A Start-Up Is Offering an Online Way to Invest in Hollywood

Thanks to new securities rules, Hollywood is about to get into the crowdfunding game.

A start-up, Junction Investments, plans to open for business on Wednesday, allowing wealthy individuals to invest in movies alongside veteran film financiers.

At the start, the company will offer an online chance to back “A Hologram for the King,” an adaptation of the Dave Eggers novel that will star Tom Hanks. Soon after, would-be mini-moguls will be able to invest in “Triple Nine,” a thriller featuring Kate Winslet, the “12 Years a Slave” star Chiwetel Ejiofor and Woody Harrelson.

The start-up has already drawn a number of prominent backers and investors, including the casino billionaire Steve Wynn and the Internet entrepreneur Dave Morin.

Junction represents the latest change brought about by the Jumpstart Our Business Startups Act, or JOBS Act, whose passage in 2012 opened up new ways for companies to raise money. The law has already made it easier for companies to go public by eliminating a number of disclosure requirements.

Perhaps its most notable change was that it blessed crowdfunding. Groups of so-called accredited investors â€" people who either make $200,000 a year or have a net worth of more than $1 million, excluding their home â€" can band together to buy up to $1 million of a company’s equity.

With financing hard to raise, crowdfunding has become a buzzword in the movie business. Filmmakers have used sites like Kickstarter to raise money to start production, giving birth to movies like “Veronica Mars.”

But Junction is taking a different tack, its founders say: The films it will back are already fully funded, and will be made regardless of how much the start-up raises. Any money raised through the site could be used either as an additional cushion or as a replacement for some of the Hollywood financiers’ original investment.

Many in Hollywood worry that crowdfunding will open start-ups to lawsuits by unhappy investors. But Junction hopes to blunt that concern by giving investors the same terms as the seasoned financiers already involved in a movie. Kickstarter users, by contrast, are essentially donating to projects in return for rewards.

“Investors aren’t being asked to put money into projects that more experienced financiers have already passed on,” Brian Goldsmith, a Junction co-founder and a former producer for “CBS Evening News,” said in a telephone interview. “Experienced investors already have skin in the game.”

Prospective investors visiting the company’s website can read about coming projects â€" and wade through lengthy legal disclaimers â€" before deciding whether to invest. As to whether Junction investors will see their names in the movie credits, that will be up to each film’s backers.

Junction took shape in the fall of 2012 when Mr. Goldsmith began brainstorming with Adam Kaufman, a friend and a former banker at Goldman Sachs, about new business opportunities. They hit on the idea of crowdfunding, then decided the entertainment industry would be a perfect start.

Last November, the two went to the American Film Market, the conference in Santa Monica, Calif., where filmmakers make their pitches to prospective backers. In a crowded bar overlooking the Pacific Ocean, the two met with Christopher Woodrow and Molly Conners, the heads of the independent film studio Worldview Entertainment.

“While most people were talking about foreign film rights, we were talking about the JOBS Act,” said Mr. Kaufman, Junction’s chief executive.

But the Worldview executives quickly understood the business proposition, and by the end of the half-hour meeting, the two sides shook hands over a partnership, with “Triple Nine” serving as the studio’s first test.

Besides Worldview and Silver Reel Entertainment, which is backing the Tom Hanks movie, other partners include Endgame Entertainment, PalmStar and QED International.

Mr. Kaufman and Mr. Goldsmith soon hired a staff, including a former Google engineer, a onetime technology employee at Goldman and a former lawyer at Cravath, Swaine & Moore. They also began to seek out advisers like Mr. Wynn and Logan Green, the chief executive of the car service Lyft.

“They got it,” said Mr. Goldsmith, now Junction’s president. “We didn’t have to explain much.”

Even though Junction has not yet funded its first movie, Mr. Kaufman and Mr. Goldsmith are already thinking of how to expand their business model beyond Hollywood. While the two will not discuss future plans, they said that the crowdfunding model could work elsewhere in the entertainment industry.

“Within the film industry, we’re looking at a market of several billion dollars a year,” Mr. Kaufman said. “Outside of that, it’s a market of tens of billions of dollars.”

Many of Oculus’s Early Backers Not Part of Facebook Riches

The big winners of Facebook’s $2 billion deal to buy Oculus VR, a virtual reality headset maker, include a roster of elite venture capitalists who invested in the company early on.

But many who supported Oculus in its early days will walk away empty-handed.

Those would be its backers on Kickstarter, the fund-raising platform that Oculus used to raise $2.4 million in September 2012. That money helped the company develop its Oculus Rift headset for video games.

Kickstarter backers, due to the nature of the platform, would not have been expecting a big payday anyway. Their goal was not to receive equity but rather to see the product come to market. The smallest backers got merely a “thank you.” Larger backers were promised early prototypes of the headset itself.

Still, not all of Oculus’s backers on Kickstarter were happy with the Facebook acquisition. Markus Persson, for one, took to his blog to complain that he did not trust the social networking giant.

“I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition,” he wrote.

But the deal does reaffirm the power of Kickstarter to bring attention and money to new ideas. Another Kickstarter project, Pebble, a smartwatch, raised more than $10 million on the fund-raising platform and went on to attract venture capital.

In the case of Oculus, venture capitalists swooped in less than a year after the completion of the Kickstarter campaign.

In June 2013, the company raised a $16 million financing round led by Spark Capital and Matrix Partners. “I have a boss now, I guess,” Brendan Iribe, who started the company with Palmer Luckey and others, told The Verge at the time.

By the end of 2013, Oculus was signing another venture capital deal. Andreessen Horowitz led a $75 million investment round, with participation from the company’s earlier investors. Marc Andreessen and Chris Dixon, two partners at Andreessen Horowitz, joined the start-up’s board.

