Where the Funds Were Invested in 2009

The largest portion of private equity in 2009 was leveraged buyouts and corporate finance funds. In 2009, $53.7 billion, or 56%, of all private equity funding went toward those categories. Still, that is a steep drop of 73% from $195.5 billion in 2008 for the same categories. Mega funds, which are corporate buyout funds of $6 million or more, had a tough year as well. Only $14 billion in mega funds were raised in 2009.

Private Equity Funding Drought

Another category of private equity, distressed funds, saw a roller-coaster drop as well. Only 30 funds for a total of $14.2 billion were raised for distressed investments, a drop of 67% from a record year in 2008.

Mezzanine capital was also down in 2009. Only 20 mezzanine funds were raised for a total of $3.3 billion. Compared to 2008, mezzanine funding saw a $43.1 billion in 24 funds last year – which is a 92% drop from the same period a year ago!

Venture capital funding saw the smallest drop of only 55% in 2009. $13 billion in 120 funds were raised compared to $28.7 in 204 funds in 2008.

The Power of Secondary Investments

However, there was strong performance in 2009 with secondary investments. Secondaries are investments made to existing private equities. 2009 saw an 83% increase from 2008 to $17.5 billion. Interestingly, although there was a sharp increase in the amount of secondaries in 2009, both 2008 and 2009 saw the same number of funds raised with 21 funds. Goldman Sachs was the leader of secondary fund, raising with 31% of the private equity in this category.

Private equity appeared to be sticking to what worked in 2009, with the strongest investments in existing secondary markets and in leveraged buyouts. Although private equity had its worst year in 2009 since 2003, the next decade will likely be defined by the activity appearing in 2010.

Comparing the Numbers

To put these numbers in perspective, the 2009 year end total venture capital funds raised was only $15.2 billion. That’s the lowest amount of venture capital fundraising since 2004, when the total was $19.1 billion. Keep in mind that venture capital reached a high of $36.1 billion in 2007.

In terms of total venture capital investment given to startup business, the total for 2009 was $17.6 billion, down from a six-year high of $30.5 billion in 2007.

Analyzing the Facts

What do these numbers tell us? The president of the NVCA, Mark Heesen, said in the press release, “Many venture firms stayed out of the fundraising market in 2009, a dynamic that is clearly reflected in the lower volumes.” Heesen goes on to say that 2010 will be a defining period as “…firms will not be afforded the luxury of continuing to wait for market conditions to improve in 2010.”

Looking Forward in Venture Capital

The amount of venture capital activity in both fundraising and investing in 2010 will define how venture capital will conduct business in the next decade. Heesen states,” all signs point to a leaner, more capital efficient asset class comprised of firms with proven track records of delivering value to limited partners. Not all firms will make that cut, but the ones that do will be very well positioned to invest.”

What we do see projected in 2010 is that venture capital firms are cautiously optimistic, according to the Annual Predictions Survey conducted by the NVCA. 63% of all respondents predict that total venture capital dollars invested will remain the same or increase in 2010. 44% of those say they expect to see an increase to $21 to $25 billion in financing.

However, the most respondents, 90%, agree that the number of venture capital firms will decrease over the next five years. 72% state that VC firms will decrease between one and thirty percent.

The bottom line is that 2009 was the lowest for VC funding and investment in five years, and 2010 will be a litmus test for the VC industry for years to come. You can find more stats and interesting data at the NVCA website.

Features of the Point of Sale System

A POS system simplifies your day-to-day tasks and lets you manage your business effectively.  The system typically resembles a desktop computer that tackles complex data and integrates lots of functions. The system maintains business transactions, stock management, processes payments and prints reports.

With a POS system your employees can view sales records any time of the day. It is also easier to create price tags for products and print labels for shelves in a short period of time. Different types of databases maintained by the system include consumer, item, department and seller databases. POS systems can be easily networked, meaning you can forward messages, maintain staff attendance records and store receipts. Using this system, you can adjust sales tax and merchandise prices effectively.

