An overriding story of the past several years has undoubtedly been the global economic volatility. Conditions in the stock markets have been unpredictable and therefore many venture capital firms have felt the need to reserve more capital for existing investments, postpone new investments and, in some cases, postpone raising new funds. While a number of firms adapted to the challenges by supporting many of their companies with additional investment rounds, the challenge to raise new funds, even smaller funds, still appears to be present.

According to a recent global study Deloitte LLP did with the National Venture Capital Association about the state of the global initial public offering market, VCs appear to be very concerned about the lackluster IPO market and the potential for IPOs in the future. Many VCs believe that without the higher returns generated by IPOs, the exit opportunities offered by M&A alone are not compelling enough to draw limited partner interest over the long term.

Other trends that stood out from this survey include:

• VCs feel the pinch from low IPO activity: More than 80 percent of venture capitalists surveyed felt the current IPO level of activity was too low to support a healthy VC industry. Many believe the higher returns generated by IPOs are important to providing superior returns to LPs and growth capital necessary to developing portfolio companies.

• U.S. exchanges are viewed as most promising for venture-backed IPOs: 87 percent of global respondents selected the NASDAQ as one of the three most promising stock exchanges for venture-backed IPOs. The New York Stock Exchange was the next most promising with 39 percent.

• Lack of key drivers a cause of light activity: 83 percent of all respondents indicated there needed to be a stronger investor appetite for equity in public companies in order to create … Next Page »

Comments (1) | Reprints | Share:          

Qualcomm has been funding some impressive R&D work on augmented reality (AR) at its research centers around the world. Could the technology really revolutionize the mobile graphical user interface? It’s time to find out. Your roundup begins now.

—Qualcomm’s Jay Wright outlined the San Diego wireless giant’s strategy for advancing augmented reality by encouraging development across a range of applications. The combination of software and hardware that Qualcomm (NASDAQ: QCOM) has developed makes it possible to overlay images, data, and even video content over the view-screen of smartphones, tablet computers and other mobile devices. Wright, who is Qualcomm’s senior director for AR business development said, “As far as I know, we have the largest R&D effort in augmented reality in the world.”

—The California Energy Commission awarded a $2 million grant to Escondido, CA-based Transportation Power (doing business as TransPower) to design, build, and test a new low-cost, fast-energy storage technology dubbed Grid-Saver. TransPower’s prototype is projected to cost one-fifth as much as competing battery systems, and has a peak capacity of five megawatts. The grant was one of 10 R&D projects throughout California to get a total of nearly $7.5 million from the commission. The commission also gave $1 million to Combined Power Cooperative of Santee, CA, to demonstrate the company’s concentrated solar thermal power technology.

—A survey of venture capitalists in the United States and eight other countries found that more than two-thirds (68 percent) expect to see a surge in capital investments in cloud computing over the next five years, with 31 percent predicting financial support of cloud computing will remain the same. The survey, conducted by the National Venture Capital Association and Ernst & Young, also shows that 64 percent of the VCs anticipate that the flow of capital into new medical and social startups will increase, and more than half (54 percent) expect to seen an increase in support for healthcare services.

—Ortiva Wireless, a startup that specializes in high-performance technology for optimizing video on wireless networks, raised $2.5 million in a combination of debt and rights to acquire securities.

—Some leaders of San Diego’s cleantech and wireless health sectors were scrutinizing the Official Google Blog last week to assess the significance of the company’s decision to shut down Google Health and Google PowerMeter, two online projects that were intended to help people make smarter choices about managing their own personal health and energy use. The blog explains that neither project attained the scale that Google had sought.

Comments | Reprints | Share:          

By the time you read this, I’ve probably already wrapped up my work as a correspondent for Xconomy, turned in my key to office on Rogers Street in Cambridge, MA, and taken a deep breath in anticipation of my exciting new role as an executive editor for the life sciences group at FierceMarkets.

