Labour-sponsored venture capital funds

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Re: Labour-sponsored venture capital funds

Postby al42 » 01 Apr 2011 15:30

It is my understanding that Growthworks has never suspended shareholders rights to redemptions as the folks at Vencrooks did.
But they made sure there was enough cash to pay their fees!!




SoninlawofGus wrote:
DanH wrote:Well, it gets worse - on principle not the amount of dollars. As Wellington Financial LP's Mark McQueen has kindly pointed out, VenGrowth is sponsoring its golf tournament. This occurs while the firm is winding up its business and the event will take place just weeks before wind-up (or wind-down or however that goes). And take a shot in the dark as to where that money comes from to pay for sponsorship.

Interesting, but did you notice that GrowthWorks is a sponsor too! :o
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Re: Labour-sponsored venture capital funds

Postby DanH » 01 Apr 2011 16:28

SoninlawofGus wrote:
DanH wrote:Well, it gets worse - on principle not the amount of dollars. As Wellington Financial LP's Mark McQueen has kindly pointed out, VenGrowth is sponsoring its golf tournament. This occurs while the firm is winding up its business and the event will take place just weeks before wind-up (or wind-down or however that goes). And take a shot in the dark as to where that money comes from to pay for sponsorship.

Interesting, but did you notice that GrowthWorks is a sponsor too! :o


I did notice GrowthWorks is a sponsor but at least they have an active business that they can justify marketing. In the case of VG, the business will soon be done (unless they hit another stalemate). And marketing a business that won't continue much past the event being sponsored seems odd to me.

al42 wrote:It is my understanding that Growthworks has never suspended shareholders rights to redemptions as the folks at Vencrooks did.
But they made sure there was enough cash to pay their fees!!


That is also my understanding. They have been something of a LSIF consolidator, having acquired Working Ventures, Canadian Medical Discoveries Fund, Capital Alliance Ventures (and its sister fund), First Ontario and ENSIS Growth off the top of my head. As a result, performance fee threholds have been reset - not unusual - which has generated healthy performance fees for GW. So, they're not a disinterested party.

And I wouldn't characterize VG's capping as criminal. It's reality that redemptions + no inflows + dwindling cash reserves = a requirement to freeze redemptions. But you can argue, as I did 2+ years ago in a private meeting with VG, that they should have sold the venture portfolio to another fund for cash, which then could have been paid to shareholders - avoiding all of this mess. This is the path pursued by Covington I fund in 2006-07.
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Re: Labour-sponsored venture capital funds

Postby RomaneeConti » 02 Apr 2011 13:06

So far I have invested four times with LSVCCs. The first was Working Ventures. The second, Vengrowth II. The third, Covington Fund II. The fourth, Vengrowth Life Sciences. That last one is the final holding and I am so ready to unload this turkey.

Overall, my net financial experience was negative. I would not recommend LSVCCs to anyone. Don't let the tax tail wag the dog.

The creepy thing was the angry letter I got from Vengrowth trashing the Growthworks' offer for voting control of my units. It felt like it was written by a cheating spouse, already caught in adultery, begging me not to see other people.
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Re: Labour-sponsored venture capital funds

Postby parvus » 02 Apr 2011 21:21

DanH wrote:Well, it gets worse - on principle not the amount of dollars. As Wellington Financial LP's Mark McQueen has kindly pointed out, VenGrowth is sponsoring its golf tournament. This occurs while the firm is winding up its business and the event will take place just weeks before wind-up (or wind-down or however that goes). And take a shot in the dark as to where that money comes from to pay for sponsorship.

Presumably that's for the non-retail biz, though flows from retail would certainly have played a part in allowing VG and GW to play in the big leagues -- well, the Canadian ones, at least.
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Re: Labour-sponsored venture capital funds

Postby DanH » 03 Apr 2011 12:16

parvus wrote:
DanH wrote:Well, it gets worse - on principle not the amount of dollars. As Wellington Financial LP's Mark McQueen has kindly pointed out, VenGrowth is sponsoring its golf tournament. This occurs while the firm is winding up its business and the event will take place just weeks before wind-up (or wind-down or however that goes). And take a shot in the dark as to where that money comes from to pay for sponsorship.

Presumably that's for the non-retail biz, though flows from retail would certainly have played a part in allowing VG and GW to play in the big leagues -- well, the Canadian ones, at least.


