Sales Down for New US Homes, but Up for Existing Ones

Falling prices lead to unexpected piece of good news for the housing market. Also, J.P. Morgan raises its offer for Bear Stearns. Transcript of
radio broadcast:
27 March 2008
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This is the VOA Special English Economics Report.

This week, the National Association of Realtors reported that sales of existing
homes in the United States increased almost three percent in February. It was the
first increase since last July.

But fueling that increase was a drop in prices. The S&P/Case-Shiller index of
twenty major markets showed that home prices fell almost two and a half percent in
January. Prices were down almost eleven percent from a year before.
A home for sale in Denver,
And still another report this week showed that sales of new single-family houses
fell in February. Sales were down almost two percent from January, to a thirteen- Colorado
year low. The Commerce Department estimated there was a ten-month supply of newly built houses waiting to be sold.

Experts say prices in many markets will have to fall further before more people are willing or able to buy.

Prices went up and up in recent years, before the housing bubble burst. Many buyers now struggling to make payments
took out loans that were too big. They thought prices would keep rising and they could sell their home for a nice profit.

Rising values meant that people could also take out home equity loans and lines of credit. They used their home as a cash
machine by borrowing against its value.

Now, as those values fall, some people owe more than their home is worth. Many buyers, often with risky credit histories,
took out adjustable-rate mortgages, which started out low but later reset to higher rates.

About two percent of all home loans are in foreclosure. Of course, that means ninety-eight percent of homes are not being
reclaimed by lenders. Still, this is the highest rate since the Mortgage Bankers Association began keeping records in
nineteen seventy-nine.

The weak housing market is largely responsible for an economic crisis that is leading to new government steps in the
financial system.

Last week, the Federal Reserve pushed through a deal for J.P. Morgan Chase to buy Bear Stearns for two dollars a share.
Bear, the nation's fifth-largest investment bank, was near collapse after big losses on its mortgage-backed securities. To
help make the deal, the Fed agreed to take responsibility for up to thirty billion dollars in those securities.

But J.P. Morgan faced a rebellion by Bear shareholders, so this week it increased its offer to ten dollars a share. It also
agreed to take responsibility for one billion dollars of Bear's hard-to-sell securities.

And that's the VOA Special English Economics Report, written by Mario Ritter. I'm Steve Ember.

American History Series: The Heart and Spirit of the Constitution

When the Constitution was written, a majority of the states already had their own bills of rights. So some delegates questioned the need for a
national one. Transcript of radio broadcast:
26 March 2008
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ANNOUNCER:

Welcome to THE MAKING OF A NATION -- American history in VOA Special English.

Last week in our series, we described how the Constitution became law once nine of
America's first thirteen states ratified it. The Continental Congress set a date for the new plan
of government to take effect. The first Wednesday in March, seventeen eighty-nine. Now, here
are Richard Rael and Shep O’Neal to continue our story.

(MUSIC)
George Washington
VOICE TWO:

In seventeen eighty-nine, the population of the United States was about four million. The thirteen states had been loosely
united for a short time, only about ten years. Before that, they were separate colonies of Britain.

Because the colonies were separate, their people developed different ways of life. Their economies and traditions were
different. As a result, Americans were fiercely independent. An emergency -- the crisis of the revolution -- brought them
together.

Together, they celebrated the Fourth of July, the day America declared its independence from Britain. Together, they
fought British troops to make that declaration a political reality. Together, they joined under the Latin phrase 'E Pluribus
Unum' -- one out of many.

Yet when the war ended, the soldiers returned to their home states. They still thought of themselves as New Yorkers, or
Virginians, or Marylanders. They did not consider themselves a national people.

VOICE ONE:

Americans of seventeen eighty-nine were sharply divided on the need for a national government. Many were afraid the
new government would not survive. They feared the anarchy that would result if it failed. Others hoped it would fail. They
wanted strong state governments, not a strong central government.

For those who supported the national government, there were good reasons to hope for success. The country had great
natural resources. And its people were honest and hard-working.

