Evan Vitale

Accounting Professional

Evan Vitale – Latest Venture Capital News

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By Evan Vitale

Here’s the latest news in venture capital and VC deals:

The Wall Street Journal is reporting the Chicago start Opternative Inc. has raised $6 million in Series A venture funding for an app that lets people take an eye exam using their smartphones and a personal computer at home.

According to Opternative co-founder and Chief Executive Aaron Dallek, Opternative’s app captures data about a patient’s vision and sends it to a licensed, local opthamologist for evaluation. Within 24 hours, the eye doctor then writes a new prescription for glasses or contacts for the patient. The exam costs $40 for either a contacts or glasses prescription and $60 for both.

Read more about Opternative Inc. here: http://blogs.wsj.com/venturecapital/2016/02/18/opternative-raises-6-million-for-online-eye-exams/

A Forbes blog post suggests business owners should stop chasing venture capital funds and start bootstrapping in order to create a profitable business.

Here, writer Danile Buelhoff uses his own experience over a 10-year entrepreneurial lifespan to formulate his opinion and advice on bootstrapping vs. venture capital.

You can read more about Buelhoff’s opinion here: http://www.forbes.com/sites/theyec/2016/02/18/stop-chasing-venture-capital-and-start-bootstrapping-a-profitable-business/#186859ea5078

Business Insider has written a nice piece “Everything you’ve ever wanted to know about venture capital, but were too afraid to ask” at http://www.businessinsider.com/venture-capital-explained-2016-2

Food Navitagor-USA (http://foodnavigator-usa.com) is reporting that the Campbell Soup Co. is hopping on the venture bandwagon “to more fully participate in growth opportunities” that could give it a competitive edge meeting consumers’ fast-evolving demands for healthy and fresh foods.

You can read the rest of the story here: http://www.foodnavigator-usa.com/Manufacturers/Campbell-launches-venture-capital-fund-new-products

Crowdfund Insider reports that F50, a venture capital startup, has announced it has launched the beta version of its co-investment platform and has successfully begun syndication. The firm has reportedly secured commitments to invest over $1 million in Knightscope’s Series B round of funding, a company that has developed technology to predict and prevent crime utilizing autonomous robots.

The full article is here: http://www.crowdfundinsider.com/2016/02/81907-f50-venture-capital-firm-debuts-beta-version-of-its-new-co-investment-syndication-platform/

 

Evan Vitale – Latest Venture Capital News

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By Evan Vitale

Here are some of the latest headlines in venture capital news:

According to GeekWire, a new study from MIT discovered that startups are more likely to succeed when their venture capital backers are connected to them via direct flight.

The research informs larger questions about the effects of venture capital oversight and whether it improves the operations of the startups in which the firm has invested or whether startup success depends solely on effective internal management.

The researchers — Xavier Giroud of MIT, Shai Bernstein of Stanford, and Richard R. Townsend of Dartmouth — compared startups in cities where a direct flight recently had become available between startups and their existing VCs to startups in cities where no direct flights existed to connect the two groups.

Read the rest of the story here: bit.ly/1PCt8oe

The Jewish Business News is reporting in 2015, Singulariteam, a medium sized Israeli fund founded by Moshe Hogeg and Kenges Rakishev, topped all VC fund investors by making 12 first investments,  according to report by IVC Research Center and APM & Co. Law Firm analyzing first investments in Israel by venture capital funds in the past five years, and ranking the most active venture capital funds which invested in Israel in 2015.

Singulariteam’s investments makes a slight increase for the number of deals made by the top ranked fund, compared to 10 first investments made in 2014 by the year’s Most Active Fund, JVP.

Singulariteam manages $152 million via three funds – two early stage funds and a new growth stage fund. The first investments made in 2015 were funded by Singulariteam II, a $102 million early-stage fund closed in 2014.

The full story is here: bit.ly/1KbDOxl

The St. Louis Post-Dispatch reported a $104 million fund managed by Lewis & Clark Ventures is a big deal for St. Louis.

Startups that have been nurtured by the region’s various angel investing groups, accelerator programs and seed-stage funds now have someplace to go when they need larger sums.

The fund plans to invest in series A and B rounds, which are when an early-stage company gets its first or second dose of institutional investment. Lewis & Clark says it will invest between $3 million and $7 million per company, and will bring in co-investors when firms require tens of millions of dollars.

The full story is here: bit.ly/1KFdqMl

Evan Vitale – What’s New In VC News?

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By Evan Vitale

Well-known sports agent Leigh Steinberg is launching a venture capital initiative. Steinberg Ventures will invest in emerging companies and startups in sports and entertainment.

Steinberg Ventures is a partnership with private equity firm Alpha Strategies, led by founder and President Jay Rodgers. It will leverage relationships and opportunities sourced primarily through the Steinberg Sports & Entertainment agency, led by Steinberg and Chief Operating Officer Chris Cabott.

