americans against the backdrop of record income inequality in America. "The story of private equity is the incredible wealth being created for the small number of individuals at the top," Stern says. "There is more than enough money in the booming private equity industry for the firms to continue to do very well, for pension funds to continue to benefit, but also to make sure workers share in the economic opportunities being created by private equity."
For example, the SEIU maintains that the $4.4 billion in fees paid to private equity firms in the 10 largest buyout deals of the last two years could pay for family health plans for 1 million American workers.
New National Effort by SEIU
SEIU has begun a broad national effort to engage with workers and communities to challenge the private equity buyout industry to work together to create "New Opportunities in the New Economy" and help restore the promise of the American Dream. The union has proposed three "Principles for The Private Equity Buyout Industry:"
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The buyout industry should play by the same set of rules as everyone else, including providing transparency and disclosure about their businesses, supporting equitable tax rates, and eliminating conflicts of interest and other potential abuses in their transactions;
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Workers should have a voice in the deals and benefit from their outcome; and
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Workers and community stakeholders, including consumer organizations and the public, should have a voice in the deals and benefit from their outcome.
"Working people should see their hard work valued and rewarded," said Lerner. "Instead of being seen as a line-item on a private equity balance sheet, the workers who build the value of these companies should share in the economic opportunities being created by buyouts."
The report includes:
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An overview of the industry - its growing size and the incredible wealth being generated by buyouts.
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Profiles of the five largest private equity buyout firms, the Carlyle Group, Blackstone Group, Kohlberg, Kravis, Roberts & Co., TPG, and Bain Capital.
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Case studies of five recent buyouts (Thomas H. Lee Buyout of Warner Music; "Zeus Holdings" Buyout of Intelsat; Bain Buyout of KB Toys; Carlyle Group/Clayton Dubilier & Rice Buyout of Hertz; Onex Buyout of three Boeing Plants) and their effects on workers.
The SEIU believes the Onex deal shows the opportunity that deals present if the buyout industry were to focus on creating economic benefits not only for the executives, but also for workers. After Onex took its purchase public, some workers were given compensation and shares of stock worth $30,000.
SEIU produced the report to be a resource for the growing number of people and organizations who may not be financial experts, but whose lives, jobs, investments, or communities are or could be affected by private equity buyouts. As the private equity buyout industry grows in size and influence, with a record $197 billion in deals in the first quarter of 2007 alone, so do concerns about how its business dealings are affecting workers, communities, and the nation.
"Buyouts are at the cutting edge of the forces leaving working people feeling insecure about their future," said Lerner. "But most Americans know nothing about this industry that is impacting millions of people and countless communities. We need to take the conversation about the impact of private equity buyouts out of the boardrooms and financial pages and into the living rooms and communities of America."
Five Most Frequent Mistakes When Selecting Financial Advisors
According to data compiled by the Paladin Registry (www.paladinregistry.com), a free Web-based service that provides information about advisors and documentation for credentials, ethics, and business practices, nearly all consumers err by selecting financial advisors based on marketing information from advisors that they can't properly evaluate.
Jack Waymire, co-founder of the Registry and author of Who's Watching Your Money?, (John Wiley & Sons, 2003) says that accepting marketing information as accurate data was one of the more common mistakes that consumers make when selecting financial planners and advisors. He noted that the results are based on responses from 1,285 consumers who used the Registry to replace terminated financial advisors in the first quarter of 2007.
"We asked them to tell us the mistakes they thought they made when they selected financial advisors and whether the mistakes contributed to the advisors' eventual termination," Waymire said.
More than 97 percent of respondents said they selected advisors who marketed themselves as trustworthy, investment experts. However, they did not have a process for gathering information that would help them validate the advisors' claims, compare them to each other and select the best ones. Instead, they based their decisions on verbal information from advisors. They failed to recognize that advisors prefer verbal information because it maximizes their sales skills and is easy to deny later.
The second most common mistake - cited by 83 percent - is relying too heavily on advisor personality in the selection process. After hiring the advisors, they learned personality had nothing to do with competent, ethical advice and services.
In fact, they felt liking advisors introduced additional risk to the selection process because they tended to trust people they liked. They then let down their guard and selected advisors for the wrong reasons.
Meantime, about 82 percent of respondents said they learned about advisors from the advisors themselves. They did not have an objective third party that provided impartial information that would help them select high-quality advisors and avoid their low-quality competitors. Now they know this practice is risky because they only hear what the advisors want them to hear. Any information that interferes with the advisors' sales success is deliberately omitted.
Being influenced by the track records of the investment products the advisors recommended was cited by 77 percent. What they didn't know was that advisors picked the products for their recommendations after the performance had already occurred. Since consumers had no way of validating when the advisors selected the products, the advisors could claim they picked the high-performing products before the performance occurred.
Finally, 64 percent said they were excessively influenced by a firm's name. They assumed big firms only employed or licensed competent, ethical advisors, so they didn't find it necessary to ask questions about advisors' credentials, ethical histories and business practices. What they didn't know was that most brand-name firms have a substantial range in advisor quality and this range is not disclosed to consumers.
Every month, thousands of consumers use the Paladin Registry's free public services to learn more about advisors, find pre-screened advisors and view documentation for their credentials, ethics and business practices.