Also, in seventeen eighty-nine, the American economy was improving after the destruction of the Revolutionary War.
Agriculture, trade, and shipbuilding were coming back to life. Roads, bridges, and canals were being built to improve
travel and communication.

The country's economy had many problems, however. Two major issues had to be settled. One was repayment of loans
made to support the Revolutionary Army. The other was creation of a national money system. Both issues needed quick
action.

VOICE TWO:

But before the new government could act, the old government had work to do. It had to decide where the capital city of the
new nation would be. It also had to hold elections for president and Congress. First, the question of a capital.

At the time the states ratified the new Constitution, the Continental Congress was meeting in New York City. And that is
where it decided to place the new government. Later, the capital would be moved to Philadelphia for a while. Finally, it
would be established at Washington, D.C.

Next, the Continental Congress had to decide when the states would choose a president. It agreed on March fourth,
seventeen eighty-nine. That was when the new Constitution would go into effect.

VOICE ONE:

The eleven states that ratified the Constitution chose electors to vote for a president. The result was not a surprise. They
chose the hero of the Revolutionary War: George Washington. No one opposed the choice.
 Washington learned of his election while at his home in Virginia, Mount Vernon. He
left for New York and was inaugurated there on April thirtieth.

Members of the new Congress also were elected on March fourth.

Now, for the first time, Americans had something many of them had talked about
for years -- a working national government. There was much work to be done. The
machinery of government was new, untested. Quick decisions were needed to keep
the new nation alive and healthy.

(MUSIC)

VOICE TWO:
Although not required by the
Constitution, George One of the first things the Congress did was to re-open debate on the Constitution
Washington presented the first itself. Several states had set a condition for approving the document. They said a
presidential inaugural address on Bill of Rights must be added to the Constitution, listing the rights of all citizens.
April 30, 1789
When the Constitution was written, a majority of the states already had their own
bills of rights. So some delegates to the convention said a national bill was unnecessary. Others argued that the
Constitution would be the highest law of the land, higher than state laws. So a
national bill of rights was needed to guarantee the rights of the citizens of the new
nation.

Time proved this to be a wise decision. The Bill of Rights gave the Constitution a
special strength. Many Americans consider the Bill of Rights to be the heart and
spirit of the Constitution.

VOICE ONE:

What is this Bill of Rights that is so important to the citizens of the United States? It
is contained in the first ten amendments to the Constitution.

The First Amendment is the basic statement of American freedoms. It protects Twelve amendments were
freedom of religion, freedom of speech and freedom of the press. proposed; the 10 that were
ratified became the Bill of Rights
The First Amendment guarantees that religion and government will be separate in
America. It says Congress will make no law establishing an official religion. Nor
in 1791
will Congress interfere in the peoples' right to worship as they choose. The First Amendment also says Congress will not
make laws restricting the peoples' right to gather peacefully and to make demands on the government.

The Second Amendment guarantees the peoples' right to keep weapons as part of an organized militia. The Third
Amendment says people may not be forced to let soldiers stay in their homes during peacetime.

VOICE TWO:

The Fourth through the Eighth Amendments all protect the peoples' rights in the criminal justice system.

The Fourth Amendment protects people from unreasonable searches and seizures. If police want to search a suspect's
house or papers, they must get special permission from a judge. The document from the judge must say exactly what police
are looking for. And it must describe the place to be searched.

VOICE ONE:

The Fifth Amendment says no one can be put on trial for a serious crime unless a grand jury has first examined the
evidence and agreed that a trial is needed. No one can be put on trial more than once on the same criminal charge. And no
one can be forced to give evidence against himself in court.

The Fifth Amendment also says no one can lose their freedom, property, or life except by the rules of law. And the
government cannot take people's property for public use without paying them a fair price.
VOICE TWO:

The Sixth Amendment says all persons accused of crimes have the right to a fair and speedy public trial by a jury. This
guarantees that people cannot be kept in prison for a long time unless a jury has found them guilty of a crime.

The Sixth Amendment also guarantees the right of accused persons to be defended by a lawyer. It says they must be
informed of the nature and cause of the charges against them. And it says they have the right to face and question their
accusers.

