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| February 21, 2008 | Volume 12 Issue 8 |
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Editor: George Lipper | |
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(Please scroll down for the full story) -- State Strategies to Promote Angel Investment for Economic Growth -- MoreLIP - The Ascendancy of Angels -- In Silicon Valley: Starting Creative Engines -- Midwest's Troubles Started when Ideas Stopped Flowing -- DC Region Rich in Biotech Research; Poor in Attracting Investors -- Florida's Growing Biotech Presence -- Incubators in Action in Oregon, Colorado, Fort Worth -- Kansas, Missouri Governors Meet in KC, Renew Commitment to Life Sciences -- North Carolina Raises Bet on Biotech Jobs -- Proposal Would Invest Minnesota Pension Funds in Start-Ups -- Bullish on Indiana's Tech Investments -- Innovation Philadelphia Scrambling for New Funds -- 2008 Utah Legislature Overwhelmingly OKs Utah Fund of Funds $200 Million Expansion -- Venture Capital: Is it Right for You? -- A Start-Up Claims It Can Predict Others’ Fate -- Some VCs Learn to Appreciate 'The Funded,' a Site that Rates Them -- Staying Ahead of the Tech Curve by Buying Into Related Companies -- New York IDA Counters Tax Credit Critics: Boom or Bust - Who's Counting? -- After Sinking for Years, Ohio State Licensing Revenue on the Rise -- Patent Tug-of-War Waged in Congress -- U-M, MSU and WSU Team on $900K Michigan Energy Plan -- VC Firms Take a New Interest in Student-Owned Businesses -- Donations Are Up, But Not From Alumni -- Seminars & Conferences State Strategies to Promote Angel Investment for Economic Growth The National Governors' Association Center for Best Practices has produced this roundup of angel investing data, concluding that "the benefits of supporting and encouraging angel investment can be great. Angel investment is now encouraged in a variety of ways in about 20 states with an objective to create high-skill, high-wage jobs and make important contributions to states and their communities. The presence of angel groups also reduces the relocation of successful entrepreneurs to the coasts for early-stage financing so that states realize greater economic impact from entrepreneurial startups: National Governors' Association MoreLIP - The Ascendancy of Angels The National Governor’s Association’s Best Practices report on state angel-group investment programs and incentives is another welcome contribution to the limited information about who is doing what in this relatively recent but important functioning of the capital continuum for start-up and very early stage companies. Coming just a few months after publication of the Wiltbank/Boeker study on investment returns in angel groups, it helps form a valuable baseline for tracking and measuring both the who and what of the growth of angel investment groups. We heartily applaud both! But.... NASVF Wiltbank/Boeker Angel Performance Study In Silicon Valley: Starting Creative Engines An elite group of young wanna-be entrepreneurs from around the world got the full Silicon Valley treatment this week: lessons in refining business plans, making funding pitches to the Sand Hill Road crowd - and engaging in "team-building" like it's the dot-com '90s. Microsoft and British Telecom invited six college student teams to spend about two weeks in the valley to get a crash course in how to turn tech innovation into tech riches. The 24 participants were finalists in the third-annual Imagine Cup, an international competition for student teams who employ technology to solve complex problems. Improving education was this year's theme: San Jose Mercury News Silicon Valley is uncommonly resistant to America's broader economic troubles but is feeling the strain of uncertainty and financial turbulence. Those are the good news/bad news findings of the 2008 Index of Silicon Valley, an annual report billed as measuring "the strength of the region's economy and the health of the community." This year, it took a strikingly introspective turn, emphasizing the "volatility" felt by the region's middle class: San Jose Mercury News Silicon Valley's first IPO of the year landed with a thud Thursday. ArcSight, a security software company based in Cupertino with 308 employees, raised $50.2 million when it made its initial public offering of stock. But after pricing the IPO at $9 a share, the stock, under the ticker symbol ARST, has yet to close at or above the original price: San Jose Mercury News Midwest's Troubles Started when Ideas Stopped Flowing For much of the Midwest, the recession is already here. It's a recession that has been in the making since the 1970s, and it's a recession that would be occurring even if there were no subprime mortgage meltdown. What news comes out of the Midwest these days tends to have a decidedly depressing theme -- more layoffs at the Big 3 American auto manufacturers, the impact on other manufacturers of low-cost competition from China, decaying big cities and small rural towns, foreclosures, the loss of young people to other parts of the country. About the only good news is the boon for some farmers and agricultural communities from the ethanol and biofuels boom, and even that trend contains no guarantee of prosperity. The region's travails are chronicled in a new book that is already a candidate for inclusion on the list of the year's most important business and economic volumes: "Caught in the Middle: America's Heartland in the Age of Globalism," by