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http://cnnmoney.yellowbrix.com/page...2&ID=cnnmoney&scategory=Business+and+Finance&
Source: Seattle Post - Intelligencer
Publication date: 2003-06-06
Arrival time: 2003-06-07
IS THE DEEP FREEZE in the venture capital community finally starting to thaw?
Some recent developments indicate that it might be.
Take, for instance, the amount of money that has flowed into Seattle start-ups recently.
In the past three weeks, $90.5 million has been invested in seven privately held companies. That's more money than the entire second quarter of last year.
Seattle venture capital firms also have begun to do new deals, rather than just propping up existing portfolio companies.
Voyager Capital, SeaPoint Ventures, OVP Venture Partners and The Phoenix Partners are all on pace to do more new investments this year than last.
Anecdotal evidence also points to an increase in merger and acquisition activity, with two Seattle area start-ups - Performant and ViAir Corp. - being sold in the past month at positive valuations. Finally, the recent stock market run-up - while far removed from venture capital investing - has provided a psychological boost to the battered industry.
"It seems like the appetite is coming back," said Singlestep Technologies Chief Executive Chris Noble, who was presenting at yesterday's WSA Investment Forum. "Investors are ready to open their checkbooks again."
But before the checks get written and entrepreneurs start spending like it's 1999, other factors must be considered.
The initial public offering market remains in the tank. Technology spending is on a slow growth curve. And some venture firms have simply run out of money.
But at yesterday's investment conference in Seattle, optimism ruled the day.
Maybe it was the 80-degree weather. The end of the Iraq war. Or Nasdaq's climb above 1,600.
But it seemed as though the technology community was starting to get its sea legs.
"There is a psychology factor right now that life could be good again," said Bill Miller of OVP Venture Partners.
Voyager Capital's Bill McAleer, whose firm has made nine investments in the past eight months, said deal flow has improved and the quality of entrepreneurs pitching business ideas is much better than it was two years ago.
"I don't think the floodgates have opened," said McAleer, whose firm has about $100 million in fresh capital. "But we think there is incremental improvement."
The Alliance of Angels - a network of wealthy Seattleites who invest in early-stage companies - has experienced an uptick in activity after an eight-month lull.
At the organization's past three monthly meetings, three start- up companies raised capital.
One of those start-ups received a check only two days after the presentation, a rarity given the lengthy research process typically required by early-stage investors.
"People are more optimistic, companies and investors," said Alliance of Angels program manager Nate Silverman.
At yesterday's conference, 15 start-up companies competed for the attention of venture capitalists during 10-minute presentations. Noble, who is trying to raise up to $8 million for his network integration software company, felt good about his presentation. With the company on track to surpass its second-quarter sales goals, Noble said investors are spending more time getting to know the business. The customer sales are driving the investor interest, he said.
That's also the case at VoiceBox Technologies, which is developing a system where voice commands can be used to retrieve information on the Internet. The Kirkland company landed its first customer in March.
"It was a huge dry spell up until then," said Tom Freeman, vice president of marketing. "But since then, we have been in active discussions with several VC firms."
David Johnston, managing partner of The Phoenix Partners, said his deal flow has picked up in recent months. The Seattle venture capitalist, who currently has term sheets pending with three new companies, senses a shift in the entrepreneurial mindset.
"I think that people who were getting paychecks twice a month from large multibillion dollar companies weren't willing to take a risk in the entrepreneurial market because they wanted to take care of their family and get paid," Johnston said.
"Now I think people see some optimism in acquisitions that are profitable and an IPO market that may be coming back."
While the mood was high at yesterday's event and private investment activity has increased in recent weeks, some were cautious to declare a complete rebound.
"I wouldn't say it is a wave yet. It is not a tsunami," said OVP Venture Partners' Chad Waite.
"But there are individual pockets and places where things are starting to happen."
P-I reporter John Cook can be reached at 206-448-8075 or johncook@seattlepi.com. For more information on Seattle-area start- ups or venture capital firms, visit www.seattlepi.com/venture.
