BioCrossroads, Indiana Teachers Retirement Fund, Lilly, Fairbanks Foundation, IU, Purdue, Notre Dame, and Credit Suisse announce new $58 million venture capital fund to fuel innovation

INDIANAPOLIS, Dec. 16 /PRNewswire/ -- Capitalizing on the continued strong growth of Indiana's life sciences industry and an active venture capital market, leaders from BioCrossroads, Eli Lilly and Company, Indiana State Teachers Retirement Fund, Indiana University, Purdue University, the University of Notre Dame, Richard M. Fairbanks Foundation, and Credit Suisse today announced the establishment of the INext Fund, a $58 million venture capital fund of funds.

Organized through BioCrossroads, Indiana's initiative to grow, expand and invest in the life sciences, and managed by the Credit Suisse Customized Fund Investment Group, the INext Fund includes investments from Lilly, the Indiana State Teachers Retirement Fund (TRF), IU, Purdue, Notre Dame, and the Fairbanks Foundation. This fund of funds is a capital pool that will invest in venture capital funds that are focused on the life sciences, thus encouraging and facilitating direct investment in Indiana life sciences opportunities.

University researchers often have no idea how to get the science they've developed to the marketplace where it can benefit real people.

Most prefer to stay in the lab and let university officials bring in off-campus entrepreneurs to create companies to market that research.

A decade before he came to the University of Utah as dean of the David Eccles School of Business, Jack Brittain started to think about another way of creating business ventures based on university-developed technology.

"We wanted to ... support the research mission, the educational mission and the service mission of the university," he said.

There is no need to wait millions of years for deceased organisms to compress into fossil fuels to burn. Forget about how the wind doesn’t always blow hard enough to move wind turbines, or that the sun doesn’t shine on solar panels at night. A typical U.S. dairy cow is a renewable energy machine, producing 150 pounds of “fuel” in the form of manure…every single day. There are no intermittency issues as there can be with wind and solar; as one dairy farmer said to me: “cows crap 24 hours a day.”

The U.S. dairy industry produces a staggering amount of manure every day, to the tune of 167 million gallons of manure from some 9.3 million cows. That is enough manure to fill 250 Olympic size swimming pools every day of the year, generated by a population of cows that is more than three times the number of people in Chicago. (This is definitely something to impress your friends with the next time you they ask you to pass the milk for their coffee.)

I have been delving into the brand new Report on The Creative Economy of the Los Angeles Region,* just released a couple weeks ago. For a copy go here. As a relative newcomer to Los Angeles, I continue to be amazed by the spirit of creativity that surrounds us here (and I came here from a pretty creative place—Silicon Valley). Of course here in LA we see creativity manifested in the entertainment and performing arts areas in a big way. But I believe we also see it in little ways like the incredibly effective and striking logo on a vehicle of a small landscaping company or the way young people express themselves through fashion, mixing up styles from different parts of the world or mixing modern and vintage into a stylish and cohesive whole. Creativity, diversity, color, inventiveness truly permeate the LA culture. And it shows.

A series of mostly unrelated activities brought LAVCA to Chile in early December, just days before the country was accepted into the OECD on December 15. Beginning with a presentation at the OECD Corporate Governance Roundtable in Santiago and ending at an ‘asado’ with IT entrepreneurs and investors at the estate of Wenceslao Casares in Pirque, my colleague Ariel Muslera and I were busy all week.

Acceptance into the OECD is in recognition of Chile’s transparent institutions and competent macroeconomic management. The country has consistently ranked first in the LAVCA Scorecard, which measures the environment for PE/VC investing in 12 Latin American countries, distinguished especially for high scores on three indicators that are low elsewhere in the region: perceived corruption, strength of the judicial system and protection of intellectual property rights.

This the full report. The executive summary is available here. Arizona has several important resources needed to build a successful high-tech economy, including three large research universities, several high-tech industries and organizations that promote technology growth. However, the state is lagging behind in terms of skilled, educated workers, sufficient capital to fund research and expansion by entrepreneurs; and state-level leadership that is informed and committed to implementing well-considered, long-range development strategies.

If Arizona wants to remain competitive in the post-recession economy, it must move quickly to build a healthy, job-intensive technology sector. This report suggests that strategic planning, virtual and brick and mortar business incubators, retaining high-tech graduates, and creating incentives for green technology are all necessary to keep the state competitive in science and technology sectors.

