Boston London New York

Semaphore's 2022 Confidence Survey Results Are In!

“Remember in March/April of 2020 we thought every fund portfolio would crash? The joke is on others not smart enough to be in our biz - not even a global pandemic can kill us.”

That was the first comment entered in the 14th Annual Semaphore Confidence Survey. It might just be true, given the stratospheric amounts of capital committed and invested accompanied by the continuing rising incomes of those taking our survey.

Commentary continued to explode – hundreds of your colleagues penned opinions – many thoughtful and some cringing to read. You can decide for yourself. Click here for the survey results and a representative sampling of commentary on matters of race, carried interest, sexual harassment, breaking up Big Tech, COVID, and the Theranos/Holmes saga. Many comments are truly delicious – how come none of you are as pithy and entertaining on my Zoom calls?

COVID proved not as troubling as expected with only 34% reporting it hurt your business while 54% of you predicted that it would in 2022. Only a third of you think it will hurt in 2022.   It most certainly did not hurt your wallets as 77% earned more in 2021 than the prior year, and 65% expect to earn still more in 2022. Unsurprising, considering that 91% of you had full confidence in yourselves. Curiously, this confidence in self plummets to a 35% confidence rating in the US Economy and only 19% with a confident outlook of the international economy compared to 54% and 37% respectively expressing confidence last year.

The honeymoon for President Biden is evidently over. His confidence rating was cut in half from with 56% last year to 27% today. Could it be because many of our respondents fear a tax hike those in our industry doing so extraordinarily well? As one stated about eliminating Carried Interest “I benefit from it - but it is wrong,” balanced by some believing that “Tax breaks for (the) wealthiest citizens must be revisited.”

66% agree that sexual misconduct, harassment and gender bias remain a problem, down from 78% a year ago.   A majority of 54% believe inherent racism is a structural industry obstacle, down from 68%. The self-identified gender mix of respondents this year were 74% Male, 24% Female (up from 18% last year and 9% the year prior), and 2% choosing Gender X.

The top five survey taking states were 22% California, 20% New York, 19% Massachusetts, 7% Texas, and Connecticut. Washington DC, Pennsylvania, Florida, Colorado and Illinois came in at 2% each and no other state represented more than 1%.

Canada represented 17% of international respondents, 15% UK, 8% Germany, 7% China, 6% India and 3% France, Italy, Israel, and Singapore, 2% Brazil, Mexico and Australia. Respondents in descending order of submissions were from Japan, Taiwan, Sweden, Russia, Spain, Luxembourg, Philippines, Columbia, Viet Nam, Nigeria, with responses from 19 other nations.

Of the 579 participants this year 22% were from PE shops; 27% were VCs; 7% Hedge Funds; 9% LPs; 14% operating executives; 7% Investment Bankers; and 14% third party vendors/advisors to the industry (lawyers, accountants, etc.).

52% of survey takers believed the Theranos/Holmes saga was an outlier in our industry against 48% believing it more systemic. The most passionate of commentary was in response to this question including “Theranos is the tip of the iceberg - there are hundreds of VC funded startups that are illegitimate fake hacks,” and “Hubris is always in fashion.”   We’ll be sure to poll the scandal of the moment next year.

Here is hope your supreme self-confidence somehow rubs off on the world economy and we come out of these still parlous times safe, healthier, and by all accounts, richer in both wealth and fulfilment. Check out the complete results and engaging opinion by clicking here.

Mark DiSalvo is Founder and CEO of Sema4 Inc., dba Semaphore,, a leading global professional services provider to troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for eleven funds, is a New Markets Tax Credit provider, and advises Limited Partners around the world. Semaphore’s corporate offices are in Boston with principal offices in Barcelona, Dallas, London, Luxembourg, and New York.

Topics: Venture Capital, private equity funds, Semaphore, general partners, limited partners, investment, growth equity investments, private equity, Corporate Growth Planning, business, Survey

Semaphore's 2021 Confidence Survey Results!

“Bubble, baby II!”

This was the comment left behind in the very last response received in our 13th annual Semaphore Confidence Survey. The comment “Bubble, baby” was my favorite economic analysis comment left a year ago. It seems some of you come back on an annual basis and remember what you said. Commentary exploded this year with pithy two-word replies and our very first emoji too vulgar to note were accompanied by nearly 500-word essays. Everyone has an opinion – you decide whether any are worthwhile. Click here for the results and you will see an expanded sampling of thoughtful commentary on matters of race, carried interest, sexual harassment, Trump, and breaking up Big Tech. Until the last day of the survey it was a see-saw race whether you believed Facebook, Google, should be broken up. In the end a near landslide 57% said “tear them apart”.   You were not shy about other opinions.   The survey closed the night before the impeachment vote in the US Senate and 83% of our respondents correctly predicted Trump would not be convicted. Of course, last February 62% of you predicted he would be reelected.

