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| The Angel Capital Association
recently surveyed 145 angel group leaders to ask whether they believed the number of investments and
amount of funding would increase this year; nearly 55 percent of respondents said yes. About 81
percent said their group intended to invest in three to nine companies this year, compared with 77.5
percent the year before, and a full 12 percent said they planned to make 10 or more investments in
2008, almost double the number in 2007. |
| (Source: Wired News, 2008-06-16) |
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| Private equity firms manage
some $1 trillion of global capital, yet because they are highly secretive, much remains unknown
about their internal economics. How do PE firms organize themselves, for example, and how do they
capitalize on their success? |
| (Source: Forbes.com, 2008-06-12) |
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| Investors in the private
equity industry are worried that buyout firms will stray too far from their expertise as the credit
crunch limits their ability to do large buyouts, a survey said. Three quarters of institutional
investors in private equity -- known as limited partners, or LPs -- are worried that private equity
fund managers will move into strategies or geographies that they don't know enough about, the survey
by Coller Capital said. |
| (Source: Forbes.com, 2008-06-09) |
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| U.S. companies that were taken
private through a leveraged buyout over the last four years are particularly at risk of eroding
credit quality default, according to a new study by Fitch Ratings. An analysis of 209 loan-financed
LBO transactions executed between 2004 and 2007 found that from completion of a deal through May
2008, the ratio of credit-rating rating downgrades to upgrades was 3.3 to-1, and the average
downgrade was 2.3 notches. |
| (Source: CFO.com, 2008-06-13) |
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| Companies traditionally get
loans from banks, but with so many lenders stretched and with credit so tight these days, businesses
are turning to what might seem like an unlikely source for cash: hedge funds. While some funds have
been offering loans for a few years, more are moving in because the credit squeeze has hobbled many
banks and left hard-pressed companies hungry for cash. |
| (Source: International Herald Tribune,
2008-06-13) |
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| Venture capitalists are urging
start-ups to conserve their funds and look for alternative sources of cash as they sit out a drought
in a market for public offerings that shows little sign of easing. Underwriters are advising
companies to hold off on IPOs until investors regain their appetite for new offerings for fear of
securing abysmal valuations. |
| (Source: Forbes.com, 2008-06-12) |
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| The rising cost of shipping
everything from industrial-pump parts to lawn-mower batteries to living-room sofas is forcing some
manufacturers to bring production back to North America and freeze plans to send even more work
overseas. The movement of factories to low-cost countries further and further away has been a
bittersweet three-decade-long story for the U.S. economy, knocking workers out of good-paying
manufacturing jobs even as it drove down the price of goods for consumers, but after exploding over
the past 10 years, that march has been slowing. |
| (Source: Rocky Mountain News,
2008-06-13) |
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| Steven C. Preston's signature
accomplishment as head of the Small Business Administration was overhauling the agency's disaster
loan assistance program, a program that was foundering under the crush of Hurricane Katrina claims
when he took over nearly two years ago. Mr. Preston has now moved on. And because his departure
comes in the waning months of the Bush administration, it is unlikely that a permanent leader for
the S.B.A., with a mandate to make major changes, will arrive before next year. |
| (Source: The New York Times (free reg. req'd),
2008-06-12) |
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| The Internal Revenue Service
is falling short on inspecting the international tax transactions of small businesses for compliance
problems, according to a new report. Large companies are much more likely to be examined for their
international tax transactions, said a report from the Treasury Inspector General for Tax
Administration. |
| (Source: WebCPA, 2008-06-13) |
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Midwest Floods Have Caused an
Unprecedented Amount of Damage
The recent floods in southern Indiana and elsewhere in the Midwest have caused an unprecedented
amount of damage to commercial and industrial property. With the widespread and catastrophic nature
of the damage, it should come as no surprise that insurers will seek to limit their losses,
including denying potentially covered claims, leading to protracted litigation with some
policyholders over flood and business interruption losses. Losses that have not been carefully
documented will almost certainly be challenged and may not be paid. Thus, it is not always safe to
deal exclusively with your insurance broker. It may be necessary to seek legal help to maximize your
recovery for losses stemming from the interruption of your business.
Read the entire article on business
interruption insurance.
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Ice Miller has been active in the
private equity industry for over 25 years, representing both management teams building great
companies and the private equity firms and individuals that invest in them. We have extensive
experience with all types of funds (formations and operations); mezzanine and senior secured
financings; leveraged buyouts, roll-ups, build-ups, and consolidations; divestitures and exits; and
complex litigation on behalf of investors and privately financed companies.
Read the complete profile of the Private Equity and Venture
Services Practice Group.
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