investing

By April of 2023, state legislatures had filed 99 anti-ESG bills, according to Reuters. Many of these bills are motivated by the perception that investors who prioritize environmental, social, and governance (ESG) compliance by companies in which they are investing are imposing their political beliefs on others. Furthermore, some believe that ESG considerations inhibit investors and thus hurt returns. On the other hand, some critics of these bills argue the opposite: that it is restricting ESG investing that jeopardizes investment returns. In fact, Research from Pitchbook found ESG investing can have as big a return as investing in non-ESG-driven investments.

SBA's Office of Investment and Innovation has launched an Investment Capital Advisory Committee (ICAC) to serve as an independent source of advice and recommendations to SBA on institutional investment market trends, innovation, and policy impacting small businesses’ ability to access patient investment capital.

SSTI has released a new data tool that defines investment activity, one indicator of the vibrancy of a region’s innovation economy, in each of 18 technology areas. Comprising two interactive visuals and a downloadable data file, this tool includes the number of investment-backed companies, investment deals, and amount of capital invested by state, year (2013-June 2023), and investment stage (e.g., seed, angel, venture) for technology verticals that were selected to align with many of the key technology areas defined in the CHIPS and Science Act and included in the U.S. Economic Development Administration (EDA) Tech Hubs program.

Despite COVID-induced setbacks continuing to keep some people out of offices and laboratories, new Business Enterprise Research and Development Survey (BERD) data reveals that domestic research and development (R&D) spending, although slowing, is still on an uptrend. From 2018 to 2019, business R&D spending increased by 11.8% (from approximately $441 billion to $492 billion), with new data showing a further increase of 9.1% from 2019 to 2020 ($492 billion to $538 billion).

The recently-passed CHIPS and Science Act included $54.2 billion in appropriations, largely for semiconductor manufacturing incentives ($39 billion) and R&D ($11 billion). The administration is releasing information about its planned distribution of funds. Recent resources include: a strategic plan from the U.S. Department of Commerce, the agency administering the bulk of the funding; a research recommendations report from the President’s Council of Advisors on Science and Technology (PCAST); and, a new CHIPS.gov website from Commerce.

The U.S. Securities and Exchange Commission (SEC) recently released guidance through its Division of Corporation Finance to address the risks of investing in companies that are based in or have a majority of their business operations in the People’s Republic of China. This action continues a trend of expanding regulation of investments related to China, and the SEC’s statement clarifies that the purpose of the disclosures is to protect investors from recently-enacted restrictions by the Chinese government on China-based companies in regard to raising capital from foreign investors. According to a report by PitchBook published earlier this year, venture capital investing in China was on pace to exceed $100 billion in 2021, with foreign investors participating in approximately one-quarter of these deals.

New York City and the state of Illinois have both made moves recently to shift more of their economies to clean energy. Mayor Bill de Blasio and the New York City Economic Development Corporation (NYCEDC) announced a 15-year, $191 million Offshore Wind Vision (OSW) plan to make New York City a leading destination for the offshore wind industry.  Last month, Illinois Gov. J.B. Pritzker signed sweeping legislation offering new incentives for the adoption of clean energy and aim to move it to 100 percent clean energy by 2050. And Massachusetts Gov. Charlie Baker is looking to use American Rescue Plan Act (ARPA) money to establish a clean energy investment fund.

Across the United States, universities’ endowments have seen a large return in their portfolios in the past year, according to a recent PitchBook report. This trend was most notable in well-known universities with large endowments. The University of North Carolina reported a 42.3 percent return, Duke University reported a 56 percent return, and Washington University in St. Louis reported a 65 percent return. These gains are largely attributed to their investments in alternative assets like venture capital and private equity.

The PitchBook-NVCA Venture Capital Monitor for the first half of 2021 reveals that the market is set to break a number of investing records, but strikingly, the record levels of investment activity are all being set by the later stages of investment. At the other end of the funnel, activity is increasing, but not at the same pace as the overall market.

“The Achilles Heel of Reputable VCs,” a recent paper by Nuri Ersahin et al., finds that the most successful venture capital (VC) funds make fewer and smaller investments in states after investment tax credits go into effect. These VCs also co-invest with fewer firms, are less likely to invest in “serial” entrepreneurs and experience fewer positive exits after the introduction of the tax credit.