In that investment round, the company was valued at roughly $250 million, Wired reported at the time.

“Facebook’s support will dramatically accelerate the development of the virtual reality ecosystem,” Mr. Dixon wrote in a blog post on Tuesday, after the Facebook deal was announced. “While we are sad to no longer be working with Oculus, we are very happy to see virtual reality receive the support it deserves.”

Court Rejects Rajat Gupta’s Appeal

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British Government to Sell a Big Stake in Lloyds Banking

LONDON â€" The British government plans to reduce sharply its stake in the Lloyds Banking Group, another sign of the strengthening of the financial sector here.

Lloyds, a British lender, received a bailout of 17 billion pounds, or about $28 billion, from the British government during the financial crisis.

On Tuesday, U.K. Financial Investments, which manages the government’s holdings in Lloyds and the Royal Bank of Scotland, said it would to sell 5.35 billion of the shares it holds in Lloyds, or about 7.5 percent, in a placement with institutional investors. Based on Tuesday’s closing stock price, the sale would be worth nearly $7 billion. The sale will reduce the government’s stake in Lloyds to about 25 percent from about 32.7 percent.

Reducing the British government’s holdings in Lloyds and R.B.S. has been a priority for George Osborne, the chancellor of the Exchequer.

The government previously sold 6 percent of its holdings in Lloyds in September. The government holds about 81 percent of the Royal Bank of Scotland.

The latest sale comes as Lloyds’ has improved its results despite continuing legacy issues, such as the sale of payment protection insurance, a product that has cost the bank billions of pounds. (The bank took a £3.46 billion charge in the fourth quarter to compensate consumers wrongly sold the product.)

In 2013, Lloyds posted a loss of £838 million, compared with a loss of £1.47 billion in the prior year. Also In 2013, Lloyds posted a statutory profit of £445 million, an important measure for the lender. It was the lender’s first statutory profit since 2010.

“We’re becoming a normal bank again,” said António Horta-Osório, the Lloyds chief executive while announcing the bank’s full-year results last month.

Bank of America Merrill Lynch, JPMorgan Chase, Morgan Stanley and UBS will act as book-runners on the share sale. Lazard is acting as capital markets adviser on the placement.

Activists Crash Deal Makers’ Party

Activists are crashing the deal maker party.

Shareholder lawsuits, cross-border mergers and Marty Lipton, defender-in-chief, will play supporting roles at the annual New Orleans conference for merger lawyers and bankers. Aggressive investors shaking dozy boards are this year’s headliners. Their increasing presence at the gathering reinforces a growing power.

Two years ago, Pershing Square Capital’s William A. Ackman prompted nervous murmurs with swipes at “entrenched management” and a defense of rules that allow investors to quietly build stakes in companies. Corporate advisers also were uncomfortably abuzz over investor forays against Yahoo and McGraw-Hill.

A lot has changed since then.  Investors publicly took aim at 237 companies last year, an 8 percent increase from 2012, according to Activist Insight. Mr. Lipton, of the New York firm Wachtell, Lipton, Rosen & Katz, and the shareholder-rights advocate Lucian Bebchuk of Harvard still publicly butt heads over whether such investors seek long-term value or just a quick buck, but the tone is decidedly less combative behind the scenes.

One reason may be that heeding shareholder concerns makes more sense. Even big companies like Apple have proved to be vulnerable, and institutional investors have noticed. T. Rowe Price and other money managers help campaigns against the likes of Dell, occasionally feeding ideas to hedge funds. The activists, meanwhile, often solicit the support of large shareholders before pounding at the gate.

Boards themselves have discovered the merits of speaking directly with certain owners. Rather than just criticize Institutional Shareholder Services and other proxy advisers for flawed recommendations on say-on-pay votes and similar matters, directors are dispensing their own guidance. Last month, the Shareholder-Director Exchange - the brainchild of Cadwalader, Wickersham & Taft and other corporate advisers - began counseling boards and big investors on how to talk to each other. Even activists concede it could be a promising approach, provided it doesn’t become a lobbying effort to preserve the status quo.

Either way, the agitators have made their mark. The scheduled keynote speaker at the upcoming Tulane Corporate Law Institute is Daniel Gallagher from the Securities and Exchange Commission, who will address the rise of such investors. Attendees can probably look forward to a not-so-distant time when the agenda no longer needs to single out activists. That will be the sign their message has finally gotten through.

Reynolds Holding is a columnist at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

I.R.S. Says Bitcoin Should Be Considered Property, Not Currency

The Internal Revenue Service announced on Tuesday that Bitcoin should be viewed and taxed as property, giving a little clarity to the shifting regulatory landscape of virtual currency.

Despite the fact that many users treat Bitcoin like a regulated currency, “it does not have legal tender status in any jurisdiction,” the agency said.

That means that employers who choose to pay wages in Bitcoins will have to report those wages just like any other payment made with property, and Bitcoin income will be subject to the normal federal income withholding and payroll taxes.

Shortly after the announcement, Senator Tom Carper, Democrat of Delaware, praised the decision by the I.R.S. “The Internal Revenue Service’s guidance today provides clarity for taxpayers who want to ensure that they’re doing the right thing and playing by the rules when utilizing Bitcoin and other digital currencies,” he said.

Bitcoin, the computer-driven virtual currency that has gained momentum since it first popped up in 2009, has presented challenges for regulators. It has attracted a growing following of users and merchants, but it has no central bank and no government oversight.

In the wake of the collapse of one of the largest online exchanges for buying and selling Bitcoin last month, governments around the world have stepped up their efforts to figure out a way to protect consumers against fraud and other illegal activities.

