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| January 24, 2008 | Volume 12 Issue 4 |
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Editor: George Lipper | |
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(Please scroll down for the full story) -- The Biggest Year in Venture Capital Since 2001 -- Measuring a 13 Year Change in Venture Investing -- Former VC Out to Shed Light on Venture Capital’s Dark Side -- Endowments Funds Grow As Spending Drops; Congress Takes Notice -- Ohio, Georgia State Roles in Creating Venture Capital -- Angel Uprising Puts Pressure on VCs -- Pfizer Exit Opening Space in Ann Arbor -- New Study: Accelerating the Commercialization of University Innovation -- California Biotechs Seek $150M for Incubators -- South Dakota Biotech Takes a Very Long View -- How Wisconsin Can Step Up to the Job Creation Challenge -- Arizona's High-Profile Entrepreneurs Test New Niches -- Governor Pledges $50 Million to University of Rochester Med Center -- Utah University Venture Summit Starts Students Early on Venture Capital Path -- Congressional Earmarks for R&D Appropriations Causes Concerns -- Call for Crackdown on Research Conflicts -- Engine of Growth: Clean Tech Jobs -- Forecasting Venture Capital in 2008 -- Pittsburgh's Innovation Works Celebrated -- N. Dakota Center for Innovation Director Bruce Gjovig Looks Back -- Financial Times: US No Longer Dominates the World of Business -- Seminars & Conferences The Biggest Year in Venture Capital Investing Since 2001 It’s the largest number in six years as both the PricewaterhouseCoopers, NVCA, Thomson Financial’ Money Tree and the Dow Jones, Ernst & Young VentureSource report that institutional venture capitalists invested about $29 ½ billion in more than 3,000 US companies in 2007: National Association of Seed & Venture Funds NVCA Tally Venture Source Release It's fascinating to see how the states and regions vying for a piece of the venture capital pie react to the reports. Here is a look at the stories we came across during the weekend. Southern California venture funding fell 25% in the last quarter of 2007. Los Angeles Times Fueled by an appetite to invest in next-generation Internet, alternative energy, and life sciences companies, the Bay Area during 2007 reached its strongest levels since 2001. Contra Costa Times If the U.S. economy is catching a cold, the venture-capital industry shows no signs of getting sick. Investments for new companies in San Diego rose to a six-year high. San Diego Union Tribune Seattle venture capitalists have mammoth year, pumping $1.3 billion into 170 deals. Seattle Post-Intelligencer New England records a banner year with both the life sciences and clean energy sectors raking in record capital. Boston Globe Venture capital funding in Connecticut rose by 125 percent in the final quarter of 2007. Hartford Courant Venture-capital investing in 2007 reached a six-year high of $661.8 million in the Philadelphia area. Philadelphia Inquirer Investments in the DC region continued to climb as companies drew more funding than at any point since the technology bubble exploded. Washington Post Minnesota start-ups ended 2007 on a high note, with local firms raising the most venture capital since the collapse of the bubble. Minneapolis Star-Tribune Mirroring national trends, Wisconsin companies raised more venture capital last year than in any year since 2001. Milwaukee Journal-Sentinel 2007 produced mixed results for venture capital activity in Michigan, with an increase in the number of deals offset by a decline in total dollars invested. Detroit Free Press NE Ohio gains ground in its objective to reach the $1.2 billion dollar level in venture capital investing. Akron Beacon Journal Even as the economy began to sputter, venture capital groups turned on the taps in 2007, pumping more money into Florida than any year since 2001: Miami Herald Fueled by large medical device deals, venture capital investing ended on a high note in Austin. Austin American-Statesman There were fewer deals and fewer venture capital dollars invested in Arizona firms in 2007. Phoenix Business Journal Venture capital investments dropped in Colorado in 2007 by nearly $100 million, to $564 million. Rocky Mountain News Triangle companies raked in a record amount of venture capital in the fourth quarter. Raleigh News & Observer Measuring a 13 Year Change in Venture Investing We also prepared an Excel spread sheet displaying the dramatic change in the strategy of institutional venture capital investing by stage of development over the past 13 years as calculated from the Money Tree data: NASVF Former VC Out to Shed Light on Venture Capital’s Dark Side Two-hundred-odd deals sourced. One deal done. Something wrong? Vinit Nijhawan thinks so, and the well-known local entrepreneur, angel investor, venture capitalist (make that former VC), chairman of TiE-Boston, and Xconomist, is on a mission to figure out what. After taking off his venture hat last August and evaluating many options for what to do next, he surfaced last week at Boston University, where he will teach and conduct his own research into what’s wrong (and what’s right) with the venture capital model: Xconomy Trying to get VC funding is a lot like dating, says Michelle Madhok, "No one ever rejects you. After you go on a certain number of 'dates' you start to realize they aren't going to commit." Entrepreneur Magazine Endowments Funds Grow; Spending Drops; Congress Takes Notice At a time that some lawmakers are pushing colleges to spend more of their endowments, data being released today suggest that the opposite was the trend last year. The average spending rate on college endowments in 2007 was 4.6 percent, the lowest since 1999 and 0.5 percentage points lower than the high point of the last decade, 5.1 percent in 2002 and 2003. Inside HigherEd Stanford University's endowment grew nearly 22 percent last year to $17.1 billion, a staggering amount of tax-free money