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Is Private Equity Dead? Well At Least 600 HBSers Think Not.

As part of the team responsible for marketing the annual Venture Capital & Principal Investment Conference, I grew worried about the conference’s attendance just seven days prior to the event. Registrations were down more than 50% compared to last year, it begged the questions: Is anyone really interested in private equity anymore? Is venture capital dead? Is the fact that the conference is the same day as the Superbowl a major deterrent? An email was sent out making an important clarification concerning the conference: “VCPI Conference 10am-6pm; Superbowl XXXVI 6pm-midnight. Don’t miss either event!!!”; registrations quickly ballooned to over 600 (a total equivalent to last year’s).

Despite industry market conditions described by some as “gloom and doom”, the conference was a tremendous success. It featured an all-star line up of venture capital veterans and LBO pros, providing insight, advice and contacts for over 600 students of HBS and other schools. It also addressed many of the primary concerns facing the industry, and offered solutions through a variety of lively and thoughtful panel discussions.
With three distinct tracks of venture capital, LBO/private equity, and career search and topics ranging from how to get a start in the industry to the science of nanotechnology and biotechnology, the conference certainly had something for everyone. Whether you were a novice trying to make sense of the industry or a seasoned veteran still trying to make sense of the industry, there was a panel discussion that was sure to be of interest. For still others, it was a chance to develop big name contacts in what traditionally has been an “old boy’s network.”
There was no central theme to the conference. Some described it as “Rebuilding the VCPI Industry From the Ground Up” while others, described it as “Creating Opportunities In VCPI for the Next Decade”. And although there was not a plethora of jobs being handed out at the door (however the question “are you hiring?” came up in every panel), people in general were very satisfied from the broad perspective that was provided, the industry contacts that were established, and the fact that the conference ended at 6pm in time for the Superbowl kick-off. For those that missed the greatest Superbowl pre-game show that Harvard Business School has ever hosted, I took scrupulous notes of my personal experience at the conference that I’m willing to share.

The conference featured keynote addresses by two of the biggest names in LBO and venture capital, respectively – Mike Nunnelly, Managing Director at Bain Capital and Ted Dintersmith, General Partner at Charles River Ventures.

I arrived early to hear the morning keynote address by Mike Nunnelly, whose presentation focused on which private equity shops are well positioned to survive the impending shake-out that will occur as the industry undergoes a major overhaul. The one-line take-away I got out of this was: “Don’t take a job a private equity shop that will go belly-up one year later.”

As a former venture capital investor, I worked on several software deals (some good, most bad). Therefore the panel discussion titled: “Can Software Recapture Investor’s Interest” appealed to me. The panel consisted of professionals from Hummer Winblad Venture Partners, Polaris Ventures, JAFCO Ventures, and TA Associates (none are hiring – I asked) and gave us a model for successful venture investing in software startups for the future.

The late morning saw one of the more entertaining panel discussions. Professor Malcolm Salter, as moderator, put prominent LBO pros on the hot seat in a heated debate aptly titled “Mega Funds vs. Middle Market Funds.” The debate pitted large shops such as Thomas H. Lee Company, and Bain Capital, against smaller shops such as The Riverside Company and Willis Stein & Partners. The battle resulted in a draw.

The afternoon session featured insightful career topics such as “LBO and VC Industry from the Associate’s Perspective” which featured recent HBS graduates at firms such as Battery Ventures, Fidelity Ventures, Atlas Venture, JP Morgan Partners, and CSFB Private Equity among others. I split the afternoon, learning about nanotechnology and biotechnology venture investing from seasoned investors at Lux Capital, Polaris Venture Partners, Newco Gen Group, and Oxford Bioscience Partners among others. My one line take away from the topics was: “Everyone seems to agree this is the next big thing, but I wish I knew what a nano really is?”
Other topics that were addressed were an enlightening perspective on the once popular buy and build strategy of many LBO shops, and an international component where ideas were surfaced in how to stimulate international principal investing to rival the returns of those in the U.S. Closing remarks were delivered by Ted Dintersmith of Charles River Ventures who discussed the perils of venture capital investing, but to those that learn how to do it well, the huge financial rewards available. In all, the Annual Venture Capital & Principal Investment Conference was a very successful event.

February 11, 2002
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