The Cincinnati Enquirer from Cincinnati, Ohio • Page 73

THL ENQUiRLR SPECIAL mm -FINANCIAL PLANNING SUNLvAf. OCTOBER 5, 2008 C3 wall Venture capital firms hittin 'Most are waiting for trade group president says By Robert Weisman Vit Huston Globe As the financial crisis deepens, venture capital finns that bankroll high-tech and life sciences startups are experiencing the slowest market iii a decade for recouping their investments. Just one venture-backed company went public in the third quarter nationally, according to figures released last week by the Thomson Reuters research firm and the National Venture Capital Association. At the same time, preliminary data show the number of acquisitions of venture-funded start-ups been advising its portfolio com. panies to prepare for the long haul, lower their rate," the pace at which they spend venture capital, and look for customers and partners around the world as well as in the United States.

The general mood is, don't spend unless you need to, make sure you're creating value in the tilings you're doing, and if you're raising capital, raise more than you need now because the capital markets are going to be tight for a while," Matheson said. Rubert Weisman can reached at ueismaiirtglobe.cum. It also means some money that ordinarily might be used to finance early-stage companies will have to be redeployed to keep later-stage companies growing until they can go public or be sold. The frozen IPO market and the slowing acquisitions market are related. "When you have an open IPO market, potential acquirers are more eager to complete deals because they understand companies might go public," Heesen said.

"Now the potential buyers can wait or send in a low-ball offer and see if ly seek to "exit" from their investments either through initial public offerings or acquisitions in five to seven years and deliver substantial profits to the limited partners, such as university endowments and state pension funds, that pool their money to 'invest in venture funds. But while venture outlays to start-ups have remained steady in recent quarters, a drought in exit opportunities means venture capital firms now can expect to hang onto the companies in their portfolios for longer periods. tumbled to 58 in the three months ended Sept 30 from 71 in the previous quarter. If the total doesn't rise as more end-ofcjuarter data become available, it would be the smallest number of deals since the first quarter of 1999. "These are not good numbers," said Mark Heesen.

president of the venture capital trade group. "I think most venture capitalists have given up on the fourth quarter and are waiting for 2009." Venture capital firms, which fuel entrepreneurial companies, typical it's accepted." In the first nine months of 2'K8. there were a half-dozen venture-backed IPOs nationally, down from 55 in the year-ago period, according to the Thomson Reuters data. There were 199 acquisitions of venture-backed firms through Sept. 30, down from 271 last year.

Jim Matheson, general partner at Flagship Ventures in Cambridge, said he doesn't see the IPO window opening at least until the second half of next year. Matheson says his firm has Money Makeover Well on their way REVIEW Dow Jonas Industrial average as.2i cios io.325.38 mt -mn Chanoe: -817 75 MON TUES WED THUR FHI 14 OOO A few tweaks all thev need lO.OOo"""''''""'" A AS I EST Nasdaq composite -le 1 loe.ls Close 1, 947 39 Chanue -235 95 (-10 B-ii) MON TUbS WtU THUR FRI si .1 ft I Dian and Lincoln Dads of Clermont County's Union Township are saving for their retirement and son Lo- -gan's college tion. LocalStocks 52-WK RANGE VOL YTD LO HI (Thousl'XHG DIV v. fv 73.07 9603 0 20 7 39 98 32.00 448 0 50 51.10 3958 -536 68.99 1561 1.10 14.38 31 -294 68 35 2602 20.7 5530 74 21.2 70.70 9249 8.5 0.881 1629 70 -64 0 2500 145 -11 6 1.92 66 36 199 -29 8 0.24 12.71 10 0.36 25.77 692 5.62 1478 4504 884 1.56 38 41 1665 0.461 48 95 276499 0 64m 19.18 1372 31.00 761 -196 1.10 21.10 10993 47.2 24 86 1694 0.16 20.78 10272 0.921 35 40 2407 -22 4 1.941 59 05 7961 1.20 3534 13179 0 60 18.00 57 21 8 068 15.72 1 -41 .8 0.36 924 42015 -398 w. Vi-.

