David

Here is David, who I have been running around with this week. We are at the Paris airport heading for Copenhagen. David my age and investing venture capital for his career. Before HBS he was with start-up UroMed that went public; post business school he ran Forge Ventures which was a joint venture with Mayfield, Enterprise and Johnson & Johnson to buy medical companies. He then became Partner at Hamilton BioVentures, where he produced top-quartile results for the fund he invested and now Correlation Ventures.

A problem with any partnership that an individual might be very good while his colleagues suck (private equity funds usually set up as partnerships - a General Partner or "GP" manages the money while limited partners ("LPs") contribute the capital; they spilt the updside 20%:80%+some management fee to the manager usually around 2% yearly on the dough over the fund life). This phenomena pronounced in venture as 'exits' few, even during good times, and often skewed to one principal in the firm. A bad fund absorbs the winners to repay the LPs and individual success might net .. nothing. Imagine, for instance, you are the guy who invests $50MM of a $200MM fund; your decisions return 4X while the rest of the fund nil. Despite producing $150MM of capital gains you get .. zilch. This not a happy scenario yet not unusual given the industry's awful performance since '00. During this time, too much money concentrated around a few large firms unable to make small bets where the real money is. Nobody gets rich putting >$30MM into a financing which needs a >$500MM exit to get some multiple. Not too many of those going around (yet <$200MM m&a's happening all the time in the United States). Pity the few who are good.

Madeleine on the trumpet as I write - four times a week for ten minutes practice (Sonnet and I sign her recitals). She is harnessing the power and while it might not be exactly music it is something .. good.

Me: "You are really getting into music I see."

Eitan: "Yes, like mom said - cheesy pop music."