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"With livestock, it's called animal cruelty. With people, it's called a morning commute." -- A subway ad calling for transit improvements in New York City, and rejected by the Metropolitan Transportation AuthorityEdited by Robert McNattReturn to top

These Headhunters Seek Bigger Game

Hunting heads pays well, but investing in tech companies can pay better. So it's no surprise that executive recruiters such as Heidrick & Struggles and Spencer Stuart are jumping on the venture capital bandwagon faster than you can say "IPO."

These new VC funds are potentially profitable and good retention tools for the recruiters, too. "It's a way that we can leverage our relationships with client companies to give our employees an opportunity to invest," says Spencer Chief Executive Officer Joseph Griesedieck. He expects to soon have several $1 million funds that will invest in Spencer's pre-IPO clients and in companies funded by venture-capital groups that are Spencer clients. Headhunter TMP Worldwide recently started a VC fund to invest in its clients and others. And Heidrick's three-month old VC entity, H&S Capital, has $25 million.

But old-line recruiter Korn Ferry remains uneasy. Says Chris Kidd, managing director of private equity: "If I am investing in a portfolio company, it becomes very difficult to convince other enterprises in the same sector that I am going to bring them the best management I can." In short, investing in a client's competitor invites mistrust. But that's a risk some recruiters are prepared to take.By Joan Oleck; Edited by Robert McNattReturn to top

Who Wants to Be an Entrepreneur?

Sometimes even a dazzling business plan isn't enough to secure venture capital. You need something special. Here's how one entrepreneur got cash via quick thinking and grace under pressure--as a game-show contestant.

In early March, PTEK Holdings, a VC firm, presented its version of ABC's popular Who Wants to Be a Millionaire at the annual Atlanta VC conference of Red Herring, a magazine that covers the industry. "We wanted to promote ourselves, but we didn't want to spend a lot of money doing it," explains Boland Jones, PTEK's CEO. His plan worked. The promotion attracted hundreds of potential clients. As on television, the finalists had to answer seven questions. The last one, in this case: "The total market cap of Internet companies is $85 billion. What percentage of that is made up by major sites like eBay, Amazon, and the like?"

The guy who knew it was 75% won $5 million. Playing was "the most intense thing I've ever done," says Mike Bruce, who is building a Reston (Va.)-based e-commerce software startup, Single-Shop.com. "It was like compressing a six-week fund-raising campaign into 30 minutes." But the payoff made that half-hour worth it.By Charles Haddad; Edited by Robert McNattReturn to top

Deficit Noshing

Is the U.S. taste for imported treats hurting our trade balance? It seems so. Commerce Dept. figures show that in Nov., 1999, the U.S. suffered a trade deficit in food and beverages--for only the second time this century.

The gap was tiny--$19 million in a $27 billion total trade deficit that month. Still, the imbalance surprised some economists; after all, the U.S. has long been the world's breadbasket. And historically, food exports have counterbalanced high imported oil bills. U.S. farms are still productive, but consumer tastes have changed. Americans are longtime buyers of such imported foods as fish, bananas, and coffee. Now, the boom has lifted demand for luxury foods like caviar and out-of-season fruit. The usual U.S. ag surplus has al-so shrunk since 1996, thanks to a strong dollar and weak Asian markets. The first food deficit? Sept., 1998.

Economists generally see this deficit as a small blow to national prestige, not a long-term problem. Kem Stokes of the U.S. International Trade Administration says "nothing fundamental" has happened to U.S. agriculture. Yet food imports are expected to climb, even if the deficit doesn't.By Lorraine Woellert; Edited by Robert McNattReturn to top


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