That's what I would have thought several months ago until it was pretty much confirmed then (and recently) that VG doesn't have an institutional business. The LPs they have are almost completely liquidated. So the marketing makes no sense.
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Re: Labour-sponsored venture capital funds

Postby parvus » 03 Apr 2011 19:01

Well that's disconcerting, to say the least. (Various imprecations come to mind.) That's because VG always claimed that, because of its size, it had access to deal flow.

GW is also a sponsor. Does it have an institutional business?
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Re: Labour-sponsored venture capital funds

Postby DanH » 03 Apr 2011 21:01

parvus wrote:Well that's disconcerting, to say the least. (Various imprecations come to mind.) That's because VG always claimed that, because of its size, it had access to deal flow.


I think at one time that was the case. And I've seen references to VenGrowth V LP and VenGrowth V Sidecar LP but I've almost never seen any substantive information on those pools. VG was always focused on smaller companies (i.e. later stage as far as LSIFs were concerned but relatively early stage companies relative to the broad class of VC). And earlier stage venture capital hasn't done well in Canada over the past twenty years. What have performed well in Canada are larger deals. So contrary to popular belief - and contrary to what many LSIFs told us - earlier stage hasn't produced higher returns. In fact, it's larger deals in more mature companies that have done well. Mezzanine has also done well in Canada.

A few yearsa go, the CVCA commissioned a report on VC performance drivers in case you didn't see it.

As for VenGrowth, makes me wonder exactly what they were doing from 1982 (VG's inception) through 1994-95 when the VenGrowth LSIF first launched. Maybe they were institutional at one time.

parvus wrote:GW is also a sponsor. Does it have an institutional business?


Don't think so. GW still has a couple of pools - GW Access Fund and the now closed GW Pacific Venture Fund - but I don't get the impression that there is much of an institutional business. I think you could scan the list of venture LPs in use by our big pension funds - i.e. CPPIB, OMERS, OTTP, etc. - to get a sense of who the institutional VC players are in Canada.
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Re: Labour-sponsored venture capital funds

Postby DanH » 03 Apr 2011 21:10

When you see the players in Canadian institutional VC, you can understand what the GrowthWorks and VenGrowths of the world are up against. Two examples include ONCAP (launched by Onex) and Torquest are but two small examples.
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Re: Labour-sponsored venture capital funds

Postby parvus » 05 Apr 2011 01:15

Interestingly, from the golf tournament link, looks like CPPIB hasn't fared all that well.
The average IRR of the 21 funds?: 1.46%. The median IRR was 3.4%. And this sample represents 17% of the entire pool of CPPIB private equity fund investments, which seems rather meaningful. More importantly, the biggest fund commitments weren’t churning out the better returns, so even if you thought 1.46% was a decent return, the smaller funds are skewing that average figure higher…and that’s before the losses we’ve experienced on the Canadian dollar.

As at September 30, 2010, I calculated that we had funded ~$18.8 billion of our $29.3 billion of private equity commitments (using a constant currency). That leaves over $10 billion of our commitments currently unfunded.

According to data from the States of Oregon and Washington (assuming the sample is representative), we are barely treading water on an Internal Rate of Return basis — 11 years in. I think it’s time the CPPIB came clean and disclosed as much information as these far smaller funds, including individual and program IRR, as well as the various values in our home currency, just as Oregon reports its Euro-denominated investment flows in US dollars. And then calculates the return on what they actually made, not just the simple multiple on capital one would have made had you invested in the home currency of the fund.

With Canadian dollar liabilities, the decision to not hedge a $29 billion PE program must surely be the largest naked currency bet by any local investor in Canadian history.

Wouldn’t you like to know where we’re at, return-wise, before we put out another $10 billion? As one industry observer remarked recently: “this is the Caisse de Depot all over again”.

Read more: http://www.wellingtonfund.com/blog/2011 ... z1IcezZ1DV

Ouch! Québec, let alone the Caisse, is not known for a measured risk appetite ... from Quebecor to PE to ABCP.
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Re: Labour-sponsored venture capital funds

Postby RomaneeConti » 07 Apr 2011 10:44

Today I signed the Growthworks Support Agreement, due tomorrow. I want Growthworks to apply some serious pressure on the Vengrowth Board that tried to sneak through self-serving acts for themselves against shareholders interests.

