Posts from Mitt Romney

The Bain Capital Files

I've posted about this topic before. I wrote down my thoughts about the Obama campaign trying to make an issue of Mitt Romney's departure from Bain. And I've written about trying to keep stuff private in the Internet era. Well this past week we saw those two themes come together in a single story.

Gawker obtained "more than 950 pages of internal audits, financial statements, and private investor letters for 21 cryptically named entities in which Romney had invested" and published them on the Internet this past week.

I will stay out of the issue of whether this was legal, moral, or right. What's done is done. And it is apparently not too damaging to Mitt Romney according to this reporter who went through most of the material.

But there's a lesson this for me and my partners. Everything we publish to our investors should be written as if it will someday be published in Gawker. And every action we take in structuring our business, our relationships with our investors, and our relationships with the entrepreneurs we back should be conducted as if it will someday be published in Gawker.

I think this policy will be good for us and others who choose to adopt it.


Partners Forever (or close to it)

Mitt Romney is taking some flack for continuing to have ongoing involvement in Bain Capital well after he supposedly left the firm for good in 1999. I am not supporting Romney for President as I can't get comfortable with his party's views on social issues that matter a lot to me. But I have a fair bit of empathy for him on this specific issue.

I am still technically a partner in a venture capital firm (Euclid Partners) that I left in early 1996. I still get K1s from them as there remain a few illiquid investments in the last fund I was a partner in.

We stopped investing at Flatiron Partners in the summer of 2000, twelve years ago. I still sit on several boards from that portfolio. One of my partners sits on another board. We have three funds that remain active. We send out annual reports and K1s on all of them. I sign things all the time for Flatiron. And I haven't been "active" in that business for a decade.

Venture Capital and Private Equity are "long latency" businesses. You can leave a firm, you can start a new career, a new business, or go into politics. But you aren't going to be completely done with the investments you made and the partnerships you set up or were partners in for a long time.

I suppose there are ways to have a clean break, but they would not be simple to accomplish. You would need to be bought out and who is going to establish fair value for highly illiquid investments? Who is going to put up the money to buy you out? And getting all the investors to sign off on these changes is another hurdle. And allocating your equity to others is another challenge. That's why I am still a partner in two businesses that I have not been active in for a long time. It's a lot easier to just let things run off and have a departed partner be a "silent partner" with no operating role or responsibility. But even if you are a silent partner, you still need to sign stuff from time to time.

I think the Obama team is beating up Romney for something that makes great headlines and might look bad to an unsophisticated voter. But to me this looks petty and cheap. I don't like petty and cheap. I wish the Obama team would talk about important stuff instead of beating up a guy over nonsense.

#Politics#VC & Technology