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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

Does Steve Jobs Matter (to Apple Shareholders)?

Next week, Apple will announce its first earnings since Steve Jobs stepped down from his role as CEO of Apple on January 15, 2011 due to health reasons. So far, the market has taken a wait and see attitude as to what it means for the company. After a relentless rise where the stock has more than tripled over the last 2 years, it has been trading in a narrow range for the last 2 months. The market is undoubtedly waiting for the next earnings report and the future guidance that comes with it to reassure them that Apple will be okay without him. Or, to confirm their fears that it won’t.

Often the market overreacts to news like this. In the end, one person rarely makes a critical difference in a company as large as Apple. But this case may be an exception. Read on to hear why…and what the implications are for other companies.

To understand Steve Jobs and his unique position, first, let’s consider the cases of some of the other technology visionaries. Starting a world-changing company is a very, very difficult feat and in our view, Bill Gates, Sergey Brin, Larry Page, Mark Zuckerberg, Larry Ellison, Michael Dell, Jeff Bezos and a few more deserve the billions that they have earned.

Yet, without diminishing their accomplishments in any way, greatness does not come from genius alone. In his book Outliers, Malcolm Gladwell makes a compelling case that timing is equally as critical to creating mega-success. Bill Gates was fortunate to have been ready when the PC was born, Jeff Bezos when the Internet first took off, and Sergey Brin and Larry Page as the Internet’s growth was making it too unwieldy for first generation search technologies to handle.

Strengthening Gladwell’s case is the fact that there are very, very few cases where companies, despite the presence of the same visionary founders, are able to replicate their initial success within an order of magnitude (or maybe even two orders).

Google is a great example. Google has probably tried harder than any other company to create new transformational innovations outside of its core business. Yet despite all the investment they’ve made in Google Mail, Google Docs, Google Books, Android, and countless other products, Google is still a one product company. Over 96% of their revenue in 2010 came from Internet advertising.  The only part of the business where they have achieved leadership outside of search is YouTube, which they bought.

Microsoft is a similar story. Practically all of the company’s success can still be tied to having DOS chosen as OS of the IBM PC. In 2010, the company earned over 73% of its operating profit from the sales of the Windows OS and Office Suite. If you include the contribution of the Backoffice tools (SQL Server, Sharepoint, Exchange, etc.), which could easily be considered extensions of the Windows Server OS, that percentage goes up to 93%. Everything else – Xbox, Windows Live, Bing, MSN, etc. – contributes just 7% of the operating profit.

This brings us back to Steve Jobs and Apple. What makes Steve Jobs truly unique is that he has done it more than once on a grand scale – In 1984 with the Mac, 1995 with Pixar, 2005 with iTunes, and 2007 with the iPhone.  My belief is that there are many individuals who can take what Steve Jobs has already created and take it forward. Assuming the company picks the right CEO to replace him, Apple should continue to soar on the strength of what Steve Jobs has already done. What is at risk is the next innovation that could take the company to new heights.

So what lesson should you take from Steve Jobs, Google, and Microsoft? The answer: Unless you have a Steve Jobs on your staff (not just a Bill Gates or Sergey Brin) you can't count on 'The Next Big Idea' to fuel your growth. Even if you do everything right, there is just too much uncertainty. Instead, what you should focus on is maximizing the opportunity you have. While Microsoft and Google may not have created a second transformational innovation, they made the most of the businesses they were in. They deeply understood their markets and competitors, strategically expanded into adjacent areas, made smart acquisitions, found new channels, expanded globally, and capitalized on new technologies.

In our Corporate Growth Planning practice, we work with executive teams on creating strategies to grow revenue 3x, 5x or more. While there are rarely shortages of good ideas, companies often struggle in sorting through and prioritizing them. In our experience, there seems to be a natural human reaction to pursue the 'Next Big Thing', especially in entrepreneurial companies. The real challenge is creating a disciplined and fact-based process that leverages all of the growth avenues available, not just the brightest shiniest objects.

This article was contributed by Jon Klein. Jon is the founder and general partner of The Topline Strategy Group, a strategy consulting and market research firm specializing in emerging technologies. Jon brings a unique blend of strategy consulting and hands on operating experience to The Topline Strategy Group and works closely with Semaphore on a variety of engagements.

Topics: due diligence, technology, market diligence, Corporate Growth Planning

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