I’m really not being modest when I say that I don’t expect my departure from Xconomy to qualify as anything close to an event [Editor's note: Ryan is, indeed, being modest---we're going to miss him like crazy!], and Xconomy has a great life sciences reporting team in place with or without me. But I spent about 33 months at Xconomy, mostly covering the biotech and healthcare IT scenes in the Boston area, and I thought a proper goodbye post would be appropriate. It’s also an opportunity for me to brag a bit about some of the cool stories that we did during my stint with Xconomy. (Still, I promise to keep this farewell relatively brief.)

Before I talk about those stories, I want to say thanks to Xconomy. I feel plain lucky that Bob Buderi, Xconomy’s founder and editor-in-chief, called me on my cell phone in late July 2008 to ask me if I was interested in working for his startup media company. I got that call while I was literally carrying my box of personal stuff out of a building on Federal Street in downtown Boston after my last day as the biotech reporter for Mass High Tech, and I was still wondering at the time whether I was crazy for moving with my wife to Vermont, where I would try my luck as a freelancer. Thanks to Bob and Xconomy co-founder and executive editor Rebecca Zacks, I was given a shot to stay on the Boston biotech beat.

In those first few months at Xconomy, I chased down a news tip from Bob and broke a little story about the big $400 million endowment that philanthropists Eli and Edythe Broad gave to their namesake research center, the Broad Institute of MIT and Harvard. (The experience told me that my sources still worked, even when I was up in Vermont.) Around the same time, I started working more closely with Luke Timmerman, Xconomy’s National Biotech Editor, who joined Xconomy via Bloomberg several months before my arrival. Luke writes terrifically detailed and compelling news copy at speeds that would rival fictional Clark Kent’s fastest work at The Daily Planet. Luke also never hesitated to share tricks of the trade with me, and I’ll try to never forget those lessons. I learned a bunch from the other editors as well.

I don’t have a “top 10″ stories list or anything to share with you, but I’m very proud to have had the opportunity to be the first reporter to provide what I would call in-depth coverage of many healthcare-related startups in the Boston area. Some examples include stories about KEW Group (most recently), Seventh Sense Biosystems, Life Image, Momelan Technologies, and Vedanta Biosciences. I also got to do some memorable stories that involved big companies such as Biogen Idec (NASDAQ:BIIB), Genzyme, GlaxoSmithKline (NYSE:GSK), and Novartis (NYSE:NVS). The only regrets I have are getting beat on certain Boston biotech stories, yet I feel like I did about as much as I could while covering the beat mostly from my home office in a little college town some 200 miles from Kendall Square.

If you’re still reading this nano-memoir, then perhaps you’ll be interested to know that I’ll still be following the Boston biotech scene as well as the life sciences industry in other geographies in my new role at Fierce. I’ll also be in Boston and other major hubs of the biotech industry to cover stories and attend meetings. And I plan to continue to provide Twitter updates under my @ryan_mcbride handle.

So perhaps this isn’t really a goodbye as much as a note of thanks to the editors at Xconomy and to you the audience, with whom I aim to keep in touch through my work at Fierce.

Comments (4) | Reprints | Share:          

It’s safe to say that the face of the media has gone through some major changes recently—with the onset of blogging and digital media, practically anyone with a camera phone and sharp texting skills can become a citizen journalist. Even the oldest names in traditional media are going social, with many publications signing up for social networking accounts from Facebook and Twitter, to Digg, Foursquare, and whatever new craze breaks out next.

Today Seattle-based startup Intersect came out of stealth mode, rolling out a platform for storytelling that incorporates elements from both new and social media. Headed up by Peter Rinearson, a Pulitzer Prize-winning journalist and former VP at Microsoft, the new venture—something of a community journalism site—aims to reinvent the way people share stories online.

Poynter Online published an in-depth interview with Intersect’s director of editorial outreach, Mònica Guzmàn, who left SeattlePI.com and her popular creation there, the Big Blog, in May to join the 20-person startup.

“Intersect brings together two elements — storylines and intersections of place and time — in ways we hope will make storytelling more collaborative and engaging,” Guzmàn told Poynter’s Mallary Jean Tenore.

Intersect users create a personal page, where, much like Facebook and other social networks, they can upload a bio, photos, and status updates or information about what they’re doing—what the team calls “storylines.” These stories have time and place incorporated in them, creating a visual map of a person’s life through storylines. Others can then navigate a person by scrolling through their storyline—an online timeline of their life.