The Seventh Amendment guarantees a person's right to have a jury decide his legal dispute with another person. The
Eighth Amendment bars all cruel and unusual punishments.

The Ninth Amendment provides protection for other rights not stated directly in the Constitution. And the Tenth
Amendment says any powers which the Constitution does not give to the national government belong to the states or to the
people themselves.

(MUSIC)

VOICE ONE:

A majority of the states approved the Bill of Rights by the end of seventeen ninety-one. As we have seen, these
amendments limited the powers of the national government. As a result, many anti-Federalists ended their opposition.
They accepted the new government. Many agreed to help with the job of building the new nation.

President Washington wanted the best men -- Federalist or anti-Federalist -- to be in his administration. The new nation
needed strong leadership. George Washington provided it. General Washington's work as the first president will be our
story next week.

(MUSIC)

ANNOUNCER:

Our program was written by Christine Johnson and Carolyn Weaver. The narrators were Richard Rael and Shep O’Neal.
Transcripts, MP3s and podcasts of our programs are at voaspecialenglish.com. Join us again next week for THE MAKING
OF A NATION, an American history series in VOA Special English.
__

In Some Schools, Learning Is Not Enough of Its Own Reward

A look at the debate in the U.S. over programs that pay students. Transcript of radio broadcast:
26 March 2008
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This is the VOA Special English Education Report.

Some American schools pay teachers more if their students improve on tests. Now, there is a
growing movement to pay the students -- in some cases, even just for coming to class.

Students at one school in New Mexico can earn up to three hundred dollars a year for good
attendance. A program in New York City pays up to five hundred dollars for good attendance
and high test scores.

In Baltimore, Maryland, high scores on state graduation tests can be worth more than one hundred dollars. And a New
Jersey school system plans to pay students fifty dollars a week to attend after-school tutoring programs.

Schools that pay students can be found in more than one-fourth of the fifty states. Other schools pay students with food or
other rewards.
Robert Schaefer is public education director for the National Center for Fair and Open Testing, an activist group. He says
paying may improve performance in the short term, but students develop false expectations for the future. He sees a lack of
long-term planning in these programs because of pressure on schools to raise test scores.

Public schools need to show improvement under the education reform law signed by President Bush six years ago. Low-
performing schools may lose their federal money; teachers and administrators may lose their jobs. Often these schools are
in poor neighborhoods where getting students to go to school can be a continual problem.

Critics say paying students sends a message that money is the only valuable reward. But some students say it makes school
more exciting. And some teachers have reported getting more requests for extra help.

In two thousand four, the city schools in Coshocton, Ohio, launched a program. They wanted to see if paying elementary
school students as much as one hundred dollars would help in passing state exams.

Now, Eric Bettinger of Case Western Reserve University has reported mixed results. Math scores increased, but only while
students were able to get paid. And there was no evidence of higher scores in reading, social studies and science. Officials
will decide later this year whether to continue the program.

Yet adults get paid for their work. And if teachers can be rewarded for their students' work, then why not the students
themselves? This is what some people say. What do you think? Write to special@voanews.com, and please include your
name and country.

And that's the VOA Special English Education Report, written by Nancy Steinbach. I'm Steve Ember.

Tenement Museum Recreates Old Immigrant Life in New York City

A visit to the apartments of the Gumpertz family, the Baldizzis, the Rogarshevskys, the Levines and the Confinos. Transcript of radio
broadcast:
25 March 2008
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VOICE ONE:

I’m Gwen Outen.

VOICE TWO:

And I’m Steve Ember with EXPLORATIONS in VOA Special English. Today, we tell about a museum in New York
City. It explores and celebrates the stories of people from different nations who came to the United States to live.

(MUSIC)

VOICE ONE:

The Lower East Side Tenement Museum is one of the smaller museums in New
York City. It lets visitors experience how early immigrants to the United States
lived. The museum is a building at Ninety-Seven Orchard Street. It was built in
eighteen sixty-three. It was one of the first tenements in New York City.

The word “tenement” comes from a Latin word meaning “to hold.” A tenement
building holds many rooms where different families lived.

