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This article by Kathleen McGinn Spring was prepared for the November 6, 2002 edition of U.S. 1 Newspaper. All rights reserved.
The New Internet: Slow But Steady
<d>Edwin Goodman, a founder of Milestone Venture
Partners, speaks on "After the Fall: The New VC Landscape,"
at a meeting of the Venture Association of New Jersey on Tuesday,
November 12, at 11:30 at the Westin hotel in Morristown. Cost: $50.
Goodman and his partner,
1999, but Goodman, a graduate of Yale (Class of 1962) has been
in the venture capital arena for 26 years. While he was with Patricof
& Co. he managed the fund that invested in Apple Computer in the
Holdings in Milestone’s funds now include a number of young companies
using technology in innovative ways. Among the companies are CarParts,
which provides supply chain management to manufacturers, warehouse
distributors, jobbers, and installers, and BizBash.com, a media
with an interesting, gossip-filled website, which targets the business
event and business entertainment market.
Other portfolio companies include Plusfunds, an electronic marketplace
for the hedge fund industry; Knovel, which provides online technical
information to the engineering and applied science community; and
Cosential, a managed application service provider for the
engineering, and construction industries.
In a recent newsletter, Goodman quotes Andrew McAfee of Harvard
School saying that "we’ll never see again a wave of enthusiasm
and investment and speculation that rises and crashes the way the
first Internet wave did. But we are in for a slow steady progression
and a deepening of these technologies."
In the newsletter, Goodman goes on to tick off the challenges facing
entrepreneurs — and why he thinks they will beat them. Here is
distractions, including additional tragedies in the Middle East and
the odious and mounting pile of evidence of genocide in the Balkans
at the hands of Mr. Milosevic and his cohorts.
Closer to home, in a professional sense, the sleazeratti have emerged
on the business scene. These individuals, through their malfeasance,
in the delicate phrasing of Chairman Greenspan, have mugged the
capital markets along with many stakeholders. The market is punishing
these companies severely, although it remains to be seen to what
the key perpetrators will suffer.
Politicians on both sides of the aisle are aggressively moving
legislation forward while trying, at the same time, to avoid killing
the golden business goose. The only thing we can be certain of is
that those supportive of business and market solutions and those who
would rely on government intervention to cure the excesses of market
capitalism will both emerge from this melee unhappy. However, I am
reasonably optimistic that the pull and tug of our system with its
many disparate power centers won’t fundamentally harm the economy
and, on the margins, may help to restore confidence.
The basic U.S. economic engine continued to chug along at an amazing
pace, particularly in the light of the September, 2001, horrors,
by the self-inflicted wounds caused by some of our
I think there are four factors of which three will recede in
over the coming months. First, we are still experiencing a retreat
in pricing from historic high and unsustainable levels that peaked
in March of 2000. Second, the corporate felons have wreaked havoc
by undermining confidence in the markets, which has been exacerbated
by media sharks with talk of systemic structural problems. Third,
despite the improving macroeconomy, a number of highly visible
have failed to meet their operating objectives for the year-to-date.
The fourth "wild card issue" is the birth of preemptive strike
foreign policy and its possible implementation against Iraq. Putting
aside the question of the folly or wisdom of such a move, markets
like certainty and the specter of war is hugely destabilizing.
But Milestone’s business is good. Deploying capital in troubled times
in capital-scarce markets has always bred opportunity. We are
many energetic entrepreneurs who focus on the task at hand in their
respective micro-markets and don’t do too much hand wringing about
macro conditions and the state of the world.
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