min-myinnersoul

A terrible decision for the company and its founder. A great decision for everybody else. Welcome to the crazy world of private equity. Facebook needs an IPO like a hole in the head. It doesn't need the money. The only possible use it has for it is to pay off some tax liabilities being triggered by doing an IPO. Most of the money is going to be invested in US government bonds - impeccable logic of raising expensive equity and investing in bonds that yield nothing. The business itself is a cash spewing machine - it doesn't need more cash. On the contrary it doesn't know what to do with th cash already being generated. Actually the risk when too much cash is sloshing around is that the Board will go and make a stupid headline grabbing acquisition. Mark Zuckerberg doesn't want to do an IPO either. He doesn't need the "valuation" to prove to everybody that he is rich. He's going to lose every autonomy he had in running the business - now he has to pander t...

I had never heard of ShoreBank until I read this article in The Economist. The Economist titled its article – Small enough to fail. I add an “alas” to my post header. ShoreBank , according to The Economist article, thrived for 35 years on a business model of a small community bank that targeted lending to poor people in poor neighbourhoods. It actually had higher repayment rates and lower delinquency,  as any careful micro lender will tell you.  But then the recession struck like a tsunami. In the neighbourhood in  which it operated, the recession has been brutal and most people lost their jobs. Despite very good payment records in the past, they couldn’t keep it up.  Unfortunately its location in Chicago and therefore the association with Obama made it a political lightning rod. No way it could be bailed out. Alas, it had to go. This article set me thinking on the risk quotient for small businesses. By definition, small businesses cannot be diversified in terms of ...

Comparisons between China and India are sure to provoke a yawn . Its an overwritten about topic . However, when I saw a report in the Wall Street Journal comparing the Indian and Chinese entrepreneur, I could not, but help, write a post. The report says both sets of entrepreneurs are extremely bullish about the future. Both don't think the recession has not really affected their future prospects. Both believe their lives will be dramatically improved in the years to come. All very good. Everybody knows that optimism is in short supply in the West and in excess in the East. The differences are also predictable. Indian entrepreneurs start out to "be their own boss". Chinese entrepreneurs start out to make money. Indians seem to be motivated to go down this route by the family and by role models. Chinese seem to be motivated by the government. Indians rely more on family financing or known investors. Chinese rely more on banks. Indians seem to rely on creativity to launch a...