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| Venture Capital Update:
Venture Capital in Uncertain Times: Observations and Predictions
A report by SVB Capital |
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Today's news of the shrinking economy, falling stock markets and Wall Street failures has many investors uncertain where to turn. While some investors had believed that venture capital would be immune to the financial crisis, venture capitalists are now calling on portfolio companies to gear up for bad times. In this article, SVB Capital provides our observations of how the current macroeconomic trends have affected venture capital and our predictions of how they will shape the asset class in the near future.
http://www.svb.com/pdfs/vc_2008_nov.pdf
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Latest MVCA CEO Placement award recognizes West Michigan firms
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The MVCA awarded Kalamazoo-based Metabolic Solutions Development Co. (MSDC) and its venture investors, Kalamazoo's Southwest Michigan First (SWMF) Life Science Fund and Grand Rapids' Hopen Therapeutics, a $200,000 MVCA CEO Placement loan award. The award, along with MSDC's match component, will be used to fund CEO recruiting activities, as well as pay part of the new hire's first year salary.
MSDC was founded in 2006 by Jerry Colca, PhD and Rolf Kletzien, PhD to develop innovative therapeutics to treat Type II diabetes and the progressive cardiovascular morbidity and mortality associated with cardiometabolic syndrome. Prior to founding MSDC, Drs. Colca and Kletzien spent a significant part of their pharmaceutical careers at the Upjohn, Pharmacia and Pfizer companies.
Mark Olesnavage, President of Hopen Therapeutircs, is interim CEO of MSDC. "An early-stage company like MSDC can be hard-pressed when it comes to moving limited funding dollars away from product development toward the significant out-of-pocket costs associated with a CEO search and initial compensation package," Olesnavage commented. "We feel very fortunate to have received the MVCA award, as it provides the means to attract a proven life science leader to MSDC. The right candidate will complement our already-accomplished team and continue to implement the strategic moves necessary to meet our longer term goals."
The company anticipates a Series C fundraising round and feels commitment to securing a permanent CEO is important to the success of that endeavor.
"The Southwest Michigan First Life Science Fund and its General Partner, Southwest Michigan First, are confident that the clinical results produced by Metabolic Solutions Development Co. will make a significant contribution to the health and welfare of millions of patients," said Ron Kitchens, Chief Executive Officer of Southwest Michigan First. "The award from the MVCA to assist the company in its recruitment of a CEO reinforces the fact that the life science industry in Michigan is flourishing. Together with the MVCA, we hope to realize the promise of this exciting technology and its clinical relevance."
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EDF Ventures' CEO search goes
national with help of MVCA award
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MVCA member firm EDF Ventures knew it would be challenging
to find the right CEO for its portfolio company Lycera, an Ann Arbor-based
pre-clinical stage pharmaceutical company formed to license technology
pioneered at the University of Michigan.
And it had nothing to do with the demanding job description. "Since virtually all of Lycera's seed
funding was dedicated to advancing the company's science toward a product, without
the MVCA our search would have been limited to networking," reflected Mary
Campbell, managing director of EDF Ventures. "While networking can be
successful, by definition, the universe is limited. We wanted to do
a national search and have many good choices."
Using the $150,000 MVCA CEO Placement loan award and its own
match component, EDF Ventures hired a Boston-based recruiting firm to supply
top-tier candidates culled from a national search. Lycera, a longtime EDF Ventures-backed
company, chose Dr. Mitchell Fink. Most
recently, Dr. Fink has been the CEO of Logical Therapeutics, a
venture-backed pharmaceutical company which he co-founded. Prior to Logical,
Dr. Fink founded Critical Therapeutics, also venture-backed, where he was
a member of the Board of Directors and a Scientific Advisor.
Dr. Fink is a world-renowned scientist whose expertise has been
long recognized and admired by Lycera founder Gary Glick, PhD. Dr. Glick, Werner E. Bachmann Collegiate
Professor of Chemistry at U-M and Lycera's CEO until the recruitment of Dr.
Fink, will become the company's Chief Scientific Officer.
Campbell continued: "The
MVCA support was critical to Lycera's ability to launch a national search to
find the best CEO available. The search met with success and Dr. Fink is now on
board. Since finding a CEO was a condition of bringing together a very
attractive series A round of financing, the MVCA indirectly helped the company's
financing prospects as well." |
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Annual member awards dinner
held Nov. 3
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The Michigan Venture
Capital Association (MVCA) gathered November 3 to honor member venture firms
and the companies they have backed.
Incoming MVCA Chairman Mina Sooch of Apjohn Ventures opened the meeting
by setting goals for the organization and reviewing how far the Michigan venture
community has come in six years. "In
2002, we were about 30th in terms of VC activity by state, and now
we're about 20th. I'd like to
see us in the Top 15 by 2010."
Outgoing MVCA Chairman
Mary Campbell of EDF Ventures introduced the "Above and Beyond" Award. She suggested that although it is within our
Midwestern spirit to volunteer time, the award's recipients Tom Porter, Michael Staebler and Donald
Walker had given both time and talent as members of the Venture Upstart
Selection Committee. "These men have put
in many hours at the conference table and made wonderful choices, selecting
outstanding recipients for the grant money the MEDC placed in the hands of the
MVCA."
Exceptional exits of
venture-backed investments were recognized as "Venture Capital Exits of the
Year." Joining Sircon Corp., who was acquired in July by Vertafore, was a
last-minute entry honoring HealthMedia's
October purchase by Johnson & Johnson.
Donald Walker, an investor in Sircon through his company Arbor Partners, identified Sircon as
one of the first companies in Michigan
backed by multiple in-state venture firms, including Avalon Investments, Blue
Chip Venture Company, and EDF
Ventures. "It's important we had an
exit, but even more importantly, 130-plus jobs are remaining in Michigan," Walker
commented. HealthMedia, a spin-out of
behavioral science research conducted at the University of Michigan,
represents "a story of perseverance", according to Avalon Investment's Chris Rizik.
Other HealthMedia investors included Arboretum Ventures and Chrysalis
Ventures.
A new award honoring a
venture-backed company who reaches $100 million in revenue or employs 100
people, or a venture firm that raises a $100 million fund was announced. The 2008 "100" Award honored Neogen Corp. of Lansing for reaching $100 million in revenues
in 2008. Lon Bohannon, President and COO
of Neogen, accepted the award and said "We've been profitable for 62
consecutive quarters, but what makes our employees most proud is the important
food safety work we do around the world."
MVCA Entrepreneur of the
Year Roger Newton, Ph.D. and
Founder, President and CEO of venture-backed Esperion Therapeutics of Ann Arbor delivered the keynote address. He relayed the importance of finding
something in which you are interested and recognizing what you are not. "I realized early on I didn't like caring for
sick people, but I was passionate about finding drug therapies for them. That made all the difference to my career
path as a doctor and an entrepreneur." | |
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