The debate over the taxation of carried interest has been bubbling for years in Congress, to little, if any, effect. But the release of Mitt Romney's tax returns during the Republican presidential primaries—showing that much of the candidate's income has come from this source—has taken the debate to a whole new level.
In the private-equity business, carried interest is the share of the profit from the sale of a company that goes to the managers of the firm that bought and then sold the company.
At first blush, policies that help pay the costs of extended nursing care make perfect sense. Bills add up quickly when you can no longer take care of yourself and your needs exceed what family and friends can provide. Nursing homes, assisted-living centers and home care all are expensive, and there is no telling for how long you may need the service. Buying a long-term-care insurance policy can be a way of making sure your future physical needs will be met. Policies designed in partnership with state governments also give individuals and their families a way to protect savings in the event of burdensome care costs that stretch on for years.
What's the best way to teach children the value of money?
That's a question that has troubled parents for years. Most use a regular allowance as the vehicle for imparting lessons about how to manage, spend and save money wisely. But there's a split among parents—and family-finance experts—over the question: Should a child's allowance be tied to doing chores?
We turned to a pair of experts to debate the question in an email discussion.
In today’s tight economic climate, angel financing continues to fill the gap in start-up capital between family, friends, and the business owner. There are more than 300,000 angels active in the country, funding over 60,000 companies and investing about $22 billion a year. Angel investors—private high net worth individuals—continue to provide the lion’s share of all seed funding compared to venture capitalists. In fact, there was a significant increase in angel investment activity in 2011, including a rise in total investment dollars, number of investments and deal size, reports the Center for Venture Research.
At first glance, Apple's(AAPL) stock price, at about $570 today, looks expensive. This is true, in part.
It's actually very expensive when compared with most others on the Nasdaq and NYSE. While it may be in the exchange's best interest to have lower stock prices to create more volume, the high price of Apple may be the reason why it's not too late to jump on the bus.
I don't know about you, but I can't function without having a lot on my plate. I'm one of those 'work-well-under-pressure' type of entrepreneur.
One thing that I can't stand is repetitive tasks; tasks that could and should be automated. I always look for ways to improve my productivity – if I can shave five minutes off something I do every day that adds up to a huge ROI.
Talking about the monetary system these days requires using unimaginably large numbers, such as $1 trillion, the total U.S. currency in circulation, and $10.9 trillion, the U.S. government debt held by the public.
The growing U.S. debt — $15.6 trillion, if you throw in Social Security and Medicare — is one reason people fear inflation and think that the monetary system is out of control. "Never in history have we run debts and deficits to this magnitude," says Lance Roberts, chief economist at StreetTalk Advisors. "We've never been here before."
Many entrepreneurs believe all money is created equal. As long as somebody recognizes their million dollar idea and writes them a check, the source really doesn't matter. Most angel investors are pure, but there are some exceptions to watch out for:
1. Shark angels. This is the ultimate bad guy whose sole intention of getting involved in early-stage investing is to take advantage of what they believe is the entrepreneur's lack of financial and deal-making experience. If the term sheet process turns to pure torture, it may be time to respectfully bow out.
Acqui-hires, if you aren’t aware, are the acquisitions of startups by large companies (usually Facebook, Google and Twitter) that are made primarily for the teams, not the products.
Every few weeks there’s a press report of an acquisition of some startup or another along with a rumored acquisition price that’s quite low, sometimes less than the amount of venture capital invested in the company. Those deals usually, but not always, have equity grants to key founders and employees that are often a multiple of the acquision price. Example – a recent deal had a rumored acquisition price of around $2 million plus stock grants to a few key employees of $15 million.
Noam calls this the Rich vs King tradeoff, and it's a remarkable finding. On average, the founders who keep the most control over their company make the least amount of money. As with any data-based result, this raises more questions than it answers. For example, most entrepreneurs know that the most successful entrepreneurs - from Bill Gates to Jeff Bezos - kept tight control over their companies. We therefore seek to emulate their approach, to our own detriment, because we're often emulating the wrong things. Having the real facts helps us ask better questions. We should be asking not "how much control did Bill Gates seek?" but rather "what else is exceptional about his decisions that allowed him to escape the more common fate?" If you're interested in answering questions like this, read on.
Why should you care if the next company you buy is on Facebook? The traditional argument that “if you're not on Facebook, your competitors surely are” is quite true in this case. Even traditional organizations like Deutsche Bank are jumping on the bandwagon. And is it truly a bandwagon? A recent forecast by Gartner notes that 80% of the top 100 companies in the Fortune 500 have a Facebook presence. With Facebook touting 800 million users and 500 million of those active each day—and making improvements every few months—it becomes more business-focused every day.
When President Obama asked Steve Jobs what it would take to make iPhones in the United States, the late Apple co-founder supposedly quipped: "Those jobs aren't coming back."
When I read this, it reminded me of something my dad presented to us as kids a long time ago - The Beer Game.
My dad was really into management theory and would often use my friends and I as experimental guinea pigs. I distinctly remember sitting down with three of my friends before a large sheet of butcher paper.