Also I know of one of the three proposed new board members and respect his reputation.


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Re: Labour-sponsored venture capital funds

Postby al42 » 07 Apr 2011 11:32

Yep, I signed last week. Hopefully Vengrowth's gravy train at the expense of shareholders will come to an end soon.
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Re: Labour-sponsored venture capital funds

Postby bill2009 » 07 Apr 2011 13:28

RomaneeConti wrote:Today I signed the Growthworks Support Agreement, due tomorrow. I want Growthworks to apply some serious pressure on the Vengrowth Board that tried to sneak through self-serving acts for themselves against shareholders interests.

Also I know of one of the three proposed new board members and respect his reputation.


RomaneeConti


we won't sign because of the overly broad commitment they want. It gives them too much ability to interfere with a sale to another proponent.
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Re: Labour-sponsored venture capital funds

Postby RomaneeConti » 08 Apr 2011 06:11

bill2009 wrote:
RomaneeConti wrote:Today I signed the Growthworks Support Agreement, due tomorrow. I want Growthworks to apply some serious pressure on the Vengrowth Board that tried to sneak through self-serving acts for themselves against shareholders interests.

Also I know of one of the three proposed new board members and respect his reputation.


RomaneeConti


we won't sign because of the overly broad commitment they want. It gives them too much ability to interfere with a sale to another proponent.


I'll give you that. And in the absence of a strong unified vote we the shareholders won't be able to influence the existing Board from serving their own interests ahead of ours. On hand, the Growthworks offer is better than the one the Board tried to sneak through last time. Vengrowth Board does not offer anything but an empty promise that "the best offer is yet to come"...probably best for THEM not US.
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Re: Labour-sponsored venture capital funds

Postby al42 » 10 Apr 2011 13:22

Looks like the Growthworks deadline is extended to April 21st.

GrowthWorks announced yesterday that it has extended its deadline for submitting support agreements that would grant it an irrevocable power of attorney. In an advisor call on April 6, 2011, David Levi advised that GrowthWorks has not received the number of support agreements necessary to requisition a shareholder meeting for any of the VenGrowth Funds. This resulted in GrowthWorks having to extend its artificial deadline from April 8 to April 21, 2011.

http://www.marketwire.com/press-release ... 424929.htm
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Re: Labour-sponsored venture capital funds

Postby RomaneeConti » 20 Apr 2011 00:27

al42 wrote:Looks like the Growthworks deadline is extended to April 21st.

GrowthWorks announced yesterday that it has extended its deadline for submitting support agreements that would grant it an irrevocable power of attorney. In an advisor call on April 6, 2011, David Levi advised that GrowthWorks has not received the number of support agreements necessary to requisition a shareholder meeting for any of the VenGrowth Funds. This resulted in GrowthWorks having to extend its artificial deadline from April 8 to April 21, 2011.

http://www.marketwire.com/press-release ... 424929.htm


I sincerely hope the required number of Support Agreements get tendered.

The NAV of the VenGrowth Advanced Life Sciences Fund has declined a staggering -62% and falling. I predict the VenGrowth Board will do anything to generate cash to keep the fees flowing from the Fund into their own pockets. Desperate measures may include selling off investments at firesale prices, raising capital from issuing more units, or do a rights issue.
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Re: Labour-sponsored venture capital funds

Postby bill2009 » 20 Apr 2011 08:02

RomaneeConti wrote:
al42 wrote:Looks like the Growthworks deadline is extended to April 21st.


I sincerely hope the required number of Support Agreements get tendered.

The NAV of the VenGrowth Advanced Life Sciences Fund has declined a staggering -62% and falling. I predict the VenGrowth Board will do anything to generate cash to keep the fees flowing from the Fund into their own pockets. Desperate measures may include selling off investments at firesale prices, raising capital from issuing more units, or do a rights issue.


I wonder why this is so hard. By now I'd be delighted to have an honest liquidator step in, unwind the contracts and assets, and pay me whatever pennies on the dollar could be salvaged.

Speaking of which, does anyone want to sell me their units for ten cents on the dollar or buy mine for $0.30? Is that even possible?
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Re: Labour-sponsored venture capital funds

Postby RomaneeConti » 21 Apr 2011 06:56

bill2009 wrote:
RomaneeConti wrote:
al42 wrote:Looks like the Growthworks deadline is extended to April 21st.