Richard Longworth, a former Chicago Tribune reporter who now is a fellow at the Chicago Council on Global Affairs: Seattle Post-Intelligencer New England is also grappling with the issues of retaining its young. Take, for example, Aziz Grieser, a native of Maryland, coming to Boston and the larger New England area to get a degree became like spinning through a revolving door. Those four-, six-, or eight-year visits keep the higher education industry afloat, but they're part of a growing problem for everyone else: Employers large and small, state and local governments, and anyone who expects their children or grandchildren to be able to find a Boston job in the future. Young people are leaving New England at a startling pace, whether they came for an education or grew up in the neighborhood. According to the Census Bureau, between 1990 and 2006, all six New England states occupied prominent spots on the list of states losing population fastest in the 25-34 age group: Boston Globe With manufacturing jobs on the wane and white-collar employment rising, the statue of Vulcan, the ancient Roman god of the forge, a longtime symbol of Birmingham Alabama's steelmaking roots, might be due for a makeover: Birmingham News DC Region Rich in Biotech Research; Poor in Attracting Investors The Washington area boasts some of the highest public-dollar figures for biotechnology research in the country. If only the private investors were nearly that interested. Even though the Washington area is considered one of the country's top five biotech markets it slipped into 10th place among 17 regions in biotech venture financing. Some biotech experts speculate that part of the problem is the high proportion of early stage companies here. They also mention two other difficulties: attracting seasoned, serial entrepreneurs who catch the attention of venture capitalists and moving research from federal labs and academia into the marketplace: Washington Business Journal Starry-eyed entrepreneurs, take note: Maryland venture investors insist that the market is 'hot.' Despite a downturn in the economy, local venture capital experts say there is plenty of startup cash lying around. "Standards are getting raised, but more money is going out than ever before," said Jack Biddle, co-founder of Novak Biddle Venture Partners, a Bethesda firm that invests in high-tech companies. "If you have a good idea and a good team you can raise money." Hometown Annapolis The Maryland Technology Development Corporation (TEDCO) says that it will provide $375,000 total in funding to support Base Realignment and Closure (BRAC) related technology transfer and commercialization initiatives by Maryland organizations: Tech Journal South Florida's Growing Biotech Presence Call it underdog syndrome, but Port St. Lucie leaders really want the Torrey Pines Institute for Molecular Studies to be the first permanent biotech lab to open in the region. Scripps Florida is giving them a run for their money: Palm Beach Post Not to be left behind, a partnership between the Moffitt Cancer Center & Research Institute and Hillsborough County could pave the way for a bustling biotechnology hub. The two entities are working together to identify 200 to 300 acres in the county for a research park. Moffitt would be the anchor tenant, and for-profit biotech companies would use the remaining space. Hillsborough is funding a $235,000 feasibility study and economic analysis of the planned park, which is being conducted by Columbus, Ohio-based Battelle Memorial Institute: Tampa Bay Business Journal If Orlando is to become one of the nation's top biomedical hubs, it will need more people like Nilabh Chaudhary. "Neil" Chaudhary, with a strong background in both business and molecular biology, may live in Cincinnati, but his heart and soul are in Orlando. He is co-founder and chief executive officer of an Orlando startup company, NeoCytex Biopharma Inc., and he needs all the help he can get. "I'm a scientist. I know business, but not the nitty-gritty," said Chaudhary: Orlando Sentinel Incubators in Action in Oregon, Colorado, Fort Worth Bob Taylor is no stranger to Portland's booming footwear industry. He's taken three shoe startups to market, including Portland-based Cloggens LLC and AQX Inc. He now wants to nurture the region's footwear and apparel startups on a larger scale. Taylor and partner William Weinstein have leased and remodeled 10,000 square feet in the historic George Lawrence building in Old Town. Their new venture, called the Center of Excellence, offers a host of support services, including a fabric and shoe-component library, rapid prototyping, access to a network of designers and developers and -- most importantly for many businesses -- access to manufacturing. Portland Business Journal Solix Biofuels plans to squeeze oil out of the protein-rich algae and sell it as biodiesel, a motor fuel. The company is just one of several Colorado State University spinoffs that seek to solve some pressing global issue, such as energy demand or air pollution, by transferring research work to the marketplace: Rocky Mountain News In Fort Worth, Darlene Ryan is on the lookout for entrepreneurs. Her target: engineers, researchers and scientists with no customers. No employees. No office space. Not even a reliable strategy for turning profits. What they must have is an idea that hinges on unique technology and a desire to turn their innovations into a lucrative business: Fort Worth Star-Telegram Kansas, Missouri