Author: Mark Boslet
Publisher: PEHub
Date: April 19, 2013

Venture capitalists began 2013 by pouring money into startups at the slowest pace in two years, suggesting a reset for an industry where dollars coming into new funds have trailed portfolio company investments for six years.

Investments in the first quarter came to $5.87 billion, down 6% from a year ago and down 12% from the fourth quarter, according to the MoneyTree Report. In all, 863 deals were funded, off 15% from the fourth quarter, according to the survey from the National Venture Capital Association, PricewaterhouseCoopers and peHUB publisher Thomson Reuters.

The slowing investment trend was evident in quarterly numbers from several other organizations this week, notably Dow Jones VentureSource and PitchBook. Together they show an industry pulling back as soft exits markets lead to a reduction in active investors and consolidation among firms. Read more here.

Author: Mark Boslet
Publisher: PEHub
Date: April 16, 2013

Angel investors continued to pay up for deals in 2012, though the median round size slipped slightly for the year, according to the Halo Report of angel group investment trends.

The median pre-money valuation for early stage seed companies remained steady at $2.5 million, compared with 2011, the report found. However, the median round size of all angel deals fell to $600,000 from $625,000 in 2011, according to the survey put together by the Angel Resources Institute, the Silicon Valley Bank and CB Insights.

The study suggests angels in the United States remain active, though they shifted dollars to mobile and telecom deals and away from healthcare companies last year. Internet companies receive about 27% of angel dollars.

Author: Mark Boslet
Publisher: PEHub
Date: March 7, 2013

Mark Heesen, the tireless head of the National Venture Capital Association for 14 years, announced on Thursday his intention to retire from his role as the nation’s top lobbyist for the venture capital industry.

In a press release, Heesen said he informed the NVCA board of his decision earlier this year and looked forward to spending time with his wife and family. He will remain in the job until a successor is named.

Affable and soft-spoken, Heesen helped steer the venture capital industry through difficult times following the burst of the Internet bubble and the consolidation that followed. On his watch, Congress passed the Jobs Act, smoothing the path a young company can follow to a public stock offering. Read more here.

Author: Mark Boslet
Publisher: PEHub
Date: January 18, 2013

Venture investing fell in 2012 for the first time in three years as global economic uncertainty combined with a soft fundraising environment to spark caution in the general partners.

U.S. investors poured money into software and Internet startups at levels nearly unseen in a decade, but scaled back funding for life sciences and cleantech companies at a significant pace due to regulatory hurdles and weak exit markets for green companies.

The restraint will probably continue this year. “It’s likely we’ll see fewer dollars invested in 2013,” predicted Mark Heesen, president of the National Venture Capital Association, on a conference call. “There will be fewer me-too deals.” Read more here.

Author: Mark Boslet
Publisher: PEHub
Date: November 1, 2012

Confidence over business conditions in Silicon Valley’s venture capital community rebounded slightly in the third quarter despite worries about stubbornly high private-company valuations, according to the Silicon Valley Venture Capitalist Confidence Index.

The index rose to 3.53 from 3.47 in the second quarter. It had slipped from 3.79 in the first quarter.

The index is calculated on a scale of 1 to 5 with 5 indicating high confidence and is based on interviews with 31 area venture capitalists. It is released by University of San Francisco Professor Mark Cannice. Read more here.

Author: Mark Boslet
Publisher: PEHub
Date: August 28, 2012

Venture dollars have shifted to early rounds from late-stage deals over the past several years. It is a shift that proved fastest in quick changing industry segments, such as the consumer Internet, and slowest in segments like semiconductor, which are less dynamic.

Until now, I have not seen a study with an industry-by-industry breakdown of the trend. The work came from Preqin and offers some useful detail. For instance, just 13% of “consumer discretionary” deals over the last four years were late stage transactions and just 15% of Internet fundings, the study found.

Meanwhile, 45% of semiconductor and electronics deals in the four years from 2009 to 2012 were late stage. And a third of transactions in cleantech and health care were, according to the study.  Read more here.

Author: Michael Greeley
Publisher: PEHub
Date: July 23, 2012

Last week the National Venture Capital Association (where I am on the Executive Committee) and Thomson Reuters announced the 2Q12 fundraising data for venture firms – don’t worry, you are excused if you did not see the results. Not pretty. The data has some potentially troubling implications for entrepreneurs, not just GP’s.

While the headline looked encouraging with $5.9BN raised this past quarter, which ironically compares very favorably to many of the recent quarters since the Great Recession started over four years ago, it is the details which are more disturbing. If you annualized last quarter’s pace you might conclude that the VC industry is back to raising around $25BN per year – which is about how much we as an industry invest each year. But as you can see in the chart below, the number of firms which raised capital (38) is very much a low water mark and most of the capital went to a small number of firms.

So why am I so disturbed by these results? Couple of high/low lights in the detailed data:

-Of the 38 firms which successfully raised new funds this past quarter, only five firms (NEA, IVP, Lightspeed, Kleiner, Mithril (Peter Thiel)) accounted for nearly 80% of the total dollars raised

-Of the top five funds raised, four were at least the ninth fund that firm had raised

Read more here.

Author: Joanna Glassner
Publisher: PEHub
Date: June 28, 2012

Overall, David Jones, a healthcare VC and self-described “recovering lawyer” is pleased with today’s Supreme Court ruling on of the healthcare reform bill.

It’s not the just the contents of the decision, which will let stand the controversial individual coverage mandate. It’s also the fact that the case is closed.

“The biggest value is not that they’re right, but that they’re final. Now we know what the law is and we can get on with our business,” says the Chrysalis Ventures managing director. Jones adds that he had expected the court would  uphold the individual mandate, but was somewhat surprised at the legal reasoning justices employed in the majority ruling.” Read more here.

Author: Joanna Glasner
Publisher: PE Hub
Date: May 31, 2012

It’s not often in the venture capital industry that the words “FDA regulation” and “good news” get used in the same sentence.

Yet, remarkably, that was the case this week when Congress approved legislation that secures funding for reviews and opens up some speedier pathways to approval for new drugs and medical devices.

Industry insiders were widely expecting a bill of some form to pass, as legislation for funding the Food & Drug Administration, which gets renewed every five years, was due for a vote this year. But the content of the legislation that did pass in the House this week and the Senate last week looks a bit more favorable to the venture industry than expected.

“One of the more favorable elements of this cycle was there was a recognition in the debate that the innovation community is struggling with the regulatory environment,” says Jonathan Leff, managing director in the biotechnology group at Warburg Pincus and a board member of the National Venture Capital Association. “There’s a recognition that some products are not being developed at all, and some are being developed but not getting to patients are fast as we would like them to.” Read more here.

Author: Gregory Roth
Publisher: PEHub
Date: March 14, 2012

It took more than six months to fill the shoes of Jim Treanor, who left last August as head of private equity for the Florida State Board of Administration, which manages $154 billion in state pension and emergency money. But fill them they did, naming Trent Webster, a 15-year veteran of the system, to the crucial post of senior investment officer, according to Buyouts, peHUB’s sister magazine. Working under Webster will be John Bradley, who was promoted to the newly created position of director of private equity. Bradley is an 11-year veteran of SBA. Both appointments became effective on March 1.

As of Dec. 31, Florida’s main $126 billion pension, the Florida Retirement System, had 4.6 percent of its assets, or $5.8 billion, in private equity. The policy target allocation to private equity is 5 percent. Read more here.