It’s crunch time in Copenhagen: the governmental leaders are here and they will have to find an agreement during the next two days if they are to leave with their credibility intact. Having now seen two official drafts of the text being discussed by AWG-LCA, it’s possible to glean some insights into the direction in which negotiations over technology transfer are moving.

Technology transfer is one of the five negotiating themes that have been under negotiation for the last two years as part of the Bali Road Map. There are two key questions surrounding technology transfer. The first is architecture: what institutional framework will be in place after 2012 to govern technology transfer activity? The second is financing: how much money will be available for technology transfer and who will decide where this money is spent?

I have noticed that VCs tend to talk to the public and with their peers more about their home runs than their strike outs. Angel investors, on the other hand, prefer to relentlessly revisit their pain—often comparing their battle scars like veteran samurai. Probably because angels put up their own capital. Cs, angels truly eat their own cooking so it’s harder to forget their fallen soufflés.

VCs achieve their highs from the opium of OPM…so even a bad trip is still a free trip.

I recently had lunch with an inveterate venture investor (aka “angel”) whom I had co-invested with in a biotech, as well as, a med-tech company, several years back. Our conversation inevitably turned to peck at our past portfolios.

Private equity has long lost its mantle as the enemy at large in the capital markets. The banks now have become the focus for public opprobrium, to such an extent that there is little ire left to be expended on other corners of the financial world. The European Union, belatedly, seems to be acknowledging this as it moves in the direction of common sense in shaping the regulation of private equity.

Yesterday's news that the European Council had put forward a compromise text that was in line with the European Parliament's prevailing position was encouraging. That private equity should be lumped into the Alternative Investment Fund Management Directive seems anyhow to be unnecessary but, since its inclusion appears to be inescapable, the drive has to be to achieve a regime that is at least workable. The European Venture Capital Association has greeted the latest development enthusiastically, saying it shows the Swedish presidency to be "clearly cognizant of the unique contribution venture capital can make to European innovation and long term economic growth."

When it comes to investing, venture capitalists are far more optimistic about next year’s prospects than they were about 2009, but they’re still just as downcast about their industry’s future, according to a survey by the National Venture Capital Association.

As it has done for the past four years, the NVCA asked its members more than a dozen questions about their expectations for the coming year. This year’s survey, conducted between Nov. 30 and Dec. 8, drew more than 325 responses to questions centered around investing, exits and their partnerships.

VCs surveyed largely expect firms to raise smaller funds in 2010 and for the industry to shrink in the next five years. Fifty-eight percent believe the industry will contract by 16%-30%, while 21% expect a 31%-50% shrinkage. That specific question wasn’t asked in last year’s survey, which took place three months after Lehman Brothers Holdings Inc.’s demise. But VCs then were equally sour about the industry’s forecast in related queries.

Again and again, high-level experts confirmed what we're hearing on the ground, at side events, press debriefs and happy hours - REDD is going to be the big winner this week.

Unless progress on finance and emissions reduction deals completely collapse here at Copenhagen, which is not likely, we are " on the verge of a major breakthrough on protecting tropical forests," said Kevin Knobloch, President of the Union of Concerned Scientists.

WWF US President Carter Roberts added: "This may be the most important moment in the history of forests ever in the world...we are within reach of the ability to save magnificent places."

Companies that received some government support outperformed those backed purely by private venture capital in recent years, according to new research that conflicts with recent reports by other bodies.

Enterprises that received up to half of their venture capital funding from governments outperformed rivals backed purely by private venture capital and also those with over 50% of government backing; both in terms of value on exit and patent creation, according to a report published today by the World Economic Forum, the Switzerland-based, non-profit foundation.

The report's authors – James Brander and Thomas Hellmann of the University of British Columbia and Qianqian Du at Shanghai Jiao Tong University – wrote: “In small amounts, government-supported venture capitalists can address obvious market failures and improve economic outcomes [by] picking the low-hanging fruit. In large amounts, however, GVCs may simply compete with, and crowd out private venture capitalist activity”.

The European Institute of Innovation and Technology (EIT) has chosen climate change, sustainable energy and information and communication technology as the subjects of its first three programmes, following a hearing with six short-listed candidates in Budapest yesterday (16 December).

