Friday Feedback

Job growth is up, unemployment also is up and oil prices are down (for now). In other words, it's time for some Friday Feedback. Almost all of this week's email concerned my post-mortem on Tuesday's election. The response was far too overwhelming for comprehensive coverage in this space (perhaps an online blog w/ a comment section is in our future), so I'm just going to print a handful of reader sentiments in their entirety. First up is Sam, who was particularly interested in my contention that folks should split their presidential and legislative votes along party lines, so as to avoid a power concentration that removes checks and balances on fiscal discipline:

"I think it's a structural issue more than a voting issue. Individual voters make individual decisions about their state's Congressional candidates (the only candidates they can vote for) at the state level, winner-take-all. It is impossible to 'split the vote' strategically on a national level when we are presented with only one or two Congressional candidates on our individual ballots.

I see a similar structural challenge in the VC industry.I had the chance a couple weeks ago to hear Mark Heesen (NVCA) and Promod Haque (Norwest Venture Partners) reflect on the state of the VC industry.Both believe at a macro level that there is still too much new money flowing into the industry relative to the number of companies that can appropriately absorb those dollars. They worry that at a macro level the industry will underperform, and will end up in an extended period where the private equity class goes out of favor with investors.But what can be done to prevent that possible future?Very little that I can see. The root challenge is that VC investment 'votes' don't happen on the macro level. They happen with individual LPs making individual bets that the GPs they are funding will perform for them.Structurally, about the only thing you can do is add up the money, fund by fund, and there you have the national picture."

Charlie adds: "I think your view that fiscal responsibility as a loser is a bit myopic.At 31 years old, I have lived through 3 short decades of both Democrats and Republicans hoping for better schools, health care, jobs, etc.Each has his methods for achieving the greater goals. However, neither party has been able to implement their systems for change because of bipartisanship. With Republicans in a commanding position, they might finally be able to implement some of the programs they have promoted over the years.If money is spent on high return investments like improved education and healthcare, then it is responsible.We should make any ethical investment where our return is higher than our cost of capital.If funds are spent elsewhere, then you are correct.I for one am excited to see some programs and strategies implemented, not just debated again in 4 years. If they don't work, then everyone can vote for Hillary in 2008."

Other folks took me to task for suggested that Erskine Bowles' connections to Forstmann Little & Co. had any significant impact on his Senate loss. Brent writes: "As a North Carolinian, I can assure you that Erskine Bowles connection with the Forstmann Little litigation had zero impact on the election. Burr won the race on the coattails of Bush. If you look at all of the

recent Senatorial races in NC, the Republicans have always won in presidential years. The only times Democrats have won (Edwards and Sanford) have been during off years." My father, a North Carolina resident (and voter) for just over a month adds: "No mention in any of the ads I saw in NC in Bowles v. Burr about venture capital or the Connecticut business -- in fact I did not even know that Bowles had been part of Forstmann's group. Issues here were the 'values' stuff, breast cancer research (a real red herring) and tax and spend rhetoric. There also were lots of negative ads linking Bowles with Clinton."

Finally, three quick unrelated notes. First, VC and private equity firms in need on interns have until next Tuesday to let me know via email. We have 10 interested groups so far, but I'd really like to increase the number substantially. Second, a few of you have asked about linking to the PE Week Wire via personal websites/blogs. It can, indeed, be done. Just let me know that you're interested, and I'll show you how to do it. Finally, more info on Tom Fogarty's split with Three Arch Partners is available here. Not an amenable departure.

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