The I.R.S.’s announcement also included a question-and-answer section:

Q-1: How is virtual currency treated for federal tax purposes?

A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.

Q-2: Is virtual currency treated as currency for purposes of determining whether a transaction results in foreign currency gain or loss under U.S. federal tax laws?

A-2: No. Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.

Q-3: Must a taxpayer who receives virtual currency as payment for goods or services include in computing gross income the fair market value of the virtual currency?

A-3: Yes. A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received. See Publication 525, Taxable and Nontaxable Income, for more information on miscellaneous income from exchanges involving property or services.

Q-4: What is the basis of virtual currency received as payment for goods or services in Q&A-3?

A-4: The basis of virtual currency that a taxpayer receives as payment for goods or services in Q&A-3 is the fair market value of the virtual currency in U.S. dollars as of the date of receipt. See Publication 551, Basis of Assets, for more information on the computation of basis when property is received for goods or services.

Q-5: How is the fair market value of virtual currency determined?

A-5: For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied.

Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property?

A-6: Yes. If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency. See Publication 544, Sales and Other Dispositions of Assets, for information about the tax treatment of sales and exchanges, such as whether a loss is deductible.

Q-7: What type of gain or loss does a taxpayer realize on the sale or exchange of virtual currency?

A-7: The character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset in the hands of the taxpayer. For example, stocks, bonds, and other investment property are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the sale or exchange of virtual currency that is not a capital asset in the hands of the taxpayer. Inventory and other property held mainly for sale to customers in a trade or business are examples of property that is not a capital asset. See Publication 544 for more information about capital assets and the character of gain or loss.

Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?

A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.

Q-9: Is an individual who “mines” virtual currency as a trade or business subject to self-employment tax on the income derived from those activities?

A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax. See Chapter 10 of Publication 334, Tax Guide for Small Business, for more information on self-employment tax and Publication 535, Business Expenses, for more information on determining whether expenses are from a business activity carried on to make a profit.

Q-10: Does virtual currency received by an independent contractor for performing services constitute self employment income?

A-10: Yes. Generally, self employment income includes all gross income derived by an individual from any trade or business carried on by the individual as other than an employee. Consequently, the fair market value of virtual currency received for services performed as an independent contractor, measured in U.S. dollars as of the date of receipt, constitutes self employment income and is subject to the self-employment tax. See FS-2007-18, April 2007, Business or Hobby? Answer Has Implications for Deductions, for information on determining whether an activity is a business or a hobby.

Q-11: Does virtual currency paid by an employer as remuneration for services constitute wages for employment tax purposes?

A-11: Yes. Generally, the medium in which remuneration for services is paid is immaterial to the determination of whether the remuneration constitutes wages for employment tax purposes. Consequently, the fair market value of virtual currency paid as wages is subject to federal income tax withholding, Federal Insurance Contributions Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported on Form W-2, Wage and Tax Statement. See Publication 15 (Circular E), Employer’s Tax Guide, for information on the withholding, depositing, reporting, and paying of employment taxes.

Q-12: Is a payment made using virtual currency subject to information reporting?

A-12: A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property. For example, a person who in the course of a trade or business makes a payment of fixed and determinable income using virtual currency with a value of $600 or more to a U.S. non-exempt recipient in a taxable year is required to report the payment to the IRS and to the payee. Examples of payments of fixed and determinable income include rent, salaries, wages, premiums, annuities, and compensation.

Q-13: Is a person who in the course of a trade or business makes a payment using virtual currency worth $600 or more to an independent contractor for performing services required to file an information return with the IRS?

A-13: Generally, a person who in the course of a trade or business makes a payment of $600 or more in a taxable year to an independent contractor for the performance of services is required to report that payment to the IRS and to the payee on Form 1099-MISC, Miscellaneous Income. Payments of virtual currency required to be reported on Form 1099-MISC should be reported using the fair market value of the virtual currency in U.S. dollars as of the date of payment. The payment recipient may have income even if the recipient does not receive a Form 1099-MISC. See the Instructions to Form 1099-MISC and the General Instructions for Certain Information Returns for more information. For payments to non-U.S. persons, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

Q-14: Are payments made using virtual currency subject to backup withholding?

A-14: Payments made using virtual currency are subject to backup withholding to the same extent as other payments made in property. Therefore, payors making reportable payments using virtual currency must solicit a taxpayer identification number (TIN) from the payee. The payor must backup withhold from the payment if a TIN is not obtained prior to payment or if the payor receives notification from the IRS that backup withholding is required. See Publication 1281, Backup Withholding for Missing and Incorrect Name/TINs, for more information.

Q-15: Are there IRS information reporting requirements for a person who settles payments made in virtual currency on behalf of merchants that accept virtual currency from their customers?

A-15: Yes, if certain requirements are met. In general, a third party that contracts with a substantial number of unrelated merchants to settle payments between the merchants and their customers is a third party settlement organization (TPSO). A TPSO is required to report payments made to a merchant on a Form 1099-K, Payment Card and Third Party Network Transactions, if, for the calendar year, both (1) the number of transactions settled for the merchant exceeds 200, and (2) the gross amount of payments made to the merchant exceeds $20,000. When completing Boxes 1, 3, and 5a-1 on the Form 1099-K, transactions where the TPSO settles payments made with virtual currency are aggregated with transactions where the TPSO settles payments made with real currency to determine the total amounts to be reported in those boxes. When determining whether the transactions are reportable, the value of the virtual currency is the fair market value of the virtual currency in U.S. dollrs on the date of payment.

See The Third Party Information Reporting Center, http://www.irs.gov/Tax-Professionals/Third-Party-Reporting-Information-Center, for more information on reporting transactions on Form 1099-K.