“Today is a great day for innovation in Europe,” said Martin Schuurmans, chair of the EIT’s governing body, announcing the three winning bids to form Knowledge and Innovation Communities (KICs). These entities, each co-located at several centres in Europe, will bring together industry and academics to work together and become world experts in each of their fields. They will be reference points not only for other academic groups, but also for companies and for investment in these areas of technology.

It might be a bit of an understatement to say 2009 was a challenging year. I imagine there are a few who will be celebrating less that a new year is coming and more that this one is ending.

But the truth is, despite the recession and all its attendant trials, a lot of good things happened in Pennsylvania in the past year--the kinds of things that highlight the unique strengths of our state and our ability to position it for a competitive future when the economy recovers.

Here is a single page highlighting innovation resources in Australia. Australian Capital Territory, New South Wales, Northern Territory, Queensland, South Australia, Tasmania, Victoria and Western Australia are all recognized and list specific resources for innovation and businesses.

Hurt by smaller R&D budgets and offshoring, Yankees are winning fewer U.S. patents than non-residents

Has the U.S. lost its Yankee ingenuity? For the first time in 2009, non-Americans were granted more U.S. patents than resident inventors, accounting for 50.7% of new grants, according to recent data from the Patent & Trademark Office. Moreover, for only the second time in the last 25 years, patent applications fell overall in the year ended Sept. 30.

The role reversal had been only a matter of time. Led by Japan and the likes of South Korea and China, other countries have been zigzagging their way higher in patent awards for decades, while the number granted to U.S. residents peaked in 2001. Still, the inflection point troubles American tech industry advocates and other analysts. "The U.S. is losing its innovation base," says Robert D. Atkinson, founder and president of the Information Technology & Innovation Foundation (ITIF), a Washington think tank.

Authors say a free agency for inventors will get innovations to the market faster and create jobs, benefit consumers, researchers and universities

(KANSAS CITY, Mo.) Dec. 17, 2009 – Creating an open, competitive licensing system for university innovators is one of Harvard Business Review's "Ten Breakthrough Ideas for 2010" and the brainchild of researchers at the Ewing Marion Kauffman Foundation. The free agency solution is one of the 10 ideas that HBR says "will make the world better."

Current restrictions imposed by U.S. research universities on the ways their faculty can commercialize federally funded discoveries are slowing the diffusion of new technologies, according to the article by Robert E. Litan and Lesa Mitchell published this week in the January-February 2010 issue of HBR. These limitations are detrimental to the U.S. economy and universities themselves.

Wichita-based NetWork Kansas needs to sell a little more than $400,000 in 75 percent state entrepreneurship tax credits before the end of the year.

The program allows donors to buy the tax credits, which are used as seed capital for entrepreneurs and small-business owners, said Steve Radley, director of NetWork Kansas.

Donors will receive $75 of every $100 they contribute to directly offset income tax liability. If the credits aren't sold, they are lost, Radley said.

"We're again trying to wrap up our year," Radley said. "It's been a successful year, utilizing about $1.5 million with some of our e-communities working on raising some funds."

Washington, DC – The Senate Commerce, Science and Transportation Committee today unanimously passed legislation, introduced by Senators Mark Pryor (D-AR) and Olympia Snowe (R-ME), intended to spur innovation and economic development through the development of science parks.

The Building a Stronger America Act will help construct or expand science parks, which seek to encourage new startup businesses, generate student interest in science and technology fields, and encourage relationships between universities and industry. Specifically, the legislation allows the Secretary of Commerce to guarantee up to 80 percent of loans exceeding $10 million for the construction of science parks. The bill would also provide grants for the development of feasibility studies as well as plans for the construction of new, or expansion of existing, science parks. Finally, the bill would require the National Academy of Sciences to evaluate the program.

The membership of the National Association of Seed and Venture Funds (NASVF) commends thoughtful application of lessons learned in modeling the Angel Investment Tax Credit legislation. We believe that tax credit for investing in qualified early stage companies is crucial to enhancing the local and regional entrepreneurial business environment. Clearly, Wisconsin Act 255, which provides tax incentive for investors in early stage companies, has helped to create a healthy angel community, which helps sustain that region’s innovative early-stage companies. Every effort should be made to take advantage of lessons learned from this legislation, in order to build effective tax policy that helps sustain local and regional economic improvement on a national basis.

We urge a comprehensive legislative initiative regarding angel investor tax credits, with specific attention to the areas of immediate behavioral reward, venture eligibility, and investment eligibility.

Rich Bendis and Innovation America fully support the NASVF position on this matter.