You can read the rest of the story here: bit.ly/202u228

The Riverside Company (formerly VSS Riverside) has added PRIMA Eye Group to its Independent Doctors of Optometric Care (IDOC) platform. PRIMA provides consulting services and purchasing programs to independent optometrists in the U.S.
Based in Atlanta, PRIMA serves nearly 400 practices representing almost 900 optometrists. PRIMA is a consulting firm and alliance devoted to helping independent optometrists through every stage of their optometric business, providing one-on-one consulting from a team of experts in marketing, human resources and practice financial analysis to help grow practice revenue.

The full story is here: bit.ly/1JlOdGe

A recent Wall Street Journal blog suggests that biotech venture investors are expecting a slowdown this year despite coming off a record 2015 investing season.

The blog, written by Brian Gormley, says “while fourth-quarter venture capital funding slid in most industries amid fears of an economic slowdown, biotechnology investment sprinted ahead.

The question is how long the run can last.

“Total U.S. venture funding reached $72.30 billion in 2015, its highest level since 2000, despite fourth-quarter investment declines in consumer services, information technology, and other markets, according to industry tracker Dow Jones VentureSource. Biotech was an exception, capturing $2.47 billion last quarter, a 25% jump from Q4 of 2014. A record, $8.95 billion pumped into biotech for the year drove total medical investment to a new peak of $16.10 billion. That was 34% above the previous high of $12.04 billion, reached in 2014.”

Read the entire blog post here: on.wsj.com/1RVvEvh

Evan Vitale – What Is ‘Royalty’ Financing?

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By Evan Vitale

As a good alternative to venture capital funding – and a funding that is hardly ever discussed – is “royalty funding.”

What exactly is royalty funding?

Royalty funding is described as a relatively new funding concept that offers an alternative to regular debt financing (i.e. loans and trade credit) and equity financing (i.e. venture capital and stock sales). Instead, in royalty funding, a business receives a specific amount of money from an investor or a group of investors.

Rather than have an equity stake in your business, the investors lend funds for a guaranteed percentage of your revenues for whatever the business is selling. Business owners guarantee investor(s) a percentage of their revenue over a period of time and pay them back the advance of cash (and some more). Deals usually run at 2% to 6% of increased revenues.

Typically, royalty financing is more common in well-established industries, such as music or mining, where revenue is steady but unpredictable.

Royalty funding is great for businesses who need a quick infusion of cash, but don’t want to give up control to equity investors. In addition, if the business suffers a down month in sales, payments are tied to a percentage of revenues, so there’s less need to worry about making a set loan payment, etc.

However, royalty funding can be expensive and businesses could eventually pay substantially more if sales take off. Remember? The funding is based on a royalty of your sales.

Some private equity firms and angel investors are willing to make royalty investments.

As always, seek advice from your team of experience professionals: your accountant, your lawyer and your banker. They may also be able to refer you to a firm that is interested in providing royalty funding.

Evan Vitale – Latest Venture Capital News

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By Evan Vitale

Here’s the latest and greatest on venture capital news:

From the Tampa Bay Tribune, local startups are already kicking into high gear and earning some notice from venture capital firms from Silicon Valley with many new programs getting some attention in Clearwater and St. Petersburg.

Check out the full article here: bit.ly/1PbBG8P

In Boston, Assemble.VC is looking to raise a $75 million initial fund, according to a recent SEC filing. Word has it the fund is more than halfway closed so far. More information and other Boston VC news can be found here: bit.ly/1Qrbvfj

iNovia Capital Inc., Montreal, says it has raised $175 million (Canadian dollars – US $120.2 million) for its latest venture-capital fund, overcoming the challenge of a sinking currency that puts Canadian firms investing in startups at a disadvantage to their United States counterparts.

Previously, iNovia attracted $110 million (Canadian) for each of its two previous funds.

The full Wall Street Journal article is here: on.wsj.com/1OGHyDn

Orange County continues to make venture capital headlines with startups landing $1 billion in venture capital in 2015, a first since the dot-com bust in 2000. Software and medical device firms made up most of the closed deals a year ago.

According to a MoneyTree report from Pricewaterhouse Coopers and the National Venture Capital Association, investors last year put their money into 88 deals in Orange County as compared to 148 deals (and $1.7 billion) in 2000. Two years ago, $683 million was invested in 89 deals.

In July 2015, Google Capital led a $100 million investment round in CrowdStrike, an Irvine-based cyber-security technology company, to expand its reach across the United States and internationally. This investment tied for the 10th-largest in the country since 1995.

According to PwC, venture capital in Irvine, California has increased 85% since 2010.

