Saturday, November 29, 2008
We had to chuckle, reading the headline on a Nov. 25 release from VU spinoff portfolio company Informatics Corporation of America (ICA), in which the company announced it had taken the Gartner-linked "2008 Healthcare IT Summit by Storm, Winning Two of Five Award Categories." You gotta love such unbridled enthusiasm, which, these days, could only arise where there's plenty of cash on-tap. It's not just still-small startups that are bragging about their tech expertise. A few weeks ago, it was venture-backed Emdeon blowing its horn about winning SAP/Business Object's Business Intelligence Excellence Awards. Emdeon is owned by private-equity players General Atlantic LLC and Hellman & Friedman LLC.
As VNC reported, Tennessee VCs made clear during the recent inaugural meeting of the TTDC Tennessee Capital Formation Board that they think Tennessee needs to do more to encourage capital formation, retention and recycling. Each weekly news dispatch from the State Science & Technology Institute (SSTI) makes clear that other states are taking steps to change their approaches, dramatically in some cases, to participate more fully in the evolving global economy. So, please read our latest story on the VCs' comments and the accompanying list of ideas, and then read the latest on Arkansas converging its economic-development initiatives.
Tuesday, November 25, 2008
[Related Nov. 28 story here.] Noro-Moseley Partners' Atlanta-based Kathy Harris (at left) had a straightforward answer, when asked what it'd take for NMP or other VCs to set-up shop fulltime in Nashville. "Nothing breeds that sort of interest more than deals getting done," she said, particularly when those deals involve Nashville investors bringing-in VCs from elsewhere to participate in transactions. Harris commented during last week's Tennessee Innovation Conference, convened by Tennessee Technology Development Corporation (TTDC) at the Doubletree Hotel. As NMP's healthcare expert, Moseley is up here frequently, and has previously dealt with WebMD, Senior Whole Health and Valor Healthcare, among others. She has previously been a partner or other exec with Atlanta's Technology Ventures, an early-stage VC in software and e-commerce; as well as playing investment-banking roles with then-J.C. Bradford & Co., where she was involved in more than 100 IB transactions. No stranger to Nashville, she holds an MBA from Vanderbilt's Owen Graduate School of Management, as well as a bachelor's from nearby Murray State. Earlier today (Nov. 25), Harris endorsed InnoVenture Southeast 2009, coming up in South Carolina, next March.
A few more of these and we'd be in business: Vanderbilt University tech transfer portfolio company Acuitec, based in Birmingham, is pursuing $1.5MM in Angel funding, and CEO Lionel Tehini more-than-hints he'd love to move to Nashville, if Angels here make it worthwhile. Here's the story. That's Acuitec's operating-room product, at left.
Pitt Hyde-founded MB Venture Partners in Memphis is apparently angling toward the launch of its third fund, suspected to go north of $100MM, on top of the $76MM assets already under management at the bio-oriented firm. Read our story here, including MBVP Managing Partner Gary Stevenson's (left) nonrevelatory comment.
Monday, November 24, 2008
State Revenue Commmissioner Reagan Farr (left) hasn't let go his interest in erasing the tax exemption enjoyed by Family-Owned Non-Corporate Entitites (FONCE), an effort that was strongly and successfully resisted earlier this year when the state's venture-capital community awakened to Farr's earlier attempt to repeal the 8-year-old exemption. Farr then set about surveying VCs and others, to get the data that was missing in the last round of this fight. During last week's 38-minute Bredesen Budget hearing on Farr's department, Farr raised FONCE again, and apparently has the support of Tennessee's chief executive. Our previous related story is here. A good story on this, earlier, at Knoxville News Sentinel.
Office of Technology Transfer and Enterprise Development Director Chris McKinney (left) told us he's "jazzed" about numerous entrepreneurial initiatives underway on the VU campus, helping faculty and staff convert intellectual property into products for end-users -- while, on the big stage, Vanderbilt's principal investigators continue to churn out inventions and innovations through sponsored research in basic sciences. McKinney said initiatives reported in our latest story have been under consideration for years, and now VU is "steppin' on the gas" in a more visible way. The new program does not imitate those of peer institutions, said McKinney, although his staff have examined many such. Here are links to similar programs at Stanford, MIT, Duke, Maryland, Minnesota, Harvard and Washington.
Saturday, November 22, 2008
It should be good news for Middle Tennessee and the nation that U.S. Rep. Bart Gordon (D-6), at left, was on Nov. 20 re-elected as chairman of the U.S. House Science and Technology Committee, which he has chaired the past two years. The committee earlier this year observed its 50th Anniversary, but has perhaps never been more important to the nation than during the present crisis. Gordon said in a statement after his reelection, in part, "...there is much more work to be done, especially in light of our country’s current economic problems. The major challenges facing our country -- a foundering economy, a changing climate, a growing need for clean energy we produce at home -- will be solved by science, technology, and American innovation. It’s more important than ever that we are looking at how we can grow new sectors of the U.S. economy and ensure our long-term competitiveness.” His committee members will be announced in January 2009. Among other initiatives, Rep. Gordon's challenge three years ago resulted in the creation of the Mind2Marketplace initiative. Gordon, 59, is a lifelong resident of Murfreesboro, a graduate of Middle Tennessee State University (1971) and the UT College of Law (1973).
