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02

Aug

2012

NVCA Weighs in on "No More Solyndras" Bill PDF Print E-mail

Emily Baker

Written by Emily Baker   
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After more than eighteen months investigating the Department of Energy Loan Guarantee program, the House Energy and Commerce Committee yesterday passed H.R. 6213, the “No More Solyndras Act” by a vote of 29-19. The bill prevents loan guarantees for any applications submitted after the end of 2011, and would place new restrictions on application reviews and existing loans.

The NVCA, along with TechNet, ACORE, SEIA and E2, put out a statement against the bill saying that the program should be reformed, not shut down.  Our statement read in part, "While the DOE Loan Guarantee Program can be improved, elements of the ‘No More Solyndras Act’ go far beyond reasonable reforms and threaten to shut down a successful policy that has helped drive billions in private capital investment, supported tens of thousands of badly-needed jobs and spurred innovation across the sector.” You can read the full statement here.

The bill will be voted on by the full House in September.  However, we believe passage in the House would only send a political message rather than ensure passage of a substantive piece of legislation as it stands no chance of moving in the Senate.  Chairman Bingaman and Ranking Member Murkowski have both indicated that they see a role for the federal government in programs like the DOE loan guarantee and, despite the failings of Solyndra, the entire program is not a failure.

When it was first enacted in the energy bill of 2005, the DOE loan guarantee program had the strong support of the Bush Administration and bipartisan support. The program was accelerated and began making loans following President Obama’s 2009 economic stimulus bill.  The NVCA will continue to support the DOE loan program with a commitment to appropriate reforms to protect taxpayers.

 

16

Jul

2012

5 Takeaways From Global Confidence Survey PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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Today the NVCA and Deloitte released the results from our first ever Global VC Confidence survey which measured the confidence levels from more than 400 investors around the world on a variety of issues. The various categories are extremely interesting and you can view the results here . But here are our top 5 big picture takeaways from this survey:

1) When it comes to overall confidence among global venture capitalists, there is significant room for improvement. Venture capitalists are eternal optimists by nature so the fact that most confidence levels averaged well below 4 (on an 1-5 scale) suggests that something heavy is dragging the industry psyche down. We believe it has everything to do with outside forces and little to do with opportunity, which brings us to the second takeaway.

2) Externalities truly impact confidence levels more than ever before, both from a market and public policy perspective. VCs were the more confident overall about investment opportunities than they were about the forces that impact those opportunities including the economic environment, capital markets, public policies and fundraising. Most concerning were the low confidence levels regarding each home country's ability to enact policies that support domestic investment where only three countries scored above 3.0.

3) With maturity comes challenges that can weigh on confidence levels. Conventional wisdom suggests that newer always feels better and that seems to hold true with investment regions and industry sectors. But that works both ways. Notably, regional hot spots of the last five years such as China and India have matured, leaving confidence levels lower than up and coming areas such as Brazil. The same seems to be the case for investment sectors such as clean tech where the capital intensive realities have impacted confidence levels of investors who were once extremely bullish on the sector in its earlier days.

4) There's no place like home. The survey suggests that investors are more confident about the economies and markets domestically than globally. Whereas earlier in 2000, there was more excitement about investing abroad, there seems to be a plateauing of enthusiasm for this strategy overall. Global economic uncertainty is clearly a driver of this but here in the US, a domestic investment strategy is also being driven by smaller fund sizes and shrinking partnerships.

5) The ebb and flow of the venture industry will always prevail. One thing is certain and that is that confidence levels are – and will always be -- highly fluid. Couple this with a venture industry that regularly moves through innovation cycles and we can only expect to see a different set of numbers next year. For our part, we hope to see an overall improvement.

 

27

Jun

2012

Congress Takes Final Action on FDA User Fee/ Reform Bill in Bi-Partisan Fashion — President Obama’s signature is expected soon PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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Yesterday, the U.S. Senate passed S. 3187, the FDA Safety and Innovation Act, by a vote of 92-4, which now goes to President Obama for his signature where he is expected to sign it into law. This is a true win and positive step forward for all stakeholders including industry, patients and the FDA.  S. 3187 will provide more than $6 billion in industry user fees to the FDA over the next 5 years to help fund the agency’s review process for drugs and medical devices.  The bill also creates new user fees for generic drugs and biosimilars and includes a number of provisions that improve the regulatory approval process. 

NVCA’s MedIC Coalition members have worked tirelessly to educate policymakers on the critical issues and challenges facing the U.S. medical innovative ecosystem which made a significant impact on the FDA reform debate and what was ultimately included in the final bill.  As a result, we believe Congress demonstrated a keen understanding of the importance of passing legislation that provides needed changes at FDA to help bring the most advanced and innovative medical breakthroughs to U.S. patients safely and expeditiously.   The final package includes several of MedIC’s priorities including:

  • creates a risk-benefit framework for the drug approval process that will provide a consistent and balanced approach to FDA’s decision making;
  • expands the accelerated approval process to new medical treatments;
  • provides a new pathway for breakthrough therapies;
  • provides incentives for antibiotic development;
  • improves the FDA’s advisory committee conflict of interest rules;
  • clarifies the least burdensome standards for medical devices;
  • modifies the De Novo application process; and
  • accelerates the appeals process for medical devices.

We would like to thank all those NVCA and MedIC members who worked tirelessly on ensuring that this legislation included these provisions which will help ensure the US competitive position in medical innovation for years to come. 

As we move forward, we need to understand that our work has just started.  We will continue to work with all stakeholders to ensure the new law is implemented as Congress intended and also work together to address the other challenges currently impacting life sciences innovation.

