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11

Apr

2013

2013 NVCA Yearbook Now Available PDF Print E-mail

John Taylor

Written by John Taylor   
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The 2013 NVCA Yearbook is now available! You can click here to download and view a treasure trove of venture capital data through 2012.

This publication, prepared by Thomson Reuters, is the 16th iteration of a series launched in early 1998 by NVCA and what is now Thomson Reuters. In 2001, we joined forces with PricewaterhouseCoopers to provide you the best possible information on venture capital deals across all 50 states. This investment information is tracked and reported by the PricewaterhouseCoopers/NVCA MoneyTree TM Report based on data from Thomson Reuters. As a sign of the times, the book is produced and distributed as a PDF file only this year.

Some interesting facts and highlights from the 2013 Yearbook:

• 2012 saw investment in a record number of states (48 plus DC). It also saw the highest concentration of dollars going to California at 53%.

• In 2012, the 10 largest venture funds raised 48% of the capital with 173 funds raising the other 52%

• The number of IPOs was down slightly in 2012, but a few high-profile IPOs pushed the combined IPO valuation to $122.3 billion, which is the highest amount since 1986

• The presence of corporate venture capital continues to increase by providing 8.2% of the invested capital and participating in more than 15% of the deals

• The Exits chapter has been expanded to include new tables on valuation and exit sizes

• Appendix H has been written which describes the current status of harmonizing/converging US and international accounting rules

• Appendix I has also been rewritten to highlight the most recent portfolio company reporting valuation guidelines, and it reviews the history of valuation and peer-created guidelines over time

This Yearbook is but one of our tools to effectively tell the unique story of venture capital and explain what’s needed to continue creating great, leading-edge companies. Note that in 2009, Cambridge Associates became the official venture capital benchmarks provider for NVCA. Year end 2012 performance benchmarking statistics will be posted separately on the NVCA website.

Questions and comments are always welcome at research@nvca.org.
 

10

Apr

2013

NVCA Response to Obama Budget PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Today President Obama unveiled his budget which, once again, included a provision to change the capital gains tax treatment for carried interest.  This inclusion is entirely consistent with the President's previous proposals, as is his lack of distinction between the asset classes that employ carry.  While we remain disappointed in the President's disconnect between support for venture capital and the startups we fund and a tax proposal that discourages long term investment in these critical companies, we are steadfast in our position that carried interest for venture is a capital gain and continue to advocate for our ecosystem.

It is important to understand that the President's budget submission is largely symbolic and will not be enacted into law.  The federal budget process and fundamental tax reform discussions are expected to continue on Capitol Hill for some time and NVCA is engaged with policy makers on these issues.  We will certainly keep you informed of any developments.

 

 

05

Apr

2013

WSJ Op-Ed on Carry Needed Clarity on VC Funds PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Tuesday's op-ed by John Steele Gordon about carried interest tax treatment in Wall Steet Journal failed to make a number of clarifications specifically about venture capital funds.  We posted the following comment on the piece, but want to share these broader points here at NVCAccess as a reminder of our position.  

The piece... needs some clarification in three areas as it relates to venture capital funds, which also receive carried interest when the companies in which they invest succeed long term:

1.       Venture capitalists do put their own money at risk, alongside the institutional investors with which they partner, to invest in companies.  They absolutely have a downside should their companies fail.

2.       Venture capitalists do work side by side with company founders offering the same type of sweat equity as the entrepreneurs.  Partners at venture capital funds are intimately involved in the operations of their companies, particularly at the earlier stages when hands on experience is needed most.  Venture capital firms do not have “staff” that handles these functions as the author suggests hedge funds do.

3.       Venture capitalists work with an entrepreneur to create and grow a capital asset – a company -- from the ground up, over many years.  This is exactly the type of behavior that long term capital gains tax policy is meant to encourage.

It is unclear whether the author’s assertions included venture capital funds – but regardless, it is important for readers to understand the distinction.

 

 

Last Updated on Friday, 05 April 2013 12:08
 

21

Mar

2013

NVCA Files Amicus Brief on Myriad Case PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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On March 14, NVCA filed an amicus brief in support of Myriad Genetics and preserving the patent rights that have created and sustained the biotechnology industry.  In particular, we recognize the importance of preserving patent protection for isolated nucleic-acid patents because these types of patents are critical to ensuring future investment in these new technologies which include molecular diagnostics, gene therapies and alternative energy sources.  