Q-16: Will taxpayers be subject to penalties for having treated a virtual currency transaction in a manner that is inconsistent with this notice prior to March 25, 2014?

A-16: Taxpayers may be subject to penalties for failure to comply with tax laws. For example, underpayments attributable to virtual currency transactions may be subject to penalties, such as accuracy-related penalties under section 6662. In addition, failure to timely or correctly report virtual currency transactions when required to do so may be subject to information reporting penalties under section 6721 and 6722. However, penalty relief may be available to taxpayers and persons required to file an information return who are able to establish that the underpayment or failure to properly file information returns is due to reasonable cause.

Daniel Loeb Sues Sotheby’s Over Poison Pill

The billionaire activist investor Daniel S. Loeb has sued Sotheby’s to remove a poison pill that has prevented his hedge fund from buying more of the company’s shares.

On Tuesday, Mr. Loeb’s hedge fund, Third Point, called the poison pill an “improper attempt by the directors of Sotheby’s to entrench themselves in office and to hinder Third Point’s or any other stockholder’s ability to run an effective proxy contest,” according to a complaint filed in Delaware.

Mr. Loeb, who is known for taking positions in companies and then seeking change on the board, mounted a proxy battle at Sotheby’s last month, requesting three seats on the board. Two weeks ago, the auction house rejected his board nominees â€" which included Mr. Loeb himself â€" saying they added “no relevant expertise not already represented on the board of directors.”

By suing Sotheby’s, Third Point is hoping that the courts will rule that the poison pill is illegal, allowing Mr. Loeb to buy more shares in the company and make more demands for control of the board. It currently has a 9.6 percent stake in the auction house.

A spokesman for Sotheby’s said the board had not yet received the complaint.

“The company intends to review Third Point’s complaint regarding the rights plan once we have been served with it, and we continue to believe that the board’s decisions to adopt and maintain the 12-month rights plan are both valid and legal,” it said in an emailed statement.

European Tech Start-Ups Pin Hopes on Candy Crush Maker

LONDON - King Digital Entertainment, the Swedish maker of the popular game Candy Crush Saga, has a lot riding on its initial public offering. But so do many other European technology companies, which are hoping King and its Candy Crush franchise are not one-hit wonders that might make it harder for the rest of them to attract investors.

King, which struggled for nearly a decade as a game maker before hitting it big with Candy Crush in 2012, plans to begin trading its shares Wednesday on the New York Stock Exchange. Some analysts say the offering could value King at up to $7.6 billion, which would make it one of the largest I.P.O.’s of a European technology company in more than a decade, according to the data provider Thomson Reuters.

King is expected to price its shares after the United States financial markets close on Tuesday.

By securing a multibillion-dollar valuation, the 11-year-old King, which has offices across the Continent and in San Francisco, could pave the way for more European tech companies to cash in via I.P.O.’s.

Over the past decade, a number of tech clusters in cities like Stockholm, Helsinki and Berlin have sprouted, as entrepreneurs and venture capitalists look to profit from consumers’ insatiable appetite for technology. Many hope a successful King’s stock offering can help cement Europe’s reputation alongside Silicon Valley and Israel as a global center for start-ups and innovation.

‘‘The European tech ecosystem is starting to have critical mass,’’ said Niklas Zennstrom, a Swedish co-founder of Skype who has also backed several of Europe’s tech outfits like the gaming companies Supercell and Rovio. ‘‘A number of successful companies are becoming role models for other start-ups.’’

Yet King’s reliance on its main Candy Crush franchise, which represents almost 80 percent of its earnings, could prove a cautionary tale for other tech start-ups, if it cannot come up with successful future releases.

Analysts cite Zynga, the American gaming company behind the FarmVille and Words With Friends franchises that stumbled after its I.P.O. in 2011. Investors became skeptical about the company’s business model, and the company’s stock is still valued at less than 50 percent of its initial price.

Those with a lot riding on the King I.P.O. include the banks leading the offering: JPMorgan Chase, Credit Suisse and Bank of America Merrill Lynch.

King has relied to date on so-called freemium games, which allow users to download games for free, but charge them for access to additional content, virtual items or opportunities to accelerate their progress in games.

Industry analysts say the company must prove to shareholders that it can replicate the success that has attracted almost 100 million daily users around the world, people who play Candy Crush on smartphones.

‘‘Companies like King are reliant on hits,’’ said Mark Little, an analyst at the technology consultancy Ovum in London. ‘‘It’s an open question whether they can sustain their success.’’

King was founded in Sweden more than a decade ago, but its celebrity is of recent vintage. Its offices in cities across Europe, which include London, Barcelona, Spain and Bucharest, Romania, also have led to many in Europe’s tech community to take credit for helping the company to grow into a global giant.

Many in Stockholm still view the company, which has a large team in the Swedish capital, as their own, while the company’s office in London has led many here to claim King as a British success story.

The company’s growth has come alongside consumers’ growing interest in games on their mobile devices. King’s revenue jumped to $1.9 billion last year from only $164 million in 2012, according to regulatory filings.

King acknowledges its current dependence on Candy Crush, having warned that the franchise’s sales will decline over time, and that the game’s revenue actually fell in the fourth quarter of last year. The company’s second-most popular game, Farm Heroes Saga, is only about one-fifth the size of Candy Crush, in terms of daily players.

Other European games companies that have achieved global prominence include Supercell, the Finnish maker of the hit Clash of Clans, was valued at $3 billion last year when the Japanese telecommunications company Softbank bought slightly more than half of the company for $1.5 billion.

