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11

Mar

2012

700+ Entrepreneurs Support Senate Action on IPO On Ramp Bill PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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During a three day period last week, more than 700 CEOs, Founders and other executives at start-up companies across the United States signed a letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell encouraging timely action on S. 1933, the IPO On-Ramp bill. This letter will be delivered to the Senate today, following last week's House of Representatives strong bipartisan passage of the JOBS Act (390-23) which contains the IPO On-Ramp provisions.

As President Obama has indicated his support of this legislation, it hopefully makes Senate passage of this bill simpler. It is only fitting that the Senate take S. 1933 across the finish line as it was under the bipartisan leadership of Senators Schumer, Toomey, Warner and Crapo that the bill was originally crafted. They have spent considerable time and deliberation on the merits of the proposals - and we are optimistic that the full Senate will pass S.1933 in the near term.  

The support from the start-up community in our letter signing campaign was swift and powerful, evidencing the need for a smoother path for emerging growth companies who seek to go public. These companies are the gazelles who, when accessing the capital markets system, create exponential growth in product development, operations and hiring. Easing the path to IPO will encourage more - and inhibit less - of these emerging growth companies to move forward and create tremendous economic value. 

We look forward to keeping you informed of developments here at NVCAccess.

 

07

Mar

2012

IPO On-Ramp Support Ramps Up PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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There is considerable action in Congress this week regarding the IPO On-Ramp legislation behind which NVCA has thrown its full support.  First, a full House of Representatives vote is anticipated this week for the Jumpstart our Business Startups (JOBS) Act which contains the on-ramp provisions originally contained in HR 3606.  Under the bipartisan House leadership of Representatives Stephen Fincher (R- TN) and John Carney (D-DE), support for this legislation has been strong and we are optimistic that the bill will pass decisively.  Stay tuned.

On the Senate side, where the legislative language was originally introduced by Senators Schumer (D-NY), Toomey (R-PA), Warner (D-VA) and Crapo (R-ID), hearings continue on a number of capital markets provisions including the on-ramp proposal.  Given the attention and momentum the bill has been garnering, this week the NVCA reached out to the VC and start-up community to demonstrate wide-spread support for moving the Senate bill -- S. 1933 -  to a vote and swift passage.  Hundreds of Founders, CEOs and CFOs of venture-backed start-ups have signed a letter of support which we intend to deliver to Senate leadership by week's end.  We have also seen support from the VC community in blogs including Ray Rothrock, Jason Mendelson, Brad Feld, Alex Taussig , Cathy Belk and others.  

Please keep the support coming.  We need to let Senators know how strongly we stand behind this legislation which will smooth the path to IPO for small emerging growth companies that have tremendous potential.  Passage of these bills and signature by the President will be not only a win for Congress - which has the opportunity to demonstrate a bipartisan effort to support the capital markets system and promote economic growth -- but it will certainly support promising venture-backed companies who today find the IPO process more challenging that it needs to be.

Want to know more about the IPO On-Ramp?  A Q and A document on the legislation can be found here.  We will keep you informed of developments here at NVCAccess - so check back daily!

 

21

Feb

2012

Corporate VC Investment Increases Reflect Growing NVCA Membership PDF Print E-mail

Janice Mawson

Written by Janice Mawson   
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This morning the NVCA released the 2011 Corporate Venture Capital (CVC) 2011 investment statistics.  The data, which comes from the MoneyTree report by PwC and NVCA and is based on data from Thomson Reuters, shows a growing CVC investment trend line in terms of absolute dollars and percentage participation alongside of traditional venture capital firms.  In addition to the traditional investment sectors of life sciences and IT, we have seen more CVC arms enter into the clean technology arena as they commit to finding green solutions for their own businesses and the businesses of others.

The increasing investment numbers parallel a growing CVC membership at the NVCA.  In 2004, we formed the Corporate Venture Group with 45 members.  Since that time, CVG has increased to 60 members representing a broad range of industries including life sciences, cleantech, consumer and business products and services, financial services, media and entertainment, automotive, retail, security and semiconductors.  While the majority of our members have had active VC arms for more than 10 years, we are seeing new entrants into the CVC arena.  But was is more telling is the deeper level of involvement CVCs are taking in the investment lifecycle.  We are seeing more CVCs taking board seats as part of their investment and often times CVCs are acting as lead investor and/or coming into deals in a seed or early stage round.

This involvement and the diversity of industries in which CVCs are operating suggests that the increasing participation is not just a flash in the pan but a strategic recognition of the value that comes with a seat at the table of start-ups earlier rather than later.  Traditional VCs are also embracing the CVCs as excellent sources of business development opportunities and, ultimately, exits.

For more information about the NVCA Corporate Venture Group including a list of current members, please visit our CVG home page.

 

17

Feb

2012

IPO Bill HR 3606 Passes House Committee PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Yesterday, the House Financial Services Committee (HFSC) voted in a dramatically bipartisan manor in favor of H.R. 3606, the “Reopening American Capital Markets to Emerging Growth Companies Act of 2011.”  The vote to move this legislation forward to the full House for consideration was 54-1. 