Beyond what we published last week, Scott Welch, the Nashville music-talent manager and Highnote entrepreneur, told us that songs, artists and videos on Highnote will be ranked by highly intelligent technology that will track about 300 different aspects of visitor behavior and demographics. He also said he believes Nashville will become increasingly attractive as the nation's Music capital, partly because he sees "live performance" as the future of the industry, and Nashville (not Indiana) is geographically the nation's Music crossroads. Here's Thursday's story.
Friday, November 21, 2008
Yes: There are bigger tech companies in Nashville. They're very quiet. They are quietly filled with good people who manage peta-oceans of financial data. We are talking B-I-G big. So big, they don't need to do real 'branding'. They do not, for example, have faces painted on their buildings. Also, for office parties, some of them must borrow other people's kegerators. Maybe they could borrow Emma's kegerator. Just not on Fridays. The story explains why we say this.
Monday, November 17, 2008
Middle Tennessee's proposed Entrepreneur Resource Center is not so much intended to "make it easy" on entrepreneurs launching business, as much as it is intended to accelerate the process of vetting ideas for businesses, according to Bobby Frist, co-chair of the Entrepreneurship Task Force of the Nashville Area Chamber and Partnership 2010. Frist, who is founder and CEO of Healthstream, answered questions during today's live webcast produced by The Tennesseen and hosted by Business Editor Randy McClain. (He's pictured far-left, with Mike Shmerling.) Frist said an advisory board of about 9 persons will be assembled to guide the ERC center along. No formal invitations to that advisory body have yet been extended, Frist said. Frist said the ER Center -- first a virtual online center, later a physical presence -- will serve as a "beacon" to the nation and the world, signaling that Nashville is serious about encouraging entrepreneurship by local firms and by firms that might be attracted to relocate to Music City. First noted that VCs and others who might have originally been concerned about the ERC possibly becoming competition for deal flow, have largely had their concerns allayed. At the same time, he said, the region must try to recruit additional capital investors to middle Tennessee. Frist said the entrepreneurship initiative would probably first leverage Nashville's existing strengths in healthcare services and technology, plus music and related technologies. Frist noted that his EP co-chair, Choice Food Chairman Mike Shmerling, has been particularly keen on using the ERC to attract businesses to relocate here from other states.
It's great to report that business-sorta-as-usual continues: As reported on VNC today, Frank Pazera of TechCFO is bullish on entering the Nashville market to provide CFOs to tech and life-sciences firms. At the same time, responses to our recent very-informal survey of 104 IT executives suggests, at best, a little tension out there. See the story here. Though there is certainly concern about layoffs, it's interesting to see that CEOs are less concerned on that dimension. At the same time, we continue to hear reports, formally and via the grapevine, of a steady stream of layoffs, realignments and reductions in force. LP, Eastman, Cybera, JewelryTV and others are among the TN firms right-sizing. We'll stick the gauge in, again, this spring and see what folks think then.
Saturday, November 15, 2008
One of VentureNashville.com's analytic tools highlighted the fact that an interesting portion of our small, but select VNC audience resides in India. Asked about possible explanations for this, one keen local observer noted there's tremendous VC action in India, and some U.S. VCs offshore their research to India. So, maybe they're monitoring VC-oriented websites. More googling, and we found updates on India's indigenous VC/PE sector and that nation's growing capacity for absorbing U.S. and other global venture capital, as well as news about the roles of Cisco and Intel as anchors in India/VC. There could also be interest abroad in the Tennessee activities of such India-flag companies as InfoSys, or the successes of such Nashville-headquartered firms as Avankia and eMids Technologies, companies with strong links to India. Or, maybe the Nashville Area Chamber, the Nashville Technology Council and others have stirred things up by planning their first trade mission to India, next year. Wonder if they'll take any Nashville VCs along on the trip.
Michael Malone's article yesterday on ABCNews online is must-reading for anyone interested in the role of venture capital in our economy...or interested in the pressures now confronting these investors.
Whew! Yesterday's Nashville Overground article stirred some discussion, including some applause for Alex Lavidge (left), and some concern about someone 'not from here' possibly taking the lead in creating a coworking environment in Music City. Comments, Anyone? Anyone?
