Venture Capital : In The News

Fast Company writes about how First Round Capital has changed the way VC firms are run.

One example is that they introduced a program where their founders can pool together shares from their company and exchange them for a small portfolio of other First Round Capital companies. I'm a huge fan of this innovation.

What people don't know is how First Round got started and often people know less about the amazing background of one of its co-founders, Howard Morgan (everyone tends to know Josh Kopelman as one of the highest profile players in our industry overall).

Source: Fast Company
Read the full story here.

Philadelphia's Osage University Partners has set up a fund to provide profit to schools where initial research is done, according to The New York Times.

THERE are a lot of smart people in universities. Some may even be geniuses. Many of them are certainly good at inventing technologies that will change our lives.

But for the most part, universities aren't particularly adept at extracting the full measure of profit from all those innovations. While university technology transfer offices routinely license the intellectual property developed on campus, the schools themselves often aren't very nimble at retaining large stakes in the start-ups that exploit that property.

Source: The New York Times
Read the full story here.

Philadelphia's DreamIt Ventures opens a satellite office in New York, reports TechCrunch.

The program will run from mid-May to mid-August this year. Applicants to DreamIt Ventures' NYC program will be reviewed on a rolling basis with an early decision deadline of February 28, 2011 and a final deadline of March 16, 2011, according to the accelerator's site. DreamIt has "Hacker" and "Strategist" tracks where individuals not yet affiliated with a company can apply to potentially join a portfolio startup, on either the technical or business front.

DreamIt Ventures plans to admit ten to fifteen companies into its NYC program, five of which will be digital education businesses. That's the same setup as the Philly program. In both cities, DreamIt Ventures partners with Startl--an organization funded by the MacArthur, Hewlett and Gates Foundations--to help five, digital education startups build their businesses.

Original source: TechCrunch
Read the full story here.

Rapidly ascending Viridity Energy last week drew a series B investment of $14 million from Braemar Energy Ventures and Intel Capital, reports GreenTech.

Founded in 2008, Viridity Energy offers "distributed demand management software, systems and services," that can turn very energy-consuming businesses into producers and sellers of power back to the grid. Viridity's technology can also help companies get paid to control and reduce their energy consumption.

Viridity Energy's chief executive and president Audrey Zibelman said on Tuesday:

"We're moving from an (energy) industry dominated by large-scale generation where customers are passive to one where customers are active in what they consume, and what they produce. First, there were personal computers. Now we're going to personal energy."

Original source: GreenTech
Read the full story here.

Managing partner Josh Kopelman writes about the evolution of Philadelphia-rooted First Round Capital, which successfully closed on its third fund last week, in Business Insider.

Over the years, First Round Capital has evolved. We've become one of the most active seed-stage investors with the most visited VC website in the country. However, we have not changed our investment style or strategy. We still fund Powerpoints (though more Keynotes these days). We still fund pre-launch, pre-revenue ideas And, despite our growth, we have not really increased our average initial investment size. We still make investments as low as $50K. Our average initial investment size is still under $500K -- and we have never made an initial investment larger than $1M.

Over the last several years, First Round Capital has also grown our geographic footprint. Our investment team has grown from Howard and myself working in Philadelphia to an eight-person investment team working out of three cities. Our San Francisco office, led by my partner Rob Hayes, continues to be our most active office � with over half of our portfolio based in California. Rob is joined by Kent Goldman and with Christine's recent departure for Intel we are seeking to grow our west-coast presence by adding a SF-based Associate. (If you're interested in the position, please reach out to Rob Hayes with why you think you might be a good fit).

Original source: Business Insider
Read the full story here.

Our sister publication Keystone Edge writes about Malvern biopharmacetucial startup Recro Pharma, among the new breed of companies presenting at the annual Biotech 2010 conference in Philadelphia.

There's no denying that the down economy has been rough for the life sciences sector. When industry news website FiercePharma listed the 10 companies that laid off the most workers in 2009, seven firms on the list had a presence in the Keystone State. But Chris Molineaux, president of the statewide advocacy group Pennsylvania Bio that is hosting its annual Biotech 2010 event next week, says the upheaval of Big Pharma represents a new model for the industry.

No longer will huge companies try to do every task under one corporate banner, Molineaux says. Already, it's increasingly common to outsource tasks like information technology, financing and the administrative aspects of clinical drug trials. Researchers remain in-house or come to a company through an acquisition.

"It's going to be more of a patchwork. We're not going to have 15 large pharmaceutical companies," Molineaux says. "We'll probably have 50 medium-sized pharmaceutical companies and dozens of these smaller contractors."

Original source: Keystone Edge
Read the full story here.

Founder of the startup accelerator DreamIt Ventures, Michael Levinson talked to Inc. magazine about best practices for pitching angel investors.

An angel investor or early stage venture capitalist will look at 1) is the business idea simple enough for me to understand and buy into, 2) does it solve a problem or meet a need, 3) is it a big enough market and customer base for the idea, and 4) does the entrepreneur have the right people on the team to pull it off, Levinson explains.

A PowerPoint presentation using about 12 slides is standard, particularly with a tech product. If you have a working prototype, show it to investors so they can see how it could actually work. If you can demonstrate your product or hand out product samples that's a plus. Discuss actual sales or anticipated orders. Also, this is where your research on testing or proving your business concept comes into play, says Levinson.

Include results from surveys, focus groups, and product tests to show any customer insight you have gained.

Original source: Inc.
Read the full story here.

The Philadelphia Inquirer reports on two online news publications that have launched recently, including yours truly.

As the market for news fragments, new models for journalism are emerging. Two of those experiments, Flying Kite and Patch, launched in Philadelphia last month.

"This is a fresh way to get fresh content about all the innovative things happening in our city," said Danielle Cohn, (Philadelphia Convention and Visitors) bureau spokeswoman.

Original source: The Philadelphia Inquirer
Read the full story here.