Euro - VC - Generations [Babbling VC]

Mike put out a good post yesterday about the future of VC's in Europe (and no, I'm not linking it just because he mentioned me). I've had multiple discussions with him about this over the course of the past couple of weeks and I wholeheartedly agree with the majority of his statements. I recommend a read and I don't want to re-hash all the thoughts here again. I only have one thing to add. I believe that some companies may head over to the US to try and raise money in the hope of doing better there. It's rare though that a crap company from the US makes this jump. It's fairly easy nowadays to stretch out your feelers from Europe to US VC's and they quickly give you feedback. I believe this idea has been over-rated in the blogosphere. My observation is that most Euro start-ups who don't manage to get financed in Europe disappear to a quiet place to die and don't regularly disappear to the US.

Mike put out a good post yesterday about the future of VC's in Europe (and no, I'm not linking it just because he mentioned me). I've had multiple discussions with him about this over the course of the past couple...

Quote of the Day: AOL/YHOO [Paul Kedrosky's Infectious Greed]

The quote of the day is slam dunk easy. It's from Techdirt, and it's on the proposed AOL/YHOO to fend off Microsoft:

...like trying to keep a wild animal from eating you by covering yourself with feces.

Well, yes.

Berkeley Center for Innovative Financial Technology [Paul Kedrosky's Infectious Greed]

Every time I think I'm away from universities, I get dragged back in. I'm newly on the Advisory Board for Berkeley's new Center for Innovative Financial Technology. Okay, okay, I'm a highly willing "drag-ee" on this one.

While in some quarters these days "innovation" and "finance" go together about as well as "magnesium fire" and "water", I think this is a great idea at the right place and the right time -- especially when the center director is my friend David Leinweber.

I look forward to working with David, et al., on this great new Berkeley center.

When You Apologize, YOU Apologize Not Dan Garton [The Post Money Value]

I assume you've seen/heard about or maybe have been impacted by the American Airlines fiasco.  Grounding a fleet is a nightmare and I feel for the passengers impacted as well as the employees who are on the front lines getting the brunt of the rage.

You, of course, would expect the airline to be falling all over themselves with apologies, mea culpa, etc, etc. And, for the most part, they are.

Sure enough, after 4 days of this nonsense, the "An Apology From American Airlines" email shows up. The first line was please accept my apology.  Long paragraphs to follow and it was signed "Dan Garton, Executive Vice President, Marketing."  Not Gerard Arpey, the CEO, nope.

Some marketing wonk created this email, scanned in Dan's signature, and used a DNR (Do Not Reply) email for a from address. You'd think there would have been ten seconds of thought to just putting the CEO's name on it. Yeah, I know, it's fluff/automatic anyway, but that's not the point.

Today, a press conference happens and the Chairman/CEO, finally steps up. 

That story, you can read here, shows it took four days for the CEO to step up. He took full responsibility at the press conference, cool, but his name should have been on this email because unless you were in Texas, you didn't really get this story. And if you hit the Google photo search, you won't find (I checked) photos of Gerard Arpey helping customers, personally handing out sandwiches, or whatever to personally try to put his responsibility talk into a walk. His face walking around DFW, American Airlines home base.  It's 3 minutes over to the terminal from the American Airlines HQ. They have a shuttle bus for employees

The lesson for you is clear: Own it. Step up and own it. With the Internet, you can own it loud and clear, get to your customers personally, and simply own it.

You, not Dan Garton.

I assume you've seen/heard about or maybe have been impacted by the American Airlines fiasco. Grounding a fleet is a nightmare and I feel for the passengers impacted as well as the employees who are on the front lines getting the brunt of the rage....

AOL-Yahoo Merger Wins Over The Critics [Silicon Alley Insider]

Like Mike Masnick at TechDirt, who sums it up this way:

"like trying to keep a wild animal from eating you by covering yourself with feces"

(Via Paul Kedrosky)

Unintended Consequences from Frontier [Feld Thoughts]

As I sit here in the San Francisco International Airport (they announce that so proudly over the PA when they tell me that the thread condition is orange every few minutes) I've been pondering the unexpected Frontier Airlines bankruptcy.  My Frontier flight is now an hour late so I've had plenty of time to surf the web and try to figure out how / why this happened so suddenly.  I'm also almost brain dead from my 10 day trip so it's hard to actually do anything productive at this point.

I've determined that the bankruptcy filing is simultaneously a smart survival move for Frontier and an example of the classic "unintended consequences" (which my dad also taught me result from "complicated mistakes.")  This one is a doozy.  I have no idea what the actual facts are, but the WSJ asserts that the Chapter 11 filing by Frontier was in response to their credit card processor (First Data) increasing they amount and length of time of their holdbacks for credit card receipts.

Let me get this straight. I'm a customer.  I charge a Frontier ticket on my credit card.  First Data processes it but now holds the money until they decide to release it to Frontier.  As a result, First Data effectively controls Frontier's cash flow (since almost all customer purchases are made on credit cards.)  All right, I got it.

In one of the articles I read, it was stated that First Data increased the holdback percentage from 45% to 100% and the time duration until "the flight was taken."  That strikes me as completely unreasonable on First Data's part - they now control the float from the moment of purchase until the moment of flight completion confirmation (which I expect is a non-trival reporting process for Frontier.)

Frontier's response - "Dear First Data: Bullshit.  We are filing for Chapter 11 and invalidate your ability to change the holdback terms.  See you in bankruptcy court."

All the chatter I heard today while waiting for my plane was whether Frontier would be going out of business and whether our plane would arrive.  The fact that is was an hour late didn't help.  Nor did the fact that the electronic scoreboard announcing the flight time was not working and the gate agent wrote all the info on a piece of paper taped to the wall.  Everyone at Frontier is keeping their chins up and saying "no problem - this is just a technicality."

