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21

Jun

2011

Stronger IPO Activity Needed, Says Global Survey PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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Today the NVCA and Deloitte issued the results of our 2011 Global Venture Capital Survey which focused on the attitudes and opinions of venture capitalists around the world regarding the capital markets.  Not surprisingly, 80 percent of the respondents believe that the current level of IPO activity is too low to support the health of the venture capital industry.  The respondents were also clear in their assessment that a more robust IPO market is critical to provide superior returns to limited partners.  The results may seem at odds with recent IPO activity and the endless chatter about the next venture capital bubble.  But most of what is happening in the market today is more buzz and less substance - making today's survey results hold water, especially here in the United States.  You can view a full slide deck here.

Thus far in 2011, there have been 34 IPOs compared to 27 in the first half of 2010 - an improvement but not much of one.  And if you consider the number of U.S. companies (as opposed to foreign companies going public on US exchanges) fewer have gone public this year (22) than last year at this time (23).  All of this compares to the first half of 1997 when 53 companies went public.  This level is one which our industry should strive to achieve. 

Currently, there is a great deal of hype around a handful of companies considering the public markets -- or the secondary markets for that matter.  Still, what is true for those companies is not necessarily true for all companies.  In order for our capital markets to fully recover, the window must be open and the appetite strong for the high profile companies and the low profile -- but still strong -- companies as well.  In fact, "investor appetite" was cited as most often as the most important driver of a strong capital markets system.  This is one driver that is harder to influence but hopefully the markets will continue to improve and a strong appetite will return.

 

 

Last Updated on Wednesday, 06 July 2011 11:07
 

19

Jun

2011

NVCA Comments on House Patent Bill PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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Last week, the NVCA sent a letter to the House Judiciary Committee Chairman Smith (TX) and Ranking Member Conyers (MI) on H.R. 1249, The America Invests Act.  The letter focused on three provisions included in H.R. 1249. 

1) NVCA expressed strong support for Section 22 that would end fee diversion from the USPTO.  Section 22 would help modernize the U.S. patent system and provide the USPTO with the needed resources to improve the quality of the patent application process. 

2) NVCA also voiced support for the expansion of prior user rights that include the appropriate safeguards for university research involved in federal funding.  NVCA believes prior user rights are an integral component of any new paradigm if the U.S. patent system changes to a “first to file” system.

3) Lastly, we expressed concern that the lower etsoppel standard for post-grant review (PGR) does not provide adequate safeguards to deter large companies from using PGR as a mechanism to harass small companies.  Under the first window PGR in H.R. 1249, subsequent court and ITC cases are subject to weak estoppels precluding re-litigation only on the grounds actually raised during the PGR.  NVCA believes this conflicts with the primary goal of PGR, which is to move as many patent challenges as possible out of the courts.  Permitting a challenger to raise only one issue in PGR and ‘reserve’ all the rest for litigation seems to open the door for abuse. 

Without changes to the PGR, the NVCA will not support H.R. 1249 which is expected to go to the floor for a vote this week. The Senate passed its version, S. 23 in April -- we did not support that bill for similar reasons.  We will be watching the House this week for developments.   

 

15

Jun

2011

ARPA-E Update: NVCA Seeks Signers for Support Letter PDF Print E-mail

Emily Baker

Written by Emily Baker   
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NVCA has long advocated for expanded federal funding for clean energy research. One of the best examples of a federal program successfully conducting critical, early stage basic research is ARPA-E.  The Advanced Research Projects Agency – Energy (ARPA-E) is modeled after the successful DARPA program.  ARPA-E was part of the America COMPETES Act enacted in 2007 and, since that time, it has always struggled for funding dollars.  Its mission to solve the nation’s energy challenges by funding disruptive, new energy technologies is critical to ongoing US competitiveness and economic growth.  Since 2009, ARPA-E has awarded $363 million in projects, and is currently funding more than 120 projects. At least six of these projects have leveraged $23.6 million in federal funding into more than $100 million in private capital investment.

