Investment Finance and Business: space

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2012年2月24日星期五

Social Entertainment Leader Milyoni Secures $11 Million in Funding

PLEASANTON, CA–(Marketwire -02/24/12)- Milyoni, the leader in social entertainment, today announced that it has secured $11 million in Series B financing led by Oak Investment Partners. Previous investors ATA Ventures and Thomvest Ventures also participated in the round. Milyoni will use the funding to further extend its product portfolio in bringing social entertainment experiences to fans on Facebook. The company will also expand its U.S. presence, with offices opening in Los Angeles and New York City.
“With more than 800 million users and growing, Facebook has established itself as a go-to platform for the discovery and consumption of content today,” said John Corpus, founder and CEO. “In 2012, we anticipate an even greater shift in behavior, with more entertainment companies putting the marketing muscle behind their Facebook presence to further expand their selections of movies, music and other content on the platform. The way we see it, we’re only in the first of a nine inning game.”
Milyoni provides a new way for entertainment companies to take their Facebook presence to the next level by providing a fun, unique, shared and social experience to users. Using Social Cinema and Social Live, fans can easily view, like and comment during particular points within a movie, TV show, sporting event or concert and chat with friends while watching. Over the last year, Milyoni has powered some of the biggest social entertainment campaigns on Facebook and has stamped a number of innovative firsts, including the first PPV movie on Facebook, the first live PPV concert on Facebook, the first socially interactive movie and the first day-and-date movie release on Facebook.
“Oak Investment Partners is excited to join the Milyoni team to further extend their stronghold in the social entertainment arena,” said Fred Harman, Managing Partner at Oak Investment Partners. “The company has shown tremendous traction and growth over the last year, hosting more than 100 titles on Facebook today. The audience for Milyoni’s technology continues to expand along with Facebook’s growth. We’re confident that the Milyoni team has both the passion and experience to propel the company forward.”
“We’ve believed in Milyoni from the beginning and have seen the company’s growth mirror that of the entertainment industry’s needs,” said Hatch Graham, Managing Director, ATA Ventures. “Milyoni’s technology has evolved into the powerhouse social entertainment platform it is today, and the company is poised to continue its leadership in the space. ATA Ventures is thrilled to be a supporting partner.”
Milyoni is primed for an impressive 2012 with 15 current studio partnerships and dozens more in the pipeline. The company has more than 3,000 Social Cinema titles and over 50 Social Live events slated by year’s end. Milyoni will continue to enrich studio interaction, administration and analytics functionality bringing unprecedented insight and engagement to the entertainment experience.
For more information, visit http://www.milyoni.com.
About MilyoniBased in the San Francisco Bay Area, Milyoni, Inc. is the leader in social entertainment. The company’s technology provides entertainment companies with a way to connect and engage with Facebook fans, and turn them into customers. Whether it’s watching a live concert, movie or sporting event or shopping your favorite brands, Milyoni enables companies to monetize fans pages through a unique level of engagement and a shared, social experience. Milyoni’s services reach over 150 million fans from industry leading customers, including Universal Pictures, Lionsgate, Paramount Studios, Big Air Studios, Austin City Limits Live, Turner Broadcasting, University of Oklahoma and The NBA to bring a variety of digital content and physical goods to fans on Facebook. For more information, visit www.milyoni.com.
About Oak Investment PartnersOak Investment Partners is a multistage venture capital firm and a lead investor in the next generation of enduring growth companies. Since 1978 the firm has invested $9 billion in nearly 500 companies around the world, earning the trust of entrepreneurs with a senior team that delivers steady guidance, deep domain expertise and a consistent investment philosophy. Its current portfolio includes Bleacher Report, Demand Media, Federated Media, Good Technology, KAYAK Software, MobiTV, Rearden Commerce, and Wonga. Oak Investment Partners is also known for its historical investments in aQuantive, Allyes, AthenaHealth, Gmarket, HuffingtonPost, Inktomi, Netspend, Polycom, Seagate, and TeleAtlas.
About ATA VenturesATA Ventures is a venture capital firm focused on seeking out early stage private companies that appear to offer above average prospects for capital growth. With over $450 Million of capital under management, ATA Ventures focuses on Information Technology (IT) and provides seed capital and early stages of financing to these companies. For more information, visit http://ataventures.com.
About Thomvest VenturesThomvest Ventures is an early-stage venture capital firm committed to the success of our entrepreneur partners. We primarily focus on investments in areas where we have deep expertise and experience, including software, technology-enabled services, and hardware businesses. The capital we invest is our own, enabling us to be more creative, flexible and patient than many venture investors. More than two-thirds of the companies we have funded in the last decade have either gone public, been acquired, or continue to grow as independent businesses. For more information, visit www.thomvest.com.
Facebook® is a registered trademark of Facebook Inc.
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Social Entertainment Leader Milyoni Secures $11 Million in Funding

2012年2月21日星期二

« Shanghai Launches RMB Investment FundW. P. Carey Announces Proposed Acquisition of CPA:15 and Conversion to REIT »GE Capital, Franchise Finance Provides $25 Million to Support Quilvest Group Investment in Anthony’s Coal Fired Pizza …

