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06

Jun

2011

MedIC's Messages on FDA Heard by Congress PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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On June 2, NVCA Board Member Jack Lasersohn of The Vertical Group testified before the House Oversight and Government Reform Committee at a hearing entitled “A Pathway to FDA Medical Device Approval: Is there a Better Way?”  This hearing provided an excellent opportunity to share the NVCA and MedIC positions on FDA reform recommendations.  In his testimony, Jack provided background regarding the key factors impacting venture capital investment in new medical technologies and discussed specific details on FDA reform priorities.   Specifically, he:

  • Focused on the fact that FDA’s risk-benefit analysis for novel medical devices has grown out of balance relative to its past practices and to current practices in other countries – especially in Europe.  Jack highlighted that FDA now weighs risk too heavily and demands unrealistic levels of benefit, particularly for first generation devices, a practice which is having a direct impact on investment in this critical area.
  • Stressed that FDA should establish, as a guiding principle, a more flexible risk-benefit analysis than what is currently in use; meaning that while the general requirement for safety and efficacy will always apply, the specific threshold for each of the elements within equation will change depending on the clinical context.
  • Explained that incidence and severity of the disease, urgency of need in the marketplace, prior medical knowledge, and the relative safety of the device should all be considered to explicitly adjust the variables in the safety and efficacy equation.
  • Highlighted other FDA reform recommendations proposed by NVCA/MedIC including the idea that FDA should significantly expand its use of certified third-party entities for reviews for Class I and Class II 510(k) devices.  Such a change for these low-to-moderate risk devices would significantly reduce the resource burden on the FDA, allowing the agency to redirect its efforts to reviews of pre-market approvals (PMAs) and higher-risk 510(k) devices.

Jack’s testimony was very well received by the Committee and we expect more opportunities to share our recommendations with members of Congress in the coming months.

 

06

Jun

2011

The Monday Meeting with Sean Dalton PDF Print E-mail

Emily Mendell

Written by Emily Mendell   
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This month we are privileged to hear from Sean Dalton, General Partner at Highland Capital Partners, who focuses on leveraging disruptive technologies in the mobile, enterprise and media markets. He currently represents Highland on the boards of Calxeda, CENX, Movik Networks, QD Vision and Zoove and also actively works with Picochip and MokaFive. Sean is a former director of AccessLan Communications (acquired by Advanced Fibre Communications), Altiga Networks (acquired by Cisco), Casero (acquired by Radialpoint), CCTV Wireless (acquired by TerreStar), CHiL Semiconductor (acquired by International Rectifier), Covergence (acquired by Acme Packet), Envoy Networks (acquired by Texas Instruments), Ocular Networks (acquired by Tellabs), Optasite (acquired by SBA Communications), P.A. Semi (acquired by Apple), Starent Networks (NASDAQ:STAR; acquired by Cisco), Telcobuy.com (merged with World Wide Technology) and Telica (acquired by Alcatel/Lucent).   Sean serves as a Director of the New England Venture Capital Association.

Sean_Dalton_-_Highland_2

Sean Dalton, General Partner, Highland Capital Partners

Q.  From which industry sector do you think we will see the most innovation in the next 2 years? 

A.  We all are enjoying a massive renaissance in innovation, particularly given that it wasn’t so long ago that it appeared the world economic order was about to be up-ended.  How far we have come!  Among my favorite trends are ubiquitous mobility, cloud computing and “over-the-top” content distribution.  It’s also interesting to see how large industries like healthcare and critical issues like conservation are being addressed with new vigor by technology. 

Q.  2011 is the year of...

A. ... the young entrepreneur.  Of course, young (let’s say under 30) entrepreneurs have seemingly always been at the heart of the greatest companies: Apple, Microsoft, Google and Facebook just to name a few.  But there are two trends that seem to be adding jet fuel to the fire.  First, the barriers to build a company and launch a product have never been lower, due largely to technology innovations.  But an equally important trend for college and graduate students is that choosing an entrepreneurial path is now viewed as the goal –  the desired path  -- as opposed to joining IBM, Merck, McKinsey or Goldman Sachs (with all due respect to these great companies).  Being an entrepreneur is the long-term “safer” path. 

Q.  The biggest threat to the US venture capital industry is...

A.  ... forgetting what it was like in January 2000, when very few asked “what could possibly happen?”  While I’m not saying we are there yet, I can see the harbormaster going out to change the flags…

Q.  What is your favorite book of the last year? 

A.  Severe Mercy by Sheldon Vanauken.  Earlier this winter I took a few days off to spend time in a monastery.  My first night there I randomly chose a book off the shelf.  It’s the self-biographical story of Sheldon and his wife Davy as they meet, fall in love and marry.  A desire to experience the world and fate brings them to Oxford where they befriend C.S. Lewis.  It is with Lewis that their intellect is challenged by examining Christian doctrine to figure out whether there is a Trinity.  So they do that and reach a conclusion (you’ll have to read it to find out), only then to be given a tragic circumstance that once again challenges both to their core.  What really comes alive is how powerful a bond can be between people.

