In today’s age of social media success stories, there is something superficially interesting about crowdfunding as a high-level idea. There has certainly been no shortage of attention to crowdfunding in the press and from business people. But in looking at the new JOBS Act exemption for crowdfunding, I see lots of reasons to avoid using it. While this list could be expanded – and will need to be revised as the SEC adopts rules to implement the new exemption – to get things started I offer up these ten reasons to avoid crowdfunding.
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Venture Capital Fundraising and Investing – Q1 2012
The National Venture Capital Assocation (NVCA) recently released information regarding Q1 2012 VC fundraising and investment amounts. They note that in the first quarter of the year, 42 venture funds raised a total of $4.9 billion while venture funds invested $5.8 billion in 758 deals in the same period. You can find additional data, including details broken out by geographic regions, on the NVCA site here.
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Venture Capital Census 2011
The 2011 Venture Census results were released this week by the National Venture Capital Association (NVCA) and Dow Jones VentureSource. This survey, first conducted in 2008, analyzes the demographics of venture capital professionals in the United States. Although there was a small increase in ethnic diversity among current venture capitalists (an increase from 12 percent in 2008 to 13 percent in 2011), the number of women investor (non-administrative) professionals decreased from 14 percent in 2008 to 11 percent in 2011 while women administrative professionals accounted for 62
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Super Committee Failure may mean no Changes to Carried Interest in Near-Term
With the failure of the Congressional Supercommittee to reach agreement by its deadline, some $1.2 trillion in automatic discretionary defense and non-defense federal spending cuts are set to become effective January 1, 2013 (although it remains to be seen what will occur in the intervening year). One venture capital-related aspect of the failure to reach agreement is that there will be no action taken on changing taxation of carried interest for calendar year 2011, and likely not for 2012. Mark Heesen, President of the National Venture Capital Association (NVCA) has
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Mark Suster: Who to Hire after Closing your Early Stage Financing
Former entrepreneur and current venture capitalist Mark Suster has an interesting post on his blog “Both Sides of the Table” about his hiring suggestion to early stage companies. His “ideal team” at the seed or Series A round (assuming 6 people) is made up of a CEO who doubles as head of product management and 5 engineers. That’s it, no one else. However, his recommendation to startups about who they should hire after they have a product built and shipped and have raised that first $2-3 million is
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Emerging Company & Venture Capital Newsletter
CONTRIBUTED BY
Megan Muir
DLA Piper LLP (US) recently distributed an electronic newsletter “Emerging Growth and Venture Capital News” containing articles regarding certain avoidable expensive employment-related mistakes by startups, updated federal rules governing investment advisers, cloud computing, and valuations in the context of venture capital financings. The newsletter also has a list of some representative emerging company and VC transactions recently completed by DLA Piper attorneys. If you would like to be added to DLA Piper’s e-mail distribution lists for news related to venture capital funds
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Venture Capital Returns Looking Up
CONTRIBUTED BY
Megan Muir
The National Venture Capital Association (NVCA) and Cambridge Associates LLC have released results of their venture capital fund performance study showing some positive signs, as summarized in this NVCA press release. Some details regarding returns over time are available here: NVCA Q2 2011 VC Performance and the entire report can be downloaded here. As noted in the report, Q2 2011 is the first quarter since Q3 2009 in which the 10-year returns have been positive.
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Venture Investing Up for Q3 2011 – Dow Jones VentureSource
CONTRIBUTED BY
Megan Muir
Today Dow Jones VentureSource reported that venture capital firms invested $8.4 billion in Q3 2011, 29% more than in Q3 2010. Additionally, the total of 765 deals is an 8% increase over the third quarter of 2010.
Jessica Canning, global research director for Dow Jones VentureSource, noted that:
Venture investment rose in the third quarter, putting the industry on pace to near pre-recession investment levels by the end of the year. While it’s unclear how long venture capitalists can continue at this pace given the weak
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Rapping VCs
CONTRIBUTED BY
Megan Muir
If I was not already a huge fan of Foundry Group, this video (posted on Geekwire last week – thank you John Cook!) would have put me over the edge. They had me the second I saw the suits.
Last week Foundry Group released “I’m a VC”, with more than a nod to Saturday Night Live’s Digital Shorts. Jason Mendelson wrote, directed and sang, together with his fellow Foundry partners, Brad Feld, Seth Levine, and Ryan McIntyre,
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Updated NVCA model documents for VC investments
The National Venture Capital Association (NVCA) recently released their updated model legal documents for venture capital investments, which can be found here. The model documents were revised to include some new provisions to reflect recent Delaware Chancery Court decisions and the evolution of other terms.
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