The full article is here: bit.ly/1lFovkt

Evan Vitale – The SBA and Venture Capital

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By Evan Vitale

The Small Business Administration has, among other informative web pages helping businesses on a variety of topics, an interesting section explaining venture capital.

The SBA’s “Venture Capital” page (https://www.sba.gov/content/venture-capital) features several sub-sections including:

  • About Venture Capital
  • Understanding Venture Capital
  • Angel Investors
  • Understanding Equity Capital
  • The Venture Capital Process

The primary “About Venture Capital” page fully defines venture capital and how it differs from other traditional financing. For example:

“Venture capital is a type of equity financing that addresses the funding needs of entrepreneurial companies that for reasons of size, assets, and stage of development cannot seek capital from more traditional sources, such as public markets and banks. Venture capital investments are generally made as cash in exchange for shares and an active role in the invested company.”

“The Venture Capital Process” section offers detailed information on submitting a business plan, conducting due diligence, investment, execution with VC support and exit.

The information, while accurate and short, doesn’t offer any opinions as to the positives and negative reasons why a startup would want to seek out (or avoid) venture capital.

The Venture Capital section is a sub-section of the “Finance Your Business” which also includes sub-sections on loans and grants – all of which is a chapter in the SBA’s “Starting a Business” category.

The Loans section references SBA Loans; a Business Loan Application Checklist; SBA Loan Application Checklist, and Acquiring Financing.

The Grants section offers a brief explanation about grants and notes that the federal government does not provide grants for starting or expanding a business. Some grants, however, are available through state and local programs.

Of note, the “Starting A Business” guide does include a section on “Filing and Paying Taxes” as well as sections covering “Business Law;” “Hiring Employees;” “Registering Your Business” and more.

You can see the full section here:

https://www.sba.gov/category/navigation-structure/starting-managing-business

Evan Vitale – What’s New in VC News?

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By Evan Vitale

Good news is coming out of Washington, DC as venture capital deals have hit their highest point since 2001.

According to the Washington Post, a few large deals during the fourth quarter, helped 2015 become a big year for investors and startups. In all, 29 DC firms received over $550 million in venture capital last quarter, a 53% increase from 2014, according to a report released recently by Pricewaterhouse Coopers and the National Venture Capital Association.

During 2015, DC companies were able to secure 169 deals totaling $1.41 billion – up from 197 deals totaling $1.09 billion in 2014.

You can read the full Washington Post article here: bit.ly/1WqBC6B

* * *

Meanwhile, companies in Wisconsin raised $87.8 million of venture capital in 2015, according to a national report printed recently by the Milwaukee Wisconsin Journal Sentinel.

In all, 23 Wisconsin companies pulled in $87.8 million, which is only a fraction of the $58.8 billion in venture capital that went into high-potential companies across the United States.

While Wisconsin’s numbers were better last year than in 2014, the state’s share of the national venture capital continues to remain low.

Biotech and medical device companies raised a combine $56.8 million, or 64% of all the state’s venture funding in 2015.

You can read the story here: bit.ly/1ZJHo8V

* * *

According to The Seattle Times, the state of Washington – which generally ranks among the top five states in venture capital investments – dropped to No. 12 during the fourth quarter of 2015.

Startups in Washington raised $167.7 million with 25 deals during the quarter – a 57% drop from the same period a year ago, when $389.6 million was invested in 29 deals, according to the MoneyTree report released recently from PricewaterhouseCoopers and the National Venture Capital Association.

You can read the full article here: bit.ly/1U9csYQ

Evan Vitale – Venture Capital News

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By Evan Vitale

Let’s take a look at recent Venture Capital (VC) news!

According to GeekWire.com, there was good news and bad news for venture capital activity in the Pacific Northwest. Here, venture capital activity was down 59% in the fourth quarter. However, overall, VC activity was up for 2015.

Last year, a record $2.4 billion was invested in 374 Pacific Northwest startup firms – up from $2.3 billion in 2014 and $1.4 billion invested in 2013.

Not bad!

From the Wall Street Journal, Healthline Media Inc. has raised $95 million from Summit Partners to compete with WebMD.com in the market for consumer-health information. Healthline.com was launched 2006 and provides health information to users through content licensed from third parties. The company was relaunched in 2012 with original content.

Also from WJS, a wine app called “Vivino” has raised $25 million in a Series B round of venture funding. Vivino Inc. is a mobile app for wine reviews and shopping. It lets users scan the label on a bottle of wine using their smartphones and access user-generated ratings and reviews. The new round of funding was led by SCP Neptune International. Other investors included Balderton Capital and Melo7 Tech Partners.