As with King, revenue at Supercell skyrocket over a short period. Last year, it rose nearly ninefold to almost $900 million compared with 2012, while its pretax profit jumped eightfold, to $464 million, over the same period.

Companies like King and Supercell have focused on new games, but other European gaming companies have diversified into new sectors to reduce their reliance on a single product line.

Rovio, the Finnish maker of the Angry Birds franchise, has expanded into movies, theme parks and educational offerings that build on its existing global brand.

‘‘Some gaming companies are clueless about branding,’’ Peter Vesterbacka, Rovio’s chief marketing officer, said in an interview this year. ‘‘They build games to last 100 days and move on to the next one. There’s no guarantee that they will create hits.’’

A Ranking of Top Executives by Their Employees

The chief executives of LinkedIn, Ford Motor Company, Northwestern Mutual, Goldman Sachs and Intuit were among the top scorers this year in Glassdoor’s ranking of the leaders at 51 big companies. Yahoo and General Electric anchored the bottom of the list.

Glassdoor is a jobs listing website that lets employees anonymously rate their bosses.

Jeff Weiner of LinkedIn, a social network website, received a 100 percent favorability rating with the employees, and former employees, who responded. His leadership scored the top marks in ratings for senior management, work and life balance, culture and values, compensation and benefits and career benefits. Each company on the Glassdoor list had 1,000 or more employees. The comments were mostly measured, though there were a few zingers.

Mr. Weiner, for example, won high marks, with one project manager noting that the company “fosters productivity from a positive, fun exchange of ideas.” But another, a former associate product manager, curtly noted that the company “needs innovation.”

In total, three of the top 10 executives on Glassdoor’s ranking were from Silicon Valley. Brad Smith at the financial software maker Intuit was ranked No. 7, with a 94 percent approval rating, and Mark Zuckerberg, at Facebook, came in at No. 10, with a 93 percent rating. The number of technology leaders increases to four when counting Larry Page at Google, who came in No. 11. Jeff Bezos, at Amazon, in Seattle, was in the middle of the pack, at No. 33, with an 86 percent rating from his employees.

Traditional industries claimed some of the top spots. Alan R. Mulally, at Ford Motor came in No. 2, and Richard W. Edelman, chief executive of the public relations giant Edelman, at No. 3. Each received a 97 percent approval rating from employees.

John E. Schlifske at Northwestern Mutual and Craig Jelinek at Costco both received a 95 percent rating, along with Paul E. Jacobs, who led San Diego-based chip maker Qualcomm before Steven M. Mollenkopf took over this month.

Even Wall Street bosses got some love. Lloyd C. Blankfein, who heads Goldman Sachs, came in at No. 8, with a 93 percent approval rating from his underlings.

There were only two women on the list. Sharen Turney, at Victoria’s Secret, was listed at No. 35, with an 85 percent rating. Marissa Mayer, at Yahoo, came in at No. 50 with a 79 percent rating, just above Jeffrey Immelt of General Electric, with 78 percent.

One employee praised Yahoo for “generous compensation for many and nice benefits, including free food,” and the “many competent and driven people who want to get things done,” but added there was “lots of red tape, difficulty dealing with proposals across properties. Company lacks direction and is not as technologically proficient as a tech company should be.”

At Carlyle, an Outsider Is Now a Potential Heir

Many financial firms, from Goldman Sachs to Bain Capital, like to groom their senior talent from within. But the Carlyle Group, a private equity giant based in Washington, has shown time and again that it is willing to look elsewhere for its leaders.

The most prominent example yet came on Tuesday, when Carlyle announced that Michael J. Cavanagh, one of the co-leaders of JPMorgan Chase’s huge investment bank, would leave to become its co-president. In the newly created role, Mr. Cavanagh, 48, will share responsibilities with Glenn A. Youngkin, 47, an insider who has spent nearly two decades at Carlyle.

Mr. Cavanagh’s hiring will ripple through JPMorgan, where he was a top lieutenant to the chief executive, Jamie Dimon.

For Carlyle, the implications are equally profound. With Mr. Cavanagh joining the highest ranks of the private equity firm, an outsider is now in line to possibly take over one day from the firm’s three founders, who are well into their 60s.

The founders, David M. Rubenstein, William E. Conway Jr. and Daniel E. D’Aniello, are not planning on stepping down any time soon. And certainly, other Wall Street titans like Carl C. Icahn and Warren E. Buffett are still going strong in their 70s and 80s.

But Mr. Cavanagh and Mr. Youngkin, who is currently the chief operating officer, are now in the catbird seat at Carlyle. As co-presidents and co-chief operating officers, their day-to-day responsibilities will be defined broadly, overseeing operations and the development of new products, along with helping to manage the funds and deal with investors.

“Coupling a highly successful senior financial services executive with a proven Carlyle leader possessing deep institutional knowledge will help ensure that Carlyle continues to innovate and grow for another quarter century,” Mr. Rubenstein and Mr. Conway said in a statement on Tuesday. “Mike’s arrival combined with the well-deserved promotion for Glenn provides Carlyle with the incredible opportunity to enable fresh perspectives in an environment that embraces change.”

Mr. Cavanagh joins other senior leaders who went to Carlyle from various corners of Wall Street. To some extent, their diverse backgrounds reflect the institutional changes Carlyle has experienced in the last few years.

Adena T. Friedman, the chief financial officer, joined Carlyle in 2011 as it was preparing to go public. She had formerly held the same title at the Nasdaq OMX Group, and was valued for her experience at a prominent public company.

Michael J. Petrick, the head of global market strategies at Carlyle - a business that includes credit, hedge funds and other investment strategies - joined the firm in 2010 after a 20-year career at Morgan Stanley, where he was the head of institutional sales and trading.