Without the POS system, who knows where retail business management would be.  Maybe we'd all still be using manual label machines!

http://www.swarmthe.com/

This is a graphical way to browse the Internet. Yes, it's unusual. Yes, it's difficult to see an immediate value… but something like this is exactly what the web of the future is looking for: a company willing to go beyond what we're doing today to try something new.

The more I think about it, the more I see great advertising possibilities coming from this, as well as a combination of the current tagging phenomenon, too, to help make the Internet even more user friendly.

This is a really impressive site, full of incredibly powerful information. Although it may be designed for corporate managers, its information is no less pertinent to the entrepreneur who needs to quickly learn how to develop their management skills.
http://www.managementhelp.org/

The first is this: http://en.wikipedia.org/wiki/Skype. I realize you can't trust everything you read on the Internet but this has me concerned enough to think twice before I use it. Some of the things I'm concerned about include (quoting from Wikipedia):

• Keeps chatting on the network, even when idle
• Blind trust in anything else speaking Skype
• Skype makes it hard to enforce a (corporate) security policy
• SkypeOut can be more expensive
• The continuous access pattern does not allow the disk to enter “sleep” or “idle” modes while Skype is active, even when offline

Other reasons were mentioned but these 5 are my biggest concerns.

The second reason is anecdotal: Every time someone has called me (on my landline phone) from their Skype, the quality has been low, the delay between talking has been painfully long (even on local calls), and some of the time I'm put on hands-free, which means that my voice is coming out of the computer speakers and I can hear myself talking. All of these things are very distracting to having a real conversation with someone.

I love new technology and I love to see it leveraged for better business use. But to me, Skype just isn't there yet. Right now they're on version 2.5. I'll wait a couple more versions before I look at it again.

Does all of your sales material work for you? Here's an interesting way to find out.

http://www.glyphius.com/

Now, I'm not mathematician but this software is supposed to help you write better sales content. It analyzes the content of the sales message — whether its' a sales page, a website, or whatever — and assigns it an effectiveness percentage. Many of us are not writers and (to be honest) that's reflected in many websites. Business owners want to be perceived as coherent and well-spoken so they should use any tools in their power to create well-written and effective sales messages.

While my view is not shared by everyone, I have to admit that I’m a big fan of Paypal. Not only is it convenient to use, it’s great that they accept credit cards.

No, this blog is not “brought to you by Paypal”!!! I’m just making an observation that they are positioned really well to build their own business while they help you build yours:

For example, they enable the small business owner to accept payments from credit cards, avoiding the hassle and cost of merchant accounts.

I also like that Paypal offers free resources, such as a downloadable e-book on ways to build your business, or free marketing for all Paypal merchants so other Paypal users can find them.

What impressed me the most, though, was their free shopping cart you can use to sell your products.

Paypal isn’t just good for the small business owner; they’re smart. All of their free products are specifically designed to increase their business.

That’s something to think about for your business!

Links of Interest: Free credit report from all Experian, Equifax, & Transunion is offered with credit monitoring.

http://www.waxmail.biz/

Microsoft Outlook users can create mp3's (those are audio files for you non-audiophiles) and attach them to your email.

Although I can hold my own with the typists of the world, I know plenty of entrepreneurs who can't be bothered to type or simply don't have the time because they use the “hunt and peck” method of typing. Moreover, nearly all of the business owners I know are great verbal communicators but fall short with the written word.

This is the solution: Say what you want to say. Save. Attach. Send.

It's unusual, at first, but then you get used to it and it becomes fairly addictive. It's definitely something I see could change the face of interactive webmedia. But like many web revolutions, it probably has to run its typical course: used initially by a faithful few who like using it for personal communication and expression… then it expands into the larger realm of early business use and personal use for the mass populace. Finally, it will become highly commercialized. That seems to be the way the Internet has progressed (as a whole as well as in its individual parts, such as websites, blogs, social sites, podcasts, etc.) Is this the next revolution?