From the Houston Business Journal, a new venture capital fund has launched in Houston, Texas. Digitech is a crowdfunding-meets-private-equity style of venture capital where unaccredited investors will invest $50 to $100 per month. Digitech is targeting both software and technology-based companies, as well as biotech and healthcare. You can read the full article here:

http://www.bizjournals.com/houston/blog/2016/01/exclusive-new-venture-capital-fund-launches-in.html

KidPass, Inc., according to the Wall Street Journal, has started to sell $49 monthly subscriptions that give families access to many children’s activities, including sports, music classes, indoor play spaces, museums, and more. The idea, says co-founder and chief executive Solomon Liou is to give parents a “starting point whenever they are looking for any kind of activity for their children.”

You can check out KidPass here: http://blogs.wsj.com/venturecapital/2016/01/11/seed-funded-kidpass-launches-childrens-activity-subscription-service/

Evan Vitale – VC Money Tight in 2016?

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By Evan Vitale

The venture crystal ball, according to the Silicon Valley Business Journal, reveals that investors are predicting fewer unicorns and tighter purse strings for the upcoming year.

TechFlash Editor Cromwell Schubarth says most of the investors he interviewed at the conclusion of 2015, says the booming trend of venture capital funding is slowing down. Perhaps, we’ve been on a good ride for such a long time, that it’s likely things are going to calm down a bit.

You can read the entire article here:

http://www.bizjournals.com/sanjose/blog/techflash/2015/12/vc-crystal-ball-investors-predict-fewer-unicorns.html

Meanwhile, the Wall Street Journal says the Federal Reserve’s quarter-point rate increase will have very little immediate impact on the startup fundraising environment. However, gradual tightening is expected over the next 12 months. Will this leave companies short of startup cash before they start to see a profit?

Check out what capital investors are saying about this potential cash crunch here:

http://blogs.wsj.com/digits/2015/12/17/vc-mailbag-startup-funding-crunch-is-likely-in-2016/

However, once you dig down far enough, you’ll always be able to find some positive news from a venture capitalist.

According to CNBC, New Enterprise Associations general manager Rick Yang says 2016 will be a big year for companies working in virtual reality, edtech and e-commerce.

VC money might be tight, he says, in the first part of 2016 as compared to 2015, but he doesn’t see early-stage companies slowing down. Facebook and Apple, he predicts will look to “acquire more startups to maintain growth and obtain new technologies,” Yang says.

“I don’t think that any of the big tech companies are scared of acquiring companies right now, they still have quite a bit of cash on the balance sheets. And as I kind of mentioned in one of the previous questions, I do think they’re looking to other services outside of their core products for growth in the next year,” he said.

You can read the full article here:

http://www.cnbc.com/2015/12/31/one-venture-capitalists-predictions-for-2016.html

Evan Vitale – Latest VC Headlines

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By Evan Vitale

Here’s some of the latest venture capital news being discussed and shared online:

According to the OC Register, Irvine, California is a quite the “mecca” in Orange County when it comes to winning venture capital funds. A recent report says Irving-based companies raised more money than any of the county’s other 33 cities combined.

The Register went on to say that during the first nine months of 2015, Irving-based companies raised nearly $278 million in venture capital. Newport Beach was next in line with $57 in venture capital funds raised. The report was released by Jones Lang LaSalle Research and PricewaterhouseCoopers MoneyTree.

You can read the full article here:

http://www.ocregister.com/articles/million-698761-capital-companies.html

Recently, Indiegogo unveiled a new service that could “prove to be controversial among its core users by giving an edge to large corporations engaged in crowdfunding.”

In a blog post by the Wall Street Journal, “Goliaths have long since infiltrated crowdfunding sites, trotting out new products and promotional campaigns on platforms like Kickstarter and Indiegogo. But Indiegogo’s new Enterprise Crowdfunding service aims to help increase their chances of success on the platform.”

The blog post is here:

http://blogs.wsj.com/venturecapital/2016/01/06/indiegogo-courts-corporate-crowdfunders-with-new-services/

Monsanto Growth Ventures, the venture capital arm of the Monsanto Company announced for the first time its growing investment portfolio; nearly a dozen independent companies that are active in key areas of agricultural productivity, digital agriculture and biologicals.

StreetInsider.com has the news here:

http://www.streetinsider.com/Corporate+News/Monsanto+%28MON%29+Venture+Capital+Arm+Launches+First+Investment+Portfolio/11197249.html

From Bloomberg Business, growing peer-to-peer lending and online money transfer services helped raise a record $3.6 billion in venture capital funding for the UK technology sector last year.

The largest single investment in the industry was attracted by London-based small-business lending platform Funding Circle, which raised $150 million in April. London continues to have an expanding financial technology sector, which had a record year in 2015.

The full article is here:

http://www.bloomberg.com/news/articles/2016-01-06/u-k-tech-startups-raise-record-venture-capital-in-2015