it- I 1 tun i "VkiL The Enquifer. Amie Dvwxecki aJ. a -7 2 0 48 6246 1.60 3261 -68 1 31.45 46.18 83.50 42.15 201894 1.24 43.20 15072 262 -343 1023 0 801 690 -59 0.41 213 13.1 073 1572 5601 0.72 5794 1.00 15.82 6694 34 69 24 80 8810 55.94 37.33 NAME TICKER CLOSE CHG AK Steel Hold AKS 20.30 03 Air Transport Svcs ATSG .61 Am Financial Gp AFG 27.29 .51 Amylin AMLN 17.17 Ashland Inc ASH 27.61 .31 AtriCurelnc ATRC 9.25 .07 Barr Pharmaceutical! BRL 64.10 .21 Boston Beer Co SAM 45.65 CSX Corp CSX 47.70 .49 CecoErar CECE 3.95 Cedar Fair FUN 18.67 ChemedCorp CHE 39.21 Cheviot Financial Cp CHEV 7.58 .03 Chiquita Brandt Intt COB 14.32 Cincinnati Bell CBB 2.80 CirmFncI CINF 25.44 CintatCorp CTAS 27.15 Citigroup 18.35 Convergyi Corp CVG 14.29 .13 DPLInc DPI 23.84 Delta Air Une DAL 7.86 Dillards Inc DOS 11.06 Duke Energy DUK 17.36 Duke Realty Corp DRE 20.25 Emerson Else EUR 38.20 .57 Filth Third Bcp FITB 13.22 FtFncI Bncp OH FFBC 13.89 Fst Franklin FFHS 5.62 .82 Ford Motor 4.05 FrischRst FRS 21.71 Gannett Co GCI 15.18 Gen Cable Corp BGC 23.37 Gen Electric GE 21.57 Gen Motors GM 9.00 Griffon Corp GFF 8.18 Harris Corp HRS 42.95 Hill-Rom Hldgs HRC 28.20 Hillenbrand Inc HI 20.36 Humana HUM 39.31 Ingersoll Rand IR 27.38 Intl Paper IP 25.30 Johnson 4 Johnson JNJ 66.16 KendlelnU KNDL 40.54 Kroger Co KR 27.20 LCA-Vision Inc LCAV 3.75 LSIInds LYTS 6.93 Lancaster Colony LANC 35.94 Lexmark InU UK 31.62 Luxottica Group LUX 21.12 Macy'tlnc 15.19 Meridian Bioscience VIVO 28.24 Multicolor LABL 21.27 Financial Group NBTF 13.95 NCR Corp NCR 20.60 Natl City NCC 3.51 .37 Omnicarelnc OCR 28.35 .37 PNC Financial PNC 74.15 Pacholder HiYld PHF 6.21 Penn Natl Gaming PENN 20.03 Peoples Community PCBI 1.22 Pinnacle Entert PNK 5.93 Pomeroy IT Solutions PMRY 4.15 Procter a Gamble PG 71.02 Reed Elsvler PLC RUK 40.05 Regent Commun Inc RGCI .73 Rex Stores RSC 10.39 flobbin a Myers RBN 27.16 Scripps Networks SMI 35.83 Smithfield Foods SFD 15.91 Smucker.JM SJM 48.82 Spectra Energy SE 22.49 Std Register SR 8.99 Streamline Health So STRM 1.72 TeradataCorp TDC 17.10 Toyota Mot TM 78.10 United Community Bnc UCBA 9.64 UPS class UPS 60.76 US Bancorp USB 35.06 WellPoint Inc WLP 44.46 19.71 0.60 2419 18.54 2681 9.06 37.40 3 60 16.14 6 74 12.51 2.82 0 21.62 25.15 12.85 11.77 4 4.00 i 20 50 37.43 7.96 -i 808 -451 i 417 19.00 27.19 2165 8 51 7.39 42 00 23 92 33 45 21 66 61.17 4.08 7.02 29.57 26.55 14 33 23.25 18.55 12.25 1.25 15.42 -4901 21.72 0.86 6.33 3.12 60.05 37.07 0.46 10.16 27.06 34 88 13.98 40.18 21.41 7.08 0.34 17.79 78.34 5.01 56.10 20.57 43.02 0.8 1.84 17.1 72.76 25187 52.00 231 30.99 8809 8809 1.8 0.36 944 95 -619 0 60 108 1.12 1763 -93 146 0.77e 11165 0.53 233 0.56 29 0.20 29.9 1.16 1880 3076 23 05 62 35 44.15 37.60 35.76 37.00 29.61 21.01 2939 health-care affairs. King also recommended the couple put in place living wills, which will assign directions for each of them regarding life-prolonging medical treatments. Last, King recommended the couple consider a living trust, which will help disuibute the couple's assets to Logan beyond his 18th birthday in the event of their death.