Another Morgan Stanley executive, Jacques P. Chappuis, joined Carlyle last year to run its so-called solutions business, a platform that invests in other funds. At Morgan Stanley, he had run the fund-of-funds business.

Carlyle has also hired from rivals in private equity. Kewsong Lee, Carlyle’s deputy chief investment officer in the corporate private equity group, joined the firm last year after 21 years at Warburg Pincus, in prominent investment roles.

Carlyle’s founders first reached out to Mr. Cavanagh last year, according to a person briefed on the matter who was not authorized to speak publicly about it. Internally, the decision to create co-presidents was characterized as “leadership planning” rather than succession planning.

Throughout months of talks, Mr. Cavanagh got to know the founders and spent time with Mr. Youngkin, to make sure the two would be compatible.

“I’m pleased to welcome Mike to Carlyle as my partner,” Mr. Youngkin said in a statement on Tuesday.

Sidley Austin Hires Senior Lawyer From General Electric

Chris Barbuto, one of General Electric’s senior mergers and acquisitions lawyers who helped engineer some of the company’s largest transactions, has joined the law firm of Sidley Austin, the firm announced on Tuesday.

During his nine-year tenure at G.E., Mr. Barbuto helped auction off the company’s global plastics business for $11.6 billion in 2007. He also aided the company with its investment and partnership with XD Electric Group of China.

Before serving in the company’s M&A practice, Mr. Barbuto worked in the firm’s energy financial services unit. During that time, he counseled the company on joint ventures with ArcLight Capital Partners and other groups.

“Chris’s experience will enable him to provide practical advice to clients seeking to execute on complex M&A, joint ventures, strategic alliances and divestitures,” said Scott Freeman, a member of Sidley Austin’s executive committee and a coordinator of the firm’s M&A practice. “We are excited to welcome Chris to the team.”

Mr. Barbuto began his career as a clerk for the United States district court judge Alfred J. Lechner Jr. in New Jersey. He is currently an adjunct associate professor at Fordh

am Law School, which he attended.

TPG’s New Investment Approach

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LiveSafe, a Safety App, Raises $6.5 Million From IAC and Others; Diller Joins Board

LiveSafe, a start-up aiming to create a next-generation safety network for mobile phones, has found a powerful new backer.

The company plans to announce on Tuesday that it has raised $6.5 million in financing in a round led by the Internet conglomerate IAC. Moreover, IAC’s chairman, Barry Diller, will join LiveSafe’s board.

The investment reflects a vote of confidence in LiveSafe, a start-up aimed at bolstering school safety. The company’s service lets university students connect to emergency services from their smartphone without having to call 911.

The company has roots in tragedy: One of its co-founders, Kristina Anderson, was shot many times during the 2007 shooting at Virginia Tech. And another co-founder, Shy Pahlevani, was mugged.

Among the problems that LiveSafe’s founders confronted was that students rarely used their phones to make calls, let alone for 911 emergencies. That reluctance to say something after seeing a potentially troubling incident - bullying, a disturbance or worse - is a missed opportunity to prevent a possible catastrophe.

“Most students these days barely call their parents,” Jenny Abramson, the company’s chief executive, said by telephone. “It’s not strange that they don’t want to call safety officials.”

LiveSafe’s app lets users perform one of four actions: report a variety of incidents ranging from a car accident to vandalism; view a map and a list of reported suspicious activity; broadcast their location to family or friends for safety; and call or message 911 or campus police. Students can send pictures or audio recordings as well.

The app lets users report incidents anonymously, Ms. Abramson said, hopefully making people more comfortable about reporting bullying or sexual assault.

Safety officials, meanwhile, can broadcast messages warning users about anything from ice in a parking lot to more serious situations.

LiveSafe is in use at a number of schools, including Georgetown and Virginia Commonwealth University, and has a number of current and former law enforcement officials as advisers.

Among its backers are a number of angel investors as well as CIT GAP Funds, an investment arm of LiveSafe’s home state of Virginia. But Ms. Abramson, through a number of contacts, arranged a meeting with IAC.

The investment will also result in a rare appearance by Mr. Diller on a corporate board unrelated to IAC. To date, he serves as a director only at the Coca-Cola Company and at Graham Holdings, the former owner of The Washington Post.

“We now have the technology and infrastructure to make life safer for people as they go about their daily lives,” Mr. Diller said in a statement. “LiveSafe is an excellent platform for putting safety directly in people’s hands, and has the potential for making individuals and communities far safer than they are today.”

Ms. Abramson declined to comment on the start-up’s finances or its pricing model, saying only that LiveSafe’s fees would depend on individual clients’ implementations.

But she added that she believed the service would take off as more schools regard safety as a selling point as important as academic ranking or cost.

Still, LiveSafe’s executives think bigger opportunities lie ahead, from high schools to sports arenas.

“This is a technology that can make people safer,” Ms. Abramson said.

Julius Baer Takes Majority Stake in Brazilian Wealth Manager

LONDON - The Swiss private bank Julius Baer Group said on Tuesday that it had increased its holdings and now owned 80 percent of GPS Investimentos Financeiros e Participações, Brazil’s largest wealth management company.

Julius Baer first took a 30 percent stake in GPS in May 2011. GPS’s assets under management have doubled in the last three years, and stand at $6.46 billion.

Terms of the deal were not disclosed.

“Our majority participation enables us to gain long-term access to one of the most attractive and promising domestic wealth management markets worldwide, and represents another key step in the execution of Julius Baer’s focused growth strategy,” said Boris F.J. Collardi, the chief executive of Julius Baer.

GPS was formed as a partnership in 1999 by José Eduardo Martins, Marco Belda and Roberto Rudge. They are expected to lead the business while it is integrated into Julius Baer’s corporate structure.