This legislation provides a regulatory on-ramp for emerging growth companies seeking to go public on the U.S. market and allows these companies to better communicate with potential investors pre- and post-IPO.  The NVCA has long supported this bill - as well as the Senate version, S. 1933, and we expressed this support jointly with the NYSE in a letter to the HFSC Chairman Bachus and Ranking Member Frank, sent yesterday.  Of particular note, we applaud the bipartisan approach and leadership shown during the Committee process by Congressmen Stephen Fincher (R-TN) and John Carney (D-DE) on the bill, which was reflected in the nearly unanimous vote of approval.  We remain extremely encouraged by the strong and growing bipartisan support for this bill and hope the full House will quickly add its weight behind this measure.

As mentioned, S. 1933, introduced by Senators Schumer (D-NY), Toomey, (R-PA) Warner (D-VA) and Crapo (R-ID) is under consideration by the Senate Banking Committee.  We hope that yesterday's strong action will encourage that committee to also move forward expeditiously. 

As the venture-backed IPO market remains slow in terms of volume in 2012, we believe that these bills will encourage more companies to pursue an IPO without sacrificing investor safety or confidence.  We will keep you apprised of all developments here at NVCAccess.

 

 

16

Feb

2012

Ross Jaffe of Versant Ventures Testifies at House Hearing on MDUFA PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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Yesterday, the House Energy and Commerce Health Subcommittee held a hearing entitled: "Reauthorization of Medical Device User Fee (MDUFA) Agreement: What It Means for Jobs, Innovation, and Patients."  NVCA member Dr. Ross Jaffe, who is a managing director at Versant Ventures, testified on behalf of the venture community and offered an important perspective on the current VC investment environment in the medical technology space.  He also summarized NVCA’s Vital Signs survey results and provided several key FDA reform recommendations that would help jumpstart investment.  The hearing also provided an opportunity for the Vital Signs survey to get submitted into the official Committee record.

Several members of the Committee referenced the Vital Signssurvey in their opening statements and questioned Jeff Shuren, Director of Center of Devices and Radiological Health, FDA, expressing concerns regarding the survey results and the impact the FDA process is having on medical innovation and U.S. job creation.   

The House Energy and Commerce Committee has jurisdiction over the FDA and will be debating and moving the MDUFA Reauthorization and broader FDA reform bills through their Committee by late spring.  On February 1, the FDA and the medical device industry announced a tentative agreement on a medical device user fee reauthorization package.  Per the agreement, the industry would pay $595 million over five years, which would provide the FDA the ability to hire additional reviewers, lower the ratio of managers to reviewers, and enhance training for reviewers.  The medical device industry believes this agreement provides a series of strong, measurable performance goals that will improve the agency’s medical device review process and provide the tools needed to improve the efficiency and consistency of the review process. 

Congress will need to reauthorize MDUFA Reauthorization by September 30 and we are optimistic that the process will indeed prompt positive change in the FDA approval process.

 

 

 

15

Feb

2012

Carried Interest Remains in Limelight PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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On Monday, February 13th, the President released the Administration’s Fiscal Year 2013 federal budget, and while there is no expectation that this budget will be enacted, it serves as a marker for lawmakers as they devise their own funding initiatives.  Not surprisingly, a change to the tax treatment of carried interest was included once again in the budget as it has been since Obama entered the Oval Office.  We continue to be disappointed that the Obama administration ignores the fact that implementing policies detrimental to the venture industry runs counter to his stated support for the venture-backed start-up companies that have been and will continue to be one of the few sources of U.S. job creation and technological innovation.

Adding fuel to the fire, Congressman Sandy Levin (D-MI) also introduced specific carried interest legislation again this week.  Between that, the President’s budget, and the laser focus on the issue generated by Presidential candidate Mitt Romney’s tax returns, we expect carried interest to remain on the front lines of political rhetoric for the rest of the year.

If and when full-scale tax reform gains serious traction, the discussion could very well shift, as we’ve noted publicly, to capital gains more broadly (i.e. should the tax code continue to provide a preferential rate for investment income) and whether partnership tax structures should be maintained.  We will remain vigilant on all of these topics as the political cycle unfolds.

 

07

Feb

2012

NVCA Submits Comment Letter on Volcker Rule PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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As many are aware, the Volcker Rule is a provision within the Dodd-Frank legislation that prohibits banks from owning, sponsoring or having certain relationships with private equity or hedge funds.  Although Congress specifically differentiated venture capital from private equity in the Dodd-Frank provisions relating to registration of investment advisers, the language in this provision remained broad.  Despite indications in the final days of debate on the legislation that Members of Congress did not intend to apply the Volcker Rule to venture capital, the final legislative language left VC status unclear. 

This provision is a small component of a very complicated rule.  Yet, it is important to clarify this language so that there is consistency among regulations.  The fact that venture capital is not a systemic risk to the financial system should apply to the Volcker Rule just as it applies to SEC registration.

As an interagency group comprised of Department of Treasury, the Federal Reserve, the FDIC, and the SEC have been finalizing implementation, they have solicited comments regarding many aspects of the Volcker Rule.  In the latest request, they have asked for comments on whether venture capital should be exempted from the provision, and if so, whether the final SEC definition of venture should be used to do so.  This week, NVCA submitted a comment letter supporting both the exemption and the use of the SEC definition.

We encourage those members who would be impacted to weigh in with the agencies by Monday, February 13th.  The proposed rules have been subject to extensive public comment, and there is no clear schedule for adoption of final rules.  We will continue to monitor the situation.

 
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