Amidst the talk of economic gloom and doom in D.C. this week, the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters, provided some encouragement for venture capitalists, innovators and entrepreneurs. Early Stage dollar investments rose to their highest level in 12 years, rising 7 percent in dollars and 8 percent in deals. In fact, Seed/Early stage deals accounted for 58 percent of total deal volume in Q3, a record percentage for a single quarter. (Full data can be accessed here.) These figures bode well for the future of innovation. Read more
One of the top priorities of the NVCA CFO Task Force is to engage the Financial Accounting Foundation (FAF), the parent organization to accounting policy-maker FASB, as it undertakes a post-implementation review (PIR) of the fair value measurement and reporting rules. This rule set is widely known by its original name, “Financial Accounting Statement 157” or simply “FAS 157.” NVCA CFO Task Force members have been working at multiple levels to encourage a thorough review of this standard, which became effective in 2008. Since then, annual audit costs and efforts have grown far beyond what we believe the policymakers intended. It is not clear how much of the issue for U.S. venture capital firms is (a) the application of the standard by some auditors, or (b) the standard itself. Regardless, NVCA members have reported escalating audit costs and team distraction. Thus, NVCA and other industry groups asked FAF to undertake this PIR. We hope it is a first step in getting necessary relief. Read more
Among the many bills packaged together in 2012 to form the JOBS Act was a measure that forced the Securities and Exchange Commission (SEC) to revisit its long-time ban on “general solicitation” – i.e. advertising – for private offerings. Although it has taken the SEC more than a year to craft final rules lifting the ban, those new rules took effect on Sept. 23, 2013.
Throughout the legislative and regulatory phase of this debate, NVCA has kept a finger on the pulse of member opinion regarding this issue, and has found little interest in using the new general solicitation regime. However, at its meeting in July of this year – the meeting at which the final rules were issued – the SEC asked for comment on additional proposed rules that deal with reporting requirements for firms that do generally solicit, as well as those that continue to operate under the “old” rules (no general solicitation.) Read more
Dear Members and Friends of NVCA:
As you all return from what has hopefully been a productive and rejuvenating summer, so too do we at the NVCA, with a robust and exciting agenda for the coming weeks and months. Today, the staff and I are gathered in Washington D.C. discussing our top priorities and strategies in the areas of policy, research, communications and membership. Today is officially my first day as President and CEO of the association, and I couldn’t be more enthusiastic about the promise that lies ahead. It is a privilege to lead an organization comprised of individuals and firms that fuel the innovation economy, drive job creation and company growth, and change the way in which we live and work for the better. Ours is a story worth telling – here in Washington D.C. – and across the country and I am looking forward to sharing that narrative with critical stakeholders and influencers who matter to the future of our ecosystem. Read more
In late June, Senate Finance Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) proposed jump-starting tax reform by starting with a “blank slate” that eliminates all tax expenditures – both corporate and individual – in the code. They then asked their Senate colleagues to formally weigh in on which expenditures or credits should be added back into the code, based on which provisions would help grow the economy or make the tax code fairer. Read more
Today the NVCA in partnership with DeSantis Breindel and Rooney & Associates released a study that, for the first time, looks at the influence of brand in the venture capital industry. The topic is one that is near and dear to my heart – and to the hearts of more than 100 members of the NVCA Strategic Communications (StratCom) Group, many who gathered last week in Santa Clara to talk about brand management, investor relations, public relations and other marketing and communications topics. The group previewed the results of the study – which is aptly called the Brand Influence Guide for the Venture Capital Industry or BIG: VC — and immediately understood the implications for their respective firms. Read more
It’s pretty clear from the most recent data that corporate venture capital (CVC) activity is on the upswing. The trend is no surprise given the visible engagement of this constituency in the industry and with NVCA. In 1H 2013, corporate VCs invested an estimated $1.38B in 303 deals. This activity is attributed to 107 corporate VC groups and represents a participation level of 16.7% of the deals done by the industry and 10.9% of the dollars. This percent of dollars is a post-bubble record. Read more
The Senate Energy and Natural Resources Committee held a hearing last week on the current state of investment in clean energy finance and discussed federal programs aimed at the development and deployment of new energy technologies. Chairman Ron Wyden (D-OR) and ranking member Lisa Murkowski (R-AK) both discussed the importance of ARPA-E, as well as the role of federal programs like Section 1703, the DOE loan guarantee program for “new or significantly improved” technologies and the ATVM program that provides direct loans to automakers. The successful early repayment of the Tesla loan was heralded as an example of how such a program can assist with the deployment of a new and groundbreaking energy technology. Read more
Today, NVCA Board Member and JumpStart Inc CEO Ray Leach testified before the House of Representatives Subcommittee on Capital Markets and Government Sponsored Enterprises at a Hearing on “Reducing Barriers to Capital Formation, Part II” Following the passage of the JOBS Act, the Subcommittee continues to identify additional legal, regulatory, and market impediments that are impacting capital formation, particularly for small and medium capitalized companies. The venture capital community was invited to give a perspective on the existing state of the capital markets for our companies. Read more
Late yesterday the Senate passed a comprehensive immigration proposal by a margin of 68 to 32, with 14 Republicans joining all of the Chamber’s Democrats in favor of the measure. For the venture industry and our entrepreneurs, as well as the broader high-tech and life science communities, the bill represents a critical recognition of the linkage between high-skilled immigration and broader U.S. economic competitiveness and job creation.
NVCA worked closely with Senators Bennet (D-CO), Shaheen (D-NH), Warner (D-VA) and Udall (D-CO) to clarify portions of the newly created INVEST visa for entrepreneurs as the Senate debated the broader bill. We’ll be reviewing the final details of the bill as passed by the Senate and will share further analysis in the coming days. But, we’re hopeful that the combination of increased access to green cards for those graduating from U.S. universities, the INVEST visa for entrepreneurs that want to start a company, and the increased number of H-1B visas available will create a smoother pathway for entrepreneurs than has been possible. Read more