Norman Hsu: Another Capital Venture Goes South
The Wall St. Journal continues its reporting of Norman Hsu's financial dealings. The latest installment (free link): A New York capital venture firm, headed by Joel Rosenman, one of the three original Woodstock creators, has asked the District Attorney's office to investigate a $40 million investment in Hsu's firm, Components Limited.
Rosenman's partner introduced him to Hsu. Both invested personally with him and made a 40% return on their money. They then pitched the idea to Rosenman's firms' clients.
The investment pool would "lend to U.S. private label designers that needed interim financing to fill orders for a select group of well-known, high-end U.S. apparel retailers." Since 2001, [Rosenman] writes, "the return of these short-term (typically 4½ months) loans has been no less than 40%."
Here's how the deal worked:
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