venture capital

Early data from a number of sources indicates that the venture capital market continued its resuscitation from the 2008 crisis during the third quarter of 2013. CB Insights reports that 857 venture deals representing $7.2 billion were completed last quarter, which, by their data, would be the highest rate of dealflow since the dotcom era. Other sources report a similar number of deals, but find that some quarters in recent years have been more active. Initial public offerings (IPOs), mergers and acquisitions (M&As) and valuations have all risen over the last few quarters, though venture fundraising is down for the year, according to data from the National Venture Capital Association (NVCA) and Thomson Reuters.

The Nevada Office of Economic Development, with guidance and funding from the U.S. Treasury Department’s State Small Business Credit Initiative (SSBCI), has launched the Battle Born Venture Program. “Battle Born” is a state venture capital program that makes equity and equity-like investments in early stage, high-growth Nevada businesses. The fund will invest in a wide range of sectors that represent the economic base of the state, and returns on investment will be recycled back into the fund.  The Nevada program is the newest venture capital program established by the U.S. Department of the Treasury under the SSBCI with the intent of enhancing local capital infrastructure. As of this year, the U.S. Treasury has approved 47 state-run venture capital programs across 30 states. Read the announcement…

In the second quarter (Q2) of 2013, venture investment totaled $6.7 billion over 913 deals, according to the quarterly survey by PricewaterhouseCoopers (PWC) and the National Venture Capital Association (NVCA). Compared to the first quarter of 2013, the amount of venture capital investment increased 12 percent and the number of deals increased 2 percent. Although still well below venture capital investment highs in 2007, Q2 2013 had the largest total amount of investment in a year.

Both venture capital dollars invested and total deals declined in the first quarter of the year, according to the PricewaterhouseCoopers/National Venture Capital Association (NVCA) Moneytree survey. The capital-intensive life science and clean technology sectors were particularly hard hit, along with seed and early stage investments. Within the data, however, a number of bright spots remained for entrepreneurs seeking capital. Seed and early stage investments continue to comprise more than 50 percent of all deals and first-time fundings remain within a healthy range. New reports from the University of New Hampshire's Center for Venture Research (CVR) and the annual Halo Report also suggest that the angel investment market continues to grow at a modest rate.

In the January 2011 edition of the Harvard Business Review, Michael Porter and Mark Kramer called for a redesign of the existing business model and their role within society. Instead of simply embracing corporate responsibility and corporate giving, businesses should work to create shared value within their community by helping to support local clusters and institutions to address societal needs and issues. In the face of great uncertainty for the overall venture capital industry, it seems that some corporations might be heeding their advice. Over the last few years, there has been a rapid rise in the number of corporate-backed venture capital funds with long-term acquisition and absorption as the driving force. However, the lack of early stage capital in regions across the country also may be ushering in an era of public-private partnerships to create industry-led, locally focused venture capital funds.

Investing money from the state's pension fund, Colorado will partner with local CEOs and technology companies to create a $150 million VC fund to help get local tech startups off the ground, according to multiple news sources. The fund, expected to launch by summer, would be run by a consortium of business leaders who would contribute around $10 million each, while the state would be the largest LP, contributing money from pension funds, according to an article in TechCrunch. Colorado's fund would focus purely on tech and span all stages of funding, the article states. Read more...

Over the last month, Gov. Scott Walker has slowly rolled out a series of ambitious proposals ranging from $25 million for venture capital investment to $100 million for worker training and nearly $500 million in new state funds for public education. Together, these and other broad-ranging initiatives make up the $68 billion 2013-15 biennial budget unveiled in its entirety yesterday.

After dipping just under 50 percent in 2011, California reclaimed its spot as the site of a majority of U.S. venture capital investment last year, according to the National Venture Capital Association/PricewaterhouseCoopers Moneytree Survey. About 53 percent of all U.S. venture capital dollars were invested in California companies in 2012, the largest share captured by the state since the annual survey began in 1995. The total share of all venture dollars invested in the top five states also reached an all-time high last year, with California, Massachusetts, New York, Texas and Washington capturing 78.5 percent of all U.S. investment.

Innovation was a key term used in Gov. Andrew Cuomo's State of the State address and is referenced heavily throughout his economic development agenda for the upcoming year. The governor proposed creating innovation hot spots, an innovation network and innovation venture capital fund. Efforts would be focused on accelerating technology transfer and providing funds to attract startup companies. Cleantech investments and support for competitive university-based projects that emphasize economic impact also are a priority for the governor.

Clean Tech venture investments declined in the third quarter of 2012, according to the MoneyTree report released on Friday by PricewaterhouseCoopers (PWC) and the National Venture Capital Association (NVCA). The numbers reinforce the current trend of decreasing investment in clean tech companies and projects and the inherent challenges of VC backing in the sector. However, many are attributing this drop to a shift in the focus of clean tech investment by private and public entities rather than complete disenchantment in the promising sector.