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7 months ago

in Getting A Piece Of My Action on A VC
Would converting a Venture Fund into a ETF help?...in the same note is it possible to run a hedge fund as a ETF?, this way even small investors can participate and no issues with lockdown period or redemption!

BTB, I am not a expert and dont understand the regulations, so this maybe a stupid idea!

9 months ago

in Rules For The Splurge on A VC
I agree the govt should get stock from the companies that sell bad loans...But i have doubts about the "salary cut" plan - if the payout is just 1 Million whats the incentive for any CEO to remain with the company?.

Maybe "Salary Cut" would work with a increase in stock payout so that the incentive of the CEO is aligned with that of the shareholders.
2 replies
jeremystein's picture
jeremystein here is a great article on ML compensation: http://tinyurl.com/4dl49u
fredwilson's picture
fredwilson That's the right way to think about it.

Cash comp is never as good as stock-based comp in my opinion

You need to pay people so they can afford to live, but beyond that comp
should really be weighted toward equity to create alignment with
shareholders

9 months ago

in What's Ailing Google's Stock Price? on A VC
Fred, here do you think the immediate growth will come from??. (Apart from future potentials like Android or Video monetization which may take years!)

1, Not from gaining search market share - It has only 10-20 points to gain in the US market, most oversees market is tapped out (90% share in most markets). Also the total search market pie is not growing fast.

2, Not much left to squeeze from eCPM optimization - Remember most of the growth in the last 2 years came from this sort of revenue optimization (via adword quality score) than organic traffic growth. IMO, there is not much left to extract in this area

The only area left for immediate growth is display ads - but unlike adwords this is a low margin business (like adsense) so it has little effect in the net cash flow.
1 reply
fredwilson's picture
fredwilson I am thinking about areas like local/maps and google apps

10 months ago

in Gaming versus gambling ARPUs on Futuristic Play by @Andrew_Chen
Poker is good but the ARPU's of house games like blackjack are much more. But Poker has a wide appeal so i guess its makes up in volume.
1 reply
Andrew Chen's picture
Andrew Chen gopi, do you have any sense for what the ARPUs for blackjack are? Any idea of dollar amount?

10 months ago

in Prosper.com and peer-to-peer lending in the economic downturn on Futuristic Play by @Andrew_Chen
>> Borrowers now have cheaper sources of credit

I think the fact is the opposite - the subprime saga tightened the creteria for lending ...But i am not sure why borrowers are not flocking to the site.
1 reply
Andrew Chen's picture
Andrew Chen ah, good point. I think it just depends on where you are in the credit market? The fed rates are lower, but you're right that the banks are more stingy with their loans. Wonder if one cancels out the other.

10 months ago

in Change I'd Like To See on A VC
>> I'd like to see how the wsj calculates that

Basically uncapping the social security tax contributes to majority of the tax increase. Anyway here is the article from WSJ - http://online.wsj.com/public/article_print/SB12...

10 months ago

in Change I'd Like To See on A VC
>> if rates get north of 50%.

With Obama's income tax hike and plan to eliminate the cap for social security tax , the combined marginal income tax rate comes to more than 62% according to Wall street journal. How do you think this will be a incentive to a hard working small business owner??
1 reply
fredwilson's picture
fredwilson I'd like to see how the wsj calculates that

10 months ago

in Change I'd Like To See on A VC
The reason your tax rate is less than your brother's or bufett's tax rate is less than his secretary is because of the unfair large difference between income and capital gain tax rates. The solution to this is not to rasie the tax as Obama suggest but to make both capgain and income tax the same flat rate and making it progressive by deducting the first $75k.

10 months ago

in Super Rewards and the leadgen side of Facebook virtual currency - can it last? on Futuristic Play by @Andrew_Chen
jayweintraub.com is good place to learn about the incentive marketing space.
1 reply
Andrew Chen's picture
Andrew Chen yep, Jay is awesome (but needs to blog more!)

