Deleting Comments? Why?
August 31, 2009
Tim Kane from Growthology, a blog created by the Kauffman Foundation, had a post titled, “Regulating Venture Capitalists? The Right Case and the Wrong One”. Rim makes the case that,
That is untrue. Venture capitalists regularly participate in PIPEs (private investments in public equities), and they often hold large amounts of stock in portfolio companies that have newly gone public. If the goal is to regulate any institutional investor with a material amount of assets who regularly invests in public markets, it will be hard for venture capitalists to avoid regulation.
Tim had comments open and I asked him to back up his claim. Specifically, I asked him to name one major U.S.-based venture capital fund that was investing in PIPEs. I suggested that I knew of lots of Canadian private equity groups that invested in PIPEs but hadn’t heard that brand name VCs were doing the same. My comment remained for an hour or two, but now it is gone. I wasn’t being offensive or even too much of a smart-alec - instead I really wanted the answer: Which major VCs investing in PIPES?
According to the Venture Capital Journal (subscription required) hedge funds, sovereign wealth funds and private equity groups dominated the PIPE market. Venture capital investors have NOT invested in PIPEs because they don’t meet their investment criteria. PIPEs offer VERY uncertain exit opportunities and NO anti-dilution protection and that is the kiss of death for VCs.
Anyway, I would still love to know which VCs are investing in PIPEs and why Tim deleted my comments.