Publication date: 2003-06-06
http://cnnmoney.yellowbrix.com/page...2&ID=cnnmoney&scategory=Business+and+Finance&
Source: Seattle Post - Intelligencer
Publication date: 2003-06-06
Arrival time: 2003-06-07
IS THE DEEP FREEZE in the venture capital community finally starting to thaw?
Some recent developments indicate that it might be.
Take, for instance, the amount of money that has flowed into Seattle start-ups recently.
In the past three weeks, $90.5 million has been invested in seven privately held companies. That's more money than the entire second quarter of last year.
Seattle venture capital firms also have begun to do new deals, rather than just propping up existing portfolio companies.
Voyager Capital, SeaPoint Ventures, OVP Venture Partners and The Phoenix Partners are all on pace to do more new investments this year than last.
Anecdotal evidence also points to an increase in merger and acquisition activity, with two Seattle area start-ups - Performant and ViAir Corp. - being sold in the past month at positive valuations. Finally, the recent stock market run-up - while far removed from venture capital investing - has provided a psychological boost to the battered industry.
"It seems like the appetite is coming back," said Singlestep Technologies Chief Executive Chris Noble, who was presenting at yesterday's WSA Investment Forum. "Investors are ready to open their checkbooks again."
But before the checks get written and entrepreneurs start spending like it's 1999, other factors must be considered.
The initial public offering market remains in the tank. Technology spending is on a slow growth curve. And some venture firms have simply run out of money.
But at yesterday's investment conference in Seattle, optimism ruled the day.
Maybe it was the 80-degree weather. The end of the Iraq war. Or Nasdaq's climb above 1,600.
But it seemed as though the technology community was starting to get its sea legs.
"There is a psychology factor right now that life could be good again," said Bill Miller of OVP Venture Partners.
Voyager Capital's Bill McAleer, whose firm has made nine investments in the past eight months, said deal flow has improved and the quality of entrepreneurs pitching business ideas is much better than it was two years ago.
"I don't think the floodgates have opened," said McAleer, whose firm has about $100 million in fresh capital. "But we think there is incremental improvement."
The Alliance of Angels - a network of wealthy Seattleites who invest in early-stage companies - has experienced an uptick in activity after an eight-month lull.
At the organization's past three monthly meetings, three start- up companies raised capital.
One of those start-ups received a check only two days after the presentation, a rarity given the lengthy research process typically required by early-stage investors.
"People are more optimistic, companies and investors," said Alliance of Angels program manager Nate Silverman.
At yesterday's conference, 15 start-up companies competed for the attention of venture capitalists during 10-minute presentations. Noble, who is trying to raise up to $8 million for his network integration software company, felt good about his presentation. With the company on track to surpass its second-quarter sales goals, Noble said investors are spending more time getting to know the business. The customer sales are driving the investor interest, he said.
That's also the case at VoiceBox Technologies, which is developing a system where voice commands can be used to retrieve information on the Internet. The Kirkland company landed its first customer in March.
"It was a huge dry spell up until then," said Tom Freeman, vice president of marketing. "But since then, we have been in active discussions with several VC firms."
David Johnston, managing partner of The Phoenix Partners, said his deal flow has picked up in recent months. The Seattle venture capitalist, who currently has term sheets pending with three new companies, senses a shift in the entrepreneurial mindset.
"I think that people who were getting paychecks twice a month from large multibillion dollar companies weren't willing to take a risk in the entrepreneurial market because they wanted to take care of their family and get paid," Johnston said.
"Now I think people see some optimism in acquisitions that are profitable and an IPO market that may be coming back."
While the mood was high at yesterday's event and private investment activity has increased in recent weeks, some were cautious to declare a complete rebound.
"I wouldn't say it is a wave yet. It is not a tsunami," said OVP Venture Partners' Chad Waite.
"But there are individual pockets and places where things are starting to happen."
P-I reporter John Cook can be reached at 206-448-8075 or johncook@seattlepi.com. For more information on Seattle-area start- ups or venture capital firms, visit www.seattlepi.com/venture.
Publication date: 2003-06-06
