[Source: Andrew Johnson, The Arizona Republic] - Venture capitalists invested millions of dollars in a handful of Arizona businesses in the second quarter, according to two new reports.
Recipients include medical-device companies that have received previous investments and a new company spun out of Freescale Semiconductor that nabbed $20 million, a large sum by Arizona standards.
Venture capitalists invest money in companies, typically in exchange for an ownership stake. Their investments are important because businesses use the funds to develop products and hire employees in hopes of becoming profitable.
But determining exactly how Arizona, which trails many other states in venture-capital activity, is trending compared with previous quarters is difficult because the reports contradict each other.
The MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association stated five companies received $33.8 million from investors. In the year-ago quarter, seven companies got $46.4 million, according to the report, based on data from financial-information service Thomson Reuters.
The Quarterly U.S. Venture Capital Report released by Dow Jones VentureSource paints an opposite picture. It states six businesses received $101 million, up significantly from the second quarter of 2007, when four companies received $31.9 million.
So what gives?
The difference is partly due to different reporting methods. The MoneyTree Report relies on information venture-capital firms report. Dow Jones surveys companies. The reports don't always capture the same deals.
Nationally, the MoneyTree Report said venture capitalists invested $7.4 billion in 990 deals, while Dow Jones pegged the figures at $6.64 billion in 602 deals.
Although there has been a slowdown nationally in venture capital-backed initial public offerings and mergers and acquisitions, Steve Socolof said it's still a good time to invest in new companies.
Socolof is managing partner of Murray Hill, N.J.-based New Venture Partners LLC, which, with four other venture-capital firms, invested in EverSpin Technologies Inc. last month.
EverSpin was spun off from Austin-based Freescale Semiconductor, which has operations in Chandler. EverSpin has about 50 employees and manufacturers magnetic-based memory chips.
"It's a technology that many people . . . have worked on for many years, and no one has been able to bring a commercial product to market," Socolof said.
Venture awards
A handful of Arizona firms received investments in the second quarter. Deals disclosed in two recent reports include:
• EverSpin Technologies Inc. in Chandler received $20 million.
• TeleSphere Networks Inc. in Scottsdale received $10 million.
• Zounds Inc. in Mesa received $8.7 million.
• Regenesis Biomedical Inc. in Scottsdale received $2.8 million.
• Medipacs Inc. in Tucson received $1.7 million.
• NP Photonics Inc. in Tucson received $700,000.
Sources: Thomson Reuters and Dow Jones VentureSource
Showing posts with label Venture Capital. Show all posts
Showing posts with label Venture Capital. Show all posts
Tuesday, July 22, 2008
Thursday, July 10, 2008
'Fund of funds' to invest in AZ tech startups
[Source: Jack Gillum, Arizona Daily Star] - Future Arizona high-tech startups may get a boost from new sources of venture-capital money.
The Arizona Economic Resource Organization has received $325,000 in state economic-development money to establish an Arizona "fund of funds," a program that raises investment capital from investors and reinvests those funds in several professional venture funds.
AERO's goal is to establish a $50 million fund of funds, which will be managed to attract overall investment of at least $200 million "to commercialize Arizona innovations."
Investors and tech-growth advocates say the state needs "seed money" to help startup companies, including from university-affiliated tech transfers.
"The impetus for all this is the recognition that Arizona is blessed with some very cutting-edge technologies, emanating in large measure from the university system," said Larry Hecker, a Tucson attorney active in local economic-development efforts and an AERO board member.
"There is tremendous potential for commercialization, and it translates into jobs and a stronger economy," he said.
Hecker co-chaired the non-profit AERO committee to search for venture funding with Bill Hardin, an attorney with Osborn Maledon in Phoenix.
AERO will serve as the catalyst in establishing an Arizona "fund of funds" to increase the size of the venture capital industry in Arizona during a two-year period, organizers said. The Commerce and Economic Development Commission gave AERO $325,000 to stimulate the formation of the fund.
About 40 other states each have a fund of funds, Hecker said, but not Arizona — until now.
To qualify for an investment from the fund of funds program, each target venture fund must satisfy certain criteria, including a requirement that projects invested in must be headquartered in Arizona or have a main office here.
Participating funds must agree to match the initial monies on a 3-to-1 basis.
"The partners on this project are committed to enhancing Arizona's global competitiveness by accelerating the pace of discovery, innovation and technology business development," said Jan Lesher, director of the Arizona Department of Commerce.
Tucson is seen as a key area for the state's biotech growth, and its startups have benefited from venture funding. One such company is Oro Valley-based Ventana Medical Systems, founded in 1985 by Dr. Thomas Grogan, a University of Arizona pathologist, and specializing in cancer-tissue testing. Ventana's value was highlighted earlier this year when Swiss Roche Holding AG bought it for $3.4 billion.
