Bailout For Australian Start-Ups

March 19, 2009

With Aussie venture capitalists reeling and several start-ups bolting overseas, the Australian government is going to provide up to AUS$83 million to early stage start-up companies in response to what it sees as a lack of funding due to the global financial crisis.

Dubbed Innovation Investment Follow-on Fund’s (IIFF), their aim is to ensure a future beyond the financial crisis for outstanding start-up companies that are doing groundbreaking work in cutting-edge areas like clean energy, biotechnology and ICT. The follow-on funding will go to over 20 venture capital fund managers licensed by the Commonwealth under existing programmes.

The move is partly in response to the call for action by the Review of the National Innovation System to improve the supply of venture capital in Australia. The Review emphasised the importance of a functioning venture capital market to a healthy innovation system.  

A far cry from Thomas Friedman’s flawed idea of giving the top 20 VC’s in American a billion dollars each


‘Bailout’ is 2008 Word of the Year!!!

November 25, 2008

According to Merriam-Webster, the dictionary publisher, the word “bailout”, which has shot to prominence amid the ongoing financial meltdown, was looked up so often on it’s online dictionary site that it was was an easy choice for its 2008 Word of the Year. I’m sure the parents of the word are so proud.

bailout (noun)

a rescue from financial distress

Henry Kravis Sees Stabilization in Banking Sector

October 16, 2008

Speaking at the Super Return private equity conference in Dubai, Henry Kravis, co-founder of KKR, said he sees the problems in the banking sector beginning to stabilize.  He also predicted consolidation in the banking industry over the course of the next year.  Kravis is convinced that private equity can be a solution to the banking crisis, not just in terms of capital which so often mentioned, but also, and perhaps more importantly, in regards to strategy and operations (which as I’ve often pointed out is the true edge of private equity even after the easy credit is long gone).  Kravis also suggested that PE firms should look at partnering with non-private equity groups when they choose to invest.

I think true stabilization in the banking and financial service sectors will only come when the various government initiatives actually get implemented.  So far it’s been a lot of political talk and papers being signed.  Most of the money has been dished out yet.  Only when the cash tap begins to flow will we see how effective these “bailouts” are.

Strategery Capital – “The Hedge Fund of the People”

October 3, 2008

With the bailout bill passing into law, we now have the mother of all hedge funds, Strategery Capital. The fund business will never be the same!

Revised Bailout Bill is Passed and Signed into Law

October 3, 2008

H.R. 1424, the Emergency Economic Stabilization Act of 2008, aka “The Great American Bailout Bill of 2008”, has passed both the House and Senate and has been signed into law by President Bush. The Senate had approved the plan on Wednesday night by a vote of 74 to 25, while the vote in the House was 263 in favor versus 171 against.

This bill won’t act as a quick fix and it probably won’t be the final action taken by the U.S. government to offset the current financial crisis. An economic stimulus package will almost certainly be brought up by whomever is the next President, as well as either further additions to this bill or even an Emergency Economic Stabilization Act of 2009 (for what it’s worth I don’t think it’ll be as big as the $700 million of this one).

As far as Private Equity is concerned, don’t look for the debt markets to rebound anytime soon just because this was passed. It’ll be quite some time before things loosen up.

Graphic Representation of the History of U.S. Goverment Bailouts

September 22, 2008

Here’s an interesting visual of U.S. government backed bailouts since 1970. The bubbles are getting bigger in more ways than one!