After the integration, GPS, which has about 120 employees, will continue to operate under its brand name.

JPMorgan Co-Head of Investment Banking to Leave

One of the leaders of JPMorgan Chase’s enormous investment bank, Michael J. Cavanagh, plans to leave the firm, in the latest departure of a senior executive.

He will join the Carlyle Group, a major private equity firm and a longtime client of JPMorgan Chase, in the newly created role of co-president, Carlyle announced on Tuesday.

The departure is the latest of a member of the inner circle at JPMorgan in recent years, including some of Mr. Dimon’s closest confidants, among them: Charles W. Scharf, former head of retail; James E. Staley, former head of the investment bank; and Heidi Miller, a onetime head of international.

But Mr. Cavanagh’s exit is one of the most surprising. He has long been a top lieutenant to the firm’s chief executive, Jamie Dimon, and his ascent through the ranks had marked him as a potential successor to his boss.

He arrived at JPMorgan with Mr. Dimon in 2004 from Bank One, serving as chief financial officer through the financial crisis and then as head of treasury and securities services. He also led an internal analysis of the firm’s chief investment office after it lost billions of dollars on a soured trading bet.

Mr. Cavanagh was promoted to co-head of the investment bank about two years ago. But having played prominent roles in two of JPMorgan’s most trying times, he wanted a change in career, according to a person briefed on the matter.

“I have worked with Mike Cavanagh for more than 20 years,” Mr. Dimon said in a statement. “He’s a highly talented executive and has been an integral part of our management team, as our C.F.O. for six years and as co-C.E.O. of the corporate & investment bank. He’s also a special person and we wish him well in his choice to take on a new challenge.”

Daniel Pinto, who served as co-chief executive of the investment bank, will now be the unit’s sole leader.

At Carlyle, Mr. Cavanagh will serve as co-president alongside Glenn A. Youngkin, a veteran of the firm.

“I have worked at JPMorgan Chase for almost my entire professional life, and it was not without a lot of soul searching that I decided it was time for me to take my career in a different direction,” Mr. Cavanagh said in a statement. “I wouldn’t have left for any company other than the Carlyle Group, a firm and a management team I have known for a long time.”

JPMorgan Co-Head of Investment Banking to Leave

One of the leaders of JPMorgan Chase’s enormous investment bank, Michael J. Cavanagh, plans to leave the firm, in the latest departure of a senior executive.

He will join the Carlyle Group, a major private equity firm and a longtime client of JPMorgan Chase, in the newly created role of co-president, Carlyle announced on Tuesday.

The departure is the latest of a member of the inner circle at JPMorgan in recent years, including some of Mr. Dimon’s closest confidants, among them: Charles W. Scharf, former head of retail; James E. Staley, former head of the investment bank; and Heidi Miller, a onetime head of international.

But Mr. Cavanagh’s exit is one of the most surprising. He has long been a top lieutenant to the firm’s chief executive, Jamie Dimon, and his ascent through the ranks had marked him as a potential successor to his boss.

He arrived at JPMorgan with Mr. Dimon in 2004 from Bank One, serving as chief financial officer through the financial crisis and then as head of treasury and securities services. He also led an internal analysis of the firm’s chief investment office after it lost billions of dollars on a soured trading bet.

Mr. Cavanagh was promoted to co-head of the investment bank about two years ago. But having played prominent roles in two of JPMorgan’s most trying times, he wanted a change in career, according to a person briefed on the matter.

“I have worked with Mike Cavanagh for more than 20 years,” Mr. Dimon said in a statement. “He’s a highly talented executive and has been an integral part of our management team, as our C.F.O. for six years and as co-C.E.O. of the corporate & investment bank. He’s also a special person and we wish him well in his choice to take on a new challenge.”

Daniel Pinto, who served as co-chief executive of the investment bank, will now be the unit’s sole leader.

At Carlyle, Mr. Cavanagh will serve as co-president alongside Glenn A. Youngkin, a veteran of the firm.

“I have worked at JPMorgan Chase for almost my entire professional life, and it was not without a lot of soul searching that I decided it was time for me to take my career in a different direction,” Mr. Cavanagh said in a statement. “I wouldn’t have left for any company other than the Carlyle Group, a firm and a management team I have known for a long time.”

Inside Box’s I.P.O.

Cloud-based computing has been a hot area for deal makers, and a number of start-ups in the business are expected to go public this year.

Among the first is Box, which filed a prospectus on Monday evening to raise as much as $250 million in an initial public offering. A fund-raising round in December valued the company at $2 billion, but the I.P.O. is expected to give it a much higher valuation.

Yet Box also discloses in its filing: “We have a history of cumulative losses, and we do not expect to be profitable for the foreseeable future.”

So what is the attraction? Quentin Hardy of The New York Times writes:

Box’s service â€" the ability to store and share files from both personal computers and mobile devices like smartphones and tablets â€" is a hot area in technology for businesses because it makes collaboration and information-sharing easier from any location.

Besides Box, companies like Dropbox, Google, Amazon and Microsoft are all in the online storage business.

In its filing, Box, quoting the research firm IDC, said digital information was expected to grow 300-fold from 2005 to 2020, increasing demand for storage and content management businesses.

A number of leading Silicon Valley venture capital firms are backers of Box, including Draper Fisher Jurvetson, U.S. Venture Partners and General Atlantic. One who will be on the sidelines, writes PandoDaily, is Mark Cuban, who wrote the first check for Box. Mr. Cuban made a $350,000 investment in 2005, but a year later, he disagreed with Box’s founder and chief executive, Aaron Levie, over the strategic course of the company and decided to sell out to Draper Fisher.

