VentureBlog

Legally Gray (Observations From My Law School Reunion)

I spent last weekend at my 10th law school reunion. About 125 of my 500 or so classmates came back to Cambridge to reconnect with others who had suffered together through torts and civil procedure, through law firm interviews and the law review competition, through moot court and ultimately the bar. It was easy to pick out my classmates from the crowd -- we were the young ones (relatively speaking). The other reunion classes were the 25th, 30th, 40th and 50th. While I'm impressed that so many folks came back for their 50th reunion, they did tend to blend together -- the men all looked an awful lot like the portrait of the grey and distinguished Archibald Cox that hung in the law school halls and the women pretty much looked like Sandra Day O'Connor.

Venture Lending 101

Many of the companies in which I invest spend more money than they make for considerable periods of time. Given the early stage at which I invest, this is neither surprising nor necessarily concerning (even those companies that could be cash flow positive if they so chose, often go negative in an effort to accelerate their growth). Nonetheless, it is an important factor with which I must deal as I try to help my portfolio companies move forward. After all, at some point any company burning more cash than it makes will have to acquire more money or go out of business.

Success Breeds Success

A couple weeks ago I attended the annual meeting for HRJ Capital. HRJ stands for Harris (Barton), Ronnie (Lott) and Joe (Montana), the three principals of what was formerly known as Champion Ventures. One of the panels at HRJ's annual meeting was made up of limited partners in their funds. The panel was intended to give HRJ's investors' perspective on the current market and included principals from Cornell's endowment, the Henry J. Kaiser Foundation, GIC and Regis Management.

As part of the conversation, the LP panelists were asked whether they were still looking at potential investment in funds run by "emerging managers" (aka new funds). While they all stated that there was a certain appeal to getting in early with funds that might be successful in the coming decade, they were all equally skeptical that they had sufficient data to judge such emerging managers and pick the ones who would shine in the coming years.