Insure income Also lacking in the Davises' portfolio is sufficient life and disability insurance to help cover bills should the couple be unable to work. While Iincoln Davis has long-term disability insurance coverage for up to 40 percent of his salary, his wife has no disability insurance. "Both of you are still highly dependent on each others' incomes, and so not being able to work becomes your biggest vulnerability," said King. He recommended that Lincoln bump up his long-term disability coverage to at least 60 percent of his salary. As for Diane, King said she should take out the maximum coverage her employer offers.

When it comes to life insurance, the Davises also are undeiinsured, according to King. Lincoln and Diane both have a group-life benefit of $25,000, and Lincoln has an additional whole life policy with a death benefit of $39,000. To safeguard their son and each other, though, both should apply for a 15-year-term plan that carries at least $600,000 in coverage, King said. By Lisa Bernard-Kuhn lbentardenquirer.com UNIOXTWP. -'When it comes to financial stability and security, Lincoln and Diane Davis hope they are making the right moves.

For starters, the Clermont County couple has no major debt, no high-balance credit cards, no car payments and no other loans lingering in the wings. Their only sizable obligation is a $1,300 monthly mortgage payment. In turn, the couple's savings and checking accounts have swelled to a meaty $43,000. Both have well-paying jobs and promising retirement plans. As a fraud investigator with Progressive Insurance, Lincoln Davis earns roughly $75,000 a year, plus bonuses.

At 43, his 401 (k) plan is worth more than $213,000. His wife, a 41-year-old social worker with Hamilton County Job and Family Services, earns about $50,000 annually. After 30 years of service, her Ohio Public Employee Retirement System benefit is expected to top out at $42,716 a year. And for 6-year-old son Logan's college education, the couple opts to funnel $2,000 a year into a fund set up through Ohio's CollegeAd-vantage 529 college-savings program. No taxes are paid on the investment as it grows, and the family can receive a yearly income-tax deduction up to $2,000 for contributing.

So far, Logan's fund has grown to $24,000. To top it off, each year the couple typically has another $7,000 in extra cash that could be used for other investments. Rework savings, investments For the most part, the Davises "have been doing a lot of the right things," King said. But with just a few changes in their approach, they could steadily grow their retirement reserve. King's first suggestion is for Lincoln to rework his 401(k) allocation, with less emphasis on Progressive stock, which makes up nearly 80 percent of his portfolio.

King also recommended that both Diane and Lincoln invest some of their extra cash into Roth IRAs. The main advantage of a Rotli IRA is the ability to grow your investments without being taxed when you or a beneficiary withdraws the investment. The downside, however, is that you don't get a tax deduction when you contribute, like you do with a 401 (k) plan. Contributions are also capped, with $5,000 being the maximum for 2008. "It's a great deal, in terms of a tax shelter," King said.

"You have to ask yourself, 'Realistically, is the tax rate environment lower today than it will be in the The Davises have already begun to put some of the advice into practice, including setting up the Roth IRAs. "1 thought I was doing the absolute smartest thing by maximizing my pretax investments and never realized that might not be as advantageous as I thought," lincobi Davis said. "Neither of us are very in-vestment-sawy, and the real benefit was getting some really important issues clarified." Still, the fairly well-off couple felt they should be doing more, and after watching in recent months as close friends and relatives scrambled for financial footing after unexpectedly losing their jobs, the Da-vises sought advice. "We're doing well right now because of long-term, stable employment, but we're trying to be reali tic about the current job market," said Lincoln Davis. "While we certainly don't anticipate losing our jobs, we want to be smart about protecting ourselves, our son and our investments." That's exactly what they should be doing, said Stephen P.

King, director of financial planning with Blue Ash-based WealthQuest Corp. King recently counseled the Davises a part of a Money Makeover sponsored by The Enquirer and the Financial Planning Association of Greater Cincinnati. To help the family stay on track, King has devised a plan that will safeguard their investments and help put their savings to better use with just a few tweaks to their strategy. Estate planning 101 Though the Davises have been wise to put aside a fat chunk of cash, they have failed to get their legal house in order, King said. "Death and estate planning are two things no one likes to think about, and for someone who is doing things so right, this is one area that you need to pay more attention to," he told the couple.

