There can never be too much money in the bank. Such appears to be the thinking behind a new dynamic that is reshaping Silicon Valley. Start-ups, already flush with cash, are piling on investment dollars, David Gelles and Michael J. de la Merced write in DealBook. Of the 100 largest venture capital fund-raising rounds on record, 88 were issued within the last five years, according to CrunchBase, which tracks venture funding. Each delivered more than $50 million to the companies.
Several factors are driving the proliferation of big late-stage investments. Technology start-ups are staying private longer, venture capital firms are looking to put idle money to work, and institutional investors are chasing returns in fast-growing private companies. For technology companies hoping to achieve the highest possible valuation on the road to a sale or an initial public offering, this means it is easier than ever to raise large amounts of money. “There’s a Silicon Valley expression: Eat when the food is passed,†said one start-up’s chief executive.
At the same time, the influx of money is inflating the valuations of young companies and stoking fears of another dot-com bubble. And some venture capitalists warn that the current rush of big late-stage funding could reduce entrepreneurs’ discipline. But venture capitalists are not the only ones writing big checks. Increasingly, the firms are being joined by hedge funds and private equity firms chasing huge returns. Even mutual funds are jumping in, given access to promising start-ups with the understanding that they would remain investors even after an I.P.O.
WALL STREET EARNINGS SEASON RECAP  | Wall Street earnings season kicked off on Friday, with JPMorgan Chase reporting an 18.5 percent slump in first-quarter profit, hurt by steep revenue declines in its trading machine. The bank’s fixed-income trading fell roughly 26 percent, to $3.76 billion, from $4.75 billion in the period a year earlier. In contrast, first-quarter earnings at Wells Fargo rose 14 percent, spurred in part by a surge in auto lending and loans to corporations.
Looking ahead, Citigroup reports results on Monday at 8 a.m., followed later in the week by Bank of America, Morgan Stanley and Goldman Sachs.
At first glance, the contrasting fortunes of JPMorgan and Wells Fargo point to the ascendancy of Main Street over Wall Street, Jessica Silver-Greenberg and Michael Corkery write in DealBook. The growth in Wells Fargo’s car loan business underscores the shifting strategies between the bank and JPMorgan. In the first quarter, Wells Fargo said it originated $7.8 billion in auto loans, a 15 percent increase from the period a year earlier. JPMorgan’s auto loans grew by only 3 percent in the same time period.
But, Ms. Silver-Greenberg and Mr. Corkery write, “Wells Fargo’s relative strength in a banking landscape where millions of consumers are still grappling with troubled credit, and many businesses remain wary of hiring new workers, raises questions about whether the bank is delving into more risky lending to bolster its bottom line.†Wells Fargo executives say the credit quality of its loans has not slipped, but some financial analysts are questioning whether part of the increase is built on loans to financially troubled borrowers.
POOLED PENSIONS TEETER AND FALL  | “The pensions of millions of Americans are being threatened because of trouble in a part of the retirement world long considered so safe that no one gave it a second thought,†Mary Williams Walsh writes in DealBook. The pensions belong to people in multiemployer plans, which are big pooled investment funds with many sponsoring companies and a union.
Pensions in multiemployer plans were once believed to be extremely reliable because, when one company in a multiemployer pool failed, the others were required to pick up its “orphaned†retirees, Ms. Walsh writes. But today, the aging of the work force, the decline of unions, deregulation and two big stock crashes have left vulnerable the pools and the federal insurance plan meant to support them. Dozens of multiemployer plans, which cover 10 million Americans, have already failed, and some giant ones are teetering.
In February, the Congressional Budget Office projected that the federal multiemployer insurer would run out of money in seven years, which would leave retirees in failed plans with nothing. Ms. Walsh writes: “So far, efforts to keep multiemployer plans from toppling, and taking the federal insurance program down with them, are giving rise to something that was supposed to have been outlawed 40 years ago: cuts in benefits that workers have already earned.â€
ON THE AGENDA  | Retail sales for March are released at 8:30 a.m. Business inventories for February are out at 10 a.m. Citigroup reports first-quarter earnings at 8 a.m. Shaquille O’Neal , the former N.B.A. star, is on CNBC at 3:30 p.m. Passover begins at sundown.
