"The only way for there to be lasting peace is for there to be two states living side by side at peace with each other." -- President Bush, on the Israeli-Palestinian conflict Venture capitalists used to hog all the risks--and rewards--for their own firms when funding startups. They didn't worry about needing co-investors for later rounds, since companies were going public so early. The success of dot-coms with single backers--Netscape, eBay, and Amazon.com--only spurred more single-backer ventures.
Then came the tech wreck. These days, venture capitalists are doing a lot more sharing. "There has absolutely been a change," says Jim Breyer of Silicon Valley's Accel Partners. Accel now seeks co-investors on almost all early-stage deals, compared with fewer than half in 1999. Researcher VentureOne says 27% of financings had one investor last year, compared with 37% in 1995.
Why the sudden generosity? When companies founder, it's no fun being the only financier on board. And companies can benefit from the experience of other backers. "You just want more brains around the table," says Brad Jones of Redpoint Ventures. His firm shares 80% of its early-stage deals, somewhat more than during the boom years. Maybe everything you need to know about business you really did learn in kindergarten. In one corner, the recording industry. In the other, computers. Gateway (GTW) came out punching in April, running a TV campaign that featured the company's black-and-white spokescow and founder Ted Waitt promoting consumers' ability to copy, mix, and transfer digital music. The Recording Industry Association of America condemned the ad, which ended a two-week run on Apr. 19. "This ad is more about them selling CD burners than acting like they care about piracy," charges RIAA President Hilary Rosen. Counters Waitt: "Gateway isn't endorsing piracy, we're advocating consumers' rights."
At issue is how to protect digital works when they're so easy to copy and distribute for free on the Net. Spooked by Napster and its imitators, Hollywood is backing laws and technology that give it more control over how consumers use copyrighted works, in some cases preventing the playing of new CDs on computers. Gateway and a growing group of tech companies view that approach as a threat to consumer rights--and to the appeal of new computer devices.
In the irreverent 60-second ad, Waitt pops a homemade CD into the truck stereo, and he and his bovine chum sing along to a rap remix of Gordon Lightfoot's Sundown. A message flashes: "Gateway supports your rights to enjoy digital music legally" and invites people to download the song from Gateway's site. Gateway did, in fact, negotiate the download rights. Like Napster, but legit. What's in a name? When it's Arthur Andersen, chagrin. At a number of universities around the country--Northwestern, the University of California-Berkeley, and the University of Wisconsin-Madison, to name a few--auditoriums, halls, and centers bear the name of the beleaguered accounting giant. None plan to change the name, they say. At least not right away.
But given current events, what goes on inside them can seem downright incongruous. Arthur Andersen Auditorium, a classroom at Berkeley's Haas School of Business, was the site of an Apr. 6 competition for entrepreneurial students proposing socially responsible businesses. "We joked about having to change the name, but it just isn't funny anymore, now that Andersen might actually be no more," says Dennis Cox, a second-year MBA student.
At Madison, administrators fear the name could deter students from studying accounting at the Arthur Andersen Center for Financial Reporting & Control, funded mainly by retired Andersen partners' donations. Says a school spokesman: "The Andersen name might very well become counterproductive." It would hardly seem a time for idealism in searching for a job. Anxious college seniors are practically begging for work. Yet grads at elite universities such as Harvard and Cornell and state schools such as Virginia are taking the Graduation Pledge, promising to enter the workforce bearing in mind social and environmental responsibility.
More than 100 colleges and universities now participate, up from only a handful six years ago when the pledge started spreading nationwide. Student organizers and administrators have enlisted at least 10,000 students so far. Signed or recited around graduation, the pledge elicits a promise from students to "take into account the social and environmental consequences of any job" they consider. They also promise to "try to improve these aspects of any organizations" where they work. Pledgers at Manchester College in Indiana, the movement's headquarters, wear green ribbons at graduation; about 50% of grads do so.
"It's easy for us to focus just on getting a job and making a living," says Harvard pledge-taker Stephen Smith, who plans to become a teacher. "The pledge gives students a chance to reflect on other aspects." What do members of what Hillary Clinton once called the "vast right-wing conspiracy" do when there's a Republican President? A good number of them find jobs in the Bush Justice Dept. Many of the folks now focused on the likes of Enron and Arthur Andersen not long ago were probing a smaller--but equally controversial--business venture. It was called Whitewater.
Three of Justice's 10 assistant attorneys general were Whitewater investigators. Criminal Division chief Mike Chertoff, the point man on both Enron and Andersen, headed the Senate's Whitewater probe. Policy chief Viet Dinh worked with him. And spokeswoman Barbara Comstock worked on the House's investigation.
Also claiming a Whitewater past is Solicitor General Ted Olson. He represented the Clintons' chief accuser, David Hale, and often spoke out in support of Independent Counsel Kenneth Starr. Then there's U.S. Attorney for Manhattan James Comey, who worked on the Senate Whitewater investigation.
Maybe they'll have better success prosecuting Enron than they did investigating Whitewater. Will the real Cuervos please stand up? Jos? Antonio de Cuervo started making tequila in the Mexican town of Tequila more than 200 years ago. But now, a father and son--who claim Jos? Cuervo tequila is no longer made by direct descendants of Jos?--are launching a new tequila. It's called Ana R. Vda. (widow) de Cuervo.
Guadalajara businessman Jos? Cuervo Lazcano, 52, says his new, high-quality tequila made from a family recipe honors his grandmother, the widow of the son of a great-great-grandson of Jos?. "It's the heritage of my family," he says. "It's my name." Cuervo Lazcano says the direct link in the family that now produces Jos? Cuervo was broken when Ana died in 1921 and gave the Cuervo franchise to her nieces. Jos? Cuervo International CEO Juan Domingo Beckmann says his family is part of the extended Cuervo clan by marriage, and that the company will challenge the use of its Cuervo trademark: "They're trying to steal a brand we have built."
Branding experts say Jos? Cuervo, the world's best-selling tequila, is already established and that it's too late for others to claim they're the real Cuervos. That, says Julie Cottineau of Interbrand consultants, may "fall on deaf ears."