I saw this blog from a VC in NYC
today. It’s entitled: "We Need A New Path To Liquidity" and I had to
read that as I thought it would be all about how to trade out of
recession or something. But no. It’s about Microsoft, Yahoo!, Google,
AOL, News Corp/MySpace and all these other players dickeying about with
the internet as though it was a toy.
The problem our VC friend is
grappling with is the fact that internet entrepreneurs spend years
building their platforms. If they take off, they then "need a way to
get paid for that effort. And those of us who finance their efforts
need to get some return on our investment" and "without a path to
liquidity, all the innovation that is being created by the
entrepreneur/VC equation will stop happening."
OK. So just IPO.
There’s the rub. The IPO market has apparently shut down, and so that
is the issue – how do you monetize your investments when you cannot
bank them anymore.
The leads him into dark pools, and Goldman
Sachs’ TrUE ("GS Tradable Unregistered Equity OTC Market") system. A
great blog on this from Roger Ehrenberg in May 2007, almost a year ago.
His point is that you then do not need to IPO anymore, as these dark pools allow you tap directly into private liquid markets.
Yahoo! lets get in there.
Worth reading the more than 150 comments as well.