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| January 17, 2008 | Volume 12 Issue 3 |
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Editor: George Lipper | |
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(Please scroll down for the full story) -- More Money Flows to Venture Capital than Any Year Since 2001 -- Is Pay to Play Making a Comeback? -- Port St. Lucie, Once Ignored, Now Envied for Biotechs -- Missouri Project Designed to Spur More Biotech Startups -- Upping Tech Transfer Deals at Johns Hopkins -- Kansas Attracts Key Scientists for Some Big Jobs -- Cleveland: The Nation's New BioEnterprise Innovation Destination -- Georgia Creates VC Fund for Technology; Connecticut Adds to Its -- Shower of Funds for Tech Firms in Sacramento Region -- Milwaukee Journal Supports Proposed New Business Incentives -- Silicon Valley Entices MIT MBAs -- Austin with its Universities, Strong Companies, State Government Well Positioned -- Entrepreneurship Takes Off in Ireland -- Venturing Not Simply a Choice Between the Jockey or the Horse -- Web Sites Help Bring Together Entrepreneurs and Investors -- Show Me the Moneymen -- Available Angel Tax Credits in Kansas Grow by $2 Million -- The Patent Debate: Two Views of Innovation -- Florida Business Editors: Economic Future Demands Vision and Investment Now -- Governor Plans $1B Boost in New York's Upstate Economy -- Seminars & Conferences More Money Flows to Venture Capital than Any Year Since 2001 Venture capital firms raised $11 billion in the fourth quarter, bringing the total to $34.7 billion for 2007, the strongest year since the $38.8 billion raised in 2001. Venture fundraising has steadily gained momentum since the bust year of 2002, when 179 funds raised $3.9 billion. In 2003, limited partners doubled their venture investing to $10.6 billion and 2004 saw another sharp increase to $19.1 billion: Red Herring NVCA Report The flood of money flowing into green tech keeps rising. North American companies that create eco-friendly products raked in $3.95 billion in venture capital during 2007, up 38 percent from the year before, according to data released this week. California, as usual, scored the largest haul, nearly half the total. Venture capitalists poured $1.79 billion into the Golden State's green companies last year, most of them in the Bay Area: San Francisco Chronicle NVCA Report Is Pay to Play Making a Comeback? In the wake of the dot-com implosion in 2001, "pay-to-play" provisions, requiring a company's existing investors to make an additional investment in the company or suffer severe consequences, began to appear with increasing frequency in private equity investment term sheets. Now with venture capital recording the highest level of new funds since 2007, the question re-emerges: The Deal Port St. Lucie, Once Ignored, Now Envied for Biotechs Port St. Lucie used to be a pass-through. Out-of-towners cruised through it on the way down to South Florida or up to Orlando, giving little more than a glance to the miles of gnarly citrus groves that lined Interstate 95. Often, they didn't even realize they had rolled across the St. Lucie County line, said Robert Rohrlack, vice president of Enterprise Florida, the state's economic development arm. Now a 120-acre section of those citrus groves is sprouting a respectable biotechnology community. That's prompting other counties and cities across the state to call Rohrlack's office and ask: "How did Port St. Lucie do it? What's going on? How are they able to be so successful in this area?" Palm Beach Post The spinout potential from the huge Florida initiative to attract world reknown research institutions to Florida also spurred creation of a new venture capital firm, Sunrock Ventures, who report that investors have been receptive to their efforts to raise their first $100-million, early-stage fund. Sunrock's pitch? Florida has attracted top-notch research institutions over the past few years. Now who's going to finance the spinoffs and, most important, make sure they don't leave the state? St. Petersburg Times Missouri Project Designed to Spur More Biotech Startups A new partnership to bolster commercialization of academic research demonstrates Missouri's biotech industry needs more than money to grow. It needs ideas. A group of academic and industry leaders last month won a $600,000 federal grant to create the Innovation Acceleration Partnership. The project will pair researchers at Washington University and the University of Missouri-Columbia with postdoctoral fellows trained in commercialization, who can act as their business partners: St. Louis Post-Dispatch Upping Tech Transfer Deals at Johns Hopkins "Wes" Blakeslee who knows the art of the deal, wants to seal many more on behalf of Johns Hopkins faculty and staff with an interest in bringing their inventions and discoveries to the marketplace: Johns Hopkins Gazette For those considering investing in early-stage Maryland life science companies, you may be entitled to a refundable tax credit equal to one-half your initial investment: Baltimore Business Journal The University of Arizona improved on efforts to commercialize its technologies in several areas in 2007. The most recent figures released by the UA show the number of patent applications, faculty invention disclosures and licensing agreements were up last year from fiscal year 2006. But there were some setbacks, as patents issued and licensing income fell, according to figures from the UA Office of Technology Transfer: Arizona Daily Star Kansas Attracts Key Scientists for Some Big Jobs he arrival of two new scientists in Kansas should be viewed as more than additions to university faculty rosters. It’s also an economic development win. With the help of a new program through the Kansas Bioscience Authority, Kansas State University successfully recruited Juergen Richt, a top animal health researcher. The University of Kansas is bringing