 

 

05

Jun

2012

FAF Seeks Nominations for Private Company Council PDF Print E-mail

John Taylor

Written by John Taylor   
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As you have read here at NVCAccess, the Financial Accounting Foundation (FAF) recently approved the formation of a Private Company Council (PCC) which will be tasked with setting accounting standards for private companies. The PCC, which you can read about here, was formed in response to recommendations made by an FAF Blue Ribbon Panel upon which NVCA Board member Jason Mendelson participated. Subsequently, many NVCA members spoke up in support of the PCC formation.

The FAF is now seeking nominations for individuals to serve on the PCC. As they explain in their communications:

Members of the PCC will include users of private company financial statements, including bank lenders, equity investors, and/or sureties; preparers of private company financial statements from a variety of industries and companies of various sizes; and CPA practitioners from national, regional, and local firms.

The NVCA will be participating in the nomination process and encourage our members and all stakeholders of the start-up ecosystem to do the same. The nomination form can be found here. If you have questions, please contact me at Jstaylor@nvca.org. it is important that the venture capital and start-up communities are represented on this important process and standard setting body. We look forward to the work they will do an progress that will be made. The deadline for nominations is June 30, 2012.

 

25

May

2012

Senate Passes FDA Safety and Innovation Act of 2012 PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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Yesterday, the Senate passed S. 3187, the FDA Safety and Innovation Act of 2012, by a vote of 96-1. Senator Sanders (D-VT) was the only no vote. The House is expected to vote on H.R. 5651, the FDA Reform Act of 201, next week. This bill is also expected to pass with few amendments. Both bills are similar and will raise $6.4 billion in user fees for the FDA over five years. House and Senate leaders have stated their goal is to finish and deliver a final package to the President before the July 4th Congress recess.

NVCA/MedIC believes that overall both bills are positive step forward in improving the FDA's regulatory process and include several of MedIC's priorities specifically:

  • Expanding the accelerated approval process to new medical treatments;
  • Providing a new pathway for breakthrough therapies;
  • Providing incentives for antibiotic development;Improving the FDA's advisory committee conflict of interest rules;
  • Clarifying the least burdensome standards for medical devices;
  • Modifying the De Novo application process; and
  • Accelerating the appeals process for medical devices.

NVCA/MedIC is also encouraged that S. 3187 includes a risk-benefit framework for the drug approval process that will provide a consistent and balanced approach to FDA's decision making regarding the benefit and risks of new drugs. However, we are continuing our efforts to include language in the bills that would define what variables should be considered within the structured framework and are asking for similar language for medical devices.

We will keep you apprised of all developments here at NVCAccess in the coming weeks.

 

23

May

2012

FAF Approves Formation of Private Company Council PDF Print E-mail

John Taylor

Written by John Taylor   
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Earlier today, the Financial Accounting Foundation voted to approve the establishment of a new body ―the Private Company Council (PCC)―to improve the standard-setting process for private companies.

Representatives from FAF and FASB have been reaching out and engaging with NVCA at a number of levels on this issue.  Several NVCA board members were instrumental in our efforts to support the creation of the PCC.  NVCA director Jason Mendelson of Foundry Group was invited and served on FAF's Blue Ribbon Panel which took a hard look at the state of private company accounting and determined that a different approach needed to be taken. Other board members active in the process include 2011-12 board chair Paul Maeder of Highland Capital Partners, Diana Frazier of FLAG Capital, Management, Mike Elliott of Noro-Moseley Partners, Trevor Loy of Flywheel Ventures, Stephen Holmes of InterWest Partners, and Anne Rockhold of Accel. More than a dozen members of the NVCA CFO Task Force were actively engaged in FAF and FASB efforts including James Stevenson of ABS Capital Partners, Mike Maher of USVP, and James Beck of Mayfield. 

While there will be more complete information forthcoming next week, and the devil is often in the details, it appears that the venture capital and start-up communities have been heard and the changes we felt needed to be made to an already solid plan to establish the Council (issued for comment 10/2011) have been mostly made. These changes range from the "veto-proofness" and independence of the Council, to the importance of the PCC being chaired by someone other than FASB member.

We'll keep you apprised as the remaining details on the PCC come forward, and we have all had a chance to digest the plan in detail. For now, we are strongly encouraged by the formation of this entity and the promise it holds for private company accounting standards. 

 

17

May

2012

SEC Seeks Input on JOBS Act PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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As many may be aware, the JOBS Act required the SEC to engage in rulemaking across a number of provisions including those involving crowdfunding, Regulation A, general solicitation and the 500 shareholder rule. Although it has not yet put out formal rule-making proposals, the SEC has invited the public to comment on any and all aspects of the new law.

The IPO on-ramp, which was the focus of NVCA's efforts, does not require any rulemaking – that provision of the legislation was self-executing and is immediately effective. For this reason, the Association does not plan to submit additional comments to the SEC at this time, unless there is clarification needed specifically on the on-ramp details. We are monitoring the comments submitted and if any submissions require a response from the venture capital community, we will certainly engage.

All this being said, we do encourage those venture firms and other stakeholders who feel strongly about the areas open for comment to submit their statements to the SEC, working with their counsel to do so. Information on submissions can be found here. We recognize that venture firms may have differing opinions on a number of provisions, but that should not be a deterrent to submitting comments.

We will certainly keep you up to date on any SEC developments that impact the venture capital industry or our portfolio companies as the comment period comes to an end and implementation commences.

 
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