HERBALIFE PLUNGES ON CRIMINAL INQUIRY NEWS Â |Â Herbalife shares plummeted on Friday afternoon after The Financial Times reported that federal prosecutors and the F.B.I. were investigating the diet supplements company, Ben Protess and Matthew Goldstein write in DealBook. The stock finished the day down nearly 14 percent, at $51.48. The hedge fund manager William A. Ackman has staked a billion-dollar bet that the company is a pyramid scheme.
The criminal inquiry coincides with civil investigations by the Securities and Exchange Commission and the Federal Trade Commission. But it is unclear whether the F.B.I. investigation has gained much momentum. An official briefed on the matter told The New York Times that the inquiry had continued for several months without Herbalife receiving a subpoena. It is possible that the authorities will close the case without taking action against Herbalife, the official said. For its part, Herbalife cast some additional doubt, saying that it was unaware of any criminal inquiry.
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Chinese Consortium Buys Peru Mine for $6 Billion  | Glencore Xstrata said it had agreed to sell its Las Bambas copper mine in Peru to a group of state-owned Chinese companies. DealBook »
Saab in Talks to Buy ThyssenKrupp Shipyard Operations  | The Swedish military contractor Saab has signed a nonbinding memorandum of understanding on the possible acquisition of ThyssenKrupp Marine Systems. DealBook »
Franken’s Campaign Against Comcast Is No Joke  | After a failed attempt to block the Comcast-NBC Universal merger, Senator Al Franken again finds himself playing a trustbusting role in Washington, The New York Times reports. NEW YORK TIMES
Alibaba to Acquire Chinese Mapping Firm as Buying Spree Continues  | AutoNavi Holdings, which holds a rare mapping license from the Chinese government, has agreed to sell itself to the Alibaba Group in a deal that values it at $1.5 billion. DealBook »
Michael Foods Nears $2.5 Billion Sale  | The Michael Foods Group is said to be in advanced talks to sell itself for close to $2.5 billion, Reuters writes, citing unidentified people familiar with the situation. Tyson Foods and Post Holdings have emerged as final contenders for the deal. REUTERS
The Poetry of the Trading Floor, Going Beyond Bears and Bulls  | Popular opinion has it that bankers think of nothing but profit, but their brains are fixated on linguistic creativity, Mark Forsyth writes in The New York Times. NEW YORK TIMES
After the Squall, Chop Remains for JPMorgan Chase  | In its first quarter without significant special items, JPMorgan Chase still could not make a case for clear sailing, Jeffrey Goldfarb of Reuters Breakingviews writes. DealBook »
Wall Street’s Work Habits Could Be Hurting All of Us  | “You might feel no sympathy for young bankers and the punishing hours they work. But you might want to pay attention, because their bad work habits could be contagious,†Jillian Berman writes in The Huffington Post. HUFFINGTON POST
For Falcone, No Joy in the Sale of Manischewitz  | Philip A. Falcone suffered a loss when his hedge fund sold its position this week to Sankaty Advisors, people close to the matter said. DealBook »
Ardian to Sell Food Ingredients Maker to Symrise for $1.8 Billion  | Symrise, a German maker of flavors and scents, said it had made a binding offer to acquire Diana from the private equity firm Ardian, which was spun off from the French insurer AXA Group last year. DealBook »
K.K.R. Said to Be Selling Ipreo  | The Blackstone Group and the investment arm of Goldman Sachs are set to acquire Ipreo, a capital markets data and software provider for banks, from the private equity firm Kohlberg Kravis Roberts in a secondary deal that values Ipreo at $975 million, The Financial Times reports, citing unidentified people familiar with the situation. The planned sale comes barely three years after K.K.R. acquired Ipreo for $425 million. FINANCIAL TIMES
Morgan Stanley Said to Be Near Deal to Sell Learning Care  | Morgan Stanley’s private equity arm is said to be in advanced talks to sell the Learning Care Group, North America’s second-largest for-profit child care provider, to the buyout firm American Securities, Reuters writes, citing unidentified people familiar with the situation. REUTERS