SCOTTSDALE, Ariz.–(BUSINESS WIRE)–
GE Capital, Franchise Finance provided a $25 million credit facility to support an investment in Anthony’s Coal Fired Pizza, Inc. by an affiliate of The Quilvest Group. The financing includes a $17 million term loan and an $8 million revolving credit facility. Funding was provided through GE Capital’s bank affiliate, GE Capital Financial Inc.
“GE Capital proved to be a great choice for us,” explains Henrik Falktoft, partner, The Quilvest Group. “Their team was very supportive and knowledgeable about this market and that made for a better transaction.”
The Quilvest Group has invested around $4 billion in more than 300 private equity and real estate funds and 150 direct investments.
“We were in a great position to help both parties using our experience in the space and our relationship with the sponsor, Quilvest,” said Mike Kurtz, vice president, GE Capital, Franchise Finance.
Anthony’s Coal Fired Pizza opened their first store in Florida in 2002 and now has 32 locations throughout Florida, Pennsylvania, New Jersey, Delaware, New York and Connecticut.
About GE Capital, Franchise Finance
GE Capital, Franchise Finance is a leading lender for the franchise finance market via direct sales and portfolio acquisition. With more than 30 years of experience and $10 billion in served assets, we serve over 3,000 customers and over 18,000 property locations. We specialize in financing mid-market operators with multiple stores in the restaurant and hospitality industries. Our team of industry experts will work with you to help develop your own growth plan with access to our proprietary industry research and customized tools. More information is available at http://www.gefranchisefinance.com/.
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2012年2月20日星期一