on Blake Peterson to its pharmacy school. The scientist is an innovative researcher with a proven ability to secure millions of dollars in federal grants and a strong interest in entrepreneurship: Kansas City Star Cleveland: The Nation's New BioEnterprise Innovation Destination Due in no small part to the research and clinical strengths, and a broad, existing biomedical industry, Cleveland has become a major center of bioscience innovation and commercialization. Over the last five years, Greater Cleveland has seen a significant increase in all measures of bioscience innovation: investment dollars, grant funding, numbers of start-ups, licensing revenues and technology deals. Importantly, the region’s innovation network and venture firms have attracted the attention of national investors, strategic firms, and investment banks. Cleveland is now recognized as a leading region for growing bioscience companies: BioEnterprise Georgia Creates VC Fund for Technology; Connecticut Adds to Its Governor Sonny Perdue Tuesday endorsed the launch of a Georgia Research Alliance venture capital fund to provide early-stage financing for emerging technology companies. The governor, who made the announcement at the Georgia Chamber of Commerce's Eggs and Issue Breakfast, is including $10 million in his budget for the fund. It would be matched by $30 million from the private sector. The $10 million appropriation has to be approved by the Legislature. Atlanta Journal Constitution Connecticut Innovations (CI), the state’s quasi-public authority responsible for technology investing and innovation development, today announced that its board of directors approved an allocation of $2 million to its Seed Investment Fund which provides funding to non-bioscience technology companies in Connecticut that are currently in a pre-Series A stage of development: Connecticut Innovations Shower of Funds for Tech Firms in Sacramento Region Eleven high-tech companies, including some in the capital region's nascent clean-technology movement, are receiving an infusion of $15 million in venture capital money – all raised locally by Velocity Venture Capital: Sacramento Bee Milwaukee Journal Supports Proposed New Business Incentives Wisconsin's retooling economy got a boost this week from a couple of proposals announced by Gov. Jim Doyle that, if implemented, would encourage new investment in the state's emerging businesses and more research and development from its old-line manufacturers. The governor's plan for tax incentives to promote emerging businesses makes sense, but make no mistake; there will be a cost to the state treasury Milwaukee Journal-Sentinel Governor Doyle also unveiled his Next Generation Manufacturing plan, which he says will target $85 million in existing and new tax credits to leverage $1.6 billion in private capital investment. He said the effort would focus on efficiency and lean manufacturing principles. If successful, it also would create 5,000 new positions and train 4,000 workers for the jobs of the future: Governor's Press Release One of the raps on the local business development scene has been the lack of support for upstart technology companies, especially from traditional financial institutions. Madison Development Corp. is working to change that through a unique program designed to reduce the risk for banks while funneling badly-needed money to entrepreneurs: Capital Times Silicon Valley Entices MIT MBAs The annual mating ritual between elite business schools and the talent-hungry technology industry this year lured a record 115 master of business administration candidates from MIT's Sloan School of Management in Cambridge to the hillside campus of VMware Inc., one of Silicon Valley's hottest companies: Boston Globe Austin with its Universities, Strong Companies, State Government Well Positioned The Austin area's booming job market has slowed to a three-year low, and its once sizzling real estate market is cooling fast. But there are forces that could sustain Austin's economy, even if the national economy tanks: Austin American-Statesman There was always something a little off about the State of Texas paying subsidies to Countrywide Financial Corp., the bedraggled mortgage company being acquired by Bank of America. Flash back to December 2004. The state’s Texas Enterprise Fund agreed to pay $20 million to Countrywide to expand its presence in Texas: Austin American-Statesman Entrepreneurship Takes Off in Ireland Ireland is now alive with enthusiasm for entrepreneurs, who seemingly rank just below rock stars in popularity. The relatively new emphasis on entrepreneurs in Ireland is the culmination of nearly four decades of government policies that have lifted the economy from centuries of poverty to modern prosperity: New York Times California entrepreneurs are also gaining a stronger voice in Sacramento. With small firms as the potential key to helping the state weather an economic downturn, says Marty Keller, the state's small-business advocate, it makes his job as chief spokesman for the state's estimated 3.3 million small firms especially vital in 2008: Los Angeles Times As 2007 drew to a close, three of the largest life sciences companies in the region made significant transitions. Respironics was sold to the Dutch conglomerate Royal Philips Electronics; Renal Solutions was sold to the German firm Fresenius Medical Care; and Precision Therapeutics announced a merger with a subsidiary of Greenwich, Conn.