Recently, the House Energy and Water Subcommittee appropriated a dismal $100 million for the program.  Last night, NVCA got word that Congressman Adam Schiff (D-CA), an Appropriations Committee member, was going to offer an amendment at the committee mark-up today to fund ARPA-E at the FY 11 funding level of $180 million.  Working with universities and others, we quickly put together a letter of support for Representative Schiff’s amendment.  The result was a letter signed by approximately 50 organizations.  Despite our effort, Schiff’s amendment failed by a voice vote in the Committee this morning.

However, we will continue to get signatures on this letter for a possible amendment when the bill reaches the House floor.  This show of support is extremely important as the Senate is still waiting to act on the Energy and Water appropriations bill.  Having this letter of support will help lay the foundation for negotiations during any House-Senate conference committee on the funding legislation.

If you’d like to add your name to the ARPA-E letter, please email me at ebaker@nvca.org as soon as possible.

 

 

14

Jun

2011

NVCA Reaction to Bill to Raise 500 Shareholder Rule PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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Today there was an annoucmenet of plans for a Congressional bill that would amend the Securities Exchange Act of 1934 to increase the 500 shareholder count threshold to 1000 shareholders for public company reporting requirements as well as exempt certain types of shareholders from that count.   The NVCA supports policies that allow our portfolio companies to prosper and grow.  Therefore, we view positively the current effort to grant companies the flexibility to remain private, if such a strategy is indeed in the best interest of investors and employees. To date, the 500 shareholder rule has impacted a very limited number of highly visible, venture-backed companies.  Thus, we do not anticipate an increase in this threshold to affect a large majority of our portfolio companies going forward.

This being said, the implied need for even a limited number of companies to remain private longer, or indefinitely, is indicative of a much larger problem in the U.S. capital markets.  It is here that the NVCA has been and will remain focused.  It must once again be compelling for our country's most promising companies to enter the public markets and continue on their growth trajectory as public companies.  Addressing this issue is important for the long-term health of the US economy across all sectors and the NVCA feels our country is best served by a sharp focus on fixing the public markets rather than working around the edges.  We are looking forward to efforts taking place this summer to offer recommendations in this regard.

Last Updated on Tuesday, 14 June 2011 22:24
 

13

Jun

2011

VC-Backed Bloom Energy Brings Jobs to DE PDF Print E-mail

Emily Baker

Written by Emily Baker   
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An old Chrysler plant in Newark, Delaware will be buzzing again as Bloom Energy opens East coast operations there in mid-2012. Funded by NVCA members, Kleiner Perkins, Caufield & Byers, New Enterprise Associates and Mobius Venture Capital,  Bloom Energy delivers fuel cell technology to compete with electric power.  The company demonstrates well how venture capital drives innovation - in this case clean technologies that will help reduce our dependency on traditional fuel sources -- and create jobs for Americans. 

The Bloom Energy plant in Delaware is expected to employ as many as 1500 workers from the First State as well as Pennsylvania and New Jersey, transforming a once defunct brownfield area into an innovation zone.  Positive news such as this reinforces the importance of a public policy agenda dedicated to supporting clean energy technology as it is clearly a driving force of the American innovation economy. We look forward to continuing to break new ground -- in Delaware -- and across the country as venture capitalists invest in the most promising technologies and people.

 

09

Jun

2011

SEC Sets Date for VC Definition Rule PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Today the SEC issued a notice that they will hold an open meeting on June 22, 2011 at 10:00 a.m. eastern to consider whether to adopt a rule implementing certain provisions of the Dodd-Frank Act.  Among the items expected to be proposed is a final definition of venture capital funds for the purposes of exemption from SEC registration.  The NVCA will be in attendance at this meeting and will be in communication with our membership once the final ruling is made public and we interpret the ruling.  We remain committed to getting members this information in a timely manner.  
 
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