You can read the full brief here.

 

20

Mar

2013

NVCA Member Teo Forcht Dagi Testifies on Health IT PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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Yesterday, March 19, 2013, Dr. Teo Forcht Dagi, Partner of HLM Venture Partners, testified before the House Energy and Commerce Subcommittee on Communications and Technologies on Health Information Technologies - Harnessing Wireless Innovation and how these emerging technologies are positioned to improve patient outcomes, provide greater efficiencies, and drive down costs in the overall healthcare system.

Dr. Dagi told the committee members that for investment to grow in the formative stages of emerging medical mobile applications, there must be a well defined regulatory pathway to market. Uncertainties in the regulatory environment create significant risk for investors and deter investment in many promising ideas. We believe that regulatory pathways should be risk-based, transparent, consistent, predictable, and balance patient safety with innovation.

He also educated the Committee about the promise of these technologies, specifically how they are a central tool in optimizing communications among clinicians and between clinicians and patients, and will help broaden and sustain shared decision making. Dr. Dagi provided examples on how these technologies can materially enhance integrated strategies for patient care, help coordinate the management of chronic disease, promote patient safety, and lower healthcare costs. Some of the examples included were: help diabetics follow and refine insulin; screen for diseases of the retina; offer telemedical consultations in remote areas; help patients with congestive heart failure avoid readmission; diagnose moles and screen for melanoma; and coordinate care across groups of physicians in different institutions. These technologies also provide a means for sending sentinel alerts to providers and facilitating home health care and remote patient monitoring in other settings, like the intensive care unit.

Dr. Dagi also expressed concerns on how the medical device tax is harming medical innovation and U.S. job creation and specifically highlighted that Congress did not intend to burden emerging medical mobile app companies with this new tax since their products aren't included in "traditional" medical devices. He told the Committee the 2.3% tax on revenue has already started to have a detrimental effect on early stage medical device companies.

In summary, he offered the following recommendations to help stimulate investment in this important sector.

1.  Promote a regulatory framework that is predictable, consistent, transparent and risk-based. The Food and Drug Administration (FDA) issued draft guidance for mobile medical applications on July 21, 2011 that addresses some regulatory concerns and reduces some regulatory uncertainty, but leaves open questions around enforcement discretion decisions.

2.  Support the process in which the FDA and other stakeholders collaborate and formulate alternative oversight frameworks that meet the goals of patient safety in mobile medical applications, but also encourage and foster innovation and invention.

3.  Solicit broad input, in evaluating new regulatory frameworks, especially from those at the forefront of innovation that promote healthcare transformation.

4.  Exempt medical mobile applications that are defined as medical devices from the 2.3% medical device tax.

You can read Dr. Dagi's full testimony here.

Last Updated on Wednesday, 20 March 2013 16:28
 

15

Mar

2013

Tech / VC Community Urges Action on High Skilled Immigration PDF Print E-mail

Emily Baker

Written by Emily Baker   
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Yesterday more than 110 venture capitalists and tech sector CEOs submitted a letter to President Obama and Congressional leadership urging them to pass legislation reforming the high skilled immigration system. The letter was spearheaded by TechNet and was presented to lawmakers during their annual Washington, D.C. fly–in.

NVCA President Mark Heesen, along with venture capitalists including Jim Breyer,John Doerr and Kate Mitchell, joined tech executives from companies such as Google, Intel, eBay, Facebook, in signing a letter that called on Congress to pass immigration reform legislation this year. The letter, which can be viewed here, asserts:

“One of the biggest economic challenges facing our nation is the need for more qualified, highly-skilled professionals, domestic and foreign, who can create jobs and immediately contribute to and improve our economy. As leaders of technology companies from around the country, we want to thank you for your sincere efforts in addressing high skilled immigration and we urge that you and your colleagues enact reform legislation this year.”

NVCA has long advocated for increased H-1B Visas, green cards for STEM graduates, and more recently a StartUp Visa category for entrepreneurs who come to the U.S. to start companies.  On March 5th, Deepak Kamra of Canaan Partners testified before the House Judiciary Immigration Subcommittee in support of these measures.  His story of being a foreign-born entrepreneur and venture investor was well received by both Republican and Democratic lawmakers.

NVCA will continue to work with lawmakers to achieve passage of immigration legislation that will allow entrepreneurs to come to the U.S. and start new companies, all the while creating jobs and growing the U.S. economy.

 
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