10 months ago

in Super Rewards and the leadgen side of Facebook virtual currency - can it last? on Futuristic Play by @Andrew_Chen
Gratis started this space but in the last 3-4 years this space has grown much much bigger. At one point more than half of ValueClick's revenue came from incentivized leads. Obviously the quaility is crap but the leads are prized accordingly.

10 months ago

in Change I'd Like To See on A VC
Fred, the current US tax system affect upper middle class professionals like doctors and small business people with earned income and thus pay income tax (35%) than the billionaires and super rich people like you who makes more in capital gains (15%) than ordinary income. This situation will be further worsened by Obama's coming income tax and SS tax hikes (marginal rate's will be more than 60% according to WSJ)

In my opinion we must have a Same flat tax rate (like 20%) for individual income tax, corporate income tax and long term capital gain. We can make it progressive by deducting the first 75k and indexing it for inflation so that most families pay no tax.
1 reply
fredwilson's picture
fredwilson i am for fixing any inequities that exist too. i just think we ought to take the rates back to where clinton had them

10 months ago

in Change I'd Like To See on A VC
I dont think Obama is going to raise taxes to reduce deficit but its to bring wealth equality. He is a socialist and he will be more concerned with slicing the pie fairly than in growing it.
1 reply
Boris M. Silver's picture
Boris M. Silver "He is a socialist and he will be more concerned with slicing the pie fairly than in growing it."

I'd suggest you read this piece, it's a great look at his economics:

http://www.nytimes.com/2008/08/24/magazine/24Ob...

1 year ago

in iGoogle start pages: Vertical integration of the first, second, and Nth click on Futuristic Play by @Andrew_Chen

I was amazed when the so called web 2.0 pundits questioned the moneymaking potential of StartPage services (when they first appeared)...


I mean, the business potential is soo obvious even for some web outsider, dont you think??.

1 year ago

in Reader question: Does Facebook + performance ad network = awesome? on Futuristic Play by @Andrew_Chen

>> the problem with local is mainly that the CPL to actually acquire a plumber in Tacoma, WA is often more than the revenue you'd ever get from it.


Lead gen companies like ServiceMagic would not agree with that point!


1 year ago

in Quantitative approaches to consumer internet on Futuristic Play by @Andrew_Chen

>> smartest things to do is to keep a low-profile, gather millions of customers, and go from there


absolutely true, if you look back you will see usually the most hyped companies in techcrunch (like flock or edgeio) never made it big. Compare those companies with the ones no one cared in the begining (ex: youtube).

1 year ago

in Not everything can be free! on Futuristic Play by @Andrew_Chen

>> you need a bunch of external money like venture capital


Isn’t that what happened in the late 90's, VC’s were the only outside money entering the internet ecosystem and when it stopped the bubble bursted!

1 year ago

in Take the driver’s seat on web stats, don’t be a passive observer on Futuristic Play by @Andrew_Chen

Andrew, Is there a particluar analytics solution you recommend or there is nothing in the market & inhouse development is the only way to go??

1 year ago

in Two years ahead of the New York Times on Scobleizer
Burtonator, i am sick of your cut/copy comments (in many blogs). You really dont know anything about this thing called "network effect", dont you??

1 year ago

in CNET to buy TechCrunch — why not? on Mathew's comments
1.5 million uniques/month website is worth 100 million dollars?...you guys have to be kidding me!. Even some myspace resource websites run by teens (ex:whateverlife.com) have more traffic than that!

2 years ago

in Need a solid Web 2.0 business idea? Go upstream from a proven model on Futuristic Play by @Andrew_Chen

The best way for a high volume sticky website to monetize upstream traffic is with a Google search box...A well placed branded search box can make atleast 20% of your traffic exit thro it. Doing the math, with a typical $50 Search CPM and assuming a 20% search box usage that comes to $10 CPM in incremental revenue.


I guess most of myspace or even hi5 or Tagged.com's revenue is thro the search box rather than with the display ads in their own sites!

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