A Chance for a Market’s Wallflowers to Bloom  | The market sell-off is providing a rare moment in the sun for so-called value investors, who focus on out-of-favor stocks with relatively low valuations, James B. Stewart writes in the Common Sense column. NEW YORK TIMES
Hedge Fund Rival Says Loeb’s Sotheby’s Campaign Could Fall Flat  | Christopher Tsai, who runs the New York hedge fund Tsai Capital and collects art, said that any change driven by the activist investor Daniel S. Loeb’s campaign against the auction house Sotheby’s “could wind up taking a long time before paying off in a meaningful way,†The New York Post writes. NEW YORK POST
Italian Asset Manager Raises $961.5 Million in I.P.O.  | Anima priced its offering near the top of the expected range at 4.20 euros a share, giving it a market capitalization of €1.26 billion, or about $1.75 billion. DealBook »
China’s Jumei Files for $400 Million U.S. I.P.O.  | Jumei International Holding, a Chinese online cosmetics retailer backed by the venture capital firm Sequoia Capital, filed to raise up to $400 million in an initial public offering, Reuters reports. Jumei operates through its website Jumei.com and sells beauty products and perfumes. REUTERS
Parsley Energy Makes I.P.O. Plan Public  | Parsley Energy, an oil and natural gas company, made public its plan to raise up to $400 million in an initial public offering of Class A common stock, Reuters reports. REUTERS
Chinese Dairy Firms Hope to Raise Up to $1.3 Billion in I.P.O.’s  | Two Chinese dairy firms â€" China Shengmu Organic Milk and Beijing Sunlon â€" are planning to raise up to $1.3 billion combined from Hong Kong initial public offerings this year, The Wall Street Journal writes. WALL STREET JOURNAL
The Art of ‘Something From Nothing’  | By producing and investing in a series of successful start-ups like Expedia, Zillow and Glassdoor, Richard Barton has managed to accomplish something few others have done, The New York Times writes. NEW YORK TIMES
The Most Dangerous Word in Tech  | We see “innovation†almost as a force of nature, a relentless outcome by the work of tech entrepreneurs. In the process, several economists warn, we’re losing sight of social realities about innovation, Quentin Hardy writes in the Bits blog. NEW YORK TIMES BITS
The Problem With Profitless Start-ups  | “While some of the money used to fund money-losing start-ups comes from rich Silicon Valley investors, some large amount of it comes from public pensions, college endowments, and other, more modest sources,†Kevin Roose writes in New York magazine. NEW YORK MAGAZINE
Tinder Stake Sale Puts Valuation at $500 Million  | The Silicon Valley investor Chamath Palihapitiya recently sold his 11 percent stake in the online dating application Tinder to IAC for about $55 million, valuing the start-up in the $500 million range, ReCode writes. RECODE
Executive Pay: Invasion of the Supersalaries  | The compensation of corporate chief executives, up again in 2013, is drawing more scorn as an engine of income inequality, Peter Eavis writes in The New York Times. NEW YORK TIMES
Pay for Performance? It Depends on the Measuring Stick  | Many companies’ pay metrics are ineffective in motivating executives to create shareholder value, Gretchen Morgenson writes in the Fair Game column. NEW YORK TIMES
Still No. 1, and Doing What He Wants  | Larry Ellison, the chief executive of Oracle, may not care what you think about his $78.4 million in 2013 compensation, the highest in the Equilar 100 C.E.O. Pay Study, The New York Times reports. NEW YORK TIMES
Finance Officials Push for Bold Action to Sustain Economic Growth  | At the World Bank and International Monetary Fund annual spring meetings, finance ministers and central bankers also discussed the possibility of new penalties for Russia, The New York Times writes. NEW YORK TIMES
Detroit Wins Judge’s Nod for Contract Settlement  | A federal judge held up the bankrupt city’s settlement as an example of “the very spirit of negotiation and compromise†that he hoped other creditors would follow. DealBook »
Buyers Find Tax Break on Art: Let It Hang Awhile in Oregon  | A lucrative, little-known tax maneuver has produced a startling pipeline of art moving across the United States as collectors cleverly â€" and legally â€" exploit the tax codes, The New York Times writes. NEW YORK TIMES