Q.  Name a venture-backed company you are not invested in but wish you were. 

A.  This is a trick question on many levels!  But I’m going to have to say Facebook.  If for no other reason than my kids would actually think I’m cool.  No one outside of our universe has any idea of what a “Starent Networks” is.

Q.  Name a practicing VC from another firm who you admire and why?  

A.  Doug Leone of Sequoia.  Early in my career we were on a board together.  Doug was, and still is, great at cutting through the inconsequential to get to the core of the situation.  One moment it might look as though he were sleeping as another board member and I debated the application of an IETF protocol.  A moment later Doug would be all over the head of sales. “OK, enough stories.  What was the number, did you hit it and why or why not?   Let’s walk through the pipeline line-by-line…”  Doug seems to consistently get to the heart of why a business is being successful, or why not.  If I were to create a personal board of directors, I would ask Doug to be on mine. 

Last Updated on Monday, 06 June 2011 12:41
 

27

May

2011

NVCA CleanTech Policy Roundup PDF Print E-mail

Emily Baker

Written by Emily Baker   
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The last month has been a busy one for the NVCA Clean Tech public policy team as we have provided meaningful input on a number of critical issues on Capitol Hill.  The following summarizes some of the highlights:

Update on CEDA

The Senate Energy and Natural Resources Committee held a hearing in support of the Clean Energy Deployment Administration on May 3rd.  In her opening statement, Ranking Member Murkowski (R-AK) reminded Senators that last year CEDA passed the committee with broad, bipartisan support and she called CEDA a “smart way for the federal government to promote renewable energy.” She further stated that “there is a legitimate role for the federal government to play in this area.” 

Enacting a Clean Energy Deployment Administration could be one of the first energy initiatives that the Senate brings to the floor this year. The main obstacle to passage will be finding offsets to fund the initial $10 billion that CEDA requires.  NVCA has long supported CEDA and was asked to provide written testimony for the record.  NVCA Board Member Ray Rothrockof Venrock submitted testimony on our behalf. 

Just yesterday CEDA was scheduled to be marked up in the Senate Energy Committee. Usually this is the last step before a bill passes the committee.  Unfortunately, Chairman Bingaman and Ranking Member Murkowski decided to postpone marking up CEDA, until after Memorial Day, presumably to take the time to build bi-partisan support.

Also last night the environmental groups came out against CEDA, consistent with previous efforts.  They are pointing to a flawed belief that nuclear energy will be the main beneficiary of a CEDA.  Last year, these groups were not effective in their arguments and we are hopefully the same will hold true this time around.  NVCA will be meeting with Senate staffers next week on CEDA and hopefully it will move after Memorial Day.

“Thank You” Letter to Congress on ARPA-E

After successfully getting Congress to include funding for APRA-E in the FY 11 budget that recently passed, NVCA led an effort to thank lawmakers for including ARPA-E in the hard-fought budget.  ARPA-E enjoys support in the Congress but when the budget battles come down to the wire and targets must be met, it is easy for lawmakers to drop programs.  Since APRA-E is a newer program it could have easily been targeted for funding cuts.  Our lobbying efforts are well underway to secure funding in FY 12. 

National Summit on Advancing Clean Energy Technologies

NVCA participated in the National Summit on Advancing Clean Energy Technologies held last week in Washington, DC.  The event, organized by the Bipartisan Policy Centerand the Howard Baker Forum and Lawrence Livermore National Laboratory, brought together energy technologists, venture capitalists, industry executives and public officials to develop a road map and guidance for clean energy entrepreneurs and technology companies interested in accessing the national laboratories.  NVCA hosted a panel on the Role of Private Financing in Commercializing Advanced Energy Technologies, with Bob Nelsen of Arch Ventures, Tom Baruch of CMEA, and Scott DePasquale of Braemar Energy Ventures.

Comments on Senate White Paper on the Clean Energy Standard

Senate Energy and Natural Resources Committee recently asked the NVCA to provide input to a Clean Energy Standard (CES) White Paper to which we responded by marshaling the resources of a group of clean tech investors at member firms.  We were pleased to have the opportunity to offer the venture viewpoint on this issues which reflect the belief that clean energy is one of the largest opportunities of the 21st century and that whichever country is the leader in innovating the best energy technologies, will be the global economic leader as well. You can view the executive summary of our submission here

We continue to be heartened by the demand for the venture capital perspective on clean tech policy issues and will continue to take our seat at the table as these and other issues are discussed and moved forward.

 

25

May

2011

NVCA Testifies on Life Sciences Issues PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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This morning I testified before the Joint House-Senate Economic Committee (JEC) on “Driving Innovation and Job Growth through the Life Sciences Industry”.  The JEC is one of the few joint committees comprising members of both the House and the Senate and is chaired by Senator Bob Casey (D-PA) of Pennsylvania. 