“In real life, our memories don’t scroll off a page and disappear, and our past can connect us as much as our present. When you pin your story to a place as well as a time, you make it easier for people to find out where their path has crossed with yours — whether it was at a meetup yesterday in Seattle or at summer camp in Maryland in 1985. You can also post stories about the places you intend to be in the future — like concerts or conferences — so the people you might meet there can learn more about you,” Guzmàn told Poynter.

The company, founded in 2007, has raised more than $3 million in angel financing, according to TechFlash, and plans to drive revenue through online advertising.

To find out more about Intersect, watch the video below, and check out Poynter’s interview with Guzmàn and TechFlash’s interview with Intersect’s chief marketing and business development officer Monica Harrington.

Comments | Reprints | Share:          

It has been a busy week for little bits of technology news, amidst some more prominent deals. Here are three items in particular that caught my eye. The common theme among them, I would say, is the importance of relationship building in business.

—Microsoft’s Bing search engine, one year old this month, has been in the news a lot. Besides the strange Google experiment of adding dramatic background images, which drew obvious comparisons to Bing’s visual interface, there were other parallels made between the sites. Rand Fishkin of SEOmoz posted a detailed analysis of search engine optimization and ranking elements between the two search giants and concluded that “Google and Bing are remarkably similar,” so that building separate sites to target the two engines separately is “a waste of energy.”

Bing also distinguished itself in terms of “social search” this week, rolling out a new search page that grabs public and shared updates directly from Facebook and Twitter. Social and real-time search has been a consistent point of effort for Bing, which first included some tweets in its search results last July, and formed early strategic partnerships with Twitter and Facebook to include real-time status updates last October. Google has similar efforts in the works, of course.

—Facebook, the Palo Alto, CA-based social networking giant, announced it has settled on office space for its Seattle engineering outpost. There had been much speculation about which neighborhood the office would be located in, ever since the company announced it was coming to town last month. Facebook’s office will be at 101 Stewart Street in Seattle, near Pike Place Market. It is slated to open in late July and could eventually house around 30 workers. (Interesting post here on the personal story behind the Seattle office.)

—A Shanghai real estate mogul named Jiang Zhaobai is visiting Seattle next week to scout out promising companies who want to do business in China in green tech, clean energy, new media, mobile, and biotech, according to a feature in the Seattle Times. Jiang has a new venture, called the Shanghai American Enterprise Center, which aims to invest in small and medium-sized U.S. companies and incubate them in Shanghai, helping them grow into the Chinese market.

I first got wind of Jiang’s local efforts from Rogers Weed, the director of the Washington state Department of Commerce, at an MIT Enterprise Forum event back in January. “We’ll make sure that guy gets a bang-up tour of Washington when he starts looking for investments,” Weed said at the time. Sounds like it’s going well so far, despite rising economic tensions between the U.S. and China.

Comments | Reprints | Share:          

Seattle-based investment bank Cascadia Capital released a comprehensive report today on the state of the Internet and new media market and its future prospects. The analysis points to social media and mobile applications as areas in which companies are most likely to make money in the next couple of years. It also fleshes out the expected growth trajectory of online marketing and advertising, given the current state of the economy.

Cascadia managing director Warren Gouk leads the company’s Internet New Media practice, and put together the report with his team. Among other duties, Gouk advises regional and national firms on their merger and acquisitions strategy, and generally has his finger on the pulse of where Internet “commerce and community dynamics are converging,” he says.

One of Gouk’s major focus areas these days is online marketing. “I’m still incredibly bullish on the category, I think there’s a huge opportunity,” he told me recently. “We’ll take a few steps backwards before we can push forward.”

Here are a few excerpts from a Cascadia Q&A with Gouk, in which he talks about how social media, mobile, and online marketing are all entwined, and points to several Northwest startups as leading lights:

—On which Internet firms to watch: “We believe companies that are harnessing cloud computing are the emerging leaders in Web 2.5. These companies include various players in the mashup, widget and social networking space. Some of the companies worth noting include: social networking firms like Facebook, Twitter, Wetpaint and Hulu; search entities like Kosmix and Mahalo; data aggregation players like AboutUs and Rearden Commerce; and mobile companies like Admob, Amobee and bluepulse.”

