What Financial Crisis? Highland’s 20th Hearkens to Days of the Bubble
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of what he said, crafted once I told him it would go in print.) M&A activity has been in the doldrums for a couple years, and the IPO market is dead, Landry observed. Private equity firms used to be the last resort for selling portfolio companies, he said. “That’s over. God help us all.” Then, looking around at the party, he added, “But Highland seems to be doing quite well.”
—Howard Anderson, another Xconomist, was ruing the day he turned down the chance to invest in the Celtics’ syndicate when Grousbeck took over—a decision that cost him, he said, a 30 percent annual return and a championship ring. On the economic front, Anderson told me he had informed his class at MIT’s Sloan School of Management that they should forget Wall Street this year when looking for jobs. But he was pretty optimistic about their chances elsewhere. “You guys are like stem cells,” he told them. “You can be anything. [But] Wall Street doesn’t need you.”
—John Chory, a partner at WilmerHale and chair of the firm’s venture group, was even less downbeat—especially when it comes to the crisis’ effect on the entrepreneurs who are his clients. “My clients don’t have 401Ks,” he quipped. Chory noted that many startups these days, especially in IT, don’t need much capital by historic standards—so even if venture firms are forced to put more resources into their existing portfolio companies, there should still be enough funding for good startups. “A lot of these companies, I’ve got to force them to go get VC money,” he said. The startups often do not think they need investment dollars, and they don’t want to give up equity to a VC. But Chory tells them that having the cachet of a top venture firm investing in them gives both potential customers and potential hires confidence in the startup and can help the business in myriad ways.
To illustrate his points, he took me over and introduced me to Bill Clerico, CEO of WePay, an interesting startup trying to create online ways for people to pool and track money for collective purposes—from roommates sharing grocery funds to sports pools, I gather. No 401K investments, Clerico confirmed. But he was a bit more cautious about the economic climate than his lawyer.