Governors Meet in KC, Renew Commitment to Life Sciences Missouri Gov. Matt Blunt on Friday urged the removal of stem-cell research politics as an obstacle for the region’s life sciences economy. “Missourians have spoken,” Blunt said at the Governors’ Summit on Regional Economic Development at Liberty Memorial in Kansas City. “They are supportive of responsible scientific research and allowing research that the federal government allows in our state,” Blunt said. “I am hopeful we will get to a sense of stability and it will be clear that this sort of early stem-cell research is indeed protected in our state.” Kansas City Star North Carolina Raises Bet on Biotech Jobs Oliver Smithies, a 2007 recipient of the Nobel Prize in Medicine, is one of the N.C. Biotechnology Center's biggest success stories. The biotech center, which is largely funded with state tax dollars, spent $899,875 to help the University of North Carolina at Chapel Hill recruit Smithies and six other researchers. It took 20 years for the investment to pay off: Raleigh News & Observer Proposal Would Invest Minnesota Pension Funds in Start-Ups Should the state's pension fund be used to finance the next Medtronic? That's the question a group of lawmakers pondered Wednesday before they passed a bill that urges the Minnesota State Board of Investment, which oversees Minnesota's $63 billion in retirement assets, to direct some of that money toward early stage start-ups: Minneapolis Star-Tribune Bullish on Indiana's Tech Investments Is your start-up worthy of investment? Ask the venture investor in a box. Two former Oxford University students are getting attention (and seed money) in Silicon Valley for developing new technology that automates aspects of the venture capital decision-making process: Indianapolis Star-News Innovation Philadelphia Scrambling for New Funds After getting her copy of Mayor Nutter's budget and five-year plan last week, the executive vice president of Innovation Philadelphia - a regional economic-development office - had a familiar sinking feeling. For Kelly Lee, it will be the third time in three years she has had to scramble to save the primarily city-funded agency from being zeroed out of the budget: Philadelphia Inquirer 2008 Utah Legislature Overwhelmingly OKs Utah Fund of Funds $200 Million Expansion The Utah Fund of Funds (Utah FoF), a major economic development program created by the Utah Legislature to provide the state’s entrepreneurs with access to a broad array of quality funding sources, has announced that recent legislation, Senate Bill 11, Substitute I, has expanded the program by $200 million – from $100 million to $300 million. Utah Governor Jon M. Huntsman is expected to sign the bill into law next month: Utah Business Magazine Cincinnati's venture capital community is about to gain another large source of money to tap. Fort Washington Capital Partners is in the midst of raising its sixth private equity fund of funds. The fund has targeted $400 million, which would make it the largest fund Fort Washington has raised to date: Business First of Cincinnati Venture Capital: Is it Right for You? Not every company is a candidate for venture capital. Outside equity, whether from family, friends, so called "angels," or institutional investors like venture capitalists, always has strings attached. If your company is a lifestyle business or one in which the main goal is to generate personal income, or if it is a company that you would like to pass along to family members, then outside equity probably isn't your best choice: Carlsbad Current-Argus You have a great business idea. And your well-crafted plan is ready to go. Now comes the even harder part: Finding money. Or, rather, securing the right type of financing. It can be a daunting task. The U.S. Small Business Administration says "inadequate and ill-timed financing is a close second" among the most frequently given reasons why businesses fail. (Poor management is No. 1.) Baltimore Sun Or it might even arise in the form of debt that you have to weigh against a venture investment: Chicago Tribune A Start-Up Claims It Can Predict Others Fate Is your start-up worthy of investment? Ask the venture investor in a box. Two former Oxford University students are getting attention (and seed money) in Silicon Valley for developing new technology that automates aspects of the venture capital decision-making process: New York Times Some VCs Learn to Appreciate 'The Funded' Site that Rates Them Silicon Valley's purveyors of start-up capital are often quick to back new ideas, but a Web site that lets entrepreneurs rate and review venture capital firms anonymously has been a harder sell. More than a year after www.thefunded.com stirred a hornet's nest among venture capitalists with anonymous complaints about their high-handed behavior, leaking of plans to competitors and arbitrary changes to deal terms, many say the site is a good idea, even if comments need to be taken with a grain of salt: Reuters Staying Ahead of the Tech Curve by Buying Into Related Companies Big pharma and technology companies have long been big spenders in start-ups. Others are taking their cue, opting to invest and buy tech companies and not just their products to stay ahead of the curve. UPS is one such company. The Atlanta group with the fleet of iconic brown trucks has invested around $35 million in more than 30 new technologies in the past 10 years: Reuters New York IDA Counters Tax Credit Critics: Boom or Bust - Who's