Private Equity
After all that lobbying, the National Venture Capital Association managed to get venture capitalists exempted from the proposed Private Fund Investment Advisors Registration Act that's been working its way through Congress. There is now new language in the bill reads: ‘‘(l) EXEMPTION OF AND REPORTING BY VENTURE 18 CAPITAL FUND ADVISERS.—The Commission shall identify and define the term ‘venture capital fund’ and shall 20 provide an adviser to such a fund an exemption from the 21 registration requirements under this section. The Commission shall require such advisers to maintain such records 23 and provide to the Commission such annual or other reports as the Commission determines necessary or appropriate in the public interest or for the protection of investors.’’ NVCA Chairman Terry McGuire will testify before the House Financial Services Capital Markets Subcommittee next Tuesday.
1 min read · 01 October 2009
There's been a resounding silence from Palo Alto on this and all other questions regarding Stanford's offer to sell a large number of its assets on the secondary market -- pretty much the whole portfolio, according to one source. News of the proposed sale followed a drop in Stanford's endowment last month of 27%, possibly the university's largest loss ever. "Trying to put a portfolio that huge out to market is very unusual," the source said. "Bulk portfolios are not selling, and most sellers try to do sales quietly, to a targeted group of buyers." Keeping a sale this large a secret, though, is impossible -- too many people know about it and will talk -- so maybe Stanford is trying to avoid the stigma that was attached to Harvard last year,
2 min read · 01 October 2009
As two of the venture industry's founders, they were a hit Wednesday night in the showroom of Tesla Motors, where Johnson received the first annual Innovation Catalyst Award from the VC Taskforce and a standing ovation from around 100 VCs. But the most entertaining part of the evening was a long speech by Bill Draper, age 81, on how he and Johnson, who met working at Inland Steel in Indiana in the 1950s and are still best friends, borrowed $75,000 each from their families and started Draper and Johnson -- one of the first venture capital firms in Silicon Valley -- in 1962, when "venture capital" was a word that most people had never heard. "We drove into the orchards -- we'd each leased a Pontiac -- and knocked on doors. We said, 'We'd like to talk to the president,'" Draper said. "If it had a sign that said 'lemon distributor' we avoided it, but if it looked like something electronic, we'd give it a shot. "We'd say, 'We're in the venture capital business,' and they'd say, 'What's that?'
2 min read · 01 October 2009
IPO filings and pricings are on the rise, but not everyone believes that the window is opening more than just a crack. One naysayer is Pascal Levensohn of Levensohn Venture Partners, who plans to deliver a speech tomorrow at the Renewable Energy Finance Forum in San Francisco on how decades of corporate and government neglect of research and development -- combined with the global financial crisis -- will continue to drain capital and create liquidity problems for all but a few viable U.S. companies seeking to go public. He says the entire clean tech industry is at risk. Also, relaxing Sarbanes Oxley to make it easier for companies to go public is out. An abstract of his speech comes after the jump:
3 min read · 30 September 2009
This is from Greentech Media, which recorded a 56% jump in the number of dollars invested in green tech since second quarter and a 47% jump in the number of deals -- that's $1.9 billion invested in 112 deals for the third quarter ending tomorrow. Top VC investors included NEA, CMEA, Khosla Ventures, Kleiner Perkins and Foundation Capital, although it's worth noting that venture capitalists weren't the biggest contributors to some of Greentech's top deals. Solyndra, for instance, which makes photovoltaic systems for rooftops, got $198 million from Argonaut Private Equity and others and more than double that in a $535 million federal loan guarantee. Synthetic Genomics got a $300 million commitment from Exxon to develop biofuels from algae. Tesla Motors raised $82.5 million from Fjord Capital and Daimler Motors and will also get over five times that -- $465 million -- in federal low-interest loans.
1 min read · 29 September 2009
Per Dan's post this morning that early-stage VC shop CMEA Capital has scrapped plans to raise a $500 million green growth fund, the firm also has gotten more aggressive about seed-stage investing. It started the strategy 18 months ago after it raised its $400 million seventh fund, according to managing director Faysal Sohail, who spoke to peHUB earlier this month. "We've been given a lot of opportunities that normally would have gotten funded by angels and others but have not been getting funded," he said. "We're also finding a lot of deals coming to us from returning entrepreneurs." CMEA has done seven seed investments from Fund VII so far and may do one more, because, Sohail said, "they take longer to bake and exit so these are not deals you want to be doing
2 min read · 29 September 2009
Even though not all Senators believed him last month when he told a Senate subcommittee why venture capital funds should not be regulated like other private equity funds, Flywheel's Trevor Loy was back in D.C. last week to continue to hammer on his points. Here's his testimony before the House Committee on Small Business, explaining how the Form D that VCs already have to file with the SEC could be modified to satisfy regulators who are worried about another meltdown of the worldwide financial system:
1 min read · 29 September 2009
If they or a friend or family member have had a medical problem that you help solve, your chance of getting funding may improve, according to a video made recently by the National Venture Capital Association. This was not the point of the video -- the NVCA made it to highlight innovation created by venture capitalists in light of the threatened regulation of their funds by Congress. But VCs' experience with healthcare problems does influence their funding decisions, according to what they said on-screen. Kate Mitchell of Scale VP, for example, backed a company that made catheters to zip-close vericose veins because her family has a history of diabetes. "The fact that we took something that was a nutty professor idea and made it accessible to my mother and her friends, and are really solving a problem out there, is pretty exciting," she said.
1 min read · 28 September 2009
Last year, U.S. seed-stage companies attracted more dollars than they had since 2000 and investments in U.S. early-stage companies were down by less than 10 percent. In India, however, investments in early-stage startups plunged in 2008 by 90%, even though overall venture investment was down by *just* 63%, from $22 billion to $8.1 billion (according to the India Venture Capital & Private Equity Report 2009 by Thillai Rajan and Ashish Deshmukh at IIT in Madras). Young companies in India have trouble getting money anyway -- between 2004 and 2008, they attracted only 9% of deals -- but in a recession, "venture capitalists play it safe and hardly venture in funding early stage startups," according to Arun Prabhudesai, author of the Indian business blog Trak.in.
1 min read · 28 September 2009
Mint.com's investors won't say, and Microsoft isn't talking either. But in light of Bloomberg's story today that Microsoft is forming a joint venture with Citibank to compete against Intuit and Mint.com, I wonder if Microsoft did. Last June, Microsoft discontinued Microsoft Money, its 18-year-old personal finance software. At the time, the move was portrayed by the media as cost cutting given Microsoft's depressed financials, and by Microsoft as its need to satisfy customers' desires to buy and use software online at MSN Money.com. But there was more to it than that, as there usually is with Microsoft. Intuit is one of the very few software companies that has consistently been able to beat Microsoft in sales.
2 min read · 26 September 2009
