Frank Quattrone, Slapping Some Sense Into Startups

Loved the story at the end of this article on Quattrone:

Mr. Quattrone recently advised a start-up in the portfolio of the venture capital firm Accel that was attracting interest from two large public Internet companies, said Jim Breyer, an investor with Accel.

The company’s management came up with the sum it thought the company was worth. Mr. Quattrone bluntly told them it was worth less, Mr. Breyer said, and walked them through an analysis of the valuation, potential outcomes and what the public markets might look like in a year.

The company remained private. It is now more realistic about its valuation and what it needs to do to go public, Mr. Breyer said. Start-ups like this “need to depend on the boutique investment bankers perhaps more than ever,” he said.

via As Banks Retreat, Quattrone Fills Gap in Silicon Valley – NYTimes.com.

“Startups like this need bankers.”

What does that mean here?  It basically means that in an illiquid market, you need someone who sits in a brokerage role and see/hears a lot of transactional info to share that information with you.

Advertisements