-based Oracle Healthcare Acquisition Corp. And all three companies demonstrate the impact of entrepreneurship: Pittsburgh Post-Gazette Venturing Not Simply a Choice Between the Jockey or the Horse Pankaj Patel and Rodney D’Souza, doctoral students at the University of Louisville, have received the fifth annual “Best Doctoral Paper” award from the Office of Advocacy of the U.S. Small Business Administration. “Pankaj Patel and Rodney D’Souza have produced cutting edge research that has practical application for small businesses, especially those seeking venture capital funding,” says Chad Moutray, Chief Economist for the Office of Advocacy. The findings suggest that while a venture team’s composition and ability are a minimum requirement in the consideration of a venture capital investment and a major factor in explaining why a business plan gets rejected, these features are not significant, however, in explaining why a business plan gets funded: • The study implies that venture potential is a better indicator of business plan funding than venture team quality and that VCs have similar knowledge structures and preferences when it comes to funding and not funding actual business plans. • The researchers analyzed the relationship between rates of return and factors such as venture team quality and venture potential. The analysis finds that a good venture team has decreasing returns even for funded ventures, but favorable competitive conditions and market potential of a business plan have increasing returns. SBA Web Sites Help Bring Together Entrepreneurs and Investors As the venture world has recovered from the tech bubble bust at the turn of the century, a number of sites have popped up offering advice and the ability to connect entrepreneurs with investors. These businesses take things beyond sites that simply offer message boards or rating services like the much publicized TheFunded, which lets anonymous people rate VCs. FundingUniverse and others like it boast services that range from e-mailed distribution of pitches to networking conferences that mirror speed dating events. The programs, while not targeted at experienced venture capitalists, are specifically useful for business owners and angel investors lacking a robust rolodex: Wall Street Journal Most venture investors get paid only when their portfolio companies are acquired or go public. While entrepreneurs and their shareholding employees also stand to benefit from a successful exit, their focus up until the point of funding is more on growing the business, and beating the competition: Chicago Sun Times Most entrepreneurs believe a bunch of myths about financing new companies that hinder their efforts to raise money. Here are a few: Small Business Times I am often asked to explain the criteria used at Flywheel Ventures to make our investment decisions. It may surprise some to learn that our most important consideration is the entrepreneurial team. We care about the character of the individuals on the team and the culture they are creating as a team: Carlsbad Current Argus Show Me the Moneymen With his latest venture, Adeo Ressi is taking on the Establishment once again. A year ago, the 35-year-old New Yorker started up TheFunded.com, a Web site that lets entrepreneurs anonymously rank, review, and post comments about venture capital firms: Business Week Available Angel Tax Credits in Kansas Grow by $2 Million A $2 million bump in tax credits is expected to mean more investment in Kansas bioscience and technology startups. The commencement of the 2008 Kansas Angel Investor Tax Credit Program this month brings with it more than $6 million in credits to the state's angel investors who invest in qualified startup companies: Wichita Eagle The Columbus region's latest venture capital pool has reached its funding goal and has made its first investment. Investors in Ohio TechAngel Fund II LLC, a $4.6 million fund for early-seed investments, have voted to put $200,000 into Columbus-based Caster Ventures Inc., a Web site development firm that helps clients use streaming video as a business tool: Business First of Columbus Hardly a day goes by that Southwest Michigan First doesn't speak to someone who needs funds to start or grow their businesses. In most cases they call because they hear we can get them free money. So the fund has created a list of six rules for courting angel capital: Michigan Business Review The Patent Debate: Two Views of Innovation As the Senate prepares to tinker with the nation’s patent laws this spring, it’s worth recalling the law of unintended consequences.From the vantage point of a half-century, for example, it’s clear that the formation of Silicon Valley involved serendipity more than intentional design: New York Times Florida Business Editors: Economic Future Demands Vision and Investment Now Amid all the graphs, the charts and the statistics from two days of briefings during the 2008 Business Editors' Summit this week, there were important remarks about the bigger picture for our state. In the short run, the economic seas will be choppy. There was ample evidence presented to support that, yet the conversations kept coming back to the prospect of fundamental, long-term changes in Florida's economy that will transcend the difficulties in the short run: Tallahassee Democrat Florida's top financial regulator called for retooling the state's approach to economic growth, warning that the days of counting on a lucrative supply of retirees will soon be over. Citing studies that show the cost of living in Florida has reached the national average, Chief Financial Officer Alex Sink predicted that retirees will start to look elsewhere, so the state needs to focus more on venture capital and attracting high-tech industries: Tallahassee Democrat Governor Plans $1B Boost in New York's Upstate Economy INew York Governor Eliot Spitzer was in Buffalo yesterday to outline the challenges facing the upstate economy and offer what he says will be long-term plans to boost the region. Included are new partnerships between higher education and local businesses, a $1 billion upstate development fund and $100 million to improve state parks and lure tourists to the region: Buffalo News 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 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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