This post originally appeared at HuffingtonPost, and is co-authored by Brad Feld The U.S. Supreme Court just blinked. In the landmark Bilski v. Kappos decision, the Court had a chance to right a patent wrong. It didn't. Instead, in a cautious and internally contradictory decision, it further fuzzified the mess that is the U.S. patent system -- and it will have sad consequences for innovation in this country. It was terrible timing for a loss of legal nerve. For all the attention given this case's decision -- and some patent law blogs had turned its release into something like the final episode of LOST, complete with countdown -- the underlying case was easily decided. It had to do with whether the plaintiff could patent a method for assessing and trading energy risk. This sort of vague nonsense is an easy lob to the high court, with Justices applauding one another for agreeing that trading energy risk shouldn't be patented.
For better or worse, Micro-VC’s and Super Angels seem to be the new intriguing sub-segment within Venture Capital. Funds like First Round Capital, Floodgate, Lowercase, Founder Collective, IA Venture Partners, Harrison Metal, and Felicis and individuals like Ron Conway, Keith Rabois and others show up multiple times a day on TechCrunch and seem to be behind every high profile investment in the internet world. How did this happen? Are these groups just a new fad or is a fundamental and long lasting change happening in the early-stage financing eco-system? Here’s a quick primer on this new category of early-stage investor:
So there I was, listening to the infectiously giddy (and, indeed, bittersweet) Katy Perry tune “Waking Up In Vegas.” Now, I realize that I’m probably more than twice the age of the typical Katy Perry listener, but the ditty struck a chord. There’s a great moment about halfway through the song in which Katy seems to be at the bottom of her stack of chips, and she urges her gambling partner to “Send out an S.O.S.” But, then, as she pauses to inhale, the momentary silence is filled with an ethereal, angelic sigh, perhaps portending a change of luck. With the wheel of fortune finally spinning her way, she changes her tune and exhorts her sidekick with renewed optimism: “and get some cash out!” Maybe it was because I was driving back from an annual meeting during which I’d heard some GPs describe a great year after a period of difficulty, but the first time I heard the song on the radio I thought it was a must-add to my mental soundtrack of the VC world. After all, the way some people think about venture and its potential for discontinuous outcomes (and punishing loss rates) makes it akin to gambling; I’ve always thought of Curtis Sharp as the patron saint of some venture investors, no? Anyhow, as I thought about it a bit more, I re-envisioned the song as a lament from entrepreneurs to venture capitalists who sit on their Boards. Spoofing the song, I’ve replaced Vegas with Woodside, a tony Silicon Valley hamlet that’s home to many VCs and entrepreneurs. Keeping true to the original, there’s little rhyme and funky meter, but here it is for your enjoyment:
With high-tech companies needing less capital due to advancements in technology, startup development methodology and online marketing, we have seen a Renaissance in angel investing. While angel investors participate in part for the excitement of engaging with entrepreneurs and placing bets on the future, they also do it for the expectation of significant financial returns. […]
With the attractiveness and increasing popularity of marketplaces for pre-IPO stock, like SecondMarket, there is growing debate over how transactions in private company stock impact the value of company securities for 409A purposes. At the core of these discussions is the question of whether a transaction occurring in a private marketplace is a strong indication […]
The following post was authored by Cheresh Casinelli and Derek Dowsett, partners at the accounting firm of Moss Adams So far 2010 appears to be one of the more interesting financial years in recent memory. It’s certainly not as glum as 2009, but it’s not as ebullient as the pre-meltdown era either. In terms of merger […]
A cry for more VC bloggers is crazy, right? There are already 150 or so who are actively blogging – which I estimate means 15% of all active VCs serve as bloggers. Yet, we need more. We need the life science and cleantech VCs to start blogging. I was leafing through the NVCA’s 2010 Yearbook […]
VCs need to invest in more capital-light Internet companies. No, VCs should be investing larger sums in capital-heavy cleantech companies. Wait, VCs need to evolve and re-invent themselves. Scratch that—VCs need to get “back to basics,” working their craft at a wooden hobby bench like Santa’s little helpers. Thin the herd: Ship half of the VCs to Algeria to ensure success for the rest... Popular prescriptions to cure such VC market schizophrenia almost always include at least one glaring omission: Context. So many discussions of venture's ails consider the industry in isolation, exclusively from the practitioner’s perspective. It’s as if an individual investor reviewed their brokerage statements over the past two decades and concluded: “I sure was a better stock picker in the late 1990s.” The truth is VC’s success is connected and correlated to global financial markets and flows of institutional capital.
Facebook COO Sheryl Sandberg gave a speech recently at the Nielson Consumer 360 Conference, arguing that the dominance of email was under threat by the explosion of both competing and complementary technologies likes SMS and social networking communications tools. This challenge to email’s pre-eminence, Ms. Sandberg added, was most apparent among the young. Now, the occasion of the COO of a leading social networking company sounding the death knell of email should be a shock to no one, but a closer examination of her comments brings into relief some concerns I have long had about how some in the tech community overplay the implications of tech trends and shifting user behavior, particularly among the young.
As Congress battles over the shape of financial reform, will it address the lack of a properly functioning market structure? The market for underwritten IPOs, given its current structure, is closed to 80% of the companies that need it. In fact, since 2001 the U.S. has averaged only 126 IPOs per year, with only 38 in 2008 and 61 in 2009 — this compared to the headiness of 1991–2000 with averages of 530 IPOs per year. Companies can no longer rely on the U.S. capital markets for an infusion of capital, nor can they turn to credit-strapped banks. The result? Companies are unable to expand and grow — they are unable to innovate and compete — so they are left to wither and die, contributing to today’s high unemployment rate. During the time since our first studies were released, Grant Thornton has received a number of intriguing questions. This post (and the report posted after the jump) addresses them and presents updated data through December 2009, while examining the continued lack of a properly functioning IPO and small cap stock market. The systemic failure of the U.S. capital markets to support healthy IPO and robust small cap markets inhibits our economy’s ability to innovate, create jobs and grow. At a time when America is struggling with double-digit unemployment, the failure of the U.S. capital markets structure can no longer be ignored.