Dollar debt set to remain sparse and steep in Asia

By Umesh Desai and Kelvin Soh
REUTERS – In a world awash with cheap cash from major central banks, it may seem ironic that companies in the top emerging market growth hotspot cannot get their hands on reasonably priced bank loans.
But Asia‘s credit landscape has changed dramatically over the past year and January provided the strongest evidence to date, with dollar lending by banks virtually non-existent except for the most pristine names — and at very rich prices.
Borrowers rushed into the more fickle and demanding bond markets, catching investors early in the year but still paying through their nose for the cash.
The flurry included eight top-tier Hong Kong-based companies that hit debt markets with a record $8 billion worth of dollar bonds in January.
“There’s never been a period with such a level of activity from Hong Kong corporates in the bond market. It’s unprecedented,” said Anthony Arnaudy, head of debt capital markets for North-east Asia at Standard Chartered Bank.
Hong Kong property developer Nan Fung International Holdings was a first time bond issuer in January, as was property firm Wheelock (0020.HK).
Spreads widened and yields soared. Bond issuers in Hong Kong paid a mark-up of as much as 4 percentage points above U.S. debt yields to secure 5-year funds, about 10 times more than they did in 2007 before the U.S. subprime crisis.
The risk, say bankers, is now of a long-term jump in funding costs in the region as U.S. and European banks stay away.
At first glance what has been happening in Asian credit markets might seem incongruous .
On the one hand, the Federal Reserve and European Central Bank have pumped cheap dollars and euros into the financial system to support their faltering economies. U.S. rates are set to stay near zero for at least two more years.
And yet corporates in fast-growing Asia are not able to get banks to lend them dollars or euros. This had not happened before. Not in 2009, and certainly not in any of the previous episodes when financial markets were this liquid.
But the past year has been different. The easiest carry trade in global markets has been disrupted by trussed up bank balance-sheets, the stringency of Basel III capital requirements and, most of all, the drawn out European debt crisis.
It’s not the best time to be seeking foreign currency loans, yet there’s potentially huge demand. At least $14 billion of dollar, euro and Hong Kong dollar denominated loans are scheduled to mature this year and might come up for refinancing.
And borrowers are sensing the terrain is not going to shift in their favour anytime soon. Hong Kong’s Nan Fung returned quickly to the dollar bond market with another issue this month, paying 5.15 percent for 5-year debt.
Others too, have been adapting to the changing game. Singapore’s MMI holdings decided to replace its loan with a bond, India’s Power Finance Corporation (PWFC.NS) had to cut the tenor on a loan proposal, and Hong Kong’s IFC Development both cut its bond offering by more than a third and upped its yield.
TAPS RUN DRY?
Forced by the turn in the credit cycle, borrowers have sought out alternate sources of funding, shifting to more liquid markets in Singapore or Japan.
Henderson Land (0012.HK), for instance, issued a S$200 million 5-year bond in Singapore late last year, while Cheung Kong Holdings (0001.HK), controlled by billionaire Li Ka-shing, also raised its bond offerings in the city-state.
Even so, loan volumes have collapsed. Across Asia, there were 28 deals totalling $3.4 billion in January 2012, a tiny fraction of the 63 deals worth $19.5 billion in January 2011.
That is worrisome, given the mountain of loans to be refinanced in Asia this year. Australia has about $53 billion maturing this year, Hong Kong has $26 billion and Singapore has $17 billion, according to Thomson Reuters data.
“Even with the monetary easing, some banks are trying to preserve capital, which will have an effect on loan pricing,” said Benjamin Ng, head of Asia syndicate and acquisition finance at Citigroup.
One fear is that European banks, traditionally the biggest providers of foreign funding in Asia, will continue deleveraging. Analysts at Morgan Stanley estimate European banks, excluding British ones, have claims of about $680 billion on Asia.
No one is quite sure how much of that cash has left the region in 2011, but one thing is certain: these banks are not committing new funds to Asia. And the billions of euros the European authorities are injecting into their banking systems are simply being recycled into safe deposits at the ECB and government debt.
“Not surprisingly, pricing on Asian loans has not budged much and the higher pricing is here to stay for some time to come,” said Birendra Baid, head of loan syndication, Asia-Pacific at Deutsche Bank.
Local banks, such as Singapore’s DBS (DBSM.SI) and India’s ICICI Bank, have sensed there are rich pickings among the assets the Europeans are offloading.
The problem though is that the foreign currency part of their balance-sheets is already stretched, and Basel III will require them to be even more prudent about managing risk and liquidity.
Foreign currency loan growth at most Asian banks has hit the 40-70 percent annual pace, Morgan Stanley estimates, which means their lending in dollars has been far faster than the 15-20 percent average rise in overall credit.
Moreover, dollar deposit growth has not kept pace, which has meant the ratio of dollar loans to deposits is upwards of an unhealthy 100 percent for most Asian banks, particularly those in South Korea and Thailand.
In Korea for instance, savings banks, which are big non-banking lenders in the economy, deposited $5 billion with their local lobby group late last year, preferring low yields over any exposure to risk.
“I don’t think it is a crisis by any stretch,” said Viktor Hjort, head of Asian credit strategy at Morgan Stanley.
“What you have though is a situation where over the past two years Asia’s grown used to there being this very generous and very cheap access to dollar funding by Asian banks.
“That’s now much more constrained because lending has already expanded aggressively over the last few years and the European banks, historical providers of cheap wholesale funding, are pulling out.”
The implications are two-fold. One is the risk that Asian banks join the issuance queue aggressively, going on a dollar-funding binge as they try to cherry-pick assets and expand balance-sheets — what Morgan Stanley terms the “dollarisation” of Asian banks.
Australia’s Macquarie Bank kicked off that country’s yankee bond issuance for 2012 this week, offering 420 basis points over U.S. Treasury yields for a 5-year U.S. dollar bond.
The other risk is a more permanent jump in funding costs for Asia, at least until the U.S. and European banks are able to come back into the emerging market wholesale lending business. Even though private banks and funds have stepped into the space vacated by the banks, Asia’s funding needs are growing.
PRICIER DOLLARS
There has already been a marked jump in borrowing costs. And a simultaneous and worrying trend of banks invoking “market disruption clauses” to increase pricing on pre-committed loans to better reflect the rise in their own cost of funds.
One interesting example is the refinancing by the top-tier IFC Development Ltd in Hong Kong, which owns the building of the same name in the city’s business district. It initially wanted to borrow HK$17 billion, but had to slash it by 71 percent to HK$5 billion, hit by the liquidity squeeze. It also had to lift the pricing by about 20 percent to attract more lenders.
Hong Kong-based Kerry Properties (0683.HK) is currently offering 230 basis points for a HK$2.4 billion three-year loan, 70 percent or 135 bps higher than it paid on a five-year loan in January 2011.
Loan pricing in Hong Kong needs to be at least 200 basis points over HIBOR, even for top rated companies, according to several loan bankers. This is almost double what was being offered about a year ago.
The all-inclusive pricing for a 5-year loan for a BBB rated borrower in Australia is close to 300 bps, a jump of 100 bps since November.
Simon Milne, treasury consultant at iSelect, an Australian insurance broker, said borrowers were facing the most difficult market conditions he has ever seen.
Milne, who has more than 20 years experience in the Australian debt markets, including four as treasurer of gaming company Crown Ltd (CWN.AX), says top-tier firms are still able to get loans at competitive rates. It’s the mid-range corporates that are struggling. “The risk of pulling a deal has increased,” he said.
Across in India, the Export-Import Bank of India, a frequent borrower in offshore loan markets with a good following given its status as a wholly state-owned borrower, is borrowing up to $250 million for 3 years, paying an all-inclusive charge of 250 bps over Libor. That is nearly double the 140 bps over Libor that it paid on a US$150 million three-year loan in March 2011.
(Writing by Vidya Ranganathan; Additional reporting by Prakash Chakravarti, Jacqueline Poh, Michael Flaherty and Stephen Aldred in Hong Kong, Sharon Klyne in Sydney,; Sumeet Chatterjee in Mumbai and; Yoo Choonsik in Seoul; Editing by Alex Richardson)http://tourism9.com/ http://vkins.com/