—On the state of Web mergers and acquisitions: “M&A transaction activity is down across all sectors and the Internet market hasn’t been immune to the M&A downturn. However, there are pockets in the Internet that have been less affected: online services with strong brand and critical mass, for example, and online marketing plays that have aggregated unique distribution or possess unique technology/data to drive increased [return on investment] across ad networks. Expect to see record levels of corporate divestitures in the consumer Internet space, similar to eBay’s recent divestiture of StumbleUpon and its plans to divest Skype.”

—On what will drive the growth of online marketing: “There are several factors. (1) Continued advancements in technologies that create better experiences for the consumer/audiences and better conversion rates for the advertiser. (2) Top advertisers entering the realm of online marketing in a … Next Page »

Comments (1) | Reprints | Share:          

As is often (too often) told in local innovation circles, Boston venture capitalists turned down funding Facebook, the company headed to Silicon Valley—and the rest is a sore spot in New England Internet VC history.

But now one of the three founders of Facebook, Chris Hughes, is returning in a big way to the New England innovation scene. He will be joining General Catalyst Partners of Cambridge, MA, as an entrepreneur in residence. The Boston Globe‘s Rob Weisman has a story this morning, and I followed up for more with General Catalyst managing director Neil Sequeira, who says the company had not intended to publicize news of Hughes’ new role just yet—but that word came out when Hughes mentioned it at the recently ended South by Southwest conference in Austin.

The plan is that Hughes, now 25, will divide his time between Cambridge and New York—and will serve as a linchpin of General Catalyst’s efforts to partially shift the center of gravity for social networking and online media entrepreneurship from the West Coast to the East Coast. “That’s really meaningful to us, working with great young entrepreneurs and having them facilitate other young entrepreneurs and really building a great ecosystem around them,” Sequeira told me in a phone call this morning from Boston’s Logan airport.

Sequeira says that General Catalyst has tended to focus its Internet investments on media infrastructure companies like Brightcove, analytics firms like Visible Measures, or more consumer-facing companies like the travel site Kayak.com. “We’ve done a pretty good job, I think, in those areas,” he says. “And what we’ve found is the passion of entrepreneurs, especially in the Boston and New York areas, around those markets…gives the region a competitive advantage.”

Now, with big media and advertising companies in those cities under increasing pressure, General Catalyst wants to bring that entrepreneurial advantage to bear in those arenas as well. “When you have this incredible group of computer scientists coming out of places like Boston and New York, they can leverage all the disruption happening in those markets around media and advertising communities to build a great next generation of online new media businesses,” he says.

Hughes is key to General Catalyst’s plans to, well, catalyze those efforts. Hughes grew up in North Carolina, but attended Phillips Academy in Andover, MA, later rooming with Mark Zuckerberg and Dustin Moskovitz at Harvard University, according to the Globe. The three founded Facebook in 2004, soon moving it to Palo Alto, CA.

After spending three years at Facebook, Hughes became the driving force behind My.BarackObama.com, an online network that helped bring in more than $500 million and organize some 200,000 events around the country, the paper said.

The twin successes of Facebook and My.BarackObama.com, Sequeira says, “speak to his [Hughes'] agility as a person, and his ability to get young entrepreneurs really excited about starting something in what’s a pretty scary time. In reality, it’s a wonderful time to build a company if you have passion and big ideas.”

Comments | Reprints | Share:          

As an editor at a growing online resource called the Public Library of Science, UC San Diego Professor Philip Bourne is in an ideal position to see the disruptive changes that are remaking the $11 billion scientific publishing industry. As it has with other types of traditional publishing, the Internet is turning the staid-but-highly lucrative business of academic publishing on its head.

Of 1.35 million peer-reviewed articles published in 23,750 journals of science, technology, and medicine in 2006, two Finnish researchers recently estimated that 8.1 percent are now available online at no cost. They estimate another 11.3 percent can easily be found on authors’ Web sites and free repositories.