The word is not used much anymore in the United States. When people use the
word today, they mean an old crowded building where poor families live in terrible,
unhealthy conditions. But in the eighteen hundreds, the word “tenement” simply
meant a building in which many families lived.
The front of 97 Orchard Street
Later, many immigrant families improved their living conditions by moving from the lower east side to other areas of New
York City. Some lived in the same kinds of buildings, but the living areas were cleaner and larger. They did not want to
call them tenements, so they called them apartment buildings instead.

VOICE TWO:

History experts say more than half the people in New York City lived in tenements in eighteen sixty-three. To get one of
these living areas, a family had to pay one month’s rent to the owner, usually about ten dollars. This money gave the
family the use of about one hundred square meters of living space, often divided into three rooms.

The building at Ninety-Seven Orchard Street shows the kind of spaces where families lived. The front room was the
largest. It was the only one with a window. Behind it were a kitchen for cooking and a small bedroom for sleeping. The
apartment had no running water, no bathroom, toilet or shower. There were six places where people left their body wastes
in the back yard, next to the only place to get drinking water. Such unhealthy conditions led to the spread of disease.

Over the years, New York City officials passed laws to improve conditions in the tenements. The owners of Ninety-Seven
Orchard Street placed gas lighting in the building in the eighteen nineties. They added water and indoor toilets in
nineteen-oh-five, and electric power in nineteen twenty-four. Then they refused to make any more improvements. They
closed the building in nineteen thirty-five.

In nineteen ninety-eight, the federal government declared the building a protected National Historic Place.

VOICE ONE:

Museum officials researched the history of the building and its twenty apartments. They found more than one thousand
objects that belonged to people who lived there. These include kitchen devices, medicine bottles, letters, newspapers,
money and pieces of cloth. They also learned the histories of many of the seven thousand people from more than twenty
countries who lived there. And they spoke with and recorded memories of people who lived at Ninety-Seven Orchard
Street as children.

Museum officials used this information to re-create some of the apartments as they would have looked during different
time periods in the building’s history. These apartments are what people see when they visit the Lower East Side
Tenement Museum. Let us join one of the guided visits. First we climb several flights of worn stairs. It is a very hot day
and we feel the heat in the dark, narrow hallway.

(MUSIC)

VOICE TWO:

Now we enter the apartment of the Gumpertz family. They were Jews from Germany who
lived here in the eighteen seventies.

On October seventh, eighteen seventy-four, Julius Gumpertz dressed for work, left the
building and never returned. He left his wife Nathalie and their four children, ages eight
months to seven years. Nathalie was forced to support her children by making clothing in
the apartment. She earned about eight dollars a week, enough to pay for the apartment each
month and send her children to school.

The Gumpertz apartment has a sewing machine and other tools similar to those Nathalie Nathalie Gumpertz
used in her work. She made the largest room into her workspace. That was where she saw people who wanted clothes
made or repaired. It was also where she did the sewing.

VOICE ONE:

The next apartment we visit belonged to the Baldizzi family. They came from Italy and were Catholic. Adolfo Baldizzi,
his wife Rosaria and their two children moved to Orchard Street in nineteen twenty-eight. They became friends with other
families in the building. Their daughter Josephine liked to help other people. Every Friday night she would turn on the
lights in the nearby apartment of the Rosenthal family. The Rosenthals could not turn on the lights themselves because it
was the start of the Jewish holy day and no work was permitted.
Josephine Baldizzi remembered those long ago days. Here is a recording of her. She tells how she felt each week after
when she saw Missus Rosenthal in the window motioning for her to come and turn on the lights:

JOSEPHINE BALDIZZI:

"It made me very proud to have to do that. I used to feel good that she chose me to do that job for her. And I can still see
her till today—the vision of her in that window. It has never left my memory."

(MUSIC)

VOICE TWO:

Now we visit the apartment that belonged to the Rogarshevsky family of Lithuania. They
moved to Ninety-Seven Orchard Street between nineteen-oh-seven and nineteen ten.
Abraham and Fannie Rogarshevsky had six children. Abraham developed the disease
tuberculosis. We can see some of the things used to fight the disease. But the efforts did
not cure him. Abraham Rogarshevsky died in nineteen eighteen.

