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The Bottom Line: Capital Markets Mosaic, How Good Ideas Come to Light
November 17, 2006
Elizabeth Johns

"The Bottom Line" column from the June issue of Exchange magazine. This excerpt is from the Nov. 2006 edition.

Fifty-five stories above the Las Vegas strip, at a V.I.P. reception at the Palms thrown by HSBC to celebrate the opening night of the AFP Annual Conference, people were talking about entrepreneurs and their ideas.

One of the subjects, of course, was guest of honor Richard Branson, CEO of the Virgin companies, who originally had set out to be a journalist but found he had to become an entrepreneur to keep his magazine alive.

Another was Bruce McWilliams, CEO of Tessera Technologies of San Jose, CA, a company that specializes in making computer chip packaging ever smaller. Bruce is great looking, brilliant, rich, and really nice. And while he may have been great looking and nice for a long time, the brilliant and rich parts came together in 2003 when he floated an IPO for over $97 million. Since going public, he has been quoted in publications all over the world and honored as entrepreneur of the year by Ernst & Young in 2005.

So trendy has miniaturization of chips become (think cell phones and MP3 players) that his name comes up in the most unlikely venues—like the roof of the Palms. Somehow I think he would enjoy the little bits of attention he is receiving all over the place. Tessera, the name of his company, means a single piece in a larger mosaic.

At the same party, a treasury professional from a restaurant chain said he was interested in radio frequency ID (RFID) chips, specifically ones that would work in cards in China. The young man explained that by tapping a payment card embedded with an RFID chip at the register, rather than swiping the card, a transaction might save a second or two.

Now, it happens that in the course of business I know of a company that makes China-compliant RFID chips. But unlike Virgin and unlike Tessera, this one hasn't had an IPO and lacks that cash infusion. I found myself struggling to relay information about it other than the name of a person I had once interviewed.

Like a song says, the best bands may never get signed, the best songs never get sung. Access to capital is like that. A company may have the best plans but may lack the capital to bring ideas to fruition, and we may never know about them.

Take the proverbial RFID chip the young man described, the one that is implanted in the card, which is tapped on the machine, which shaves a second off the fast-food transaction, which builds the profits, which opens another restaurant in the hinterlands of China. What if great ideas like that couldn't incubate because the companies hatching the ideas lacked resources?

This is why AFP's initiative with the credit rating agencies, our cover story in this issue of Exchange, is so important. By pushing for rating agency fairness, we want to ensure that companies have fair access to capital. If you think about it, we just might be ensuring that the next great idea can come to light.

And you never know where the next great idea or collection of ideas is going to come from.

Standing on the roof of the Palms, listening to the casual conversations of some of the world's great financial minds, it was apparent that the real progress happens when ideas touch other ideas, part of a larger mosaic.

Elizabeth Johns is AFP's managing director of communications. Send comments to exchange@afponline.org