Venture Capital News

Neurotechnology Revenues Reach $110 Billion Says New Report

Representatives of NeuroInsights, a neurotechnology market authority, announced the release of the industry's second annual comprehensive investment and business analysis of the global neurotechnology marketplace on April 19. In the report, NeuroInsights provides a unified, market-based framework to help investors, companies, and governments easily quantify opportunities, determine risks, and understand the dynamics of this rapidly changing market.

"The Neurotechnology Industry 2006 Report: Market Analysis and Strategic Investment Guide of the Global Neurological Disease and Psychiatric Illness Markets," is a 330-page report tracking developments at over 450 public and private companies involved in neurotech. The report includes competitive analysis and clinical trials by market segment for more than a dozen disorders, including Alzheimer's disease, addiction, anxiety, attention disorders, depression, epilepsy, hearing loss, insomnia, obesity, pain, Parkinson's, schizophrenia, stroke, and other brain-related illnesses.

The Neurotechnology Industry 2006 Report's findings include:

• Neurotech products generated revenues of $110 billion in 2005, with 10% growth. The three sectors contributed as follows: neuropharmaceuticals, with revenues of $93 billion and 7% growth; neurodevices, with revenues of $3.4 billion and 21% growth; and neurodiagnostics, with revenues of $13.5 billion and 11% growth.
• Venture capital investment in neurotech companies climbed 230% from 1999 to 2005, representing nearly $7.5 billion. Today, one-in-four VC dollars invested in life sciences goes to neurotechnology companies.
• NeuroInsights' Neurotech Index, an investment benchmark that measures the stock performance of 30 publicly traded neurotechnology companies, which was started December 31, 2003, was up 85%, as of March 31, 2006, compared to gains of 16% in both the S&P 500 and the NASDAQ Composite Index.
• Neurological disease and psychiatric illness represent the largest and fastest growing unmet medical market: over 1.5 billion people worldwide and 100 million individuals in North America alone.

Developments in the neurotechnology industry will be discussed at NeuroInsights' annual Neurotech Industry Investing and Business Conference to be held on May 18, 2006, at the Westin San Francisco in Millbrae, California. The market-defining conference will feature 40 neurotech executives and investors discussing the critical trends driving the development of new drugs, devices, and diagnostics for the brain and nervous system.

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Microsoft Spins Out a Wallop

Representatives of Microsoft Corp announced Wednesday the spinout of a new social networking technology, developed by Microsoft Research, to create a new Silicon Valley start-up, Wallop Inc. Wallop, whose aim is to deliver the next generation of social computing, is led by experienced entrepreneur and CEO Karl Jacob, with 30-year veteran Bay Partners providing Series A financing.

Microsoft IP Ventures will celebrate its one-year anniversary next month.

Launching later this year, Wallop solves the problems plaguing current social networking technologies and will introduce an entirely new way for consumers to express their individuality online. For example, today's social networks have difficulty enabling people to interact in a way similar to the way they would in the real world. Wallop tapped legendary Frog Design Inc to conceive a next-generation user interface enabling people to express themselves like never before. In addition, Wallop departs from the friend-of-a-friend model common in all social networks today and the root of many of their problems. Instead, Wallop developed a unique set of algorithms that respond to social interactions to automatically build and maintain a person's social network.

The dynamic IP Ventures program was launched in May 2005 to enable Microsoft to expedite new innovations from its multi-billion-dollar research and development investment into the marketplace and seed business development. Through IP Ventures, venture capitalists (VCs), entrepreneurs and small businesses have a unique access point to Microsoft innovations. The program is available globally and now offers more than 30 technologies. Microsoft expanded the IP Ventures program in January 2006 to include collaboration with governments and public-sector development organizations. The IP Ventures program is also closely integrated with Microsoft's Emerging Business Team to provide resources to the VC community.

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Peter Fenton Joins Benchmark Capital As General Partner

Representatives of Benchmark Capital, a leading early-stage high-technology venture capital firm, announced that Peter Fenton has joined the firm as a general partner.

Mr. Fenton is a seasoned entrepreneur, strategy consultant and venture investor.  He spent the last seven years at Accel Partners focusing on software and technology-enabled services investments, and led and managed Accel's investments in more than ten companies, including the successful acquisitions of JBoss and Wily Technology.

Prior to joining the venture capital community, Fenton was an early employee at Virage, a multimedia information retrieval company that went public on the NASDAQ in 2000.  Mr. Fenton also worked as a management consultant at Bain & Company in San Francisco, where he advised high-technology businesses in Silicon Valley on their product and business strategies.

Fenton's investments include Coremetrics, JBoss, Mendocino Software, Oak Pacific Interactive, Reactivity, Terracotta, Xensource, and Zimbra.  He earned his Bachelor of Arts and an M.B.A. from Stanford University.

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Angel Capital Education Foundation Names Jeffrey Sohl as Recipient of Hans Severiens Award

The Angel Capital Education Foundation (ACEF) has named Jeffrey E. Sohl, Director of the Center for Venture Research at the University of New Hampshire, as the recipient of the Hans Severiens Award. The Award recognizes individual accomplishments in the advancement of angel investing.