For TechCrunch, the “big surprise” in the I.P.O. filing is that Mr. Levie owns only 4.1 percent of Box. “The numbers reveal Levie sold off much of his start-up to raise the $414 million that funded Box’s rise to become an enterprise brand name.”

The single-digit ownership “tells one story â€" a story of grit, determination and ability to write his own destiny,”  writes Om Malik of GigaOM in a paen to Mr. Levie.

“He has sweated blood, cried dry tears and all the time has conducted business with a smile and a quip.”

Tuesday Markets

United States stock-index futures were slightly higher on Tuesday morning after European markets recovered from a sharp sell-off on Monday. Stocks in London and Frankfurt were up more than 1 percent. Asian markets closed modestly lower.

Insurer RSA to Issue Shares to Raise $1.27 Billion

LONDON - The British insurer RSA Group said on Tuesday that it has launched a rights issue to raise 773 million pounds, or about $1.27 billion, as it looks to bolster its balance sheet following capital problems in its Irish business.

The company expects to issue 1.38 billion shares at 56 pence a share, giving shareholders the right to buy three shares for every eight they own.

The move will keep the company ahead of “anticipated industry capital trends” and allow it to carry out plans “without undue risk of suboptimal decisions forced by capital shortage or instability,” said Stephen Hester, the RSA chief executive.

The proceeds of the rights issue are expected to be held as cash or low-risk investments to improve the insurer’s capital position.

Mr. Hester, the former C.E.O. of Royal Bank of Scotland, took the top job at RSA in February. He joined R.B.S. in October 2008 after it took a government bailout and left the bank in September.

Mr. Hester replaced Simon Lee, who stepped down in December after the insurer said for the second time in just over a month that it would have to significantly increase the reserves for its Irish business and again warned that its profit would be lower. Mr. Lee was named RSA’s chief executive in August 2011 after eight years with the insurer.

In December, RSA said it would need to strengthen the reserves for its Irish operations by an additional £130 million pounds, primarily because of increased potential for bodily injury claims by customers with automobile and liability policies.

The company said in early November that it would have to add £70 million to its reserves because of irregularities uncovered in its claims and finance operations in Ireland, and that it had suspended three top executives in it Irish business in the face of an accounting investigation.

After the company said in November that its operating results would be lower than market expectations because of the accounting irregularities, Philip Smith, the chief executive of its Irish business, was suspended by the insurer and later resigned. Mr. Smith has said that he was being made a “fall guy.”

Two other executives were dismissed in January after an internal investigation.

After a review by PricewaterhouseCoopers, the company said that the issues were isolated to its Irish business.

RSA was created in 1996 by the merger of two of the largest British insurers, Royal Insurance and Sun Alliance. Their combined history dates back more than 300 years; the Sun Insurance Office was formed in 1710 and merged with Alliance Assurance in 1959.

The company employs about 23,000 people worldwide and wrote £8.7 billion in net premiums in 2013.

Bank of America Merrill Lynch and JPMorgan Chase are serving as joint global coordinators, joint book-runners and joint underwriters on the rights issue.

CVC Capital Acquires Nordic Eyewear Retailer

LONDON - The private equity firm CVC Capital Partners said on Tuesday that it has acquired Synsam Nordic, an optical retailer in the Nordic region, from an investment group controlled by the family behind the Swedish furniture retailer Ikea.

The sale comes about seven years after Synsam was acquired by a group of former store owners and Alipes, an investment firm sponsored by Ikano and Inter Ikea. The Kamprad family controls the furniture retailer as well as Ikano and Inter Ikea.

Terms of the deal weren’t disclosed.

Synsam was founded in 1968 when a group of independent opticians began operating under a common brand name. The company now has more than 420 stores and franchises in Sweden, Denmark and Norway, selling glasses and contact lens and providing eye examinations.

“Synsam is our oldest portfolio company and we are proud of having worked together with former store owners and an excellent management team to develop it from a voluntary retail chain to the leading integrated optical retail chain in the Nordic,” said Gunnar Selving and Richard Silén, partners at Alipes.

The transaction is subject to regulatory approval.

In 2013, Synsam posted revenue of 3 billion Swedish kronor, or about $470 million, and employed about 2,600 people.

“With attractive market positions, a strong brand name and an extensive store network as well as an emerging online offering, Synsam is now ready to take the next step in its development,” said Peter Törnquist and Søren Vestergaard-Poulsen, partners at CVC.

Centrica and Investors to Buy Irish Energy Supplier

LONDON - The British energy company Centrica and two investment partners said Tuesday that they have agreed to acquire the gas and electricity supply business and other assets of the Irish energy supplier Bord Gáis Éireann for 1.1 billion euros, or about $1.52 billion.

Under the deal, Centrica will acquire the state-owned energy company’s Bord Gáis Energy unit, the largest supplier of both gas and electricity in Ireland with about 650,000 residential customers. Centrica also will acquire the 445-megawatt Whitegate gas-fired power station in County Cork.

As part of the deal, the investment firm iCON Infrastructure will acquire Bord Gáis Éireann’s energy supply and regulated gas distribution assets in Northern Ireland, and Brookfield Renewable Energy Partners will acquire the company’s renewable generation assets.

“This is a unique opportunity for Centrica to take a first step in a neighboring market with strong links to the UK, building on Bord Gáis Energy’s existing capabilities and delivering value for the group,” said Sam Laidlaw, the Centrica chief executive, in a statement.

The transaction is expected to close in the first half of 2014 and is subject to regulatory approval.

Centrica employs about 37,000 people worldwide, operating primarily in Britain and in the United States. The company posted an operating profit of £2.69 billion, or about $4.44 billion, in 2013.