The wealth of the American nation depends on the productive power of our major business corporations. In 2008 there were 981 companies in the United States with 10,000 or more employees. Although they were less than two percent of all U.S. firms, they employed 27 percent of the labor force and accounted for 31 percent of all payrolls. Literally millions of smaller businesses depend, directly or indirectly, on the productivity of these big businesses and the disposable incomes of their employees.
5 days ago saw the 150th year anniversary of an event so historic that a very select few even noticed: the birth of US fiat. Bloomberg was one of the few who commemorated the birth of modern US currency: "On April 2, 1862, the first greenback left the U.S. Treasury, marking the start of a new era in the American monetary system.... The greenbacks were originally intended to be a temporary emergency-financing measure. Almost bankrupt, the Treasury needed money to pay suppliers and troops. The plan was to print a limited supply of United States notes to meet the crisis and then have people convert the currency into Treasury bonds. But United States notes grew in popularity and continued to circulate."
1. Equity Averse: Indians are hugely equity averse. Only 1.2% of the Indian household financial savings is directly invested in shares (2010-2011). This amounts to a laughable figure of 2.5 Billion dollars for the entire Indian household population .
2. Low Participation: In a country of 1.2 billion, there are only 20 Million demat accounts (ed: a dematerialised account for individual Indian citizens to trade in listed stocks or debentures in electronic form) and 248 portfolio managers.
Now more than ever, investors are focusing squarely on one thing: cash. They want to know how much cash companies have in their corporate coffers, and what those companies intend to do with it. They want more of it back in their pockets through dividends and share buybacks. And they want to make sure that the stocks they invest in are backed by cash-generating businesses that will keep the money rolling in for years to come.
It could be easier for you to launch your next great idea. Now, thanks to a provision of the recently enacted JOBS Act authorizing "crowdfunding," instead of trying to convince big banks and Wall Street to back your business, you will soon be able to turn to Main Street. The provision, dubbed the CROWDFUND Act, brings securities laws and regulations into the Internet age. It’s designed to boost job growth by making it easier for new small businesses and entrepreneurs to raise capital from small dollar investors.
Code-naming their effort "Project ASAP," South Carolina officials offered up more than $33 million in incentives, including free land, a property-tax cut and payroll-tax credits. They even agreed to loosen the area's Bible Belt moral code, repealing a decades-old Lexington County "blue law" so Amazon's warehouse could stay open Sunday mornings.
As they discovered, that wasn't enough.
I'm no fan of business brokers. I'm not saying they're all crooks. Some really do provide excellent service, especially those who focus on particular industries. But most business brokers are generalists. In other words, they claim to be so knowledgeable about business in general that they are able to do a good job advising any buyer or seller on any type of transaction in any industry. That's baloney on the face of it. In my experience, moreover, enough of these generalists are ethically challenged, so to speak, that it's a good idea to be very cautious when dealing with them.
Woodland Hills, Calif. (March 27, 2012) – GA Keen Realty Advisors, LLC, a subsidiary of Great American Group LLC (OTCBB: GAMR), a leading provider of asset disposition, valuation, real estate and appraisal services, has been retained by Hudson's Bay Company to assist in the subleasing and assignment of 36 Fields Department Store locations throughout Canada.
Founded in 1950, Fields is a chain of Canadian discount stores owned by the Hudson's Bay Company serving rural and urban Canadian communities. In December 2011, Hudson’s Bay announced that Fields will cease operation beginning in February 2012 in Ontario where 26 stores will close. ...
Venture capitalists aren't like your discount broker; you can't just call them up plop down a few thousand bucks and invest in their funds. First of all, they'll likely want more than a few thousand, and more importantly, you need to be considered an accredited investor.
In its eternal struggle to protect its citizens from themselves, the government declares that you need a net worth of $1 million or a $200,000 annual income to be worthy of risking your capital in start-ups.
Success is as common as an eclipse, the result of externalities lining up at the right time. However, entrepreneurs rarely launch their business as a result of market (macro) conditions, but rather, personal (micro) timing and circumstances that have little to do with the broader landscape, even if the macro backdrop is at odds with the micro circumstances.
An example of this is launching a hiring startup in a recession when companies are laying people off by the boatloads. No amount of vision, ambition, determination, execution and luck will offset your bad timing.
When Alcoa (AA) introduced Paul O'Neill as its Chief Executive Officer in 1987, investors thought the new boss was pulling a prank on them. Standing on a stage, O’Neill did not speak about increasing market share or earnings forecasts. Instead, he pointed out the nearest emergency exits. “In the unlikely event of a fire or other emergency,” he said, “you should calmly walk out, go down the stairs to the lobby, and leave the building.” O'Neill's sole focus that day was on how to make a habit of worker safety.
After a fit, a start and a dose of whiplash, legislation permitting startups to raise money through online crowdfunding is moving through Congress. The House has now passed two bills, including the Jobs Act this week, that would overturn a 70-year-old ban on small companies asking the general public for seed money.
A few days ago, the Senate began to catch up, releasing its own plan. The result is a bipartisan bill called the Crowdfund Act. If it passes, it could transform how companies get off the ground. One of these versions is likely to pass, but don't expect selling stock online to be as easy as registering your indie film project on Kickstarter.