2012年2月10日星期五

Concord-Based SpaceClaim Claims $4M – cbl

2012年1月11日星期三

Loans likely for downtown Crandall building, Broadway Park lofts

Salt Lake City’s oldest “skyscraper,” the seven-story 1892-era Crandall Building, has watched quietly as City Creek Center — it’s flashy, $2 billion neighbor — moves in next door.
Now, the slumping staple on the northwest corner of 100 South and Main is getting a financial leg up from City Hall so it remains relevant under downtown’s retail renaissance.
By unanimous vote Tuesday, the City Council, acting as the Redevelopment Agency Board, approved a $337,500 loan to Crandall Properties so the owner can renovate the space for a Starbucks, Dickey’s Barbecue Pit franchise and a JMR clothier.
At the same time, the RDA punted for one week a decision to loan Broadway Park Lofts’ Ken Milo $2.3 million to complete the second condominium building fronting 300 South across the street from Pioneer Park. Council members want more time to vet the terms of the loan, which, if issued, would deplete the RDA’s central business district coffer.
Crandall did not get all the terms requested. A push to defer interest for one year was denied. So was a petition to exempt the owners from adding showers and lockers — a requirement of all RDA projects with 25 or more employees.
But the loan would allow the 120-year-old office building to add fresh retail and restaurant tenants this spring, the same time the LDS Church’s massive mall is set to open.
Councilwoman Jill Remington Love called the new retail tenants “critical.”
“This really is a gem of a building in our downtown,” Love said. “I’m just so glad it’s in the shape it is in.”
Listed on the National Register of Historic Places, the Crandall Building has roughly 10,000 square feet of unoccupied retail space. Crandall has signed leases from the clothing store and barbecue restaurant, city documents show, and expects to receive a signed lease from the coffee shop this month.
For his part, Milo made an emotional appeal, with his voice cracking briefly, for his Broadway Park Lofts loan.
“There’s a lot at stake,” he told the RDA board. “I’m 16 years into a 10-year plan to create an urban, walkable neighborhood around Pioneer Park. It was a war zone 16 years ago,” he added, insisting it is now one of downtown’s best residential environments. “We’re done if this loan isn’t approved.”
In November, Milo’s team held a successful auction for the discounted units in phase one of the lofts at 300 S. 360 West. All 34 units are under contract but not all have closed. The loan’s terms call for the units to close before any money can be released.
The RDA’s loan committee recommended rejecting the request, even though it was restructured Tuesday to reduce the city’s risk to $450,000. But questions remain about the project’s primary lender and whether the city’s money would be immediately reimbursed once the new units sell.
“I’m just not comfortable moving forward with it as squishy as it seems,” said Councilman Charlie Luke. At the same time, Luke says he is not opposed to lending the money so long as the financial review checks out.
“It appears to be a much-improved risk position for the RDA to be in,” explained RDA deputy director Justin Belliveau.
Milo says he’s been working on the funding strategy for six months, agreeing with city officials that the building shell fronting 300 South needs to look finished to attract buyers. He says he owns other properties in the area that he would have to abandon if the city loan is denied.
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2012年1月9日星期一