Counting? How many jobs do tax breaks for developers create? Depends on whom you ask. Last May, New York Jobs with Justice, a permanent coalition of community, labor, religious and student organizations, released research showing that developers receiving tax breaks from industrial development agencies failed to meet their job-creation estimates. The developers promised their projects would create 217,000 jobs statewide in 2005 -- but actually created just 79,000. But a study released Tuesday tells a contrasting tale. The New York State Economic Development Council-sponsored research says the tax-aided projects in 2005 created a whopping 309,504 jobs. One report, then, paints the industrial development agencies as a failure. The other says they are a smashing success: Albany Times-Union The Iowa State Senate sent Governor Chet Culver a sweetened package of business incentives Wednesday designed to lure Microsoft to locate a costly data center in Iowa. The project is part of what backers hope would be a new wave of high-tech development in the Hawkeye State: Seattle Post-Intelligencer After Sinking for Years, Ohio State Licensing Revenue on the Rise For 20 years, Ohio State University could count on the money coming from its feline leukemia vaccine. That discovery brought in $14 million. In 2001, the patent expired. The money Ohio State earns on licenses and royalties plummeted. Even after several years of double-digit revenue growth, the university has not caught up. The money brought in from groundbreaking work there still trails the other Big Ten schools and remains well below OSU's all-time high of $2.3 million 11 years ago: Columbus Dispatch University of South Carolina ranked 19th nationwide and 14th among public universities for the number of start-up companies created in 2006, according to a national technology-transfer survey from the Association of University Technology Managers. The survey measures academic intellectual-property licensing in the U.S. and Canada: The State Patent Tug-of-War Waged in Congress In a lawsuit it filed this month against Intel Corp., the Wisconsin Alumni Research Foundation is going after a familiar adversary.Its volley, alleging that Intel infringed on a patent covering a circuit developed at the University of Wisconsin-Madison, isn't the first the foundation has aimed at the computer chipmaker or the semiconductor industry: Milwaukee Journal-Sentinel According to the US Supreme Court in the recent Ebay case, there is no longer any assurance that rightful owners of valid US patents have any legal right to prevent unlawful trespassers from infringing his or her patent, Patent expert Dennis Fernandez of Fernandez & Associates to offer this unusual opinion on the current state of U.S. intellectual property: Venture Experts U-M, MSU and WSU Team on $900K Michigan Energy Plan Michigan's three largest research universities will invest $900,000 to encourage their faculty to work collaboratively on novel alternative energy research that could help shape energy policy: Detroit News Can Silicon Valley become a world leader in cheap and ubiquitous solar panels for the masses? Given the valley’s tremendous success in recent years with such down-to-earth products as search engines and music players, tackling solar power might seem improbable. Yet some of the valley’s best brains are captivated by the challenge, and they hope to put the development of solar technologies onto a faster track: New York Times VC Firms Take a New Interest in Student-Owned Businesses Student businesses are like any other business in one sense: They desperately need capital and business advice early on. Lucky for them, some VC firms are taking a special interest in student businesses. Highland Capital Partners, a VC firm in Lexington, Massachusetts, has a long history of working with universities, including the Massachusetts Institute of Technology, and has funded a few of the high growth-potential startups sprouting from that environment, says Michael Gaiss, senior vice president of HCP: Entrepreneur In North Dakota, the Dakota Venture Group (DVG) goes one step further It believes that even a small organization like itself can make big societal contributions by encouraging entrepreneurship. Students at the University of North Dakota have been given the opportunity to take part in real-world venture capital and angel (high-net-worth individuals) investing: Young Money Donations Are Up, But Not From Alumni Private giving to colleges grew by 6.3 percent — to $29.5 billion — in 2007, setting a new record, according to a report being released today by the Council for Aid to Education. Amid all of the big gains, the “Voluntary Support of Education” reports some trends that could concern colleges — especially with an economic downturn taking hold in 2008. First, alumni giving declined by 1.5 percent. Because of an unusually large increase last year of 18.3 percent, experts played down the significance of that figure, although they are watching it for the long run: Inside HigherEd 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: 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 New York, NY March 27-28, 2008 - San Antonio, TXL May 4-7, 2008 - Community Development Venture Capital Alliance Annual Conference CDVCA Annual Conference Las Vegas, NV May 4-7, 2008 - Consumer Health World Summit Health 3.0 Summit San Antonio, TX 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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