Robert Creeden knows a little something about how to invest in early-stage companies. A former vice president at the Massachusetts Technology Development Corp. and a general partner at Egan-Managed Capital, Creeden has spent countless hours on due diligence for new ventures.
Venture Capital/Private Equity
The state of venture capital
Over the past year, I’ve described the dismal state of VC and the problems this industry has had raising new funds. Certainly, these issues have been widely reported and discussed elsewhere.
Does D.C. understand VC?
There’s been a flurry of activity in the wake of Treasury Secretary Timothy Geithner’s proposal to treat venture capital firms the same as hedge funds, by making them register as investment advisors with the SEC (see my original post).
The National Venture Capital Assn. response seems to be taking three forms: Reject new regulations, eliminate new requirements for smaller VC firms and limit additional information required by the SEC.
Former Interleukin Genetics CEO joins Third Rock Ventures
Philip Reilly will officially join Third Rock Ventures, LLC as a partner in the Boson-based venture capital firm that specializes in life science investing.
Reilly is the former CEO and chairman of the board at Interleukin Genetics Inc., a Waltham-based maker of genetics tests for personalized health care, where he served at the helm from 2000 to 2006.
Prior to his time at Interleukin, Reilly served as executive director of the Eunice Kennedy Shriver Center for Mental Retardation, Inc.
According to the firm, Reilly will focus on companies developing treatments for genetic disorders.
Medical device companies raise $766 million in VC deals during Q2
Medical device firms in the U.S. pulled in more than $766 million in venture-backed financing during the second quarter of 2009, according to a report from Dow Jones VentureSource.
In total, 79 financing deals for medical device companies were reported during the quarter.
The total financing represented a 41 percent increase from the $545 million invested in medical device firms during the first quarter. However, overall deal flow was off by 26 percent from the same period last year on a dollar-for-dollar basis.
During the second quarter of 2008, medical device firms raised $1.04 billion on 77 financing rounds.
U.S. House boosts SBIR grant awards
A bill re-authorizing the Small Business Administration’s seed grant program for start-ups, which significantly boosts the amount of the awards but decreases their number (and allows venture capital backing of grantees) passed 386-41 in the U.S. House of Representatives yesterday.
The bill, HR 2965, would increase the amount of Phase 1 Small Business Innovation Research grants to $250,000 and push SBIR Phase 2 grants to $2 million (Phase 1 grants are now $100,000; Phase 2 grants are $750,000).
Yogi Berra was right
In a follow-up to an ongoing saga in Washington, the House and Senate are considering several bills which are miles apart in their treatment of whether VC-backed companies should be eligible for SBIR funds. Although I’m not a legal expert, I thought that it might be interesting to break them down in order to better understand them.
Good news balanced out the bad at the XSITE 2009 conference
At the recent Xconomy Summit on Innovation, Technology, and Entrepreneurship, the tag line was “The recovery starts here.” And for the day, for some 400-plus attendees, the recovery did in fact feel like it had started.
SBIR grants and venture capital
The controversy over whether small firms with VC funding (resulting in more than 50 percent ownership) should be able to apply for government funding through the Small Business Administration has received much press lately. Non-dilutive financing can be an important part of fundraising for start-ups, but should the Small Business Innovation Research door be shut once a company gets institutional financing?
SBIR grants provide non-dilutive funding at levels ranging from about $100,000 to $1 million. VCs would like their portfolio companies to be able to seek this sort of funding if it can delay or eliminate future rounds of financing, but some feel that SBIR money should go only to those who are truly in boot-strap mode.
The doctor will tweet you now
Virtual health
Most Americans use the interwebs to shape their decisions about personal health care, according to a Pew Research poll that says 61 percent of our fellow citizens regularly check the Web for information on personal health.
That’s nearly twice the number of people who use the intertubes to contact their insurance providers and slightly more than those who use the Internet as a research tool.
Why can’t I get funded?
Winning a business plan contest and getting funded are not exactly the same thing. Based my experience at Excel Medical Ventures, where over the course of a year I examined nearly 100 executive summaries and business plans (of which Excel funded only a couple).
Here are seven common reasons companies fail to land funding, based on my observations at Excel (of course, often the reasoning behind the decision was more subtle; if you got a “no” from Excel, don’t assume your business plan necessarily has one of the following issues).
1. A solution looking for a problem