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| January 3, 2008 | Volume 12 Issue 1 |
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Editor: George Lipper | |
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(Please scroll down for the full story) -- Venture Capital at Year End 2007, Year Beginning 2008 -- CALPERS Shifts More Investment to Venture Capital -- Robust Angel Activity During the Holidays -- Michigan Hammers Away at Economy Transition -- Inventions Starting to Pay Off in a Bigger Way at Ohio State -- Against the Tide: Biotech Moves from California to Sioux Falls -- St. Louis as a Tech Center? It's Possible -- For KC Biosciences Effort, Don’t Forget Kansas State -- More Louisville Startups Get Investments -- Venturing in the Big Sky Neighborhood -- Philadelphia, Pittsburgh Spur More Startups -- University of California Incubator Hatches another Bright Idea -- Baltimore Receives First Profit-Sharing Check for Marriott Investment -- Uses/Abuses of Tax Credits & Incentives -- Will 2008 Be the Year of Launching Stem Cell Therapies? -- The Clean Energy Industry's Thirst for Investment -- Maryland's Greatest Economic Asset -- Research Efforts Ready to Start in Kannopolis -- A Talent Contest We're Losing -- Innovative Minds Don’t Think Alike -- Miami of Ohio University Students Revive Venture Fund -- Bay State 5th in Share of Patents Despite Inexplicable Drop in Numbers -- Seminars & Conferences Venture Capital at Year End 2007, Year Beginning 2008 31 venture-backed IPOs totaling $3 billion in proceeds were issued in the fourth quarter of 2007, according to a media release from Thomson Financial and the National Venture Capital Association, the highest quarterly number since the third quarter of 2000. For the year, 86 venture-backed companies went public for $10.3 billion, a 51 percent increase over 2006. In contrast, the venture-backed M&A market had only 45 deals in the fourth quarter, 22 of which had a combined disclosed value totaling $5.0 billion, the lowest number of total M&A exits since in 10 years: NVCA Media Release And the road ahead looks to be smoother for the industry as funds raised during the bubble-era approach maturity coincidentally with the arrival of some 'new venture capital math': NASVF NetNews CALPERS Shifts More Investment to Venture Capital The California Public Employees' Retirement System, the largest U.S. public pension fund and trend setter for the industry, will sell more than $20 billion in stocks and bonds aiming for higher returns from venture capital, commodities, real estate and several other alternative investment options. Under a new strategy approved last month, Calpers rolled back its exposure to the stock market to the lowest level in 14 years: Washington Post Robust Angel Activity During the Holidays A growing number of Google millionaires are hoping to parlay their newfound wealth into even greater riches by bankrolling technology start-ups: New York Times Since its formation in 2005, the St. Louis Arch Angels group has poured more than $14 million into startup companies. Of that amount, more than $10 million has gone to local firms, and $12 million has been invested in just over a year: St. Louis Business Journal "It's a fine time to look for angel funding," says Jeffrey Sohl, director of the University of New Hampshire's Center for Venture Research, which is tracking increased angel interest in recession-proof industries like software, health-care services, medical technology, online social networks and alternative energy: Reuters The New Mexico Angels had a bang-up year for investments in 2007, and expect to do even more in 2008. Since September, the group has made four more investments worth $405,000, said Angels board member John Chavez: New Mexico Business Weekly What better season than Christmas to report on angels? A network of wealthy, early-stage investors in South Florida has set up a chapter in the Tampa Bay area. And members, as well as potential investments, are welcome, with several caveats: St. Petersburg Times Marc Silverman is resigning as director of CTEK's Boulder Venture Center to start a new seed-stage funding group called Mountain Angel Capital, or MAC: Boulder County Business Report Michigan Hammers Away at Economy Transition Michigan's "Pre-Seed Capital Fund," a collaborative effort of Michigan’s 12 SmartZones and the Michigan Economic Development Corporation, has dispersed more than $4 million of the $6.6 million in start-up investment monies that it was awarded through the 21st Century Jobs Fund. The invests in technology-based companies that are creating and retaining jobs in the state: MEDC Pre-Seed Media Release MEDC Power Point Here's a jolly holiday surprise for Michigan. A rapidly expanding Detroit-area company is adding hundreds of jobs and doubling its revenue every year. And there's more. Not only is this hot growth company in Michigan, but it's also a story of rapid