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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (64967)	10/13/2003 2:46:07 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

Lizzie, RE: How about this: please post a link showing that there is "considerable debate within KPCB on options expensing". There's a diametric disagreement between the two lead partners at KP. I believe that you realize that. That's a pretty good indication that there's considerable debate. And that is what I was referring to. At the time, I could only make the statement that I did because I didn't want to violate a confidence. By the way, it's funny how you completely ignore the fact that you misrepresented my position and falsely accused me of fabricating information. And you have the temerity to question my integrity.

To: Lizzie Tudor who wrote (64967)	10/13/2003 5:22:19 PM
From: hueyone	Respond to of 77400

I think when the most significant VC of the decade (90s) takes the most aggressive, political position against options expensing in the industry Yes, but the Mercury News article that I posted this morning referred to Vinod Khosla, not Doerr, as "arguably the the last decade's most successful venture capitalist". I think you are underestimating the stature of this man. bayarea.com Off the top of my head, I would think the easy and natural bias for VCs would be to not want to expense stock options, thus being able to continue on with the model of making tech companies appear much more profitable than they actually are, thus keeping the general public willing and eager to take companies with questionable business economics off their hands. (JMO) Yet Vinod Khosla appears to be taking a less simplistic view imo, recognizing that he has to compete for human talent against companies like Cisco, who under current accounting rules can hand out stock options too generously when they don't have to report an expense. As a result, Khosla likely ends up with much higher costs, that is a higher percentage of options going to employees for his start ups, has to pass on more deals (not enough ownership and upside left in the deals when he has to outcompete the Ciscos of the world with their "free" options), and he likely sees less overall deal flow as a result of this competition for human capital. In short, Khosla feesl that there would be more innovation and start ups if the big, public companies had to accurately report their expenses: If we want to encourage innovation, and support the start-ups which are the life-blood of Silicon Valley, we want to give them an advantage in hiring management,'' he said. I suspect Khosla also appreciates the long term risk in relying on business models that require fooling the greater public in order to succeed. When I have time, I will see if I can dig up any more articles that elaborate on his thinking. JMHO and conjecture, Huey