|While statistically, 2012 wasn't a very dramatic investment year for U.S. venture capital (with a slight decline overall from 2011, but higher levels than 2010), corporate venture capital (CVC) continued to quietly gain strength. In 2012, CVC reached a 4-year high in participation (percent of deals with at least one corporate VC) of 15.2%, rising more than a percentage point from 14.1% in 2011. And dollar share also rose to 8.2% of total VC dollars in 2012, up from 7.5% last year.
Historically, it has been during difficult economic times that corporate venture programs have waned. So, it is significant that the CVC investment numbers have held steady as we have moved through the recession. This stability, coupled with more and more corporates joining the NVCA each year (it is our fastest growing new member segment), suggests that the sector is poised to become an even more important part of the VC landscape in the next five years.
Compared with total VC, corporate VCs are playing their largest roles in industrial/energy deals (21% of all deals have CVC in them), biotechnology (20%), computers (19%) and networking/equipment (18%). And within the CVC investment pool itself most dollars are being directed to companies operating in software (27% of all 2012 CVC dollars); biotechnology (21%) industrial/energy and IT Services (11% each).
Among the four stage categories (seed, early, expansion, and late), corporate groups far and away were most active in expansion stage deals measured by both total dollars invested (almost 10 % of all expansion stage dollars), deals completed (18% of all expansion deals) and 42% of all CVC investment.
For more information on corporate venture capital investment, check out our 2012 YE data here.
|After years of advocating for clarification on rules governing Small Business Innovative Research (SBIR) Grants so that venture-backed companies could qualify, we, at long last, have closure on this issue - and it is good news for our companies who seek government grants for critical, early stage basic research.
On December 28, the SBA issued a final rule amending its regulations governing size and eligibility for the SBIR and Small Business Technology Transfer (STTR) programs in accordance with the SBIR/STTR Reauthorization Act that passed Congress in 2011. Overall, the final rule, which is effective as of January 28, 2013, achieves a reasonable bright-line test for majority vc-backed small companies, and should ensure their ability to once again participate in the program. However, NVCA will be requesting that SBA provide greater clarity with certain provisions including the changes to the affiliation rules.
The Final Rule makes positive changes to the SBIR program's ownership and affiliation rules and allows an SBIR applicant to be more than 50 percent owned by multiple Investment Funds, as long as no single Investment Fund owns more than 50 percent of the applicant. A summary analysis from NVCA's counsel Mary Kuusisto of Proskauer can be viewed here.
We look forward to the positive impact this rule will have for our companies going forward.
Today the NVCA officially announced the formation of our Growth Equity Group, comprised of members investing in this critical stage of the venture capital life cycle. As you will read in the press release, NVCA believes that growth equity is a natural, later stage component of the venture capital investment process and is in direct alignment with the VC mission of creating and growing businesses, with the emphasis on "growing." Growth equity represents an important private alternative to the public markets for the capital needs of emerging growth companies, as well as an alternative source of liquidity for earlier stage venture capital investors.
Championed by NVCA Board Director Bruce Evans of Summit Partners, the group will seek to educate the market on the definition of growth equity, gather relevant research and develop benchmarks, share best practices, and support members through political advocacy, education and networking opportunities.
The subgroup will be led by an Executive Committee which includes:
• Bruce Evans, Chair – Summit Partners, Boston, MA (NVCA Director)
• David Lincoln, Chair-Elect – Element Partners, Radnor, PA (NVCA Director)
• Adam Grosser, Silver Lake Kraftwerk, Menlo Park, CA (NVCA Director)
• Brian Rich, Catalyst Investors, New York, NY (East Coast Industry Liaison)
• John Drew, Technology Crossover Ventures, Palo Alto, CA (West Coast Industry Liaison)
We are pleased to offer for the first time a Growth Equity Group Deep Dive at VentureScape, the NVCA annual meeting on May 14th, 2013 in San Francisco. At this session, investors will have the chance to discuss the shared challenges and opportunities of investing in growth equity and set the course for the coming year in terms of initiatives for the group. Venture investors can register for this session and VentureScape here.
For more information about NVCA's Growth Equity Group, please check out our webpage or contact me email@example.com.
Last Updated on Monday, 28 January 2013 09:35
By now you know that this year’s NVCA Annual Meeting – VentureScape 2013 – is going to be different. If you have checked out the website, seen our speaker lineup, and read about The World’s Largest Office Hours, complimentary 23andMe tests for all registrants, and our rock concert – NVCALive! presented by Silicon Valley Bank, you know that we are planning a fantastic event and 40th anniversary celebration that is going to be worth your time and a ton of fun.