On the table we see the kinds of foods that family and friends would have eaten after
Abraham’s funeral. They include hard-boiled eggs and round bread. Both represent the
circle of life, from birth to death.
Fanny Rogarshevsky
Fannie Rogarshevsky was faced with the same problem as Nathalie Gumpertz. What could she do to support her family
and continue to live in the apartment? She got the building owner to let her clean apartments and do other work in
exchange for rent.

VOICE ONE:

Now we enter the apartment of the Levine family. They were Jews from Poland. Jennie and Harris Levine moved into the
building in the early eighteen nineties. They lived there for more than ten years. During that time, Jennie gave birth to
four children. Her husband and his workers produced clothing in the front room.

We see Jennie in the bedroom awaiting the birth of her third child. We also see the clothing shop as it looked after the
workers had gone home at the end of the day. We hear stories about the many immigrants who have worked in the
clothing industry in New York City.

(MUSIC)

VOICE TWO:

Still another apartment is an example of living history. We can visit it on a special tour. It belonged to the Confino family
in nineteen sixteen. Abraham and Rachel Confino came to New York from Turkey. They were Sephardic Jews, people
whose ancestors had been born in Spain, North Africa or Middle Eastern countries.

An actress who plays thirteen-year-old Victoria Confino welcomes us. She tells about Victoria’s experience living in the
building. Here, she explains the language of Sephardic Jews, called Ladino, and sings part of a sad Ladino song:

VICTORIA CONFINO:

“Oh, it’s a very mixed up language. It’s like a little bit Spanish...we call it Judeo Espagnol...and it’s a little bit Turkish, a
little bit Hebrew...a lot of languages mixed up all together.”

VOICE ONE:

Officials say one of the purposes of the Lower East Side Tenement Museum is to use history to explore modern social
issues. For example, what kinds of problems do recent immigrants face while trying to build new lives in America?

The Lower East Side Tenement Museum cooperates with other international historic places around the world. These places
are part of the International Coalition of Historic Site Museums of Conscience.
They include the District Six Museum in South Africa, the Gulag Museum in Russia, and Project To Remember in
Argentina. Others are the Terezin Memorial in the Czech Republic, the Workhouse in England and the Slave House in
Senegal. Officials of these historic places are working together to help explore and solve modern problems in their own
societies.

(MUSIC)

VOICE TWO:

This program was written by Nancy Steinbach and produced by Mario Ritter. I’m Steve Ember.

VOICE ONE:

And I’m Gwen Outen. Join us again next week for EXPLORATIONS in VOA Special English.

New Drug Shows Promise Against Worm Disease

Experts worry that the parasite that causes schistosomiasis could become resistant to an existing treatment. Transcript of radio broadcast:
25 March 2008
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This is the VOA Special English Health Report.

Scientists think they are a step closer to a new drug to treat schistosomiasis. More
than two hundred million people suffer from this parasitic worm disease. Most live
in developing nations in tropical climates. About ten percent of victims become
seriously disabled from internal bleeding, iron loss, organ damage or other effects.

A team in the United States found that chemical compounds known as oxadiazoles
can target an enzyme needed for the survival of Schistosoma. This is the group of Schistosoma mansoni, one of
flatworms that cause schistosomiasis. three major kinds of worms that
cause schistosomiasis
The scientists tested oxadiazoles on laboratory mice. They found that one compound killed the parasite at every level of
development – from larva to adult. The study also showed that the compound was active against all three major species of
Schistosoma worms that infect humans.

The National Institutes of Health supported the research. Scientists from Illinois State University and the Chemical
Genomics Center at N.I.H. reported their findings in the journal Nature Medicine.

Biology professor David Williams led the research. He says the Schistosoma parasite needs oxygen to survive. Oxygen use
produces oxygen-free radicals that can destroy an organism. The worm has a protective enzyme. But Professor Williams
says the experimental drug disables this enzyme, causing the worm to self-destruct.