COVID proved troubling as 59% reported it hurt your business with 54% believing that it would continue to do so in 2021. That said, it did not appear to hit our respondents in the pocketbook. 67% earned more in 2020 than the prior year with 21% earning less. The same 67% expect to earn still more in 2021. This follows along with the continued expression of confidence expressed in ourselves - a full 97%. This near unanimity of confidence plummets to a 54% confidence rating in the US Economy and only 37% believing one should be confident in the International economy.

One person enjoying a honeymoon is President Biden with 56% expressing confidence in the new president as compared to 69% who were not confident in his predecessor just a year ago. Even Congress has seen a boost in confidence to 20% up from 4% last year. Under the Capitol Dome, Speaker Pelosi enjoyed the confidence of 32% with new Senate Majority Leader Schumer at 30%.

Sadly, 78% agree that sexual misconduct, harassment, and gender bias remain a problem, and 68% believe inherent racism is a structural industry obstacle. The self-identified gender mix of respondents this year were 80% Male, 18% Female (up from 9% last year) and 2% choosing Gender X.

The top five states were 26% from California (supplanting NY for the first time), 20% New York, 18% Massachusetts, 6% Texas and 3% Connecticut. Washington DC, Pennsylvania, Florida, and Illinois came in each at 2% and no other state represented more than 1% (with Missouri topping Utah for first on that list).

Canada represented 21% of international respondents, 13% UK, 5% Germany, 5% China, 5% India and 2% France, Italy, and Singapore, with multiple respondents in descending order from Israel, Australia, the Philippines, Taiwan, Brazil, Russia, Japan, Columbia, Spain, Viet Nam, and single responses from 14 other nations.

Of the 620 participating this year 21% were from PE shops; 32% were VCs; 4% Hedge Funds; 9% were LPs; 11% were operating executives; 11% were Investment Bankers; and 12% were third party vendors/advisors to the industry (lawyers, accountants, etc.) – reasonably consistent with last year albeit more heavily representing VC.

A favorite comment this year was “I have encountered rapacious thieves in PE as well as some of the finest people I could ever hope to meet…”. In our baker’s dozen years that the Semaphore Confidence Survey has taken your temperature we ruefully note we have seen too many rapacious thieves given our niche taking over troubled funds. It is mercifully balanced by very many fine individuals and firms with whom we proudly enjoy working to right the misdeeds of plundering bandits.

Please keep safe, wear a mask, get jabbed in the arm so we can do it all again next year. Check out the full results and enjoy informative and sometimes entertaining opinion by clicking here.

Mark DiSalvo is the Founder and CEO of Sema4 Inc., dba Semaphore,, a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for eleven funds, is a New Markets Tax Credit provider, and advises Limited Partners around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London, Luxembourg, and Dallas.


Topics: troubled funds, equity, Semaphore, market diligence, market, business, Survey

No Sand Between Our Toes (2016)

Why being at the bar won’t get you a drink but will make your dermatologist smile.

I’ve been spending my summer with lawyers.  It’s not a sentence for misbehavior or because I’ve committed some wrong.  It’s not been at BBQ’s or quaffing beers with my friends at the bar (groan) telling enhanced memory college war stories while listening to the surf above the clatter of conversation. We have not even been competing at Rio inspired beach volleyball pretending each slam - if we could actually jump high enough to make one over a regulation net - was for the gold medal winning point.

Nope.  It’s been nose to the grindstone reviews of complaints and counter complaints, pleadings, filings, hearings, motions, and depositions.  And it’s been fun! Now, not the fun of an exhilarating boat ride against a swift current or being elbow deep into a great steamed lobster fest.  Rather it’s been the joy of winning a tactical position, discovering confirmation of an adversary’s transgression,  laboring under the responsibility of being fully prepared to argue your belief against some very smart colleagues, enjoying the emotional fulfillment of knowing that you are right and having someone in a black robe affirm your belief. Yeah…that may seem like a poor substitute for being at the beach but as far as alternatives go it is certainly better than, say,  Disney World in August.

This year I have relished the privilege of a deep dive in litigation esoterica and SEC regulation, welcomed as a real-world contributor to strategy, even appreciated the more than occasional 2 o’clock in the morning email exchanges, and learned that being a “good” client working with open-minded and keenly intelligent lawyers makes for more than good results.  In our troubled fund practice over the last 15 years we often spurn law firm “help” – particularly at the crisis stage of an intervention as few law firms truly understand the practitioner level consequence of the standard legal playbook on a VC or PE practice that is more medieval than modern.  The vexing engagements we have been working this year required intimate assistance and leadership of a group of attorneys who, in concert with our replacement General Partner practice team, helped secure rights lost, arrested loss of value and fixed governance of particularly dynamically challenging circumstances.  The collective efforts of the Team have given our common Limited Partner clients progress and conclusions that any one of us independently would not have been able to gain.  So here’s a toast, to my friends at the bar who, while keeping me off the beach, have kept me engaged, stirred intellectually and appreciating the fire-power a well-crafted legal and operational strategy can have when dealing with wayward General Partners and the mess they leave behind.  