The award was presented at ACEF's 2006 annual North American Summit, which was attended by leaders of more than 120 angel groups from the United States and Canada, representing more than 5,000 individual angel investors - high net worth individuals who take equity stakes in startups, and by many representatives of the venture capital community.

In announcing the award, Marianne Hudson, executive director of ACEF and entrepreneurship director of the Ewing Marion Kauffman Foundation, sponsor of ACEF, said, "Over nearly two decades, Jeff has pioneered research into venture investing and has been unstinting in his support of angels and angel groups. Developing data about angels and their investments is critical to ensuring better understanding and decision-making in the field. He has truly advanced the legacy of Hans Severiens."

As Director of the Center for Venture Research at the Whittemore School of Business and Economics at the University of New Hampshire, Professor Sohl conducts research on the angel and venture capital market, analyzing trends in the market and providing timely analysis of market conditions to entrepreneurs, investors and public policy makers.

Professor Sohl's research interests are in early-stage equity financing for high growth ventures and his findings are reported extensively throughout the United States and Europe. He currently serves on the Advisory Board of the New Hampshire Community Loan Fund, the eCoast Technology Roundtable and MerchantBanc, and the Editorial Board for Venture Capital, Entrepreneurship Theory and Practice and Frontiers of Entrepreneurship Research. He also serves on the New Hampshire Governor's Advisory Committee on Capital Formation and is on the Board of Directors for NetworkNH.

Professor Sohl has presented his angel research in academic and practitioner forums in the United States, Europe and Asia, and in briefings for several government agencies and scholars from the United States, Europe, Scandinavia, Australia, Asia and Africa. For more information on the Sohl and the center's work, visit http://wsbe.unh.edu/cvr/.

The award is named after Hans Severiens, one of the fathers of angel investment organizations. Dr. Severiens founded Band of Angels in 1994 as one of the first angel investment groups in the United States. Dr. Severiens was also a founder of the Angel Capital Association, a companion organization to ACEF.

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National Venture Capital Association Launches US Competitiveness Initiative

On Thursday, representatives of The National Venture Capital Association (NVCA) announced MAGNET USA (Maximizing America's Growth for the Nation's Entrepreneurs and Technologists), an innovation leadership initiative aimed at strengthening America's competitive position in an increasingly global economy. Born of the belief that innovation is the key driver of US competitiveness, MAGNET USA embraces four priorities for continued leadership – a larger home-grown pool of mathematicians and scientists, the attraction and retention of the world's best and brightest talent, more robust basic research funding, and unfettered access to growth capital. MAGNET USA will support these priorities through public education programs, public affairs initiatives, focused political advocacy and thought leadership at the national and community levels.

Maintaining a culture of innovation in the US will undoubtedly require a larger home-grown pool of energized and creative mathematicians and scientists. The venture capital community is committed to communicating the opportunities afforded to math and science students in the United States as the VC industry was built by individuals with such backgrounds. MAGNET USA will include national communications programs and individual member involvement at the community level to increase the interest of K-12 students toward careers and future courses of study in mathematics and the sciences. The NVCA will also continue to advocate for legislation that enhances education in math and science for all students.

America has been the magnet for the world's best and brightest innovative minds for more than 300 years. Today, foreign nationals remain the unsung heroes of American innovation and entrepreneurship where they play a critical role in the founding and building of great US companies. Yet, due to economic and political changes worldwide, the US must work harder to attract and retain foreign innovators or risk having to import from abroad technology that our system was responsible for helping to develop. MAGNET USA will seek to quantify the positive impact of foreign born nationals on the US economy and tell the stories of immigrant innovators and their contributions to the quality of life in America. The NVCA will continue to support legislative efforts to ease restrictions on the participation of foreign born nationals in the US innovation economy.

Basic R&D must remain a priority for government agencies, educational institutions, and corporations. A precipitous drop in this area among corporations and weakened output on the part of the government and university sectors threatens to choke America's innovation pipeline. Recently, venture-backed companies have filled the research gap by serving as the de facto R&D arms for larger companies, which ultimately acquire them. However, venture capital can not alone fill this void. Through its advocacy efforts, the NVCA hopes to increase government funding for federal basic research programs at the National Sciences Foundation and the National Institute for Standards and Technology. The Association will also work in critical related areas of public policy such as patent reform and access to Small Business Innovative Research grants

The US capital markets system, which remains one of the most important competitive tools in attracting and nurturing innovation, must be protected from the ill-effects of over-regulation and over-taxation. For example, since the inception of the Sarbanes Oxley Law, it has been the NVCA's position that the law is the “right shape, but the wrong size”. Its requirements burden younger, smaller companies – the very innovators that are trying to make it to market – and make the US IPO market less attractive than overseas markets. The venture capital industry will continue to encourage the implementation of policies that strike the right balance of transparency and opportunity for all investors.

The National Venture Capital Association (NVCA) represents over 480 venture capital and private equity organizations. NVCA's mission is to foster the understanding of the importance of venture capital to the vitality of the U.S. and global economies, to stimulate the flow of equity capital to emerging growth companies by representing the public policy interests of the venture capital and private equity communities at all levels of government, to maintain high professional standards, facilitate networking opportunities and to provide research data and professional development for its members. For more information, visit www.nvca.org.