In the 1930s, there was a stretch where you could borrow more against the real estate than you could sell it for. I think that's what's going on in today's private-equity world.
To Wall Street, a firm like BP isn't just a profitable energy company with lots of assets like oil rigs and pipelines and gas stations - it's also a corporation that routinely borrows hundreds of millions of dollars to keep its business up and running.
The activists play the balance sheet by selling a division to buy back stock and leveraging the balance sheet and buying back more stock.
What happened after publication of our paper was that, for the next 40 years, people said, all right, we now know the answer to the capital structure question under ideal conditions.
I think one thing that may have happened with both Facebook and Zynga is that they may have waited too long to go public. They got particularly cute on that front.
There is no correlation between a weak IPO market and an impact on early-stage VCs.
Capital structure isn't an eyeshade economic thing: It's about your ability to protect your workforce and your service levels.
You, as an entrepreneur, must make sure the postmoney valuation is a number you can obtain. You don't want too high of a valuation.
We actually tried to invest in Twitter in April 2007, right when it launched. At the time, the company was wary of having a classic, tier-one traditional venture firm involved.
Increasingly, the real estate developers can't get bank loans for their project financing in China. They're now going into the Hong Kong market to raise money in the bond market at very, very high rates, as high as 15, 20 percent.
When I'm raising money, this fundraising, I'm thinking about the next fundraising. I'm thinking how I'm set up for it.
As an investment banker, I'm in the cross-flow of information and the changes that are taking place in capital markets.
It takes 150 years to build an investment bank and only five minutes to convince you to sell me preferred stock in it at a 10% interest rate.
If some stock categories get too hot-and-pricey, mass supply is created via stock offerings to tap that cheap money - and, when overdone, drives it all down.
On the other hand, we raised $25 million by going public. It's that money that we used to build this company, to build the circulation, to build a high profile and to hire staff that made Salon what it is today.
While Wall Street firms typically underwrite offerings in teams, the lead underwriter, or manager, of the offering has primary responsibility for selling the offering and reaps much of the fees and profit.
But NESV has always had debt from the first day we purchased the Red Sox. We have some partners who look at Internal Rate of Return (IRR) and almost demand that we have debt as a consequence.
I won't say that 'shotgun' is the word I'd prefer to use, but we certainly do a lot of investments.
If you're running a business for the long term, the last thing you should be doing is borrowing money to buy back stock.
With tech startups, it's all loose-goosie. You raise money as you go, often from friends, family and investors.
The important source of finance is now commercial papers, bonds, and so on.
Before Blockchain Capital, I was cranking out startups like an incubator.
The JOBS Act will allow entrepreneurs to utilize 'crowdfunding,' which permits them to raise equity capital from a large pool of small investors.
I met with several public company CEOs to learn about their experiences of going public and listened to as many earnings calls as I possibly could.
If a thousand shares of stocks or bonds make nothing, you pay nothing. But on a thousand acres of land you pay enough to support half the community who own no land and pay no taxes.