response from a state agency that helped keep this growth firm from departing for Denver: Detroit Free Press The Pentagon will spend about $113 million for projects at Michigan companies, universities and other research institutions this year, according to U.S. Senator Carl Levin, the Detroit Democrat who chairs the Senate Armed Services Committee: Detroit Free News And some up-and-coming Michigan entrepreneurs are betting they can boost their businesses and the state's struggling economy by giving each other a helping hand. The Entrepreneurs' Organization, a global group with an 80-member Detroit chapter, connects young business owners whose companies generate at least $1 million in annual revenues. Its core mission is to help members successfully navigate business challenges and help their companies grow: Detroit Free News Inventions Starting to Pay Off in a Bigger Way at Ohio State Royalty and licensing income from the inventions of Ohio State University researchers increased 36 percent in the 2006 academic year, but the $947,000 in earnings remained last among Big Ten schools and fourth among Ohio colleges, reports a new survey: Business First of Columbus Against the Tide: A Biotech Moves from California to Sioux Falls A biotechnology company that relocated to Sioux Falls from California has settled into a laboratory with plans to grow. AlphaGenix, which develops diagnostic and other tests for sale to research laboratories, moved to Sioux Falls from Carlsbad, California earlier this year. The prohibitive costs of doing business in California outweighed the advantages of southern California's cluster of biotechnology research firms and companies, says founder and president Stephen Hall: Sioux Falls Argus Leader St. Louis as a Tech Center? It's Possible Here's the good news for St. Louis: It's one of two locations, along with Raleigh-Durham, that a report singles out as examples of "high-quality, alternative markets" for tech employers. And even better, according to the St. Louis Regional Chamber & Growth Association, KLG is working with a Fortune 100 company that is looking to relocate its technology center, with 1,500 jobs. St. Louis is one of four finalists: St. Louis Post-Disptach But the Mound City is also losing one. A venture capital firm from St. Louis sees Cleveland as the place to be for investing in biomedical research and development. So RiverVest Venture Partners plans to open an office in the Cleveland soon. It's the latest evidence that Northeast Ohio is becoming a destination for health care investors: Cleveland Plain Dealer For KC Biosciences Effort, Don’t Forget Kansas State Don’t overlook the potential for Kansas State University to provide one of the critical missing pieces to making the Kansas City region into a thriving biosciences hub. And KC certainly could use the help. The area is all but alone “among important American cities in not having in its midst a world-class research university that is deeply engaged in meeting all the city’s opportunities and challenges,” wrote authors of a high-powered task force in a 2005 report called “Time to Get it Right.” Kansas City Star More Louisville Startups Get Investments 2007 was been a good year for Louisville startups looking for funding, according to the local office that provides management and funding guidance for entrepreneurs. Thirty local ventures are known to have received private or state investments over the past 12 months, said Mark Crane, executive director of the Enterprise Corp, a division of Greater Louisville Inc., the metro chamber of commerce: Louisville Courier-Journal Venturing in the Big Sky Neighborhood Joanna Glasner, in a piece for PEHub, writes about venture capitalists and angels finding a home away from home serving Montana, Idaho and Wyoming entrepreneurs: PEHub Utah, which attracts significantly more venture activity than its northerly neighbors is poised to invest a minimum of $100 million to buyout and venture capital funds is putting together a second fund of funds: PEHub Philadelphia, Pittsburgh Spur More Startups Three entrepreneurs who also invest in early-stage companies have launched an organization to induce more young people to stay in the Philadelphia area and start companies of their own. David Bookspan, Michael Levinson and Steven D. Welch have formed DreamIt Ventures, which they are describing as a pre-seed-stage venture firm: Philadelphia Business Journal Matt Harbaugh, the chief investment officer for Innovation Works, 'startups' count everything from technology firms to pizza shops. The statistic, however, is not an accurate reflection of how Pittsburgh is doing when it comes to innovative technologies. That statistic that is not an accurate reflection of how Pittsburgh is doing when it comes to innovative technologies: Pittsburgh Post-Gazette University of California Incubator Hatches another Bright Idea The Bay Area's biotech future may rest in 2,500 