Meanwhile, venture-capital deals were on the upswing in Arizona in the first quarter.
Arizona companies attracted $80 million in venture capital on six deals in the first quarter, after attracting about $205 million on 28 deals in all of 2007, according to the MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association.
Did you know
In a landmark 2002 report, Arizona's Bioscience Roadmap , by the Battelle Memorial Institute's technology-consulting arm, the group recommended "putting in place mechanisms, programs and incentives that encourage research to be turned into products, processes and wealth generation."
A December 2007 update said the state has been recently successful in attracting bioscience venture capital since the initial Battelle report, but some say Arizona startups still face challenges in attracting capital.
The Arizona Economic Resource Organization has received $325,000 in state economic-development money to establish an Arizona "fund of funds," a program that raises investment capital from investors and reinvests those funds in several professional venture funds.
AERO's goal is to establish a $50 million fund of funds, which will be managed to attract overall investment of at least $200 million "to commercialize Arizona innovations."
Investors and tech-growth advocates say the state needs "seed money" to help startup companies, including from university-affiliated tech transfers.
"The impetus for all this is the recognition that Arizona is blessed with some very cutting-edge technologies, emanating in large measure from the university system," said Larry Hecker, a Tucson attorney active in local economic-development efforts and an AERO board member.
"There is tremendous potential for commercialization, and it translates into jobs and a stronger economy," he said.
Hecker co-chaired the non-profit AERO committee to search for venture funding with Bill Hardin, an attorney with Osborn Maledon in Phoenix.
AERO will serve as the catalyst in establishing an Arizona "fund of funds" to increase the size of the venture capital industry in Arizona during a two-year period, organizers said. The Commerce and Economic Development Commission gave AERO $325,000 to stimulate the formation of the fund.
About 40 other states each have a fund of funds, Hecker said, but not Arizona — until now.
To qualify for an investment from the fund of funds program, each target venture fund must satisfy certain criteria, including a requirement that projects invested in must be headquartered in Arizona or have a main office here.
Participating funds must agree to match the initial monies on a 3-to-1 basis.
"The partners on this project are committed to enhancing Arizona's global competitiveness by accelerating the pace of discovery, innovation and technology business development," said Jan Lesher, director of the Arizona Department of Commerce.
Tucson is seen as a key area for the state's biotech growth, and its startups have benefited from venture funding. One such company is Oro Valley-based Ventana Medical Systems, founded in 1985 by Dr. Thomas Grogan, a University of Arizona pathologist, and specializing in cancer-tissue testing. Ventana's value was highlighted earlier this year when Swiss Roche Holding AG bought it for $3.4 billion.
Meanwhile, venture-capital deals were on the upswing in Arizona in the first quarter.
Arizona companies attracted $80 million in venture capital on six deals in the first quarter, after attracting about $205 million on 28 deals in all of 2007, according to the MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association.
Did you know
In a landmark 2002 report, Arizona's Bioscience Roadmap , by the Battelle Memorial Institute's technology-consulting arm, the group recommended "putting in place mechanisms, programs and incentives that encourage research to be turned into products, processes and wealth generation."
A December 2007 update said the state has been recently successful in attracting bioscience venture capital since the initial Battelle report, but some say Arizona startups still face challenges in attracting capital.
Thursday, December 20, 2007
Local investor group aims to market UA tech ideas
[Source: Jack Gillum, ARIZONA DAILY STAR] - If Alicia Reeves and Olin Feuerbacher have their way, testing time for dangerous E. coli bacteria would be cut to a fraction of what it takes now.
The duo hope to move that vision closer to reality with backing from a new group of local investors created to help bring University of Arizona technologies to market.
Reeves' and Feuerbacher's company, Innovis Technologies, is developing its E. coli test based on research performed at the UA. It was one of three biotech groups that presented their technologies on Oct. 8 at the inaugural meeting of Desert Tech Investors LLC.
Desert Tech, which has about 45 members, has entered into an alliance with the UA via the Arizona Enterprise Program. The UA's Office of Technology Transfer is working with Desert Tech to invest $400,000 in research on UA innovations with "high commercial potential," the UA said.
The group's president, Jerry Sonenblick, and its executive vice president, Bob Morrison, are members of the Desert Angels. That local group is made up of so-called "angel" investors — people with a qualifying level of wealth who invest individually in startup companies — although the two groups are not connected.
