Law & Entrepreneurship News

Archives: Venture Capital

New Wisconsin Venture Capital Fund Completes Initial Fundraising

Kegonsa Capital Partners' "Kegonsa Seed Fund I" has successfully completed raising $10 million from 41 individual investors, according to the Capital Times of Madison.  "The fund is the first new Wisconsin-based venture capital fund in more than 10 years that was not initiated by a capital commitment by the State of Wisconsin Investment Board," said Kenneth U. Johnson, managing director of Kegonsa Capital Partners.  The fund, made up completely of individual investors who are primarily from Wisconsin, will make initial investments in Midwestern start-ups of $250,000 to $500,000.  Offers have already been made to two Wisconsin ventures.

Raise Money for Your Startup

If you aren't getting any bites from the Angel and VC world, here's a way to raise $50 million for your start-up (or to buy yourself an island, for that matter).  Space.com has posted information on how to win $50 million.  Of course, the catch is you've got to build a spacecraft capable of taking a crew of no fewer than five people to an altitude of 400 kilometers and complete two orbits of the Earth at that altitude.

Sort of reminds me of Steve Martin's old routine on how you could be a millionaire and never have to pay taxes.

Product Release Schedules

BeyondVC has a interesting article about how his firm prefers to see start-up companies manage product delivery schedules.  The firm prefers date driven schedules instead of content driven schedules.  After working in development and management of software products for 15 years I observed that this approach has become the industry best practice for nearly all types of software development projects.

Date driven release scheduling has a number of advantages:  it forces the project team to bite off a manageable chunk of requirements for the release, gives both the project team and users a predictable release schedule, and makes the projects easier to manage. For a primer on date-driven releases in software development, I suggest Rapid Development by Steve McConnell.

Upcoming Wisconsin Life Sciences and Venture Conference Showcases State's Medical Start-ups

The 20th annual Wisconsin Life Sciences and Venture Conference will take place this Tuesday and Wednesday at Monona Terrace in Madison, according to wisbusiness.com.  The conference is an opportunity for companies to attempt to attract investors and present research projects to outsiders that may become cures for diseases in the future.  This year all 21 companies that are making presentations are connected to drug therapy in some way.  In the first ten years 8 percent of participating companies attracted investors; that figure rose to 21 percent in the last decade. 

Tips on Choosing a VC

Steve Hall, the man behind Northwest VC, has an interesting post on NW Venture Voice about what to consider when choosing a VC. Hall stresses the importance of not using a shotgun approach to targeting VCs, but instead focusing on identifying a specific partner with a specific fund that is actively targeting the space your company is in. If the VC isn't on the same page with where the entrepreneur thinks the sector is going or how the entrepreneur is planning to address a need in the sector the conversation can derail before it even begins.

Q2 2004 VC Returns Outperform NASDAQ and S&P 500

Thomson Financial and the National Venture Capital Association report that performance of VC investments in the second quarter of 2004 showed double-digit returns for 5-, 10-, and 20-year horizons.

The five-, ten- and twenty-year horizon returns for venture capital in the quarter were 14.4%, 26.7%, and 15.6%, respectively. The second quarter reflected an improved exit market for venture-backed companies. During the quarter, there were 29 IPO's and 86 acquisitions.

Strategic Partnership with Microsoft Garners Interest from VCs

Former Amazon.com executive builds new technology offering and, with the help of a partnership with Microsoft’s eHome Division, is attracting attention from the VC community.

The Seattle Post-Intelligencer reports that Scott Lipsky, a former executive of Amazon.com, has started a new venture in Seattle that delivers high-quality images of artwork to flat screen televisions. The company, Beon Media, originally targeted business users who pay $195 to access four galleries of images, presumably to display in rotation on flat screen monitors in their lobby or throughout their offices.

Looking to penetrate the home market, Lipsky contacted Microsoft’s eHome Division and the service will now be an offering of Windows Media Center, at a much lower price. The company has now seen a lot of interest from VCs and is planning to start its first institutional financing efforts this fall.

More Rational Venture Capital Valuations

Levensohn Venture Partners recently stated that valuations for private companies are returning from the "boom/bust" model to "more rational pricing." Levensohn told the audience at the New York Private Equity Analyst conference that this is good news for technology and emerging growth entrepreneurs and investors because it will lead to continuing investments in a more attractive VC market.

Venture Capital Spending on Rise in Wisconsin

Wisconsin companies raised $33 million in venture capital in the first six months of 2004, compared with $44 million in all of 2004, according to the MoneyTree Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association, the Milwaukee Journal Sentinel reports. This mirrors a nationwide trend observed by Venture Capital Editor Kenny Hoeschen on September 2.

Signs of Life in the Venture Capital Industry

The New York Times reported today that, four years after the Internet bubble burst, the VC industry is stirring. Investments by VC firms rose by 22% in Q2 of 2004. The forecast for all of 2004 is $20 billion -- an 11% increase from 2003 but still far from the halcyon days of the Internet boom when, in 1999, VC investments reached $108 billion.
[via A VC]

Going Public Getting Harder

The San Francisco Chronicle reports that a growing number of entrepreneurs, faced with spiraling accounting costs and stiffer corporate governance rules, are choosing to keep their startups private or sell them to a rival rather than take them public.

The article tells the story of one entrepreneur who decided to sell his company, Tickle Inc., instead of going through the IPO process. The decision to go public has changed because the costs of being a public company have more than doubled in the last three years, according to securities attorneys, venture capitalists and startup CEOs. Such decisions have become more challenging in the last two years as the costs of being public have gone up to between $2 million and $3 million. The bulk of the increase is the higher expenses for auditing and other accounting services required by the Sarbanes-Oxley Act of 2002.

Venture Capital Survey Available

The law firm of Fish & Richardson has published its Q2 '04 Multimarket Venture Capital Survey. The survey is based on data from 156 publicly reported venture capital financings.

Wisconsin Life Sciences and Venture Conference Scheduled for November in Madison

For the past 20 years, the Wisconsin Life Sciences and Venture Conference has provided opportunities for selected Wisconsin and Upper Midwest companies to make presentations and meet with investors. Companies which previously presented at the conference and eventually went public include Third Wave Technologies and Sonic Foundry.

The next Wisconsin Life Sciences and Venture Conference will be held Nov. 16-17, 2004 in Madison, Wisconsin.

WisBusiness.com reports that, over the 20 years the conference has been held, 196 companies have presented at the conference. Of those 196, four have gone public and nearly half the companies that presented prior to 1993 have been dissolved. However, of those that presented after 1993, only 19 percent have ceased to exist.