There has been quite a bit of chatter in the blogosphere and elsewhere about the Levin bill that, if enacted, would essentially reclassify the taxation of certain private equity partnership carried interest from long-term capital gains to ordinary income.  I don’t intend to get into the rationale or merit of any such bill as there are enough folks speaking out on the matter that I’m confident it will be discussed and analyzed enough without my limited input.  Instead, I think the whole debate has led to additional confusion over what, exactly, private equity (a.k.a. “PE) is and is not.

For all you math-types, let’s start with the following statement: VC=PE; BO=PE; But VC?BO.  Huh?  Yeah, it’s a bit confusing and the historically clear lines of demarcation have been blurring at an accelerated pace.  Rather than bore you with the details, I’ll simply summarize by stating that you should think of PE as a wholistic asset class  that is subdivided into venture capital (”VC”) and buyout (”BO” or “LBO”).  Furthermore, VC deals typically involve less-mature / start-up compaines focused on some type of technical or market innovation whereas BO deals typically include debt and involve established and (usually) profitable companies.  For those of you inclined to delve deeper, I can direct you to a very good book on private equity,  Private Equity as an Asset Class by Guy Fraser-Sampson (job well done, Guy) — with a disclosure here being that Guy approached me awhile back to review and comment on his book.  I have not been nor expect to be compensated in any way by providing the plug here; I simply like to read and found the book to be worthwhile (for those of you in the industry or want to learn more) so I agreed to do so.  Now, let’s wait and see how this PE tax bill turns out…

I’ve been told countless times that it’s never a good idea to begin a dialogue with an apology so I guess I still haven’t learned that lesson as I have two today.  First, I want to apologize for the delay in this posting.  I had set out to post once a week but have found it difficult to do so and still post any meaningful kind of material relative to the OC VC ecosystem.  Second, I feel compelled to apologize for the shameless “plug” I’m going to give here as I told myself that I didn’t want to become one of those VC bloggers that simply write to pimp their portfolio companies, etc.  I’m not sure this post qualifies as such but I’ll leave it to you to decide.  On to the topic at hand…

In case you haven’t noticed, there as been somewhat of a “new media revolution” going on as advertising dollars shift from traditional media to new media (e.g. the Internet) and it has been accelerated of late with the “success” of YouTube and others (at least from an investor’s perspective).  As such, the Orange County Venture Group (a.k.a. OCVG) is hosting an all-star panel of new media players this coming Tuesday.  You can see the details and register by clicking here.  I will be introducing the moderator and panelists and expect it will be a well attended event given the timeliness of the topic and our proximity to Hollywood.  If you attend, please make sure to stop me and introduce yourself and I’ll be there early for the free coffee and networking ;-)  I’m sure I’ll be posting more on this topic in the months to come, but in the interim I hope to see you Tuesday!!!