Hopefully I'll get home today.  As one of my twitter friends told me - "at least I'm not on American Airlines."

FT: Citi Stuck With EMI Debt, Not Happy About It [Silicon Alley Insider]

Here's a recipe for heartburn: Take one heap of music business malaise, add an equally large helping of credit crunch. Stir.

How's that taste, Citigroup? Thought so. Citi, which financed Terra Firma's buyout of EMI last year, has been trying to lay off some of its $10 billion in EMI loans, but is having a hard time. No one, it seems, wants to back a struggling company in a struggling industry, particularly when the company seems unclear about where all of its money is going. FT:

The bank had tried to include those loans in a $12bn portfolio that it is planning to sell at a discount to private equity firms. However, Citigroup was forced to remove them from the package after it was unable to provide adequate financial information to potential buyers, people familiar with the matter say.

EMI is now in the midst of a radical restructuring being undertaken by Guy Hands, Terra Firma's chief executive, that will include as many as 2,000 job cuts. Its bankers remain unclear about its future business prospects and the financial results of that overhaul, a person close to the situation said.

There is also uncertainty because EMI is reviewing the way that it accounted for merchandise shipments to retailers in late 2007, according to people familiar with the matter.

The FT story, which is both detail-laden and depressing, says EMI is specifically struggling to offload about $2.4 billion in debt, but feels OK about its chances with another $2.6 billion or so, since it's supposed be replaced with a music rights securitization deal.

A few years ago, we'd agree with Citi about that, since music catalogs, particularly publishing rights, used to throw off steady, predictable cash flow. But now we're thinking that convincing anyone that any part of the music business will generate predictable anything is a tough sell.

MySpace Launching New Series "I Love Chieftown" [Silicon Alley Insider]

MySpace (NWS) has commissioned another original Web series: "I Love Chieftown," from the creators of "KateModern." MySpace plans to promote it heavily by creating its own channel with character profiles and behind-the-scenes footage.

No word on costs for the series, but MySpace has committed to a fairly hefty run of 60 4-5 minute episodes, which will begin running on the site in September. Like "Quarterlife," the series will be shot close to when they appear, allowing viewers to have input into the plotlines.

"Chieftown" will be a candidate for international TV distribution under the agreement recently signed with Elisabeth Murdoch's ShineReveille.

Nerds To Valleywag: Stay Off Our Site! [Silicon Alley Insider]

Several users have suggested we ban Valleywag, not for anything in particular that they write about, but because their articles [sic] always such deliberate linkbait. I personally agree. In 99% of Valleywag articles, the most interesting thing is the title. But I don't want to be accused of censorship, so I thought I'd ask for opinions first.

So far, 414 people have voted. About 60% think it's a good idea to ban Valleywag stories from the site.

We vote no. Banning a specific outlet's stories from a news aggregator is a losing idea; it only lowers the value of the index. Sooner or later Valleywag will write something particularly informative or amusing and Hacker News readers will miss out.

Plus, we like the guys! In fact, we'll be hanging out with Wag-In-Chief Owen Thomas and his underling Nicholas Carlson in a few hours at Nowhere Bar near Union Square. Join us!

A word about the google/DoubleClick non compete story [bijansabet.com]

Valleywag reported today that google required DoubleClick employees to sign a non compete. And then there was a subsequent layoff after the acquisition . Many folks asked me what I thought since I have been so vocal about ending non competes. Here are my thoughts. I don’t like non compete ageements. I don’t think they are fair and they stifle innovation. I believe that California has it exactly right. Non competes are not permitted or enforced However even in California there is an exception. Non competes are permitted if they are part of a negotiation in merger or acquisition. In that case the courts have ruled in CA that the two parties are balanced and exchanging value. In other words its part of the sale price of the company. That balance does not exist in a normal employer/employee ageement I think that is the right model. Get rid of non competes except for a m&a. But if Valleywag story is accurate than I think that this was consistent with the letter of my opinion but breaks the spirit in my view unless employees and common shareholders knew that their portion of the $3B sale to google was going to include a non compete and then a layoff.

CollegeHumor Dudes Move Offline, Onto Dorm Walls [Silicon Alley Insider]

The newest line extension from IAC's CollegeHumor/Connected Ventures crew: Posters.

This one's pretty self-explanatory: In addition to CollegeHumor and Vimeo, Josh Abramson and Ricky Van Veen run BustedTees, a mail order t-shirt business which makes much more money than either of the other two ventures. So slapping the same images from the t-shirts on $9 posters makes plenty of sense.

That said, we haven't been in a dorm room for a long time. Kids these days still use posters, right?

Indian IT Services Crunch [Paul Kedrosky's Infectious Greed]

Two points make a trend, and I've now heard today from people at two major IT services firms that business, especially in India, is slowing to a crunching halt. Can't be good news for Tata, et al.

Why Does Al Gore Hate The Press? [Silicon Alley Insider]

Al Gore is speaking at the RSA security conference in San Francisco this afternoon. But good luck finding out what he says: Reporters are banned from the event.

We don't know what's more disheartening: The fact that the former veep is trying to keep a trade show talk private -- or that this isn't the first time he's been oddly press-shy.

When he was a guest lecturer at the Columbia University's journalism school in 2001, he tried imposed a gag order on his students, but eventually backed off. And in January 07, he banned the press from a speech he was giving in Sioux Falls, S.D.

We can sort of understand why Al wanted to keep junior journalists from writing about his chat in 2001 -- losing a presidential election can make you pretty grumpy. But now? He's Al the Great, winner of both a Nobel and an Oscar. Lighten up, Al! Or don't ask us to write about your next movie.

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