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18

Apr

2012

NVCA Director Holmes Named to New SEC Group PDF Print E-mail

John Taylor

Written by John Taylor   
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The Securities and Exchange Commission (SEC) has appointed NVCA retiring director Stephen Holmes to its new Investor Advisory Committee. Established by the Dodd-Frank Act,  the committee will advise the Commission on regulatory priorities, the regulation of securities products, trading strategies, fee structures, the effectiveness of disclosure, and on initiatives to protect investor interests and to promote investor confidence and the integrity of the securities marketplace.

Stephen Holmes, COO and general partner, at InterWest Partners, is a founding member of NVCA’s CFO Task Force in May, 2003. He has been active in NVCA’s efforts to constructively engage with the Financial Accounting Standards Board (FASB), and its parent organization, the Financial Accounting Foundation (FAF). This has resulted in a number of changes to proposed accounting rules as they affect venture capital fund reporting and private portfolio companies.

"The SEC’s new Investor Advisory Committee is made up of individuals with a broad range of backgrounds and experiences," said SEC Chairman Mary Schapiro. "I look forward to their insight and recommendations as to how we can further the SEC’s critical investor protection mission."

The official announcement is here.

 

05

Apr

2012

Thank You U.S. Congress PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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Today, I will join NVCA Board Chairs Past and Present, members of the NVCA staff, CEOs of venture-backed companies, members of the IPO Task Force as well as members of Congress and the Administration in the Rose Garden at the White House as President Obama signs the 2012 JOBS Act into law.  A great deal of work went into advocating for the passage of this bill – specifically the IPO On-Ramp provisions that will help smooth the path to the capital markets for our emerging growth companies.  We are heartened by the bipartisan, bicameral recognition of the importance of these companies to the US economy and hope that today is a harbinger of favorable policies for entrepreneurship, innovation and capital formation in the coming years.

Please join us in thanking and congratulating those Members of Congress who supported our efforts.  The NVCA posted an official thank you this morning which lists the Congressional members who voted in favor of the JOBS Act.  We encourage you to drop them a note in the coming weeks, letting them know that you appreciate their efforts on behalf of the venture capital industry and the start-up economy.

And to that end, we would like to once again thank all NVCA members and supporters for their efforts in making today a reality.
 

02

Apr

2012

Favorable IPO Conditions Forming in 2012 PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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Often the term "perfect storm" is used to describe a series of conditions that occur simultaneously to effect some event. Such is the case with the venture-backed IPO market as we enter the second quarter of 2012 – yet only in the most positive sense. After several years of market and regulatory conditions that have weighed heavily on companies considering an IPO, the clouds appear to be lifting -- at least for now -- and the right conditions are forming for a brighter future for our exit environment and our capital markets system.

Today, NVCA and Thomson Reuters released the first quarter Exit Poll report which provides IPO and M&A data for venture-backed companies. Driven by the stable market and a pipeline of strong companies in registration, the IPO volume was at its highest level since 2007 at 19 offerings. M&A volume was also stable at 86 transactions, but more importantly, the quality of deals remained strong with more than half of the disclosed transactions bringing in more than 4 times the venture investment.

The strong quarter comes on the heels of last week's passage of the JOBS Act which will provide temporary but meaningful regulatory relief for emerging growth companies that are pursuing an IPO. Once the President signs the bill on Thursday, the IPO process will become less daunting for a critical class of companies that has struggled in the last decade with the burdens of going public.

Adding to this positive legislative development, we have two U.S. exchanges that are healthy and hungry for business. This quarter's 19 IPOs were split almost equally between the NASDAQ and NYSE (at 10 and 9 respectively). The competition means good choices for our companies who can now select the exchange that best meets their needs.

Clearly, we benefitted from a more stable market in Q1 – and we can only hope that this continues. No legislation or venture capital firm or outstanding company can offset a market that suffers from 600 point swings on a daily basis. With a pipeline of 50 strong venture-backed companies waiting to price, we believe that conditions are favorable to begin to see the issues flow.

A healthy IPO market can only help the acquisitions market. If buyers believe that a company has only one choice, it compromises the target's ability to negotiate a fair price for their company. With the U.S. capital markets system open for business, there are more options to consider and better deals to be made

Do we expect this "perfect storm" to flood the market with hundreds of IPOs this year? No. But it looks as if we are in the process of slowly turning a trend that had been hurting our companies for a decade. And we are optimistic for smoother sailing ahead.

 

27

Mar

2012

JOBS Act Passage: Why Now? PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Today Congress passed the JOBS Act which contained provisions to temporarily ease regulations for emerging growth companies that pursue an initial public offering. The bill now goes to President Obama who is expected to sign it, making it law – effectively immediately.

The passage is a victory for venture-backed companies who for a decade have struggled with not only unpredictable market volatility but also very predictable regulatory burdens which, in many cases, delayed or prevented an IPO from taking place. It is an issue that the NVCA has been raising for a decade as well.  

In 2005-2006, NVCA Board member Ted Schlein participated in the SEC Advisory Committee on Smaller Public Companies. That committee was formed to address the outcry from small companies struggling under the explosive costs of the new Sarbanes-Oxley mandate. After over a year of debate and examination, the committee ultimately made what became the first recommendation that scaled regulation be implemented. Unfortunately, those recommendations were never enacted, in large part because of the chorus of disapproval from the same groups (activist investors and labor unions) that most recently attacked the JOBS Act. In 2009, then NVCA Chairman Dixon Doll presented a Four Pillar Plan which sought to educate lawmakers and regulators about the continued difficulties for venture-backed companies trying to go public. In the midst of the financial meltdown gripping the country, those recommendations too were not acted upon. So the question today is – why now?

