SSTI Digest

Angel and venture capital firms invested more in seed and early stage companies last year than any time in the past decade (for details see the related Useful Stats article). Seed and early stage companies appear to be generating a great deal of attention from the venture capital industry, even as overall U.S. investment activity remains steady. Both seed and early stage investment continue to grow, a development that a recent CB Insights report attributes to the proliferation of new micro VC funds and multi-stage venture firms. Though year-end numbers are not yet available for angel investing, which represents a major source of financial support for seed and early stage companies, early reports indicate that activity levels continue their trend of steady growth.

Last year, U.S. venture capitalists invested about $10.7 billion in seed and early stage companies, 17.1 percent higher than 2012, according to data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PwC) Moneytree survey.  Though the overall venture capital (VC) market has returned to about the same level of activity as before the economic crisis, investment in seed and early stage companies has grown by more than a third. Most of this increase is attributable to growth in early stage investment, but seed activity has grown as well (as discussed in another article).

The fifth installment of SSTI’s Tech Talkin’ Govs series includes excerpts from speeches delivered in Connecticut, Maine, Oklahoma, and Tennessee. Read part I, part II, part III and part IV.  

Connecticut

Gov. Dan Malloy, State of the State Address, Feb. 6, 2014

“Here are three ways we can continue helping employers to grow jobs this session.

“First, we can continue to fund the Small Business Express program, which has a proven record of success.

Delaware Gov. Jack Markell outlined a FY15 budget proposal with further detail and funding levels for TBED priorities announced in his recent State of the State address. The budget would provide $1 million to create a faster path to degree or certificate completion in advanced manufacturing and establishes a $3 million cyber workforce initiative. Higher education institutions would be tapped as partners for the new initiatives, and also would receive an additional $2 million for federal R&D matching grants as part of the budget recommendations.

In his fifth State of the Union address, President Barack Obama touted the administration’s Institutes of Manufacturing Innovation program as central to its plan to reinvigorate the American economy. The president called on Congress to expand the manufacturing network beyond the two existing institutes in Ohio and North Carolina and the six additional institutes to be rolled out in 2014. He also requested legislative action to undo last year’s sequester-related cuts to basic research, to pass patent reform and to improve U.S. STEM education.

While much of the coverage following the address has focused on the president’s plan to make extensive use of executive orders to enact the administration’s agenda in the coming year, much of his plan to boost American innovation would require additional action from Congress.  Many of the policy options that the president linked to innovation and entrepreneurship in his address, including immigration reform, patent reform and boosting federal funding for research, would require legislative approval and have already met resistance in the House and/or Senate.

The fourth installment of SSTI’s Tech Talkin’ Govs series includes excerpts from speeches delivered in Illinois, Massachusetts and Utah. Read part I, part II and part III. 

Illinois

Gov. Pat Quinn, State of the State Address, Jan. 29, 2014

"Part of our jobs strategy is investing in industries that are the future of a 21st century economy. ...

"... And that's why now, we're going to invest in a new bio-hub for pharmaceutical, medical device, and health IT startups.”

Massachusetts

Gov. Deval Patrick, State of the Commonwealth Address, Jan. 28, 2014

Filling the pipeline with skilled workers able to perform the high-tech jobs employers say are sitting vacant has long been advocated by state leaders and policymakers as essential to competing in the global economy. Governors in Florida and Louisiana are stepping up efforts this legislative session with proposed multi-million dollar investments through training and scholarship programs to change the landscape of their states’ workforce.

In both states, the governors say the goal is to strengthen the link between college coursework and industry needs while increasing opportunities for job seekers. The Florida plan encompasses worker re-training in its plan while the Louisiana plan puts a greater emphasis on new graduates in STEM fields. 

After hitting an all-time high in 2012, California’s dominance of the nation’s venture capital activity receded a bit last year. California continues to receive about half of the country’s venture investment dollars and about 40 percent of its dealflow, but in 2013, the state’s share of dollars fell from 53 to 50 percent, according to data from the PricewaterhouseCoopers/National Venture Capital Association (PwC/NVCA) Moneytree survey. Massachusetts, which has been host to about 10 percent of national venture activity in past years, also saw its share of total U.S. activity decline. Gains in second tier venture capital states appear to account for the shift, including upticks in Florida, Maryland, New York, Texas and Virginia. Massachusetts continue to lead the country in terms of dollars and deals per capita, though for the first time that lead was threatened by the rise of Washington, D.C., as a venture capital hotspot.

The FY15 budget proposal outlined last week by Gov. Andrew Cuomo would provide funding to continue many of New York’s innovation-focused efforts while investing in new initiatives, including a genomic medicine network and STEM scholarship program.

First announced in his State of the State address, the NY Genomic Medicine Network is a proposed partnership between the New York Genome Center and the University at Buffalo’s (UB) Center for Computational Research to accelerate advances in genomic medicine and develop the burgeoning industry in the state. The budget provides $55.75 million for the New York Genome Center and authorizes $50 million of the Buffalo Billion initiative for UB’s Center for Computational Research. With the investment, the state hopes to attract and grow companies on the Buffalo Niagara Medical Campus, including those with a focus on diagnostics and information technology. Companies would benefit from the research and supercomputing resources provided by UB, according to a press release.

Tech Talkin’ Govs: Part III

The third installment of SSTI’s Tech Talkin’ Govs series includes excerpts from speeches delivered in Delaware, Michigan, Missouri and New Mexico. Read part I and part II.

Delaware

Gov. Jack Markell, State of the State Address, Jan. 23, 2014

“As we send more of our students into higher education, we need to make sure that they have a roadmap from the classroom to employment, and that our major employers are working with our universities so that our youth are prepared for the workforce. I’m pleased to announce today that DuPont has agreed to partner with our colleges on this effort.

“They will work to identify skills needed for entry-level positions, match those skills with courses offered by our colleges, and provide internships. ...

Ontario officials launched a new fund-of-funds this week intended to boost capital resources for high-tech companies. The Northleaf Venture Catalyst Fund is a privately led initiative, supported by federal and provincial funds. The governments of Canada and Ontario have agreed to make a combined capital commitment of $1 for every $2 secured from the private sector. Current commitments total $217.5 million CAD ($195.4 million USD), but leaders hope to match the government’s maximum match level of $300 million CAD ($269.6 million USD) in a second closing later this year. Read the announcement…

North Dakota has announced it will relaunch its Innovate ND business venture competition as a more expansive suite of services for innovative startups and entrepreneurs. Participants will receive vouchers for up to $2,500 to help pay for coaching and consulting services at an entrepreneurial center, development of a business plan or building a prototype. Education services also will be available, including biannual Entrepreneur Boot Camps.  Read the announcement…