Friday, October 28, 2011

Corporate Venture Capital

Right now we are sitting on PILES of $$ at big US multinational firms. I've been hearing commentary for example Berkshire Hathaway authorizing share repurchase at Buffett's discretion. I found a quick article indicating there's almost 1 trillion of CASH on corporate balance sheets. Most of this money is probably paying VERY low yields and doing NOTHING for their core business or the USA.

Then I read this article on a mountain with literally tonnes of rare earth metals inside, and very little is being done to get at these minerals while China has a monopoly and is constraining exports. Why are these guys going to the government? Many of our biggest and most successful companies depend on things like rare earth metals, infrastructure like transportation, and other things that our government seems unable to break out of gridlock and do much about.

How about a STRATEGIC fund pooled among our top 500 companies. Proportional voting based on contributions. A sort of endowment for US industry. Perhaps it could even be run as a charity. What is important is that this fund looks at things that will make the US succeed in the long term. If public school education stinks, make private schools. If the government isn't handing out enough money for mining, fund it. Need some pipelines and roads. Government is broke, but BUSINESS has money, so we'll fund it.

What would the results be? Certainly all this construction and investment will fuel jobs, and production. Not only will our biggest companies be getting the things they need, but their customer base (the US population) will be growing it's earnings and spending power. Obviously this ecosystem will also facilitate the success of small businesses which are the bread and butter of the United States, not to mention a big customer for those top 500 companies as well.

What could we do with $200 billion to $300 billion dollars INVESTED into our national economy? Nevermind that the big companies funding all of this will make $$ of their investments as well as their core business. Which corporate titans are willing to make this happen? I don't think it will take many to get the ball rolling. Let's not wait for our government. We have a LOT of really smart capable people at the top of corporate America. Let's get it done!