I sincerely hope the required number of Support Agreements get tendered.

The NAV of the VenGrowth Advanced Life Sciences Fund has declined a staggering -62% and falling. I predict the VenGrowth Board will do anything to generate cash to keep the fees flowing from the Fund into their own pockets. Desperate measures may include selling off investments at firesale prices, raising capital from issuing more units, or do a rights issue.


I wonder why this is so hard. By now I'd be delighted to have an honest liquidator step in, unwind the contracts and assets, and pay me whatever pennies on the dollar could be salvaged.

Speaking of which, does anyone want to sell me their units for ten cents on the dollar or buy mine for $0.30? Is that even possible?


If anyone takes you up on this, you would have discovered the only fountain of...liquidity.
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Re: Labour-sponsored venture capital funds

Postby al42 » 22 Apr 2011 11:34

I wonder how much this move will cost shareholders?

Toronto, Ontario - April 18, 2011 - The Board of Directors of the VenGrowth Funds today announced that former Bank of Canada Governor and corporate director John Crow has been appointed as Chair of the Board of Directors and Co-Chair of the Special Committee of the VenGrowth Funds.
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Re: Labour-sponsored venture capital funds

Postby RomaneeConti » 23 Apr 2011 03:44

al42 wrote:I wonder how much this move will cost shareholders?

Toronto, Ontario - April 18, 2011 - The Board of Directors of the VenGrowth Funds today announced that former Bank of Canada Governor and corporate director John Crow has been appointed as Chair of the Board of Directors and Co-Chair of the Special Committee of the VenGrowth Funds.

Can we pay him in shares?
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Re: Labour-sponsored venture capital funds

Postby al42 » 23 Apr 2011 06:49

I don't think he is that stupid. Shares are almost worthless and every day that passes they are worth even less!!!
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Re: Labour-sponsored venture capital funds

Postby bill2009 » 23 Apr 2011 15:20

al42 wrote:I don't think he is that stupid. Shares are almost worthless and every day that passes they are worth even less!!!


ok, I'll revise my bid downward to $0.09 on the dollar, ask is still $0.30 - anyone in?
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Re: Labour-sponsored venture capital funds

Postby RomaneeConti » 08 May 2011 06:43

I just read the Growthworks.com website and they have received 10,000 units of support from Vengrowth unitowners. This is greater than the support for the Covington deal. Growthworks' next step is to get the Vengrowth Board to move towards a unitholder-advantaged solution. Liquidity still is on the horizon!

As an aside, why don't all Labour-sponsored funds follow an ETF model to boost liquidity without sacrificing internal cash?
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Re: Labour-sponsored venture capital funds

Postby parvus » 09 May 2011 00:30

RomaneeConti wrote:
al42 wrote:I wonder how much this move will cost shareholders?

Toronto, Ontario - April 18, 2011 - The Board of Directors of the VenGrowth Funds today announced that former Bank of Canada Governor and corporate director John Crow has been appointed as Chair of the Board of Directors and Co-Chair of the Special Committee of the VenGrowth Funds.

Can we pay him in shares?

Well that's enough to destroy a party rally. Take the punch bowl away and beat those leveraged folks into the ground -- lest they cause inflation. :evil:
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Re: Labour-sponsored venture capital funds

Postby bill2009 » 09 May 2011 07:51

al42 wrote:I wonder how much this move will cost shareholders?

Toronto, Ontario - April 18, 2011 - The Board of Directors of the VenGrowth Funds today announced that former Bank of Canada Governor and corporate director John Crow has been appointed as Chair of the Board of Directors and Co-Chair of the Special Committee of the VenGrowth Funds.



so, i wonder if this guy has any shame or integrity? Maybe some kind of highly public "Dear John" letter asking him to lead a charge to liquidate the fund and walk away. Maybe some kind of social media effort would get some interest from the media.

BTW in my ongoing effort to establish a secondary market I'm revising my bid to eleven cents on the dollar and my ask to twenty-nine.
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Re: Labour-sponsored venture capital funds

Postby al42 » 28 May 2011 07:06

Only a few days left in May and still no news. I guess the longer it takes the more they can rape investors with their monthly fees.

The Special Committee continues to work towards a timeline that will see a transaction selected
for presentation to shareholders in May of this year.
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