Bourne saw the emerging trend and recruited Leo Chalupa, a friend and colleague at UC Davis, to launch an online video project to help scientists make their research better-known. Bourne and Chalupa were initially unsure if the project they started last year was merely an interesting science project or a business. But they decided to form a startup company earlier this year around what they call SciVee. It is basically a YouTube for academic researchers.

As Bourne explains in this SciVee video, “What we’re really trying to do here is to further the dissemination of science.”

Bourne says his first idea was to essentially create “pubcasts,” which typically consist of a 15-minute video in which the author of a published and peer-reviewed article explains the research and highlights the key findings. Presentations can include slides, computer-generated animations, and other graphics.

“What Phil and Leo saw was the opportunity to add new capabilities … Next Page »

Comments (4) | Reprints | Share:          

How do you run a national investment bank here in the Northwest, far away from the bustling financial centers of New York and San Francisco? I put the question to Michael Butler, chairman and CEO of Seattle-based Cascadia Capital, one of the area’s leaders in providing banking services in corporate finance and strategy. His answers provided insight into banking and local investments, as well as a broader snapshot of growth areas to watch in the region.

Butler is a Seattle native who spent 16 years working on Wall Street. Like almost everyone you meet from the Northwest, he eventually wanted to move back. In 2000, he co-founded Cascadia with an eye towards making deals across a broad geographical region centered on Seattle, but stretching north to Vancouver, BC, south to Portland, OR, and east to Denver, CO. “Out here you have to educate people about what an investment bank does. Back east, everyone knows,” says Butler. “We’re a facilitator of taking capital and getting it to companies.”

The main challenge out here, Butler says, is attracting experienced bankers to the Seattle area. He says his team tracks the top investment bankers in New York and San Francisco and actively recruits those who are from the Northwest (or whose spouses may be) to come back. It’s about “getting a few good bankers,” he says. “It’s all about the people.”

On the plus side, being away from the major financial centers means Cascadia can stay “out of the rigamarole,” Butler says. “We don’t get caught up in the group-think, and we make decisions less influenced by the day-to-day noise.”

Cascadia is small, with just under 30 bankers, and is looking to focus on three main areas of high-tech. “We see telecom and [traditional] tech as consolidating. We believe growth will be in new media, cleantech, and health care,” says Butler. “There are a lot of companies with big-time capital needs.”

—By new media, he means innovative Internet-based business models. As Butler sees it, 15 to 20 percent of the Seattle-area dot-coms from 2000-2001 survived, are raking in $20 to $30 million in annual revenue, and are “doing something to get to the next level,” he says. “There’s really some great talent out here.” Case in point: WidgetBucks, the online ad network that recently raised $10 million from Draper Fisher Jurvetson and Bellevue, WA-based Ignition Partners, with Cascadia involved in the deal.

—Cleantech and alternative energy is the “fastest growing area, with a lot of capital being raised,” says Butler. But these days most of it is in Portland, OR, Denver, Vancouver, BC, and Calgary, AB—which Butler calls “absolute hotbeds.” There has been a lull in Seattle proper since an early wave of companies getting funded, such as Imperium Renewables. “The west coast is still learning the sector,” says Butler. He’s looking at closing deals soon with Bend, OR-based PV Powered and Burnaby, BC-based NxtGen Emission Controls.

—Healthcare, especially where it converges with software, has great potential for growth. “We have pretty good expertise here in using software to discover drugs,” says Butler. Plus, he says, “the Gates Foundation will transform the city… The leading experts are all relocating out here, drug companies are locating offices here. There will be an influx of people, and some of them will migrate to the private sector.” Meantime, he says, there are three to five deals to be done in healthcare tech and services for assisted living.

Butler left me with a final thought, which echoes something Xconomist Eddie Pasatiempo of the Clarion Group told me a few weeks ago. Given that mergers and acquisitions are the “exit of necessity” these days, it has become more important to position a company so potential acquirers see how it fits their needs. And a lot of that positioning is determined by the quality of the company’s investment bank. “It’s critical,” Butler says, “absolutely critical.”

Comments | Reprints | Share: