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| February 14, 2008 | Volume 12 Issue 7 |
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Editor: George Lipper | |
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(Please scroll down for the full story) -- Issues Arise on Use/Abuse of Tax Credits for Jobs in NY, MN, KS, KY & MD -- Tech Giants Open Bidding War among States for a Cool Billion-plus in Tax Breaks -- Michigan's Low Rate of College Degrees Connected to Job Loss -- Governor Pushes Texas Universities for More Startups -- Seattle Taps Its Inner Silicon Valley -- DC Region Rich in Biotech Research; Poor in Attracting Investors -- Slow California Stem Cell Progress Offers a Lesson for Massachusetts -- Albany Makes Show of Support for Sematech -- Pennsylvania's Ben Franklin Technology Partners at 25: Still going Strong -- Ohio's Economic Stimulus Plan Requires Borrowing -- Report: Maine R&D Seeing Growth -- South Carolina's Innovista Attacts Fuel Cell Company -- Ethanol: More Harm Than Good? -- Angels: New Mexico Deal Search; Nashville Launches a Fund -- Hitting Up Family and Friends for a Venture Loan -- Patent Rule Changes Could Restrict Biotechs -- Time to Break the Town-and-Gown Barriers -- Bob Calcaterra Leaving St. Louis' Nidus Center to Form a Venture Capital Fund -- Milwaukee Firm Breaks its '50-mile rule, to Invest $1.3M in Madison Biotech Start-Up -- Brace Yourselves:the SPAC Is Back and on the Attack -- Seminars & Conferences Issues Arise on Use/Abuse of Tax Credits for Jobs in NY, MN, KS, KY, & MD Up to 30 percent of businesses looking to benefit from Empire Zone tax breaks in the future may soon be out of luck, thanks to new rules recently approved by the state Department of Economic Development. In the meantime, about 180 companies around the state, including three in the Capital Region, face being dropped from the program in a few days due to not meeting the state's standards: Albany Times Union While top state officials defend the state's biggest economic development program, Empire Zones, to legislative critics, some say the program ought to be scrapped : Rochester Democrat & Chronicle Even as New York questions the Empire Zone issue, the state biotech asociation steps up to the legislation with a request for more: Rochester Business Journal And Governor Eliot Spitzer met with Upstate civic leaders in Rochester yesterday to build support for his proposed $1 billion package of assistance to the upstate economy. He did not leave empty-handed. The Rochester Business Alliance gave him a list of 300 business executives and community leaders from across upstate endorsing the Upstate Revitalization Fund: Rochester Democrat & Chronicle In Minnesota Governor Tim Pawlenty's flagship rural economic development program, JOBZ, is something of a mess, lacking oversight and giving big tax breaks to companies and communities that don't necessarily need them, the legislative auditor reports. In a 100-page evaluation of JOBZ that the state government watchdog issued is the first official examination of Minnesota's four-year-old business tax-break program - the largest state-run business subsidy program in Minnesota's recent history: St. Paul Pioneer Press In Kentucky, a state board overseeing economic development funds has agreed to a regional group’s request to essentially rewrite the rules of a $400,000 grant, eliminating a provision that the funded building must create 40 full-time jobs: Lexington Herald-Leader Kansas’ top revenue official told lawmakers Friday that development tax credits were being used by some businesses as a subsidy rather than an incentive to expand: Kansas City Star And Maryland's economic development arm may get an 18 percent increase to its budget in the next fiscal year, potentially boosting a key fund used to help businesses expand. Governor Martin O'Malley upped the Department of Business and Economic Development's budget from $124 million in fiscal year 2008 to $146 million in fiscal year 2009: Baltimore Business Journal Tech Giants Open Bidding War among States for a Cool Billion-plus in Tax Breaks Microsoft and a handful of other tech giants are quietly securing a Washington state tax break that could be worth more than $1billion through legislation forged amid corporate threats and an interstate bidding war for computer server farms that have become the backbone of the Internet: Seattle Post-Intelligencer Iowa is quick to make known its interest with a kind of 'How much you want?' tone in hopes of securing the tech job potential: Des Moines Register Michigan's Low Rate of College Degrees Connected to Job Loss If having an abundance of knowledge-based jobs and vibrant metro areas is a key to economic prosperity, then Michigan's future is in doubt, a new study says. In its first report card on Michigan's progress in developing a knowledge-based economy, Michigan Future Inc. says the state and its three largest metropolitan areas - Detroit, Grand Rapids and Lansing - are lagging other leading states and cities in creating high-wage jobs requiring at least a bachelor's degree: Ann Arbor News Governor Pushes Texas Universities for More Startups Governor Rick Perry has outlined a plan for Texas universities to churn out startup companies faster and with less red tape. While campuses statewide feel pressure, leaders at the University of Texas say they already have met his mandates: Austin Business Journal Seattle Taps Its Inner Silicon Valley Many communities dream of becoming the next Silicon Valley. Seattle is actually doing it. Stroll through the hip Fremont District and you will sense the Valley vibe. Google recently opened a research lab here, its second in Microsoft’s backyard. Technology start-ups are sprouting up amid quirky neighborhood landmarks like a bronze statue of Lenin and the Fremont Troll, the giant concrete creature lurking beneath the George Washington Memorial Bridge: New York Times 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 Slow California Stem Cell Progress Offers a Lesson for Massachusetts Fast results in state funded research programs are rare. The same day that President Bush won a second term, California voters approved their plan to pour $3 billion of taxpayers' money into stem cell research over the next decade. Supporters argued the investment would save millions of lives through new medical therapies, generate millions of dollars in added tax revenue, cut healthcare costs by billions, and create thousands of high-paying jobs. Three years later, Californians still await some results. Until recently, most of the money was tied up in lawsuits. And even now that the tap is flowing, proponents acknowledge it could take years, if not decades, for the grants to pay off: Boston Globe Nonetheless California sees 2008 as the year of the stem cell. A number of stem cell companies are expected to soon announce the results of clinical trials and, if they are as positive as anticipated, 2008 could be an important time for the industry: San Francisco Business Journal And even as the state economy sputters, California Governor Arnold Schwarzenegger was in Carlsbad this week to shine the spotlight on biotechnology, an industry that is growing. “We are here today to talk about job creation,” Schwarzenegger said after touring a stem cell lab and manufacturing facilities at Invitrogen, a publicly traded biotechnology company that makes tools for drug-discovery research: San Diego Union-Tribune Albany Makes Show of Support for Sematech Nearly 20 local business executives and educational leaders voiced their support Friday for the state's $300 million incentive package to bring the headquarters of Sematech Inc. from Austin, Texas to Albany: Albany Times Union Pennsylvania's Ben Franklin Technology Partners at 25: Still going Strong The Ben Franklin Technology Partners program, launched 25 years ago, became the premier model for state sponsored economic development programs a quarter of a century ago. Representative Rick Geist, sponsor of the legislation which created the organization, recalls the growth and progress of Ben Franklin Technology as it lights its silver anniversary candles: Ben Franklin Technology Partners Pennsylvania also hopes to spur growth of biotechnology and life sciences by guaranteeing another $10 million in venture capital funding. The guarantee will support venture capital provided by the Radius Venture Partners based in New York City: Harrisburg Patriot-News Ohio's Economic Stimulus Plan Requires Borrowing Ohio Governor Ted Strickland wants to put Ohio's economic rebirth on a credit card. "No one likes additional debt, including me," the governor said Wednesday. "But the national economic downturn is costing us jobs." Strickland capped his second State of the State address with an economic stimulus proposal built on the state borrowing $1.7 billion for a plan to create 80,000 jobs: Cleveland Plain Dealer Five Central Ohio startup businesses are getting cash infusions from TechColumbus, and more young companies should soon be in line for aid as the technology incubator opens two satellilte offices. The agency also plans to find more deals with regional entrepreneurs through offices in Dublin and New Albany scheduled to open in the next three months: Business First of Columbus Report: Maine R&D Seeing Growth The Maine Department of Economic and Community Development Office of Innovation has released a Comprehensive Research and Development Evaluation, charting the growth and economic impact of the state's R&D economy. According to the report, state investment through such organizations as the Maine Technology Institute leveraged almost 18 times as much money in new economic activity: Portland Press Herald South Carolina's Innovista Attacts Fuel Cell Company USC’s Innovista, the budding research campus that touts itself as a leader in hydrogen fuel cell research, is getting a tenant that is ready to come and make money off the fledgling technology. Gecko Energy Technologies, a New Jersey-based company, will open a branch in Columbia to begin testing and manufacturing a portable battery-like device that can provide power for emergency workers: The State Ethanol: More Harm Than Good? Renewable fuels such as ethanol have long been hailed as a cleaner-burning alternative to fossil fuels and a potent way to reduce the climate-changing gases pumped out of car tailpipes. The 2007 Energy Act signed by President Bush last December doubles the nation's use of corn-based ethanol. Ethanol production in Minnesota, a pioneer of the technology, is expected to double during the next three years. But research by Minnesota scientists is challenging the underpinnings of the biofuel rush. Ethanol and similar products may do more harm than good because of the changes they bring to the landscape, some scientists say: Minneapolis Star Tribune Angels: New Mexico Deal Search; Nashville Launches a Fund They might lack leather jackets and motorcycles, but the New Mexico Angels are cruising the desert highways in search of some profitable hot spots in which to invest. In an effort to expand beyond the central Rio Grande corridor, the Angels are kicking up dust in Las Cruces, Roswell, Hobbs and Farmington, said President John Chavez. The group also is rumbling through Tucson, Ariz., to strike a few deals with their brethren, the Desert Angels: New Mexico Business Weekly Sidney Chambless Jr. has been executive director of the Nashville Capital Network for four years, working to connect entrepreneurs with angel investors willing to commit enough cash to help fund good business ideas with growth potential. The capital network recently unveiled a new $5.2 million angel fund designed to invest alongside many of the network's 50 individual participants, most of whom are business leaders with the know-how to pick winners: The Tennessean New angel organization also are flapping their wings over Oregon and Missouri: Corvallis Gazette Times St. Louis Post-Dispatch Hitting Up Family and Friends for a Venture Loan Does the idea of hitting up family or friends for cash make you cringe? You may be forgetting that the people close to you might actually be happy to lend you money. The most important financial perk is that with proper structuring, your lenders can benefit financially from the transaction as well, and with very little risk: San Jose Mercury News With the capital market turmoil raging, many argue that 2008 is going to be a tough year for start-ups to raise money, particularly follow-on capital in the form of a Series B financing (not surprisingly to any veteran viewers of Sesame Street, Series "B" follows Series "A" rounds of financing). Series B financing processes are all about credibility: Boston VC blog Words are an indispensable tool in the entrepreneur's toolbox. Well used, they add light, color, symmetry and balance to the entire entrepreneurial venture. But if we use the wrong words or don't understand what words really mean, the result can be disastrous. Nowhere is that more true for the entrepreneur than in the process of raising money for a startup venture. There is a particular language that is used by investors that must be understood before real communication can flow — not to mention before money can flow: Deseret Morning News Patent Rule Changes Could Restrict Biotechs Biotechnology investors and attorneys are alarmed over proposed new patent rules that they say will weaken the rights of biotech inventors over their creations. The rules by the federal patent authority would, among other things, restrict the number of times a company or inventor could resubmit or amend an application. After applicants have exhausted their so-called "continuations," the new rules would generally require them to go to the end of the line -- potentially allowing other applicants to grab patent protection for the same inventions: San Francisco Business Times Time to Break the Town-and-Gown Barriers For lots of regions, especially declining ones, universities have come to be seen as economic saviours, at least since people started talking about Stanford University's role in the rise of California's Silicon Valley. One leading Valley entrepreneur, asked for "the secret" of the area's success, replied, tongue-in-cheek: "Take one great research university. Add venture capital. Shake vigorously." Businesses, governments and economists talk of getting local universities more involved in technology transfer, commercial innovation and start-ups. "If only our university could be more like Stanford and MIT," they say. The idea actually sells universities short. It oversells their commercial role and underestimates their other contributions. There are only a few instances where universities have played a major role in high-tech development — certainly Silicon Valley and Greater Boston, as well as Austin, North Carolina's Research Triangle and Waterloo, Ontario Toronto Globe & Mail Bob Calcaterra Leaving St. Louis' Nidus Center to Form a Venture Capital Fund Bob Calcaterra, President of the St. Louis' Nidus Center for Scientific Enterprise, a biotech business incubator he has run since its inception, presided last night over his final graduation ceremony. Calcaterra's is leaving the center this spring to form a venture capital fund with a partner, Randy Weiss. They have begun fundraising and hope to launch the Startup Midwest Bio Seed Fund with $20 million — enough to invest in about a dozen very early stage life-science companies in Missouri and surrounding states. Bob has been a regular at NASVF functions since it was launched more than a decade ago: St. Louis Post-Dispatch While across the state, Missouri leaders are facing growing questions about whether they are doing enough to bolster Kansas City’s bioscience economy. “I’ve always felt the state of Missouri has been depressingly missing in action in terms of Kansas City,” says Irvine Hockaday, chairman of the Kansas City Area Life Sciences Institute. The issue will receive renewed attention Friday as Missouri Governor Matt Blunt, Kansas Governor Kathleen Sebelius meet in Kansas City. For the third year, officials at the Governors’ Summit on Regional Economic Development will focus on how the two states can work together more effectively: Kansas City Star Milwaukee Firm Breaks its '50-mile rule, to Invest $1.3M in Madison Biotech Start-Up Centrose reports it raised $1.3 million in a type of funding round that has not been common among Wisconsin start-ups. The Madison biotech start-up, which has a proprietary technology that uses sugar molecules to make drugs less toxic and more effective, raised the money from Pavek Investments, rather than seeking angel funds: Milwaukee Journal-Sentinel Brace Yourselves:the SPAC Is Back and on the Attack Life-science IPOs may be hitting the wall — so far this year, seven biotech and medical-device startups have yanked their offerings — but one part of the IPO market is booming. That’s the field of “special-purpose acquisition corporations,” or SPACs, which are essentially blank-check companies that raise money through initial offerings specifically for the purpose of acquiring other companies: Venture Beat TheFunded, a web site that lets entrepreneurs rate venture capitalists, often with aggressively snarky commentary, has released a new feature to reduce criticism the site is being gamed: Venture Beat 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: 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 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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