The top priority for the Davises is to set up a will and durable power of attorney for financial, legal and 27.21 202432 0 04 35.73 1628 24.3 0.09 87.99 3832 12.9 2.64 960 25 0.90 62.30 4515 18.00 1 29.75 2348 6.63 17 75.18 22379 1.60 54 60 38 1.48e 2.81 3 21.15 50 55 09 562 0.15 44.98 943 0.30 32.26 1719 56.69 437 1.28a 29.18 4839 1.00f 13.74 103 0.92 4.00 15 30.08 1660 119.00 1771 12.67 0.36 78.60 7058 1.80 42.23 18930 10.5 1.70 90.00 2089 How to get cash in a credit crunch NASDAQ NYSE Weekly AdaiKfiS Last Cng. Pet. Weekly Ust Chg. Pet Sell something, or get a second job FdAqricA 7. FedAqric 25 4 80 195 9 21 5 35 187.1 .90 8.90 148.3 40 1.40 140.0 Advances MS Aerosonic PraUShtBM PrUSR2KG ProUShtRE ProUShtlnd ProUSR2K AMEX Weekly Advances Last Chg.

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MexcoEn 13. By John Eckberg jeckbergenquirer.com In today's tight lending climate, being short on cash and credit or, rather, owing too much on too many credit cards may leave you few options when it comes to raising quick cash for an emergency. It's like eating a salad with a spoon you can do it, just don't expect a lot of green. But few options does not mean no options, says financial adviser Richard E. Martin, CLU, ChFC, of Anderson Township.

The fact of the matter is that there aren't many good ways to come up with quick cash without borrowing," Martin said. "Our economy relies heavily on short-term lending. Should the lending environment tighten, it could have grave implications for the broader economy." al IRAs. Martin said. Don McNay, founder of McNay Settlement Group in Richmond.

Ky thinks a second or third job may be the best approach. "1 agree on the concept of a second job especially pizza delivery. It tends to be night work and fairly lucrative, even with the higher gas prices," said McNay, a financial planner and author of the book, "Son of a Son of a Gambler Winners, Losers and What to do When you Win the Lottery." McNay, a native of Edgewood and a 1977 Covington Catholic graduate, says another simple solij-tion is obvious: Sell something. "In business, everything comes down to assets and liabilities," he said. "You need to increase assets or reduce liabilities.

To raise quick cash, sometimes selling assets is the best way." fc Weekly Ust Chg. Pet 3 90 9 56 -50 2 2.33 641 6,73 16.90-11.16 29.05-18.64 7.76 11.65 12.12 Weekly Ust Chg. Pet. 5.59 27.40-29 24 7.70 4.69 40.88-35.17 2.07 -45 5 9.67 3.40 -250 4.77 3.01 Declines ReliantEn HartfdFn AlliedCap CypSeml Mosaic iSlar QnGrthPrp MiranlwlB FlrtyPldlnc AbitiBow GenMoly CapWest EmmisC pi Expedwt2 A-Power Agilysys If Crosstex FuelSysSol VRC Wwde ReiEnergy SlIDynam even your collection of empty beer cans in the basement. "Does it really still matter to you?" Martin asks.

"See if there is any value in the collection on eBay, Craigslist or at a yard sale." And for the true emergency: Take an early distribution from a traditional IRA. The price is high though: When cashed in prior to age an early distribution packs a 10 percent penalty on the amount withdrawn unless the cash-out meets a handful of exemptions. A Roth IRA distribution can be made penalty-free as long as contributions and not earnings are withdrawn. There is, however, a five-year waiting period for contributions that were converted from tradition .28 -1 70 -34 1 .42 Desperate consumers can find cash in a couple of ways during hard economic times, according to local financial and money-management experts: This one is obvious but also exhausting: Get a second job. There are 168 hours in a week.

A 40-hour job leaves 128 hours for work at another job on the night shift, weekends or from home. It may not bring an immediate infusion of jingle, but second jobs do bring in cash. Family members might be a good source assuming family members have money to lend. "Go into this understanding the baggage that conies with borrowing from family," Martin said. Take a hard look at that collection of gold, baseball cards, pottery 18-18 68 ProUBasM 33.

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