that is attracting attention from members of Congress who want wealthy institutions to do more to keep tuition costs down as student loan debt soars. As dozens of elite institutions continue to post double-digit endowment growth, most generally spend less than 5 percent of their endowment each year: San Francisco Chronicle Harvard's endowment rose by nearly $6 billion over the past year, a nearly 20 percent increase: Boston Globe Ohio, Georgia State Roles in Creating Venture Capital It's a $10 million item - a relative pittance in a $21.4 billion budget. But if it survives the legislative process - as it should - that $10 million outlay proposed by Georgia Governor Sonny Perdue could have a significant impact on economic development in this part of the state: Athens Banner Herald Credit Suisse and the Ohio Public Employees Retirement System have invested a total of $10 million in two more Ohio private equity fund managers, River Cities Capital Funds of Cincinnati and Chrysalis Ventures of Louisville: Cincinnati Enquirer Angel Uprising Puts Pressure on VCs Every time you hear a bell ring an angel gets its venture-capital wings. Or so it seems. The line between venture capitalists and angel investors -- the wealthy individuals that use personal cash to get startups off the ground -- is blurring like never before. Their intense involvement, once frowned upon by VCs who often called them "dumb money" during the tech boom, may have powerful ramifications for the industry over the next few years: VentureWire Last year saw record levels of business angel investment in Scotland, according to new figures released by LINC Scotland, the nation’s angel capital association. However, representatives from the organization are warning that future investment in start-ups and emerging companies is under threat due to proposed Government changes in Capital Gains Tax: Glascow Herald Perhaps this is the year when Missouri's tax code once again will take the side of the angels. Gov. Matt Blunt, in his State of the State address this week, endorsed the idea of $5 million in tax credits for angel investors. Missouri had an angel-investor credit in the late 1990s, but let it lapse after the dot-com bubble burst. Stories of virtual companies that were here today and gone tomorrow left state officials wondering why they had subsidized such risky ventures. St. Louis Post-Dispatch Also on the angel scene, the Twin Cities Angels, an investor group that launched an early-stage venture-capital fund two years ago, has closed on its sixth deal and may begin raising a second fund as early as this summer: Pfizer Exit Is Opening Space in Ann Arbor From lemons to lemonade: nearly a year after Pfizer Inc. announced the shutdown of its massive Ann Arbor research campus -- a move that Gov. Jennifer Granholm called a "punch in the gut" -- a surprising turn of events has occurred amid the misfortune and uncertainty. Economic development officials have already offset the lost jobs with new ones to be added over the next 18 to 24 months: Detroit Free Press Pfizer also announced Tuesday it would donate $6 million in lab equipment to four state universities and to support life sciences companies in Michigan: Detroit News New Study: Accelerating the Commercialization of University Innovation An emerging approach to identifying, funding and commercializing university-based innovation is proving quite effective at seeding new companies, according to research conducted by the Ewing Marion Kauffman Foundation and the Max Planck Institute of Economics. According to the Kauffman Foundation, “proof of concept centers” are an effective vehicle to help launch the commercialization of university innovation and to fill the seed-stage funding gap for new technologies. Ewing Marion Kauffman Foundation California Biotechs Seek $150M for Incubators Even as another state budget crisis looms, biotech leaders are requesting $150 million for earliest-stage entrepreneurs with a plan to fund three incubators operated by the University of California system: San Francisco Business Times Milwaukee Area Technical College runs two urban business centers that are supposed to cultivate new businesses, create jobs and revitalize parts of a city that has one of the highest unemployment rates in the nation. One of the lures for tenants: cut-rate rents. But by most measures, the taxpayer-supported business "incubators" have failed, the Journal Sentinel found: Milwaukee Journal-Sentinel South Dakota Biotech Takes a Very Long View The founder of a Sioux Falls-based biotechnology firm hopes the biotechnology used to clone two cows can someday be used to manufacture and develop drugs to treat everything from staph infections to Alzheimer's disease: Sioux Falls Argus Leader How Wisconsin Can Step Up to the Job Creation Challenge Wisconsin Technology Council President Tom Still advocates for support of governor's proposed new and expanded incentives to increase investments in Wisconsin based companies: Wisconsin Technology Network Arizona's High-Profile Entrepreneurs Test New Niches Restless. Disruptive. Driven. These are words commonly used to describe entrepreneurs: Risk-takers who aren't satisfied until they've put their latest idea into motion. Just when it seems that their plans are jelling, they start from scratch with an entirely new idea: Arizona Republic Governor Pledges $50 Million to University of Rochester Med Center The University of Rochester Medical Center plans a $500 million expansion in research and patient services that would add some 800 URMC jobs and nearly 500,000 square feet of new medical and research space. URMC officials announced a strategic plan for growth that would emphasize nine disciplines and help the university join the ranks of top medical schools across the country: Rochester Business Journal New York Governor Eliot Spitzer singled out the UR project in his first-ever “State of Upstate” address delivered in Buffalo. It was the biggest