square feet in Mission Bay. The Garage, a biotech incubator to spin out University of California-related research, is set to graduate its third company with multimillion-dollar venture capital backing. That's significant, Garage supporters say, because all those entrepreneurs entered the garage over the past two years with little but ideas.: San Francisco Business Times Baltimore Receives First Profit-Sharing Check for Marriott Investment Baltimore has collected its first profit-sharing check from one of the major development projects that got tax breaks from the city over the past decade to help spur economic growth. The Baltimore Development Corp. said yesterday that the city received $819,826 for fiscal 2006 from the Marriott Waterfront Hotel. The hotel was one of the first big projects that helped transform Harbor East from an industrial stretch of waterfront to an upscale urban neighborhood: Baltimore Sun The State of Texas received a 46 percent return on its investment in CardioSpectra, with the potential to receive even more. The Texas Emerging Technology Fund (TETF) awardee was acquired by Volcano Corporation. CardioSpectra is the first TETF awardee to provide a cash return on investment: Texas Governor's Office Uses/Abuses of Tax Credits & Incentives Hawaii tax officials have rejected $22.2 million in technology tax credits claimed between 2001 and 2005, a figure that could grow as more audits are completed. About 38 percent of the audited tax credit claims were disallowed: Honolulu Advertiser Orlando taxpayers are racking up quite a bill when it comes to incentives paid out to corporations in exchange for creating new jobs. Right now, deals in Orange and Seminole counties are leaving taxpayers on the hook for more than $27 million over the next few years. And the tab is likely to grow when AirTran Airways accepts an incentive package worth more than $4 million to help construct a new flight operations center and create 121 new jobs: Orlando Sentinel The giant Cabela's store in Fort Worth is impressive by many measures. It's a retail paradise for sportsmen and a feast for the eyes for anyone who loves the outdoors. But it was supposed to be a lot more, which is why city leaders agreed to give Cabela's up to $42 million in incentives over a 20-year period. They even went to court to defend the tax breaks. Promises, promises. Two-and-a-half years after opening, Cabela's is falling short of projections. It's not even hitting the relatively low marks tied to its tax breaks: Fort Worth Star-Telegram And this is not just another Pat and Mike story! Mike Meyers and Pat Doyle report that Minnesota's JOBZ program has given more than 300 companies sweeping tax breaks in hopes of creating jobs where the state needs them most. But as state government becomes strapped for revenue and Minnesota's job growth has fallen behind the national rate, the public has no way of knowing details on the costs of what JOBZ has achieved. It's political heaven if you can claim great results without having prove it: Minneapolis Star-Tribune The National Defense Center for Environmental Excellence opened its doors in 1991 with a $5 million earmark from a powerful lawmaker. Operating in Johnstown, Pennsylvania, the privately run center has received at least $671 million worth of federal contracts and earmarks since then to research and develop pollution-abatement technology and other systems for the Defense Department, which rarely uses them: Washington Post One little-noticed provision stuck inside the massive spending bill Congress sent to the president may actually benefit taxpayers. That provision will ensure that taxpayers have access to information about the medical research they fund. Scientists getting grant money will now have to submit a final copy of their research papers to a federal database when they are accepted for publication. That database will be made available to the public: Las Vegas Review Journal Will 2008 Be the Year of Launching Stem Cell Therapies? After years of heated debate and painstaking research, 2008 is shaping up to be a critical year in the development of stem cell therapies. Among those in the forefront isMaryland's Osiris Therapeutics, which has three final-phase human trials under way that it hopes will lead to approval of stem cell drugs: Baltimore Sun Persuading the private sector to accept a handout from California's $3 billion stem-cell institute might strike some as a no-brainer. After all, what business wouldn't take the money? But there's a catch: Although companies now have a chance for the first time in the institute's three-year history to apply for its money, they may wind up having to share some of their revenue and research. And that's giving some companies second thoughts about participating: San Jose Mercury News Clean Energy's Thirst for Investment The Pacific Northwest still ranks below the Bay Area and the Northeast in terms of clean-tech