Hawaii Venture Capital Association (HVCA) Luncheon
Thursday, March 27, 2008
The Plaza Club 20th Floor
11:30am-1:30pm
$29 for HVCA, Hawaii Angels, DualUse Council, Bytemarks and HSTC Members, $39 non-members, $25 students.
Aloha attire is required by the Plaza Club.
Register at www.hvca.org (Direct link - http://www.hvca.org/display.aspx?base=Luncheons&ID=68
Will Turmoil in the Public Markets Hit the Venture Capital World?
New Challenges Face Entrepreneurs and Investors
Elliot Parks, CEO of Hawaii Biotech and former venture capitalist with Ventana Capital, a 24 year old venture capital firm with global reach, will address members and guests of the Hawaii Venture Capital Association at its March 27, 2008 monthly luncheon meeting at the Plaza Club. With every passing day, the turmoil in the public markets caused by the mortgage crisis and instability of the US dollar touches us in many ways. Venture capital is traditionally insulated from the twists and turns in the stock market, however, today that insulation may be wearing thin. Elliott Parks, whose career spans many years in the private equity market will talk about the about the current cash flow situation within venture capital firms and address some of the challenges for venture capital portfolio companies. He will also speculate the impact of the current financial climate on the flow of capital into venture firms planning to raise another fund in 2008.
One situation, according to a MarketWatch report by Scott Austin, is the failure of “auction-rate securities” which are debt instruments that corporations and wealthy individuals invest. This situation may severely impact venture investing and venture capital portfolio companies. These securities, which comprise a $330 billion market, bear floating interest rates that reset in auctions every week or so. An estimated $60 billion of such debt failed to generate enough demand from bidders at a recent auction and the interest rates soared. This unprecedented occurrence prevented many holders of auction-rate securities from getting their cash back, according to the report. In addition to tying up cash available to venture capital firms, many start-ups who have parked their cash in these instruments may face lengthy delays in accessing their cash that could hinder operations.
“Investors and entrepreneurs need to be sensitive to big picture issues such as these that could severely impact operations and future investment,” said Bill Spencer, HVCA President. “We are lucky to have experienced observers like Elliot Parks in our community who can educate us about these challenges.”
The Hawaii Venture Capital Association, founded in 1988, is one of Hawaii’s oldest private non-profit economic development organizations devoted to entrepreneurship and capital formation.