At the conjuncture of the financial-services sector and cash-starved IT entrepreneurs are ...VCs

Businesses starting up or anxious to enter new fields in the internet-technics sector mite want to meet h+ ranking representatives of these companies from a certain niche of the financial-services sector. This "niche" is an industry, a number of whose corporations appear on the following list of participants in a recent event:

▪ 3i
▪ Arch Venture Partners
▪ Atlas Accelerator
▪ Bank of America
▪ Clearstone Venture Partners
▪ Divergent Ventures
▪ El Dorado Ventures
▪ First Round Capital
▪ Foundation Capital
▪ Frazier Technology Ventures
▪ Granite Global Ventures
▪ Hummer Winblad Venture Partners
▪ Lehman Brothers Venture Partners
▪ OVP Venture Partners
▪ Paladin Partners
▪ Partech International
▪ Polaris Venture Partners
▪ SeaPoint Ventures
▪ Sierra Ventures
▪ Sunriver Ventures
▪ Voyager Capital
▪ Vulcan

That's what we're told by Read-Write Web email newsletter in "Amazon, VCs woo Seattle-area Developers" (Apr27,2k7).

While here I am most interested in showing simply the nexus of two industrial sectors (financial-services and internet-technics) of a given national economy (in this case, USA) and a regional economy (in this case, Silicon Valley / Seattle), where cross-fertiilization takes place between the two, and where the specialized companies of the one are looking for mates in the second with whom to place the funds of the first's investors; I am also interested in simply displaying a population for the first industry's specialist companies. These are direct competitors with one another, and thus are members together of a specialist subsector of a sector of an economy (both national and in this assemblage, regional too). The sector, as mentioned, is financial-services; the subsector is venture-capital services which is made up of Venture Capital companies, hence VCs); and a selection of the population of the first sector/subsector (which has been assembled in one region of the other sector, IT) is displayed above.

Now, the specifics of the event are not without interest, but R/WW's discussion centers around one of the hosts, Amazon (principally still defined by its originating role in the online [IT] subsector of the retail-sales sector), and and around Amazon's own possible future venture-capital role.

If you're already familiar with the Amazon Web Services pitch, there wasn't much new in the presentation. However, a question and answer session led by Andy Jassy, Senior VP of AWS, to clarify that Amazon is in fact building a distinct line of operation with its own investments and not using idle capacity [that otherwise would] sit... around until the next Christmas season, was interesting. True, they have not yet opened up Elastic Cloud Computing, but the servers currently running EC2 are dedicated for that purpose.

Some Take-aways

One participant wondered why Amazon hasn't started its own venture capital arm to make strategic investments in their AWS platform. Then we looked around the room and noticed all the engaged VC representatives and came to the conclusion [that Amazon] didn't need to [launch an arm of its own in the VC subsector of the financial-services sector].

The question of 'What happens if [some] Big Company moves in on this space?' is becoming more common, and the big company on everyone's mind in this part of the world (Seattle) is Microsoft. To this, the only thing the AWS folks could do was smile and claim first mover advantages. However Matt McIlwain of Madrona Venture Group mentioned that he had just returned from a Silicon Valley forum where people thought Microsoft simply can't ignore what's happening here much longer. I did hear a rumor that the first Microsoft data center has come online in the last month, and one can only speculate about Google and Akamai, so stay tuned...

I would only add a remark to link explicityly "we looked around the room and noticed all the engaged VC representatives" with mention of the larger companies Microsoft, Google, and Akamai: these latter are the competitors of one another and of the entire list of VCs taken as an ensemble. Surely, some parties to that VC list are thinking we've go to merge/acquire so as to be better able to both feed cash from investors to Amazon, for instance, and to compete with Microsoft, Google and Akamai. The nature of the market at the nexus of these two sectors is such that the little guys must form a conglomerate to add a fourth competitor to the top tier of three. I would suspect that Madrona VC realizes this, and realizes that Amazon would be the perfect mate for a new VC conglomerate capable of such competition with Microsoft, Google, and Akamai.

A first try at understanding "sectors"--whether you call them 'economic,' 'industrial,' or 'business'

In this blog-entry I'm laying out some loose-ended notes toward building a sense of economic sectors, industrial sectors, or business sectors--whatever you may wish to call them, depending on the context in which your are making a single point--the sectoral point.

To initiate our thinking along this line, I'm going to select one possible way of designating a specific sector, as I build up my own personal email file with a myriad of newslinks that could possible constitute a category. The general file envelopes a set "Companies"--but I'm not seeking to constitute any sector by this designation. Rather, within the "Companies" file, I place all the emails that feature one specific company or another (usually). But between the specific companies files and the main collector file of the set, I've slowly generated a mid-level designation that could constitute a sector. Still, my designation is something of a grab bag the contents of which are analytically isolated from other grab bags.

"Financial and Accounting" sector

This mid-level designation for a sector, between top-level "Companies" and third-level for collector files for subsectors (occasionally) and then the bottom-level of specific companies. Within any subsector. Within the sector of "Financial and Accounting" companies. Within general file I maintain for "Companies."
You understand the filing and category-generating hierarchical system that is very much only a work in process. A file tree, you mite call it. Also, as to the method of creating the system and using it now for basic purposes trending/tending toward ontological categories ("ontocats"), still it is only part of a pragmatics toward understanding companies in an overall economics theory, taking into account how specific companies relate to a system of economic sectors (industrial sectors, business sectors).

Here's a list drawn up from what's actually lurking in my email files at present:

"Financial and Accounting" sector
Accounting - subsector
Banks - subsector
Private Equity - subsector
Stockbrokers - subsector

I don't pretend even to myself that the subsector list is complete, and I have the suspicion that a further subsector should be listed--namely, "Insurance - subsector." But I have been empirically confronted yet with emails specific to the Insurance industry's subsector (my guesstimate of its most responsible classification). In my pragmatics, I can decide the matter later one. Now let's drill down to a further level toward specificity regarding kinds of businesses according to there industrial subsectors and sectors, their economic sectors and subsectors according the focal activites at their center of each company.

"Financial and Accounting" sector

Accounting - subsector
Lehman
Merrill-Lynch

Banks - subsector
ICBC (China)
J.P. Morgan Chase (this company also has a "retail unit")
Royal Bank of Scotland
Santandar (Spain)
Fortis (Belgo-Dutch bank)

Private Equity - subsector
ABM Abro (Dutch, just merged with Barclays UK)
Blackstone UK
Kohlberg Kravits Roberts
New Century Financial

Stockbrokers - subsector
Goldmann Sachs

That's what I've got for this sector at present. There are several problems with it; the problem that most bothers me at present is my attempt to split into two cats the subsector of banks from that of I've labelled "private equity" companies--which are in good part specialist banks engaged in many large-scale activities that don't feature private banking of individuals (or at least only the "filty rich" whose accounts are enormous in dollars or other currency/ies compared to most middleclass to lowerclass bank acccount holders. Another feature of the commercial banks is that they are lenders to huge corporations, sometimes to governments and govt agencies working on large-scale projects. And the crowning feature that I'm trying to get a bead on, they are often what are called "holding companies."

Another problem is the separation I've made between "central banks" which often are not banks, but govt agencies that play a role in the control of the economy and the furtherance of govt policy (like Keynesian techniques) in regard to a national economy. Also, are specialized govt financial agencies such as the US's Securities Exchange Commision. And then there's the stockmarkets where the mentioned stockbrokerage firms are active. But, stockmarkets are themselves usually businesses that are owned, have a board of directors, and make a profit (or loss) annually.

So, many revisions are possible in regard to this initial example. More to come.