SEP and SSE Join Forces to Establish New £95 Million Green Energy Fund

LONDON and GLASGOW , January 9, 2012 /PRNewswire/ –
- New secondaries fund acquires cleantech portfolio from SSE plc
Scottish Equity Partners (SEP) has raised a new £95 million fund to invest in innovative green energy businesses in a deal involving the acquisition of a portfolio of clean energy assets from SSE Ventures, the investment arm of FTSE 100 utilities company SSE plc.
SEP raised the new secondaries fund from four institutional investors, headed by Lexington Partners, the world’s largest independent manager of secondary private equity and co-investment funds with $20 billion under management. The syndicate also comprises UK based investors, Hermes GPE and F&C Private Equity, as well as Swiss-based Partners Group.
The new Environmental Energies Fund (EEF) has acquired nine companies from the SSE Ventures portfolio and will operate as a partnership between SSE and the financial institutions, with SSE maintaining a significant interest in the portfolio through becoming an investor alongside the financial institutions. SEP has formed a separate team to manage the fund headed by SEP partner Gary Le Sueur .
The fund’s portfolio companies are market leaders from across the European clean energy spectrum, including solar energy, ground source heat pumps, energy efficiency services, electricity grid management solutions, domestic water recycling and heat recovery, wave energy, small scale hydro-electric projects and low-carbon based community heating systems (see Notes to Editor for full details of the nine companies).
EEF will have substantial fresh capital available for investment in the portfolio and also has agreement to add up to a further five SSE investments to the portfolio in future.
This marks the first move into the secondary fund market for SEP, the UK’s leading growth equity and venture capital firm. It is SEP’s second significant recent fundraising, following the successful close of its new £200m SEP IV fund announced last week, bringing the total raised in recent months to £300 million.
SEP Managing Partner, Calum Paterson said: “We are excited by the opportunity that this partnership with SSE brings and pleased to have secured such blue chip investor backing for the fund. Energy-related technology investments have always been an area of strong interest for us and there will be synergies between our involvement with the new secondary fund and SEP’s standalone primary investment activity.”
SSE’s Finance Director, Gregor Alexander , said: “SEP has a strong track record in helping innovative companies grow and mature. By moving our cleantech investments into the Environmental Energies Fund we can ensure the companies are able to benefit from the track record and expertise of SEP, draw upon the financial resources of the new partners and ultimately deliver a better return on our initial investment”.
“We continue to believe that cleantech companies have an important role to play in developing new technologies and that is why we continue to be involved as a major partner in the EEF.”
Marshall Parke , Managing Partner in Lexington Partners’ London office, said: “The clean energy sector is relatively new to the secondary market, and we expect to see more secondary activity in this space in the future.” Pål Ristvedt, Partner, added: ”Selecting the right partners is absolutely critical to the success of these deals. We believe the three way partnership between a major strategic player like SSE, the substantial energy and general investment expertise of SEP plus the secondary experience of Lexington Partners creates a very strong platform for managing these assets.”
Notes to Editors
About the Environmental Energies Fund:
The Environmental Energies Fund is a £95 million secondaries fund formed by SEP to acquire and invest in a portfolio of innovative UK based green energy businesses originally backed by SSE plc. The fund is managed by leading UK growth equity and venture capital firm SEP and will operate as a partnership between FTSE-100 listed SSE plc, one of the UK’s largest energy companies, and the fund’s blue-chip financial backers Lexington Partners, Hermes GPE, F&C Private Equity and Partners Group.
The fund’s portfolio of assets was acquired from SSE Ventures, the investment arm of SSE plc and comprise the following nine companies:
Anesco: http://anesco.co.uk
(Energy efficiency services and solutions)
Aquamarine Power: http://www.aquamarinepower.com
(Marine renewable power technology)
Cyberhawk Innovations: http://www.cyberhawkinnovations.co.uk
(Unmanned aerial inspection of energy installations)
Geothermal International: http://www.geothermalint.co.uk
(Turnkey services in ground and air source heat pumps)
Green Highland Renewables: http://www.greenhighland.co.uk
(Small and medium scale hydro-power schemes)
Smarter Grid Solutions: http://www.smartergridsolutions.com
(Electricity grid management technologies)
SolarCentury: http://www.solarcentury.co.uk
(Solar power design and installation)
Vital Energi: http://www.vitalenergi.co.uk
(Energy centre installation and services)
Waterevolution: http://www.waterevolution.co.uk
(Water recycling and heat recovery)
About Scottish Equity Partners
Scottish Equity Partners (SEP) is a leading independent, owner-managed growth equity and venture capital firm with a 20 year track record of successful investing. Operating from offices in Glasgow and London , it invests in innovative, high growth potential companies in the IT, healthcare and energy sectors. With significant funds available and an integrated investment team, SEP has the resource and experience to add value from investment through to exit and has been selected as the partner of choice by many of the UK’s leading technology companies.
Recent portfolio exits include the sale of web traffic management company Zeus Technology to Riverbed Technology Inc (NASDAQ: RVBD – News) for a total price of up to $140m , recently named Best Venture Investment of the Year. SEP also sold multimedia home networking company Gigle Networks to Broadcom Corp (NASDAQ: BRCM – News). SEP also exited from cancer therapy company BioVex which was acquired by Amgen Inc. (NASDAQ: AMGN, SEHK: 4332) in a deal worth $1bn which earned SEP won the Venture Deal of the Year award in the Unquote British Private Equity Awards 2011.
SEP’s current portfolio comprises award-winning high growth companies including oil technology business Deep Casing Tools (http://www.deepcasingtools.com); energy-related technology specialist ARKeX (http://www.arkex.com); Media Ingenuity (http://www.mediaingenuity.com) a specialist in online marketing services and technology for the financial services sector; managed IT services provider Control Circle (http://www.controlcircle.com); flight search engine Skyscanner (http://www.skyscanner.net); wireless communications leader ipaccess (http://www.ipaccess.com); IT analytics company Sumerian (http://www.sumerian.com/); Cmed (http://www.cmedgroup.com) which combines full clinical research services with advanced clinical data capture and management technology; and healthcare informatics company Aridhia (http://www.aridhia.com).
For more information visit http://www.sep.co.uk/

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2012年1月6日星期五

Can Credit Unions Replace "Predatory" Lending?

Felix Salmon has a really interesting piece about a professor who took out a loan from a personal finance company–at a roughly 40% APR–after her credit union turned her away.

Is it a good idea for the professor to be taking out loans at 40% interest rates? Really, she didn’t have much of a choice. She needed the money, she got precious little help from her credit union, and the loan company was friendly and extended her the cash on terms she could afford.
What’s more, the professor’s relationship with World Finance has indeed improved her credit. Since taking out that first loan, she’s obtained two different credit cards, and also bought a brand-new BMW with 2.9% financing. All with essentially no help at all from her primary financial institution, which is Missouri Credit Union. The debt the professor is taking on may or may not be wise, given her unique individual circumstances. And the credit union could in theory be a valuable resource in terms of helping her work out whether, for instance, she can really afford that car. But the relationship there is broken, and I see no chance that it will be fixed.
James does admit that he let the professor down: “I think we did fail her,” he says, “and I don’t think we did what we should have done.” The credit union dropped the ball with respect to her loan application, which was left in limbo when she was in a time of need. But at the same time, he also admitted to me that the credit union would not have given her the unsecured loan she was looking for.
The professor’s credit score is now good enough that she qualifies for a mortgage; it wasn’t before. That’s the kind of help a credit union should be able to give, and it’s disappointing that Missouri Credit Union doesn’t seem to be able to bring itself to do that. If the professor (a) wanted credit and (b) wanted to improve her credit score, then the loan company was, sadly, the place she needed to go.