My testimony, delivered on behalf of the NVCA, focused on how venture investment fuels life sciences start-ups and included recommendations on how policy makers can continue to help protect these emerging growth companies.  Specifically Congress must:

  • Support a tax policy that rewards long term investment in innovation
  • Protect future sources of capital for the venture industry
  • Encourage more small-cap IPOs
  • Implement health reform that promotes innovation
  • Support broad-based FDA reform
  • Continue to fill the R&D pipeline through funding of basic research
  • Embark upon legal immigration reform
  • Protect small innovators through patent reform 

We were pleased to be able to have the opportunity to share the venture industry’s most pressing issues with the JEC.  Committee members were particularly concerned about the stalled SBIR bill and its impact on innovation.  Also, the hearing was an opportunity to educate members on the fact that R&D tax credits typically do not directly help small, emerging growth companies because these companies are not yet profitable.  The holding of this hearing itself is evidence that the JEC understands the importance of life sciences to both the US economy and our global competitiveness and we look forward to continuing to contribute to the conversation as policy is shaped.

 

18

May

2011

Venture Capital Performance Continues to Improve PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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This morning, the NVCA released the Q4 2010 venture capital performance numbers from our partner Cambridge Associates and the news continues to be encouraging.  As you can see in the press release, venture returns improved at the end of the year in nearly every time horizon, marking the second consecutive quarter in which we saw meaningful increases.  

Based on current exit market activity, we feel that the venture industry is on a steady, upwards trajectory rather than experiencing a quarterly blip.  In other words, barring any unforeseen market dynamics, returns hit bottom last year and are headed back up.  Still, we do have a ways to go before the venture industry can boast the type of performance that compels limited partners to expand their venture capital allocation beyond what it is today.

While we typically discourage analysts from reading too much into the one year numbers, the figure is a good measure for recent exit activity.  At the end of 2010, an opening of the IPO market and quality acquisitions brought the pooled industry 1-year performance number into positive, double digit territory.  The first quarter of 2011 is showing a similar pace.

More detailed information is available and we encourage those interested to review the full Cambridge report which details performance by vintage year and industry.

 

16

May

2011

The Monday Meeting with Jason Matlof PDF Print E-mail

Emily Mendell

Written by Emily Mendell   
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This month's Monday meeting is with Jason Matlof of Battery Ventures.  Jason joined Battery in January 2005 and focuses on investments in the clean technology sector. He is currently a board member at Redwood Systems, SolarBridge Technologies, Qteros, and Ideal Power Converters (Observer). Before joining Battery, Jason spent more than a decade in management roles at leading technology companies. Most recently, he served as Vice President of Marketing and Business Development for Neoteris, which was acquired by NetScreen and then subsequently acquired by Juniper Networks. At Neoteris, Jason was responsible for developing and executing the company’s product strategy and establishing leadership within the emerging SSL VPN product category.

Prior to Neoteris, Jason spent five years at Cisco Systems, where he led the product management team for the company’s multi-billion dollar family of fixed-configuration Catalyst switches. Jason has also held positions with Ford Motor Company, Ericsson Raynet Corporation and MPR Associates. Jason received a BA with honors in Political Science from the University of California, Los Angeles and an MBA from Harvard Business School.

Jason co-authors www.cleanmakesgreen.com, a blog focused on cleantech.

Jason_Matlof_Battery_2

Jason Matlof, Partner, Battery Ventures

Q.  From which industry sector do you think we will see the most innovation in the next 2 years?

A.  Cleantech, for sure. The first generation of Cleantech investing has been challenging. Capital intensity, scale up, science risk, and other things are just a few of the big learnings of “Cleantech 1.0.” But, the opportunity to generate great venture returns is still significant.  These are the biggest product markets in the world; they suffer from acute economic and political challenges; and, technology is the answer in most cases.  Those are challenges where technology entrepreneurs and venture investors do well.

Q. 2011 is the year of the ...

A.  The Solar Microinverter. Enphase has done a great job building this new product category and is growing wildly fast.  But, this is the just the beginning.  There are a number of great solutions coming to market that will only accelerate the value proposition and growth potential.  Keep your eyes open in 2H11.

Q. The biggest threat to the US venture capital industry is ....

A.  Returns!  The venture industry’s mean average returns have been poor for over a decade. If the industry intends to maintain size or even grow, the industry mean returns need to start growing dramatically.  That means we need new product categories, driving new value propositions, and that drive new categories of strategic buyers to create exit opportunities for our portfolios.  Can you say “Cleantech”?

Q. What is your favorite book of the last year?

A:  The Big Short.  I was already skeptical of the ethics of some bankers and asset managers.  Now…I’m scared to death.

Q.   Name a venture-backed company you are are not invested in but wish you were.

A.  Solar City.

Q.  Name a practicing VC from another firm who you admire and why?

A.  There are a number of them, but they all share the same character traits – intelligent, successful, yet humble and enjoyable to hang out with.

 
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