After much angst over the drop-off in VC deals in 2008, activity appears to be heating up. The Wall Street Journal recently revealed the top 10 VC funding deals of the year, using data from Dow Jones VentureSource. It’s a must-know list for anyone interested in discussing the industry during their interview for a venture capital job.
Topping the list was Freemont, CA-based Solyndra Inc., a maker of solar panels. After receiving a $535 million government-backed loan guarantee, the company snared another $198 million from various venture capitalists including Argonaut Private Equity. All together, six VC partners have reportedly invested more than $600 million in the business, which is aiming to ship its first products in early 2011.
Other notables on the list included Clovis Oncology Inc., a Boulder, Colorado-based cancer-drug company receiving $146 million; and Small Bone Innovations Inc., in New York, developers of the STAR ankle replacement system that just won FDA approval, receiving $108 million. There was a 5-way tie for fourth place that included the $100 million venture capital injection into Facebook Inc. of Palo Alto, CA, which has grabbed headlines for finally becoming cash-flow positive and signing up its 300 millionth member. Rumors of an IPO abound. Also tying for fourth place was Twitter, out of San Francisco, whose $100 million fourth round cash injection sends the message that the company is here to stay, or at least for a while longer.
You can see the full list and more details on the individual venture capital investors behind them at the WSJ’s blog.
Venture capitalists have been getting a bad rap in the press lately, either for lackluster 10-year returns, not supporting enough innovation, or even contributing to the financial meltdown.
However, Paul Kedrosky, an investor, writer, and entrepreneur well known for his blog, Infectious Greed, and his columns for TheStreet/RealMoney, has a pointed defense of the industry in a recent article in TechCrunch.com.
“Creating a successful startup is among the hardest things you can do in a capitalist economy,” Kedrosky says. “The idea that anyone at all would build a business around funding startups is the remarkable thing. No revenues, no sure market ahead, no collateral, no liquidity, and doe-eyed founders who were in high school when Enron blew up. It all adds up to more ways to break down than an old Winnebago.”
To be successful in your venture capital career, you must successfully navigate a “sea of multi-dimensional uncertainty” Kedrosky says, ranging from whether the product or technology will actually work, to whether you have the right staff, right financing, right marketing and finally, whether or not the start-up company can actually sell the product for more than it costs to produce. At a big company, you can fail at every one of these decisions and still keep your job. In the venture capital world, one mistake and “you’re wandering a maze of dark and twisty passages — most of which are paved with trapdoors to hell.”
There’s no better place for growing green technology start-ups and creating green-collar jobs than California. That’s the opinion of San Francisco Mayor Gavin Newsom, in a rebuttal published by Reuters to political rival Meg Whitman, who was the former President and Chief Executive Officer of eBay from March 1998 to March 2008. Both are thinking about entering the race for California governor. Whitman recently penned an op-ed piece saying she’d suspend California’s climate-change legislation if elected governor.
Newsome said that the four largest clean energy industries (solar, wind, biofuel and fuel cells) will have combined annual revenues of $255 billion by 2015. And that California is capturing the lion’s share of “green capital”, some $6.6 billion invested in start-ups between 2006 and 2008.
The emerging green economy in California has created thousands of jobs, through economic growth and through venture capital and entrepreneurship, says Newsome. He feels the state’s climate-change legislation, AB32, is a key element of that growth and has challenged Whitman to a public debate on it.