Salmon, who is an enormous booster of credit unions, thinks that this points to directions for reform:

So two things are needed here, I think. The first is effective regulation, with teeth; I hope that Richard Cordray, newly installed at the head of the CFPB, will start providing that soon. There’s no time to waste.
But regulation isn’t enough: we also need alternatives — non-predatory financial products which allow people with bad credit to repair that credit and get back on their feet. Many credit unions provide such products, but as we’ve seen, many credit unions don’t. And credit unions are in any case often difficult institutions to navigate: it’s never entirely obvious who’s allowed to join any given one. Can someone set up a Kiva for America? Help is needed, here. And it’s very hard to find.

I too, am a fan of the credit union. We got our mortgage through Navy Federal, and even though we could probably refinance to something cheaper, we’re sticking with them because I like the customer service and the fact that they will bend over backwards to fix issues with your loan. (Back when I had a car loan, it took me a year to straighten out issues with my car titling, and as long as I made the payments, they kept giving me more time).

But I don’t think that they are somehow going to substitute for the lenders at the bottom of the risk market: loan companies and payday lenders. Felix, who is on the board of a credit union, may have some insight into this that I don’t, of course. But right now, I don’t see it.

Credit unions are not charities. They have responsibilities to the members who deposit money with them: they cannot make loans that are reasonably likely to lose money (at least in aggregate). And while the interest rates on products like payday loans are indeed eye-popping, the companies themselves are not especially profitable. This suggests that the reason the loans are so expensive is that they cost a lot to make.

Why is this? For starters, because the risk of default is very high. It’s hard to get good numbers, and estimates vary widely, but I’m pretty sure that they’re well north of 10%. That’s a pretty high default rate for any type of loan, but particularly one where the term is measured in weeks.
That’s not the only reason to think that these loans are expensive. Since they are often for very small amounts, they have high transaction costs relative to the loan amount–it takes just as much time to process forms for a $200 loan as it does for a $10,000 loan.
There’s also the structure of the loan, which involves a lot of intensive interaction with the borrower. Remember, the short term (and the fact that they’re tied to payday) helps hold down the default costs on payday loans. It’s also really expensive to achieve; it means maintaining a storefront with people in it at all hours.
Credit unions might make those loans somewhat cheaper by layering that overhead on top of existing operations, and because they don’t need to make a profit. On the other hand, credit unions lack expertise and skill in this sort of loan. In general, credit union loans are not wildly cheaper than similar loans from other institutions.
But I suspect that what Felix has in mind is substituting a different–and much cheaper–type of loan for the payday loans. And I’m skeptical that this can happen. All of the research that I’ve seen on these super-expensive loan products indicates that most of the people who are taking them are not doing so because they don’t understand how high the interest rate is, but rather, because they have exhausted all of their other borrowing options. (And frequently, the alternative is even more expensive: a bounced check fee, a utility disconnect that will require a hefty fee for reconnection, a lost day of work because of car trouble).
So I take it that the reason that the credit unions aren’t putting them into cheaper loans is that they can’t. The cost of an unsecured loan to someone with terrible credit is high because those loans go bad very frequently, resulting not only in the loss of funds, but in considerable overhead expended on collection. Particularly in the case of credit unions, who–as my auto loan illustrates–work very, very hard to keep their members’ loans from going bad.
And I’d guess that credit unions, for all sorts of reasons, don’t really want to get into the super-expensive-super-risky loan business. That’s why they focus on figuring out how to help you not need the money. Obviously, that is going to be a bad outcome in some particular cases, because no system is ever perfect. But on balance, I can understand why credit unions aren’t eager to get into the payday loan game.

Update: Apparently, some are. But the products often aren’t substantially cheaper than regular payday loans–though Felix highlights this program at a State Employees credit union, which does look much cheaper.

Felix asks me if there’s any reason that last program can’t scale. I think there are three possibilities:
1. They’re losing money on it, and a lot of credit unions can’t be in the business of charity to people who need payday loans
2. Their lending population is somehow different from those who need regular payday loans (state paychecks are pretty steady, and the program requires direct deposit)
3. It’s a game changer that will revolutionize payday loans.
I’m pretty skeptical that #3 is the answer–these loans are cheaper than most credit cards, and that’s a very competitive space. On the other hand, all game changing innovations suffer from not having been done before: that’s no proof that they can’t be. I’ll only note that the general experience of nonprofits in this space seems to be that they have to charge high APRs (or fees that amount to the same thing) in order to make up for the costs.
More From The Atlantic

