The Skype/Silver Lake story is refusing to die, with Yee Lee’s revelations bringing out the same anonymous investor-group sources defending Skype’s actions. But if the defenders are comfortable in their anonymity, it seems only fair for me to share an anonymous email I got this morning from “Skype Insider”.
Last week, Bloomberg’s Joseph Galante published a story claiming that Skype investors in general, and Silver Lake in particular, were firing senior executives just before the company is sold to Microsoft, so that they don’t get their full share of the proceeds from the sale. This seemed pretty evil to me, but it wasn’t long before anonymous Skype investors started showing up on various blogs (SAI, TechCrunch, GigaOm) pouring cold water on the allegations, saying that the firings were all the doing of Skype’s CEO, Tony Bates, and had nothing to do with Silver Lake at all.
Tensions between owners and managers are nothing new; you might remember, for instance, the way in which Sequoia Capital forced Zappos to sell itself to Amazon over its founders’ wishes. But at least when the sale took place the executives got their full share of the proceeds — in contrast to what seems to be going on at Skype.
SecondMarket put on a conference in San Francisco this morning, where I got to talk to chief strategy officer (whatever that means) Jeremy Smith. I asked him about my theory that it’s easy to make big acquisitions if you’re public, using a hypothetical Facebook-Skype deal as my example.
I had a long discussion at lunch today talking about my theory that it’s just as well the Basel III process was ill-publicized and depoliticized. Because when issues get onto Congress’s radar, the quality of debate can be low indeed. Take this debate between two Democrats on the question of whether private-equity funds should register themselves with the SEC:
Last week, Ira Stoll took issue with Dennis Berman’s column on SharesPost and SecondMarket, on the grounds that Berman lied about his own identity: he pretended to be his late grandmother. Stoll likened Berman’s behavior to Project Veritas’s entrapment of NPR — something the WSJ itself said failed to “meet the ethical standards of elite journalistic institutions, including of course The Wall Street Journal”.
I spent most of this morning at SecondMarket, having a long conversation with Adam Oliveri, the person in charge of their private company market. That’s the part of the company which gets the most attention: it’s where stock in companies like Twitter and Facebook change hands, for instance. I learned a huge amount while I was there, and have now changed my mind on whether Facebook is going to go public: I finally understand exactly why companies need to do an IPO once they have more than 500 shareholders.
Clare Baldwin and Sarah Lynch are unambiguous: “As US regulators review rules on shares issued by private companies,” they write, “they must not make it too easy for hot Internet companies such as Facebook or Twitter to avoid the scrutiny that goes along with an initial public offering.”