The Desert Tech program "is a rare, and very possibly unique, mechanism for a university to formally match the interests and expertise of local angel investors with those of a university and its individual researchers," said Stephen ONeil of the Technology Transfer Office. The university and the investor group will work "transparently within university policies regarding intellectual property and conflict of interest," he said.
Such a public-private partnership can combine investors with the "educational, technical knowledge" of professors to encourage successful biotech companies, Sonenblick said.
"When the light bulb goes off in a university professor's head," Sonenblick said, Desert Tech "will have the first look at contributing capital, person power and mentoring advice toward achieving proof of concept."
"This is the embryo stage of technological development," he said.
Innovis, like the other ideas showcased, is at that formative stage, and its technology is timely. The process of detecting E. coli — which can cause potentially fatal illness and has been blamed for sickness and millions of dollars in product losses recently — can take 24 to 48 hours.
But if Innovis' product is successful, companies can sniff out trouble in as little as 10 minutes.
The Innovis idea, developed by UA chemist Dr. Indraneel Ghosh, uses a technology known as sequence enabled reassembly to detect E. coli at the DNA level using specialized zinc "fingerprints." Reeves and Feuerbacher worked together at the UA through the McGuire Entrepreneurship Program.
It would be "as easy as reading a color pregnancy test," Feuerbacher, Innovis' chief scientific officer, said during a recent demonstration.
Other projects presented at Desert Tech's first meeting include:
● A simple defibrillator, or electrical heart stimulator, that uses AC power and would be cheaper to manufacture than existing over-the-counter models. Project head Dr. M. Reza Movahed, a UA cardiologist, said current automatic external defibrillators are costly to make because of their specialized lithium batteries.
● Nasser Peyghambarian, a professor in the UA College of Optical Sciences who already has commercialized several products, plans to develop a new kind of low-power, fiber-optic laser.
Desert Tech plans to meet next on Nov. 28, when the group will vote on whether to proceed with one of the companies that gave a presentation in October, as well as another that will present in November.
The duo hope to move that vision closer to reality with backing from a new group of local investors created to help bring University of Arizona technologies to market.
Reeves' and Feuerbacher's company, Innovis Technologies, is developing its E. coli test based on research performed at the UA. It was one of three biotech groups that presented their technologies on Oct. 8 at the inaugural meeting of Desert Tech Investors LLC.
Desert Tech, which has about 45 members, has entered into an alliance with the UA via the Arizona Enterprise Program. The UA's Office of Technology Transfer is working with Desert Tech to invest $400,000 in research on UA innovations with "high commercial potential," the UA said.
The group's president, Jerry Sonenblick, and its executive vice president, Bob Morrison, are members of the Desert Angels. That local group is made up of so-called "angel" investors — people with a qualifying level of wealth who invest individually in startup companies — although the two groups are not connected.
The Desert Tech program "is a rare, and very possibly unique, mechanism for a university to formally match the interests and expertise of local angel investors with those of a university and its individual researchers," said Stephen ONeil of the Technology Transfer Office. The university and the investor group will work "transparently within university policies regarding intellectual property and conflict of interest," he said.
Such a public-private partnership can combine investors with the "educational, technical knowledge" of professors to encourage successful biotech companies, Sonenblick said.
"When the light bulb goes off in a university professor's head," Sonenblick said, Desert Tech "will have the first look at contributing capital, person power and mentoring advice toward achieving proof of concept."
"This is the embryo stage of technological development," he said.
Innovis, like the other ideas showcased, is at that formative stage, and its technology is timely. The process of detecting E. coli — which can cause potentially fatal illness and has been blamed for sickness and millions of dollars in product losses recently — can take 24 to 48 hours.
But if Innovis' product is successful, companies can sniff out trouble in as little as 10 minutes.
The Innovis idea, developed by UA chemist Dr. Indraneel Ghosh, uses a technology known as sequence enabled reassembly to detect E. coli at the DNA level using specialized zinc "fingerprints." Reeves and Feuerbacher worked together at the UA through the McGuire Entrepreneurship Program.
It would be "as easy as reading a color pregnancy test," Feuerbacher, Innovis' chief scientific officer, said during a recent demonstration.
Other projects presented at Desert Tech's first meeting include:
● A simple defibrillator, or electrical heart stimulator, that uses AC power and would be cheaper to manufacture than existing over-the-counter models. Project head Dr. M. Reza Movahed, a UA cardiologist, said current automatic external defibrillators are costly to make because of their specialized lithium batteries.
● Nasser Peyghambarian, a professor in the UA College of Optical Sciences who already has commercialized several products, plans to develop a new kind of low-power, fiber-optic laser.
Desert Tech plans to meet next on Nov. 28, when the group will vote on whether to proceed with one of the companies that gave a presentation in October, as well as another that will present in November.
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