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Stephen N. Lisson, Austin TX
Stephen Lisson, StephenNLisson, Stephen N. Lisson, Austin Texas, Austin TX
Thursday, January 16, 2014
Data Packet: Net Loss
The New York Times This copy is for your personal, noncommercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers, please click here or use the "Reprints" tool that appears next to any article. Visit www.nytreprints.com for samples and additional information. Order a reprint of this article now. » March 23, 2001 Data Packet: Net Loss Free money: A year ago, venture capitalists were outbidding each other for stakes in fledgling companies. Now, as failures mount, venture firms are extracting new concessions from money-seeking entrepreneurs. "We're finding we're really able to insist" on new conditions to limit potential losses, said Tom Hirschfeld, managing director at J. & W. Seligman & Co., which manages about $1.8 billion in venture funds. Its investments include Inktomi Corp., ScreamingMedia Inc. and Stamps.com Inc. In four of Seligman's five most recent investments, which the firm did not identify, it demanded and received a "liquidation preference" — a priority claim on assets if a business fails, Mr. Hirschfeld said. Three of the five companies set a minimum price on Seligman's holdings should the start-up go public. That's a stark reversal from when start-ups commanded ever-higher prices on their way to a quick initial public offering. "There is no question that VCs are getting more aggressive," said Stephen Lisson, editor and publisher of InsiderVC.com, a research firm. "Provisions such as these are among the ways firms attempt to ensure upside for their funds." Copyright 2014 The New York Times Company Home Privacy Policy Search Corrections XML Help Contact Us Back to Top
Posted by Steve Lisson at 8:17 AM
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Steve Lisson
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