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2012年1月3日星期二

Putting a Value on Your Startup

In 2011, we saw a variety of young companies join the billion-dollar valuation club. These included Airbnb, Dropbox, Square, Spotify and Gilt Groupe. In fact, the rounds of financing have looked like IPOs, with amounts exceeding $100 million.
We also saw a group of hot companies hit the IPO market, such as LinkedIn (NYSE:LNKD), Pandora (NYSE:P), Zynga (NYSE:ZNGA), Groupon (Nasdaq:GRPN) and Zillow (Nasdaq:Z). They currently have a combined market value of more than $32 billion (for a closer look at Social IPOs in 2011, check out my recent post.)
Keep in mind that these companies are generating revenues — and in some cases, even profits! As a result, it is easier to use traditional approaches to come up with valuations.
But what should be done with a pre-revenue startup? In this situation, there are some ways to get a sense of the valuation:
Amounts: For a Series A round, a typical amount is $3 million to $5 million. So given that a venture capitalist often will take a minority position, the valuation of a company usually will be in excess of $10 million.
The Lingo: VCs have a certain vocabulary, and it can have a big impact on your valuation. First of all, you need to understand the concepts of “premoney” and “postmoney.” Premoney is the valuation before the investment is made, and postmoney is the sum of the premoney valuation and the investment.
Example: Let’s say a VC is willing to invest $4 million in your company at a valuation of $10 million. In most cases, he or she means that valuation is on a postmoney basis, giving the firm an equity stake of 40%. However, if the $10 million valuation is considered premoney, then the stake would be 28% ($4 million divided by $14 million).
You also should account for the option pool. This is the percentage of the outstanding shares available for option grants to employees. For early-stage companies, the option pool can range from 10% to 20%. When the VC negotiates the valuation, he or she will apply the option pool on the premoney valuation. Ultimately, this lessens the value of your equity position.
Timing: If your space is red-hot and you have multiple VCs interested in your deal, you should raise as much money as possible — and negotiate as hard as possible. Bidding wars are a common theme in the startup game, but they can fizzle out quickly (just look at prior trends like podcasting and RSS).
Proof Points: Measure key metrics continuously and set goals, say on a weekly and monthly basis. If you can show that your startup is making consistent progress, you’ll likely get VCs’ attention.
You also should try to highlight your progress against competitors. Are you becoming the dominant player in the space? If so, the valuation should spike. Consider that tech often is a winner-take-all kind of business.
Team Value: If you have rock star executives and engineers, they actually might have independent value. In some cases, a brilliant engineer can fetch more than $1 million. Companies like Facebook and Google (Nasdaq:GOOG) often acquire companies for their talent, not their products or customers.
Valuation Time Bombs: Even if you get a sky-high valuation, it might be worthless. How? VCs usually will require liquidation preferences. This means a firm will get back all — or even more — of its initial investment if the company is sold or liquidated. In other words, if the valuation of the “exit” is less than the investment amount, your take will be zilch.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook,” “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli
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2012年1月2日星期一

Golub Capital Provides One-Loan Financing to Support Freeman Spogli & Co.’s Acquisition of First Watch Restaurants, Inc.

NEW YORK , Dec. 27, 2011 /PRNewswire/ — Golub Capital announced today that it provided a GOLD financing debt facility to First Watch Restaurants, Inc. (“First Watch” or the “Company”) to support the acquisition of First Watch by Freeman Spogli & Co. (” Freeman Spogli “). GOLD financings are Golub Capital’s One-Loan Debt facilities.
Headquartered in Bradenton, Florida , First Watch is a leading operator of full service breakfast and lunch restaurants, located primarily in the Southeast, Midwest and Mid-Atlantic regions. With 82 company-owned restaurants spanning nine states and 10 franchised locations in five states, First Watch is recognized for providing healthy and hearty breakfast and lunch offerings, served in a welcoming and friendly environment. First Watch specializes in the creation of traditional favorites such as pancakes, omelets, salads and sandwiches, as well as a variety of signature items, with all menu items freshly prepared to order. First Watch has received more than 200 “Best Of” accolades in markets across the country.
“We are excited to support Freeman Spogli ‘s investment in First Watch,” said Golub Capital Principal Troy Oder . “The Company’s management team has an excellent track record of growing the First Watch brand, and Freeman Spogli is the ideal sponsor to position the Company for its next phase of growth due to their extensive knowledge of the consumer sector.”
“We chose to partner with Golub Capital due to their expertise in the restaurant industry and their understanding of the unique financing needs of investors in the space,” noted John Roth , President, of Freeman Spogli & Co. “They were able to deliver a flexible financing solution that allowed us to complete the transaction within an extremely tight timeframe.”
About Golub CapitalWith over $5 billion in capital under management, Golub Capital is a leading provider of financing solutions for the middle market, including one-loan financings (through the firm’s proprietary GOLD facility), senior, second lien, and subordinated debt, preferred stock and co-investment equity. The firm also underwrites and syndicates senior credit facilities up to $200 million . Golub Capital’s hold sizes range up to $100 million per transaction.
Golub Capital is currently ranked as the #1 Middle Market Bookrunner for YTD 3Q 2011 by Thomson Reuters Loan Pricing Corporation. Golub Capital was named “Middle Market Lender of the Year” by Buyouts Magazine in 2009 and 2010. The firm was also honored as “Debt Financing Agent of the Year” by M&A Advisor in 2010. Golub Capital is a national firm with principal offices in Chicago and New York . For more information, please visit the firm’s website at golubcapital.com.
About Freeman Spogli & Co.Freeman Spogli & Co. is a private equity firm dedicated exclusively to investing in and partnering with management in consumer-related and distribution companies in the United States . Since its founding in 1983, Freeman Spogli has invested $3.0 billion of equity in 47 portfolio companies with aggregate transaction value of over $17 billion , and is currently making investments from FS Equity Partners VI, L.P. Freeman Spogli has offices in Los Angeles and New York . For additional information, visit freemanspogli.com.

