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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: llwk7051@aol.com who wrote (2054)	12/2/1998 5:33:00 PM
From: John Arnopp	Read Replies (2) \| Respond to of 4467

I agree, Robert. It's a good time to step back and look at the whole situation: First, what is the outlook for venture capital? You've got large companies (and newly large companies due to market valuation) looking for investments and companies to acquire to grow. And there are a lot of VC dollars chasing larger investments. Most seed stage companies are too small for the amount of money VCs are looking to invest. Second, with huge valuations being assigned to the hottest companies, I don't think it makes sense to save a few dollars of underwriting costs for hot companies to want to go the Safeguard rights offering route. I'm not sure we'll ever see the VerticalNets and other ICG portfolio companies coming out through Safeguard or Safeguard-like offerings. Finally, investing in IPOs and "VC" type companies is getting easier. You can get Ticketmaster On-line through Wit Capital, and I believe you could have got eBay through E*Trade. Of course, you had to qualify, but I think many more people were able to do that than would be willing to buy 500+ shares of Safeguard and hold them for the rights. You can also buy more companies like CMGI and companies that are investing heavily in new companies. What does this mean for Safeguard? I think Safeguard is still a great concept and an extremely well-managed company. I would like to see them focus on seed and development stage companies, using their expertise to take the time to grow them up. This would allow them the early entry and time necessary to really own a substantial portion of the company, giving them the leverage they need to be able to offer them at $5 per share. They can let the other VC funds invest the smaller amounts in the larger companies. For my money, I want to see the SCAIs (who doesn't), the WhoVisions, the ChromaVisions, and the MultiGens. They won't all be great, but one SCAI makes up for a DOCC or two. Small and innovative with big ideas and payoffs. Anyway, that's my opinion. I still wonder why Don Caldwell wants to pursue opportunities in Europe...maybe he wants to travel. Good luck to all, --John