Here’s hoping next year we are all scrunching sand with beer in hand telling war stories about the terribly active summer of 2016.  Meanwhile our summer labor is not over. I think my lawyer friends spent less time than I did on whatever their version of a holiday may be.  Instead we are all seemingly locked in steel and glass towers under the glow of fluorescent lights rather than risk sunburn. Other than our clients, maybe only our dermatologists applaud the consequence of our busy summer this year!

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore,, a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for eight funds, is a New Markets Tax Credit provider and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: Venture Capital, troubled funds, equity, private equity funds, Semaphore, general partners, LP, business advisory, VC, venture funds, private equity, ethics, business

Teaching Ethics

Stop the Merry-Go-Round:

It’s Time to Get Serious and Teach Ethics to Help End the Games

By Mark DiSalvo and Mark Connolly

The media are filled with the seemingly never-ending games of financial fraud and scandal. We continue to witness a basic lack of ethical standards, the end result of which translates into higher consumer costs, economic ruin, cynicism, and most assuredly a lack of confidence in our business sector, government and society generally. And despite all of this, nothing is being done to train citizens and future business leaders concerning the simple task of proper behavior. This is playground stuff – learn to play by the rules and, where rules don’t exist, act appropriately. These are easy guidelines every kid running around an elementary school playground understands.  Why is it so hard for those of us in business suits to remember what our schoolmates and playground monitors taught us?
In 2002, the New Hampshire Securities Bureau reached a $5 million agreement with Tyco Corporation concerning its alleged corporate malfeasance. At that time, that settlement was one of the largest securities settlements in the nation’s history. The funds have since been dedicated to establishing programs within higher education in the state for the advancement of ethical standards in both the private and public sectors. 
Just days ago it was announced JP Morgan will be ponying up $13 billion to state and federal regulators to address its mortgage dealings failures. It has been estimated the remaining level of legal exposure by the largest US financial institutions could result in the settlement total for alleged mortgage fraud in the United States to be in excess of $100 billion.  It is now evident 2013 will likely mark the high-water mark toward addressing the responsibility of the financial-crisis era of the first decade of this century, a period resulting in two major economic slowdowns—all because of ethical lapses in our financial markets. Both periods resulted in Congressional action to address regulatory shortcomings (Sarbanes-Oxley in 2002 and Dodd-Frank in 2010).
Unfortunately, as yet, no action has been taken to address the ethical behavior break-down in our country and how such behavior not only diminishes society but damages our economy as well our very way of life.  No national effort has been crafted to teach that “greed is not good.” Now is the time to take stock on why ethics matters.  We need to get America’s future business and community leaders thinking about ethical behavior and what it means in terms of responsibility and accountability.  
American entrepreneurialism and government support for it has created the most dynamic country in world history. This dynamism has also produced unparalleled growth and economic opportunity. However, the recent past also shows that unlawful and unethical behavior left unchecked can result in moral break-down and economic self-destruction. We must instill a sense of citizenship and personal responsibility across society.  
Financial fraud settlement funds are not government budgeted monies per se or even tax payer dollars but instead are used to fund further government fraud mitigation programs as well as benefit the general treasury of government. However, none of the national financial fraud funds has been targeted to address the importance of personal responsibility and ethical conduct.
We propose the Congress direct a small portion of settlement funds to a dedicated national educational ethics program. We come to this notion as a former securities regulator and private equity manager of troubled and fraudulent funds. Such a program can be guided and administered by the recently-established Consumer Financial Protection Bureau (CFPB) so as to promote ethics and ethical curricula within post-secondary education institutions, including professional graduate schools, as well as teaching the importance of ethical obligations in primary and secondary education.
Our proposal offers the following guidelines for consideration: (1) a non-partisan panel of educational, financial, consumer and business experts be established to propose how best to implement such a program; (2) any program is to be free of all ideological or political bias; (3) the panel’s work to be funded by an appropriation from financial fraud settlement funds; and (4) the award of any funds for the teaching of ethics in curricula is to be on a voluntary basis.
Funds could also be used in concert to leverage the few already established ethics education programs in the nation. The basic premise of our proposal is a correlation between the fact that fraudulent behavior causes the literal diminution of the world economy and a modest part of the financial fraud settlement funds be utilized to address the root cause of the matter.
Doing nothing will  mean no real change—consider that the settlement funds derived during 2002-2003 for financial fraud did nothing to affect the course or impact of the much more severe 2007-2010 financial crisis. It is time to act now and teach future generations that ethics matter – if only to diminish future economic blowups.
Business can be rough at times but it will be a better playground if we stop the endless games. Extending the lessons on how to play fair will be a boon to us all.
Mark Connolly is the former Director of Securities Regulation for the State of New Hampshire and Principal of New Castle Investment Advisors, and Mark DiSalvo is CEO of Semaphore, a leading global provider of Private Equity funds-under-management.

Topics: troubled funds, private equity, ethics, ethical standards, business

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