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First Wind Names Michele Beasley as Senior Vice President and General Counsel

BOSTON–(BUSINESS WIRE)– First Wind, an independent U.S.-based wind energy company, today announced that Michele Beasley has joined the company as Senior Vice President and General Counsel. Ms. Beasley comes to First Wind with extensive experience in the development and financing of wind and other energy projects. In her role, she will oversee the company’s legal affairs and manage its legal team.
“We are excited to have Michele join our executive management team, which will benefit from her talent and experience,” said Michael Alvarez, President and CFO of First Wind. “Her expertise in the space is unparalleled and positions her perfectly to support our projects in operation and under development across the U.S. from the Northeast to the West and to Hawaii.”
Ms. Beasley most recently served as Senior Counsel at Wells Fargo Bank in San Francisco and Boston, serving as senior legal counsel to the Securities Investment Group of its division of Wholesale Division, supporting a multi-billion high-yield investment portfolio and large street- and customer-facing sales and trading groups. She served on the Securities Investment Risk Management and Firewall Committees, and represented commercial real estate financing teams.
Prior to Wells Fargo, Ms. Beasley spent more than a decade working on all aspects of the development and financing of energy projects at Orrick, Herrington & Sutcliffe LLP and Chadbourne & Parke, including the structuring, negotiation, and documentation of equity investments, project contracts, and third-party limited- and non-recourse financing, and related real estate and governmental approvals work. She also served as staff counsel to the then-new Women’s Rights Project of Human Rights Watch, under the Georgetown University Law Center’s Women’s Law and Public Policy Fellowship.
Ms. Beasley received her Bachelor of Arts from Smith College, and her Juris Doctor from Georgetown University Law Center. Ms. Beasley currently resides in Natick, MA.
About First Wind
First Wind is an independent wind energy company exclusively focused on the development, financing, construction, ownership and operation of utility-scale wind projects in the United States. Based in Boston, First Wind has wind projects in the Northeast, the West and in Hawaii, with the capacity to generate up to 735 megawatts of power and projects under construction with the capacity to generate up to an additional 141 megawatts. For more information on First Wind, please visit www.firstwind.com or follow us on Twitter @FirstWind.

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Jun Group Secures $2.5 Million From Western Technology Investment (WTI)

NEW YORK, NY–(Marketwire -12/13/11)- Jun Group (www.jungroup.com), the premier social video platform, today announced that it has secured $2.5 million in financing from Western Technology Investment (WTI) (www.westerntech.com). Jun Group joins WTI’s portfolio of social Internet companies, including Kosmix, myYearbook, Plaxo, StumbleUpon, Ustream, Youku, and, most notably, Facebook.
“Since we founded Jun Group in 2005, we have grown the company into a leader in one of digital advertising’s hottest areas — online video — and pioneered the new category of social video,” said Mitchell Reichgut, founder and CEO of Jun Group. “The opportunity to change online video advertising from the interruptive model of yesterday by putting people in control is significant and partnering with WTI will enable us to drive the category of social video forward.”
The financing from WTI provides Jun Group with the capital to accelerate its strong growth in the social video space. Today, the Jun Group social video platform delivers millions of monthly opt-in video views across social networks, mobile devices, and YouTube. Jun Group has tripled its revenue since 2009 by working with a roster of Fortune 500 brands, major entertainment companies, and media and creative agencies.
“Online video advertising is a significant and rapidly growing opportunity, but, most importantly, it is ripe for innovation,” said Dan Holman, investment partner at WTI. “Jun Group is a clear leader in the space. They’ve set the standard for opt-in, performance-based video, and our partnership delivers the financing to aggressively capitalize on this opportunity.”
Jun Group will put the financing from WTI to work by continuing to build its sales, business development, and client services team, which tripled in 2011. The company will also aggressively advance its industry leading distribution and analytics technology.
About Western Technology Investment (WTI)For more than 30 years, WTI has provided financing facilities to high-growth public and private companies, including 3Par Data, Brocade, Cerent, Facebook, Google, IDEC Pharmaceuticals, IronPort, Juniper Networks, Postini, Transmeta and Youku.
About Jun GroupJun Group is the premier social video platform. The company’s distribution technology delivers millions of monthly opt-in video views across social networks, mobile devices, premium content sites, and YouTube. Jun Group distributes videos from 15 seconds to 3 minutes-long with exceptionally high completion rates and significant post-view activity, such as web site visits, coupon downloads, and store locator usage. The company’s analytics dashboard, Voyeur, provides real time data about views, shares, likes, tweets, ratings, comments, and geographic dispersal down to the state and town. Founded in 2005, Jun Group’s clients include Fortune 500 brands, major entertainment companies, and media and creative agencies. For more information, visit http://www.jungroup.com/.

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