upstate funding project he identified: Rochester Business Journal Utah University Venture Summit Starts Students Early on Venture Capital Path Reaching out to tomorrow’s entrepreneurs, top universities nationwide were invited to send a few of their best and brightest to Utah last weekend to learn about the world of venture capital: Utah Business Journal Congressional Earmarks for R&D Appropriations Causes Concerns There's nothing quite like delivering the bacon to your home state's research institutions. And influential congressional legislators have resumed, in a big way, earmarking R&D appropriations be directed to projects benefiting states where they garner their support for election. This analysis is part of an AAAS effort to enumerate congressionally designated, performance specific R&D projects not appearing in the agency's budget requests: American Association for the Advancement of Science President Bush is unlikely to defy Congress on spending billions of dollars earmarked for pet projects, but he will probably insist that lawmakers provide more justification for such earmarks in the future: New York Times Call for Crackdown on Research Conflicts The inspector general of the Department of Health and Human Services, of which the NIH is a part, released an audit in which it found that the NIH did relatively little to gauge the extent of financial conflicts of interest among academic researchers. The inspector general’s office called on the agency to significantly ramp up its internal oversight of what universities report and to seek to change federal rules so that the NIH can do more to judge whether research institutions are appropriately managing and eliminating conflicts of interest: Inside Higher Ed Engine of Growth: Clean Tech Jobs On the campaign trail and during Monday's debate, the Democratic presidential candidates touted "green-collar jobs" as a solution to unemployment. Some critics are skeptical. "The people who talk about green-collar jobs as the solution to low-skilled unemployment overestimate the number of jobs and underestimate the supply of labor," says Marcellus Andrews, an economist at Columbia University in New York: Christian Science Monitor Forecasting Venture Capital in 2008 Triangle companies as diverse as Red Hat, Quintiles Transnational and Inspire Pharmaceuticals can trace their early growth to financing provided by venture capitalists. Venture capital firms typically invest in emerging companies with high-growth potential: Raleigh News & Observer Pittsburgh's Innovation Works Celebrated Pittsburgh's Innovation Works last year invested in the 100th company since 1999, and its portfolio of technology-related firms last year garnered $117 million in follow-up investment from private and other sources. Seventeen companies were added to Innovation Works' portfolio in 2007, the most in its nine-year existence. "Innovation Works has proven to be a statewide leader in early-stage technology investment," says DCED Secretary Dennis Yablonsky: Pittsburgh Tribune-Review N. Dakota Center for Innovation Director Bruce Gjovig Looks Back When the Center for Innovation opened at UND in 1984, it was housed in a storage closet in Harrington Hall. "They cleaned it out, gave me a World War II edition desk, a chair that was partially broken and a typewriter," said Bruce Gjovig, who launched the Center for Innovation and now serves as the center's director and entrepreneur coach. "That's how I started the Center for Innovation in 1984. In a closet with old furniture." Grand Forks Herald Financial Times: US No Longer Dominates the World of Business In the 20th century, the US had an uncontested lead in global business. The early 21st century has seen a growing set of challenges to the country’s position: Financial Times Investor and Entrepreneur Seminars & Conferences Detroit, MI Sept. 10-12, 2008 - 15th Annual Conference of the National Association of Seed & Venture Funds Registration Not Yet Open Offered by Our Friends: Midway,UT February 7, 2008 - 24th Annual Investors' Choice Venture Conference Investors Choice Chicago,IL February 21, 2008 - NASBIC Midwest Private Equity Conference NASBIC Midwest Tysons Corner,VA February 27-28, 2008 - Southeast Venture Conference Conference Southeast Venture Conference Chicago, IL March 17-18, 2008 - Annual Midwest Venture Summit Midwest Venture Summit San Antonio, TXL May 4-7, 2008 - NBIA’s 22nd International Conference on Incubation National Business Incubation Association San Diego, CA May 7-9, 2008 - Angel Capital Association Summit Conference Angel Capital Association Ann Arbor (Ypsilanti), MI May 14-15, 2008 - 27th Annual Michigan Growth Capital Symposium Michigan Growth Capital Symposium Subscribe to NASVF NetNews Unsubscribe from NASVF NetNews 
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    An independent not-for-profit economic development organization, Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) was established in 1982 to stimulate economic growth through innovation, entrepreneurship and the development and adoption of new technologies. BFTP/SEP, part of a statewide network, provides capital and expertise in technology, finance and business that helps entrepreneurs and established businesses overcome challenges and plan for growth. The organization fosters dynamic relationships among companies, institutional and private investors, research institutions and the university community.  NASVF is accepting membership inquiries from organizations and individuals who build their local economies through investment and facilitation of investment in entrepreneurial ventures. Review our Member Benefits and submit your Inquiry Form today! Members Have a tough seed/venture capital question? Let NASVF provide the answers! Check out the newest member-only feature, "AskNASVF". This member exclusive email service is provided to help our members network and learn among the industry’s top innovation capital leaders.   |