Speaking of fun, we are committed to it --- and to demonstrate that commitment, we shot a few videos in December that highlight some of the newer aspects of our meeting. Featuring some of the coolest people in the VC ecosystem, these videos will be rolled out over the next month to convey the excitement we are all feeling here at NVCA.
Today we present… Deep Dives. On May 14th, we will be diving into focused sessions for CFO’s, General Counsels, Corporate VCs, Life Sciences Investors, Clean Tech Investors, and Emerging Managers. In this video, we have an “all-CFO/COO cast” comprised of Steve Simonian (August Capital), Scott Walters (Morgenthaler) and Karen Wilson (Interwest Partners) with an award-worthy cameo from NVCA’s own head of research John Taylor. The film was shot in a few hours at the Aquatech Center in Concord, CA. Not only are these folks intense “athletes” but they are also super good sports.
All of our videos were the product of the amazing team of Melissa and Tom Dowler at Long Haul Films in Boston. Professional, creative and efficient, this husband and wife team delivered in a huge way as you will see over the course of the next few weeks. So enjoy… and be sure to register for VentureScape 2013 today!
I don’t know if many folks are aware that the NVCA will turn 40 years old this year – and in recognition of this exciting milestone, we are turning our annual meeting on its head. Today, we launched the VentureScape 2013 website
and are now taking registrations. Here are 10 exciting things you should know now about our new format:
1. Our meeting is now VentureScape – part landSCAPE; part eSCAPE; all Venture.
2. May 14-15, 2013 -- two intense days of outstanding content, networking and – yes – FUN.
3. It all takes place in downtown San Francisco – Westin Market Street is our meeting venue.
4. Fantastic speakers including Colin Powell, Ginni Rometty, Dick Costolo, Anne Wojcicki and others
5. Deep Dives for CFOs, Life Sciences, Corporate VC, Emerging Managers, Growth Equity, and Clean Tech
6. World’s Largest Office Hours with hundreds of VCs and entrepreneurs
7. NVCA Live!: A Private concert for NVCA members and their guests at the Great American Music Hall featuring Pat Monahan, lead singer of Train and the best of the VC bands
8. Complimentary 23andMe DNA Analysis for EVERY registrant
9. LP Rants and Raves from UTIMCO, Morgan Stanley and Viafunds
10. More to come as we round out our agenda… be sure to follow us on Twitter (@VentureScapeNow) and Facebook (NVCA VentureScape) so you don’t miss out.
Questions? Email us at firstname.lastname@example.org. We are expecting to sell out of both the conference and NVCALive! So get tickets early. We can’t wait to see you there.
Today the NVCA and Thomson Reuters issued our Q4 and YE 2012 Venture Capital Fundraising statistics which measure the amount of funds US VC firms are raising from qualified investors. As expected, the fourth quarter was extremely slow in terms of fundraising activity with just 42 funds raising $3.3 billion dollars. With many larger funds already closed in the first three quarters of the year and the political and market uncertainty, the dollars stayed largely on the sidelines. Those funds that did raise were smaller in nature, with the average fund size just $78 million – compared to averages of $91 million, $135 million, and $111 million in Q3, Q2 and Q1 2012 respectively. This dynamic highlights an important trend that has taken shape and will drive venture investment for the foreseeable future: Bifurcation.
Venture capital fundraising activity is being driven at two ends of the spectrum: Large funds – over $700 million – are being raised and deployed by well established firms who are stage agnostic (seed to growth equity), nationally and internationally driven, and have the exit track record to attract limited partners. The five largest funds raised in 2012 accounted for one third of the dollars raised in the year.
At the other end of the spectrum are the smaller industry or geographically focused funds that are largely looking at seed and early stage investments. This is where many first time funds are being raised. Of the 182 funds raising money in 2012, 158 or 87 percent were under $300 million. And of the 55 first time funds raised in 2012, all but 3 were under $300 million with 88 percent under $100 million.
These numbers suggest to entrepreneurs the types of venture firms that they are likely to be working with over the next decade – large or small. Each has distinct advantages, but it will be choice many will have to make. One thing seems clear though: the mid size funds – that sit in between this barbell structure -- will be fewer going forward as the industry continues to concentrate at either end.