investment, but Michael Weaver is among many local techies who see fertile opportunities to address the world's insatiable thirst for energy and the accompanying geopolitical and environmental concerns: Seattle Times How green should we be? Dean Takahashi, as he heads out to next week's CES show in Las Vegas suggests "it's worth a pause to consider whether we really need all of the estimated 27,000 new gadgets that will be introduced at the tech industry's biggest trade show: San Jose Mercury News Biofuel companies have enjoyed a boost from federal energy legislation and the push to reduce foreign oil dependency. But the road ahead for corn-based ethanol, a wildly booming market just a year ago, now faces many obstacles: Chicago Tribune Vinod Khosla seems to relish rattling cages. He has become the nation's most visible investor in green tech, that fast-growing field of companies that develop new fuels and other eco-friendly products. Environmentalists couldn't be happier to see serious money flowing into the young industry, which they hope will render oil obsolete and fight global warming. But Khosla's comments border on environmental heresy: San Francisco Chronicle Maryland's Greatest Economic Asset Few states are better positioned for the brain-powered new economy than Maryland, which ranks either first or second in the nation for the percentage of professional and technical workers in the work force, for its concentration of scientists and engineers, and for the relative number of workers with graduate and professional degrees. It's best economic development asset is that human capital: Baltimore Sun Research Efforts Ready to Start in Kannopolis The first tenants will move into the core lab building at the N.C. Research Campus in 2008. And with that -- and the commitment of hundreds of millions of private and public dollars -- an entire industry will be born in Kannapolis, North Carolina: Charlotte Business Journal A Talent Contest We're Losing The European Union took a step recently that the U.S. Congress can't seem to muster the courage to take. By proposing a simple change in immigration policy, E.U. politicians served notice that they are serious about competing with the United States and Asia to attract the world's top talent to live, work and innovate in Europe. With Congress gridlocked on immigration, it's clear that the next Silicon Valley will not likely to be in the United States: Washington Post Innovative Minds Don’t Think Alike It's a pickle of a paradox: As our knowledge and expertise increase, our creativity and ability to innovate tend to taper off. Why? Because the walls of the proverbial box in which we think are thickening along with our experience. Andrew S. Grove, the co-founder of Intel, put it well in 2005 when he told an interviewer from Fortune, “When everybody knows that something is so, it means that nobody knows nothin’.” In other words, it becomes nearly impossible to look beyond what you know and think outside the box you’ve built around yourself: New York Times Miami of Ohio University Students Revive Venture Fund If Miami University senior Jack Tench ever decides to seek money to start a business, he'll know how to approach - and impress - potential investors. He might also be able to go right back to his alma mater for funding. Tench spent the past year along with three other Miami undergrads administering the Miami University Student Venture Capital Fund, formed several years ago by donors, including Cincinnati-based Procter & Gamble, to spur entrepreneurial enterprises among Miami students. The fund had fallen dormant, but last year Jeff June, MU's Markley professor of entrepreneurship, revived it as a teaching tool: Cincinnati Enquirer The Lorain County Community College Foundation says that it will invest $225,000 in three Northeast Ohio technology startups through its new Innovation Fund. The idea behind the Innovation Fund awards is to fill the funding need for businesses at the earliest stage of development, says Tracy Green, director of advancement at the LCCC Foundation: Cleveland Plain Dealer Bay State 5th in Share of Patents Despite Inexplicable Drop in Numbers Despite a drop in the number of patents awarded nationwide in the past year, Massachusetts remains a haven for inventors, according to data from the US Patent and Trademark Office and the US Census Bureau. "We are, in effect, an innovation economy," said Paul Guzzi, chief executive of the Greater Boston Chamber of Commerce, citing the area's wealth of elite colleges and medical research centers. "We have consistently been high in terms of patents. That is our comparative advantage." Boston Globe 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 San Diego, CA May 7-9, 2008 - Angel Capital Association Summit Conference Investors Circle Spring Conference 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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