Fortunately for our companies and the U.S. economy, a confluence of forces made today's passage possible:

1) It's the economy. Statistics don't lie and the country continues to struggle with economic recovery. Job creation is top of mind for lawmakers, the Administration and the American public. Fact: Emerging growth companies that go public create jobs. Fact: The number of IPOs has fallen precipitously in the last decade. More IPOs means more U.S. jobs. While millions of jobs won't be created overnight, lawmakers recognized that, over the long term, easing the IPO process for fast growing companies can help reverse a trend that has sacrificed employment.

2) The IPO On-Ramp was a reasonable approach. The IPO On Ramp offered a reasonable approach to a significant problem. The IPO Task Force , which was led by former NVCA Board Chair Kate Mitchell and which included professionals from the capital markets ecosystem, made measured recommendations that served as the basis for the on-ramp provisions. It did not suggest a complete roll-back of important regulations. It requested a 5 year period of relief for companies after which time all existing regulations would still apply. Maintaining investor protections remained top of mind with the IPO Task Force and members of Congress, which was instrumental in garnering support for its passage.

3) Congress needed to demonstrate its value. Given the increased partisan rancor that has enveloped Congress – displayed painfully over the last several years throughout consideration of some of the nation's critical challenges - many Members of Congress were keen to champion a bipartisan bill that did not cost American taxpayers additional money but which would help stimulate the lackluster economy. Both Senators Schumer and Toomey – with support from Senators Crapo and Warner – along with Representatives Fincher and Carney – recognized the benefits of this legislation early on, and led the effort to move the bill through the Congress with both R's and D's attached to it.

4) Entrepreneurs weighed in. We can never underestimate the power of the entrepreneurial voice. Through the NVCA letter to the Senate signed by more than 700 company CEOs, CFOs and Founders to the AngelList that had thousands of supporters, the startup and venture capital communities let Congress know how important this bill was to the growth of their companies. Our legislators heard us loud and clear.

The NVCA would like to thank all of our members and supporters in this process, especially Kate Mitchell and the IPO Task Force for it thoughtfulness, commitment and work on the recommendations. It is a rare opportunity to be part of a process that sees a bill crafted, debated and passed in an expeditious and efficient manner. The JOBS Act will help emerging growth companies reach their potential and for that, we are so very proud to have played a part in its passage.

 

27

Mar

2012

Senators Introduce Bill to Get Treatments to Patients Faster PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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The NVCA applauds Senators Bennet (D-CO), Hatch (R-UT) and Burr (R-NC) for introducing yesterday the Advancing Breakthrough Therapies for Patients Act aimed at bringing breakthrough treatments to patients more quickly.  This bi-partisan legislation expedites the FDA approval process for breakthrough therapies and increases clinical trial flexibility of drugs that show dramatic early responses without compromising drug safety and efficacy.  

NVCA has been working with Senators Bennet, Hatch, Burr and several other Members of Congress to develop legislative proposals that will provide more clarity and certainty in the FDA review process, especially for early-stage companies.  We believe the Breakthrough Therapies for Patients Act along with expanding the Accelerated Approval (AA) pathway for all promising new therapies in areas of unmet need will provide greater regulatory certainty and shorten drug development time.  These improvements will, in turn,  help open flow of critical investment in critical therapies for patients.  S. 2113, Transforming the Regulatory Environment to Accelerate Access to Treats (TREAT Act), sponsored by Senator Hagan (D-NC) and H.R. 4132, the Faster Access to Specialized Treatments Act (FAST Act), sponsored by Representatives Stearns (R-FL) and Towns (D-NY) would expand the AA pathway.    

We are hopeful that these bills will get attached to the Prescription Drug User Fee Reauthorization (PDUFA) bill currently being moved through Congress with a target reauthorization time frame of mid-summer 2012.

Stay tuned for updates on these legislative proposals for which NVCA is advocating to unlock the flow of investment into promising medical technologies.

 

22

Mar

2012

Senate Passes JOBS Act PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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We are extremely gratified by today’s bipartisan passage (73-26) of the JOBS Act and commend the U.S. Senate for its leadership – particularly Senators Schumer, Toomey, Crapo and Warner -- in crafting this legislation and expeditiously moving it forward.   The JOBS Act will address a multitude of challenges currently faced by America’s emerging growth companies that are seeking capital to grow, innovate and hire employees.   We are optimistic that the House will agree to send the JOBS Act to the President to sign in short order as this will be a significant victory for entrepreneurial companies and the U.S. economy.

 

21

Mar

2012

JOBS Act Passes Cloture Vote PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Moments ago the JOBS Act passed a cloture vote in the Senate (76-22) which means that the Senate has limited the amount of time for further debate and that the legislation will move towards a vote on final passage - most likely tomorrow. A strong cloture vote usually presages a strong vote for final passage.
We are not across the finish line yet but we crossed a significant threshold today. Thanks to all NVCA members and their companies for their continued support. Our collective voice has gotten us to this point and we hope to share some good news on final passage this week.
 
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