MyCFO Inc. shows how times have changed. MyCFO, one of Mr. Clark's 1999 brainstorms, popped up along with a bumper crop of busy Internet multimillionaires. It combines professional advice with Web-based software, helping the rich with tax planning, charitable contributions and paying bills. Yes, fewer dot-com tycoons are feeling flush. But the Chicago-based firm saw enough ground for cooperation with myCFO that it took a lead role in the new funding.
Strings Attached In venture capital, as in life, there are no guarantees.
Yet in a sign of how difficult the financing environment has gotten, VCs are now commonly asking for, and getting, special terms that help guarantee some return on their investments. And they generally get that money back before company employees or earlier investors get anything. Matthew Cowan, a general partner at Bowman Capital, says that a year ago he never saw a liquidation preference higher than one, but the past 10 transactions he has looked at this year have all had higher guarantees. I've been at this a long time, and I'm hard pressed to think of a time when terms were so favorable to investors. In a development that would have seemed odd a year ago, numerous companies have recently announced layoffs at the same time as financial infusions, or while in search of them.