MESSAGE
| DATE | 2004-01-07 |
| FROM | From: "Steve Milo"
|
| SUBJECT | Re: [hangout] Liquidator: 6,500 tech firms among 'walking dead'
|
A 'music manager'?
If the musicians he managed are any reflection of his business
philosophy I'm not surprised he chose the business he's in today.
Sounds like pichinson has a knack for ruining good talent.
Steve M
----- Original Message -----
From: "Inker, Evan"
Date: Wednesday, January 7, 2004 2:29 pm
Subject: [hangout] Liquidator: 6,500 tech firms among 'walking dead'
>
> Liquidator: 6,500 tech firms among 'walking dead'
> Tech company 'doctor of reality' expects another busy year
>
> PALO ALTO, California (AP) --Amid rising hopes for a high-tech
> turnaround,there's this sobering sign: Martin Pichinson -- a man
> who has buried nearly
> 150 failed startups since 1999 -- has swooped into Silicon Valley
> like a
> vulture lurking over a pack of wounded animals.
>
> Pichinson, a self-described "doctor of reality" who helps liquidate
> companies, says he wouldn't have moved from Los Angeles to Palo
> Alto a few
> months ago had he not smelled more high-tech trouble looming.
>
> "Sadly, it looks like 2004 is going to be another busy year for me,"
> Pichinson said. "There's still another 6,500 to 7,500 companies
> out there
> who are among the walking dead."
>
> Even before the move, Pichinson became a familiar face in Silicon
> Valley and
> other high-tech hubs, largely because so many venture capitalists
> summonedhim and his firm, Sherwood Partners, to help clear the
> debris left by the
> dot-com implosion.
>
> Kozmo.com, iChristian.com and Alladvantage.com are among the high-
> profilecasualties bagged by Pichinson during the past four years.
> Pichinson figures
> more than 50,000 people have lost their jobs on his death watch.
>
> It's a macabre job that most venture capitalists abhor.
>
> "Venture capitalists only want to deal with the top 40 percent of the
> companies in their portfolios," Pichinson said. "We get the bottom
> of the
> barrel."
>
> With most of the dregs flowing from Silicon Valley, Pichinson
> decided to
> move Sherwood's headquarters to the high-tech center so he's in a
> betterposition to handle the future carnage.
>
> Sometimes, Pichinson and Sherwood's 60 employees are able to salvage
> troubled startups by cutting costs and training the executives to
> rethinktheir ways. Sherwood even brings in an FBI consultant
> specializing in
> hostage negotiation techniques to help management.
>
> But for every company that Pichinson has saved, he has overseen the
> liquidation of roughly three others since 1999.
>
> Conventional wisdom says Pichinson, 57, is about to face a
> business downturn
> himself. With technology stocks finishing their best year since
> the 1990s
> and companies poised to spend more money on computer gear, there's
> a growing
> consensus high-tech's high death toll is tapering off.
>
> "Most of the biggest problem companies have been restructured,
> sold off or
> closed down," said Barry Kramer, a Palo Alto attorney who advises
> venturecapitalists.
>
> Pichinson scoffs at that notion, predicting the carcasses of
> doomed startups
> will continue to pile up for the next three to seven years.
>
> "I have closed more companies than anyone in the world, so no one
> knowsbetter about all the things that can go wrong in a business,"
> Pichinsonsaid.
>
> Sweeping statements like that are vintage Pichinson -- a colorful
> former pop
> music manager who enjoys schmoozing, even when he is filling the
> role of a
> grim reaper. Pichinson boasts that his Rolodex is filled with more
> than5,000 Silicon Valley contacts.
>
> "Someone has to dance to bring in the business and Marty likes to
> dance,"Sherwood Partners co-founder Michael Maidy says of
> Pichinson's networking
> skills.
>
> While Pichinson's showmanship helps open doors, it's his ability
> to close
> businesses that wins Sherwood the trust -- and patronage -- of venture
> capitalists.
>
> "Marty likes to talk, but he also walks the walk," said Spencer
> Tall, a
> general partner with APV Technology Partners, a Palo Alto firm
> that has
> worked with Pichinson. "He can help you make some very cogent
> decisions."
> It's a process that often requires Pichinson to be brutally honest
> with the
> entrepreneurs running a troubled startup. Sherwood Partners "comes
> in and
> talks tough," said Doug Koo, who ran a failing San Francisco
> startup, Cat
> Technology. "They teach you that some of the things are a
> necessary evil."
>
> When Sherwood entered the picture in late 2002, Cat Technology
> didn't have
> enough money to cover about $15 million in unpaid bills, Koo said. The
> startup seemed destined for bankruptcy until Sherwood engineered a
> restructuring that led to the startup's sale to a rival firm,
> FusionStorm.
> Sherwood Partners isn't the only business gravedigger in Silicon
> Valley. The
> list of other high-tech undertakers in the area includes Diablo
> ManagementGroup, Venture Asset Group, Gerbsman Partners and the
> Sage Group.
>
> But Pichinson's flair has helped separate Sherwood from the rest
> of the
> pack, enabling the firm to demand a premium fee. When closing a
> startup,Pichinson says Sherwood typically charges a 7.5 percent
> commission on the
> liquidation of the company's assets or $75,000, whichever is greater.
>
> Pichinson began working with the downtrodden in the early 1970s
> when he
> began managing music acts around Los Angeles.
>
> His clients included The Miracles after Smokey Robinson left the
> group, and
> Lou Rawls several years after the singer had fallen on hard times.
>
> Under Pichinson's management, both acts turned out major hits in
> 1976, "Love
> Machine" by The Miracles and "You'll Never Find A Love Like Mine"
> by Rawls.
>
> Pichinson grew weary of music management and left the
> entertainment business
> to begin working with distressed companies in the 1980s. He shows
> no signs
> of burning out in his current job, despite all the tales of woe.
>
> "We are trusted caregivers, like a hospice," Pichinson said.
> "There is
> always going to be something in trouble, or someone who needs our
> help."
>
>
>
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NYLXS: New Yorker Free Software Users Scene
Fair Use -
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NYLXS is a trademark of NYLXS, Inc
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