Wednesday, November 12, 2008
VU's release today: "...First-year students in the 'Stealing in Music City' seminar at Vanderbilt University must devise a workable system for distributing music that delivers content for a reasonable price and allows songwriters, artists and other stakeholders to get paid. “We are challenging the students to re-invent the music industry for a fair model of music distribution to compensate artists, consumers and labels,” said Holling Smith-Borne, director of the music library at Vanderbilt’s Blair School of Music..." On Nov. 12, also, Gov. Phil Bredesen signed into law a copyright-protection bill intended to discourage illegal downloading and sharing of content.
Today's log shows that while Council Ventures is rumored to be approaching $90MM in its second fund, it also reportedly may lose a portfolio company, iKobo of Atlanta. Meanwhile, an ESPN-financed company has scooped-up two Nashville transactions companies... and over at Nashville Technology Council, there a changing of the guard, with Tod Fetherling taking the CEO post, following Jeff Costantine.
Tuesday, November 11, 2008
On Forbes.com today, early-stage Cambrian Ventures Founder Venky Harinarayan opines that the market drop may be the solution to a trend in which, with the IPO window closed, entrepreneurs and their VCs have been left only with selling. The result: We've been "replacing potentially great companies with underperforming divisions of mature companies. Acquisitions invariably remove both the future risk and rewards -- not just for the company but for society as a whole. Innovation is stifled, and that hurts us all." He sees a return to investing in high-growth Tech companies and the resurrection of the IPO market that has been moribund the past eight years. But, first, he says, startups must survive 2009.
Monday, November 10, 2008
'Want to read about e-Discovery, as it's viewed from inside HCA? That's one of the latest offerings on Counsel on Call's new blog, Lawdable.com. Counsel on Call is the Brentwood firm that helps law firms and corporate law departments manage workload, by providing legal staff, as needed. CoC Founder and President Jane Allen (left) is naturally one of the blog's authors. We mention this here, because there is little doubt that a similar, best-practices-oriented blog -- MorePartnerIncome.com -- was a key factor in earning Juris Founder Tom Collins and his co-investors the premium they exacted from LexisNexis, upon the sale of the company 15 months ago. Free sharing of lessons-learned is often good business.
The roughly 80 tech executives, VCs and others assembled last week for a panel discussion on venture capital and angel investing seemed happy enough after hearing tough-love observations about how bank debt facilities have dried-up, Angels ain't writin' checks so easily and VCs enjoy deal flow that's as greater or greater than they had in boomtimes. The story's here.
Saturday, November 08, 2008
There are a number of new venture-capital and related initiatives afoot that deserve close attention: Obviously, the State pension plan's first-year authority to allocate something north of $750MM to private-equity investments is stunning. And, as we reported Friday, the strong capital-formation task force created by Tennessee Technology Development Corporation represents a real 'gathering of eagles'. There are other actors: In that same story yesterday, TTDC President Eric Cromwell indicated he's exploring an expanded role for Nashville Capital Network, an angel group that also has a sidecar investment fund. And, Nashville Technology Council's Tod Fetherling's public appearances make clear he hasn't lost any of his entrepreneurial spirit, in moving from ConnectivHealth to NTC.
Tuesday, November 04, 2008
The Wall Street Journal reports today that Harvard University is just one of numerous institutional limited partners attempting to liquidate private-equity positions, hampering managers of private-equity funds. Despite strong returns from the institutions' roles with PE players, the economy's distortion of asset-class allocations, the availability of other investments at discounts, the illiquidity of PE and venture funds' pressure for scheduled capital calls are among reasons cited for retrenchments.
Monday, November 03, 2008
Jim Clayton, the IBM veteran who established InfoWorks Inc. eleven years ago, told his employees today he's chosen former U.S. Bank Regional Chairman and NMG Advisers Principal Tony Heard to become president of the company. Although I, too, am associated part-time with NMG Advisers, I didn't know of Tony's move til today. Here's the breaking news on Tony.
Sunday, November 02, 2008
In Memphis last week, 22 fledgling companies presented their business plans to an audience of about 200 gathered at the FedEx Institute of Technology, for the 6th Annual Musculoskeletal New Ventures Conference (MNVC). The co-sponsors are Memphis Bioworks Foundation (MBF) and MB Venture Partners. This is the kind of thing that might one day occur in Nashville, if the Chamber and Partnership 2010 continue on their path toward creating a 'Virtual Entrepreneur Center'. The closest thing we have, right now, is the general business plan competition conducted biannually by the Nashville Business Incubation Center (NBIC).
Saturday, November 01, 2008
Coming Nov. 6th: Sid Chambless of Nashville Capital Network and Rachael Qualls of Angel Capital Group, together on the same stage, talking about the nuts 'n bolts of approaching investors. Stalwart VC Vic Gatto of Solidus (left) has volunteered for the middle seat. This Boult Cummings-sponsored event complements last week's NCN-sponsored VC panel, which produced insightful comments. Moderator for this round is Courtney Ross, VP with the Nashville Area Chamber. More info here at Nashville Technology Council.