Since the nineteen eighties, doctors in more than seventy tropical nations have used one main drug to treat schistosomiasis.
Public health experts worry that the worms will become resistant to this drug, praziquantel.

Each year, two hundred eighty thousand people die of schistosomiasis, also known as bilharzia or snail fever. The
microscopic worms infect snails, which in turn lay infected eggs. Humans become infected when they enter fresh water
where the snails live.

The worms dig through skin to enter the body. They move into blood vessels that supply the intestinal and urinary systems.
Then, if worm eggs in human waste enter fresh water, more snails and people become infected.

More studies are needed on the experimental new drug. The scientists say the results in mice were better than all the targets
set by the World Health Organization for new schistosomiasis compounds. They hope the drug will be ready for testing in
humans in four to five years.

And that’s the VOA Special English Health Report, written by Jill Moss. Transcripts, MP3s and podcasts of our reports are
at voaspecialenglish.com. I’m Steve Ember.
What's Become of Land Under Starry Skies Above?
By Ted Landphair
Washington, DC
26 March 2008
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There's a fellow here at the Voice of America who vividly remembers a live
drama from the days of black-and-white TV. He thinks it may have been an
episode of screenwriter Rod Serling's eerie show called The Twilight Zone, which
combined science fiction and social commentary. One TV show half a century ago
carried the fear of over-
The premise was that all but one hectare of open space in America had been development to the extreme that
paved over for homes, schools, and industry. This was absurd, of course, since a even the nation's first national park
nation with no farms or ranches could not feed itself. The last open hectare was
– Yellowstone – was paved over
in Yellowstone National Park out west, and that land, too, was being sold in
some kind of lottery. Needless to say, there was a fierce fight to get it.

This, of course, was extreme exaggeration of a trend that some Americans believe
is actually happening, 50 years later. Politicians in formerly rural counties around
big cities face intense pressure to, on the one hand,
preserve what is natural and wild, and on the other, to
open the land to developers who provide lots of jobs.

A former Washington Post newspaper reporter,

James Conaway, has written a book about these
tensions, and it's clear where his sentiments lie. The
book is called Vanishing America. Conaway argues
Those who are concerned about that more than chunks of land are being lost to the
bulldozer. So, he argues, is America's appreciation of
unfettered development in the the natural world, dating to the days when native
United States believe the country is tribes freely roamed the land.
quickly looking more like this . . .
He writes that the American West today is a stomping ground for lawyers . . . developers, who This is one parcel that no one
sell off the landscape to friends and corporate interests. could develop – unless
someone figured a way to put
There's plenty of evidence to the contrary, as well. Just ask the legion of environmentalists,
even in the conservative West. And one could point out that instead of being sold and paved
a cork in the Old Faithful
over, Yellowstone National Park, where wolves have been re-introduced, is wilder than ever. geyser that erupts every hour
or so
Vanishing America, by James Conaway, is published by Shoemaker Hoard.

Venture Capitalists Fuel Economic Growth

By Jela De Franceschi
Washington
24 March 2008
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American venture capitalists are world leaders in the investment field. They have been transforming industries and
boosting U.S. economic growth since the 1970s, investing largely in high- technology and biotechnology companies.
Venture capital has created millions of jobs in America and helped generate trillions of dollars in U.S. corporate revenue.
 Some people say the most successful venture capitalist was Queen Isabella of Spain who
helped Christopher Columbus discover America. The queen's risky investment reaped a
handsome return.

Venture capitalists today are willing to take risks that conventional banks and other financial
lenders are not. Many venture capitalists were once themselves entrepreneurs, scientists or
engineers. They often finance fellow innovators whose ideas produce generous profits for
investors.

"The reason that venture capitalists have jobs is that often times entrepreneurs with wonderful
ideas about how to transform industries don't have the capital to build these companies," says
Jeffrey Andrews, a partner in Atlas Venture, a leading international venture capital firm
headquartered in Boston, Massachusetts. "A technologist who has a brilliant idea for a new
In 1492, Queen Isabella semi-conductor innovation or a new solar cell probably doesn't know much about how to set up
of Spain was convinced a payroll system or how to set up a corporate structure. Venture capital investors, like myself,
are in the business of not only finding and working with these early stage entrepreneurs to
by Christopher build companies, but also really working to build those companies with them."
Columbus to sponsor
his voyage of discovery Where to Invest?

"Venture capitalists invest in what we call early stage companies, which could be two people in a garage and a dog who
have an idea," says Emily Mendell with the Washington-based National Venture Capital Association. "A third of the
companies that venture capitalists invest in never succeed. But the payoff is great because those companies that do succeed
contribute significantly to the U.S. economy. Starbucks, Microsoft, AOL, Federal
Express, Home Depot, Staples, Outback Steakhouse, Cisco, Intel, Genentech --
these are all companies that started with venture capital."

Modern venture capital investment is mostly an American phenomenon, says

Mendell. "It was invented here. It thrives here. There are other regions who want
to emulate what we've done here in the U.S. Areas of interest are China, India, Backed by venture capital, start-
Korea, Vietnam and Eastern Europe. U.S. venture capitalists invested about a ups, such as Google, are major
billion dollars in India and about one-and-a-half billion dollars in China in 2007,
players in global business
but about $30 billion here in the U.S."

Mendell says companies that receive venture capital account for about 10-point-three million jobs in the United States and
about 18 percent of U.S. gross domestic product.

There are some 800 venture capital firms in the United States. Venture-backed companies often grow faster than their non-
venture-backed counterparts. Most new companies change hands after four-to-five years of growth, or as soon as investors
think they can make a significant profit on their sale. The process of finding a buyer is often left to investment banking
firms that connect buyers and sellers, similar to how a real estate agent matches home buyers and home sellers.

Driving Innovation

Woodside Capital Partners, a leading international investment banking firm based in Palo Alto, California, specializes in
mergers and acquisitions of cutting edge technology start-ups. The company's Managing Partner, Rudy Burger, says his
firm performs a vital function in the economy. "Companies, I think, quite rightly have realized that the most cash and time
efficient way for them to innovate their businesses is through acquiring young companies. It used to be that the AT&Ts
and IBMs and Xeroxs of the world would innovate primarily in-house through having world-leading research
laboratories," says Burger. "The idea that a single company could innovate within four walls by hiring a team of people
seems to me increasingly absurd, given that they are competing against the market itself and all the entrepreneurial
energies and ideas in the world."

Nonetheless, some high-technology start-ups choose to remain self-funded by their founders

for an extended period of time, such as LitePoint Corporation, based in Sunnyvale, California.
Benny Madsen is co-founder and Chief Executive Officer of the company, which is a
trailblazer in communications technology. "We wanted to be self-funded because we wanted to
be in control of our own destiny. We had seen way too many companies start off with venture
funding and crash because when you are venture funded, you have to execute the business plan
that got funded," says Madsen. "You don't execute to maybe a changing environment or a deep
analysis you get through the work [of finding new technology solutions]."
Benny Madsen, a co-
founder of LitePoint
Corporation
LitePoint recently did raise venture capital to broaden its global reach. Madsen says the company turned to Silicon Valley's
Sequoia Capital. "We didn't have any financial investors on our side. So no one knew about us in the financial world. We
needed a strong financial partner -- somebody that's well known in the industry that is sort of a class one-type of brand
name in the financing world," says Madsen. "That's the stage when we decided to take an investment from Sequioa
Capital, whom we consider a premier venture capital firm in the world."

Sequoia has backed some of Silicon Valley's biggest success stories, including Google, Yahoo, YouTube, Apple, Cisco
Systems and Oracle. Atlas Venture's Jeffrey Andrews says companies that attract investors of Sequoia's or his firm's
caliber are by definition "world-class". "They have to be very big ideas with brilliant people involved at every position on
the team. It is an exciting business to be in because every company almost by definition is a world-changing idea with a
world-class team. There's nothing more fun than being involved in that."

Most importantly, Andrews adds, these companies help create new industries, countless jobs and economic growth.