Clean technology startups once again raised a record amount of venture capital in the third quarter, $2.6 billion, with 42 percent of it going to companies in California .... But problems with the U.S. financial system means the torrid pace can't continue, the report warned, potentially threatening one of the bright spots in Silicon Valley's economy. [San Francisco Chronicle, Oct 1]

[Fred Wilson at] Union Square Ventures has built its portfolio making small bets on young companies. .. readers of TheFunded.com, a social networking site for entrepreneurs, rated him their favorite venture capitalist in 2007 ...  the three-partner firm focuses on services that use the Web to change a market rather than simply make it more efficient. [Clair Cain Miller, New York Times, Sep 21]

European venture capitalists are investing less money in fewer companies, mirroring a trend seen in financing for American start-ups, according to a report Tuesday by Dow Jones VentureSource.  Venture capital firms in Europe invested in 167 young companies in the second quarter, 42 percent fewer than in the period last year. Venture dollars invested declined 35 percent, to $1.3 billion. The quarter was the worst since at least 2000, when VentureSource started tracking European data.  [Claire Cain Miller, Aug 26]

Google is working on plans to start a venture-capital arm ...  Corporate venture-capital arms have been hampered by challenges that traditional venture-capital businesses don't face. Venture capitalists invest in private start-ups at an early stage, usually in hopes of a big payout if the company is sold or if its stock goes public.  Many start-ups fear that taking corporate money limits their options and comes with strings that could turn away other potential investors -- such as a right to buy the company at a later date.  [Jessica Vescellaro, Wall Street Journal, Jul 31] 

Optimism Still Flowing. The pace of U.S. venture capital investments remained steady at $7.4 billion during the second quarter despite a wobbly stock market that has made it increasingly difficult for the financiers of new ideas to cash out of startups. [Michael Liedtke, AP, Jul 19]  The pace of such investment mocks the SBIR claim that government handouts are necessary to get innovation, especially when so much of the money winds up in the hands of life-style companies who can make no economic claim of success for the nation. Oh yes, they do claim that they are better off.

From April to June, venture investments around the globe in clean-tech reached $2 billion, an all-time record, said the study from the Cleantech Group, a San Francisco research and strategy firm. That's up 58 percent from the same period in 2007 and 48 percent from the first three months of 2008, said Brian Fan, the group's senior director of research. [San Jose Mercury News, Jul 8]

The first quarter in 30 years without an IPO prompted the NVCA and its fellow travelers on Wall Street to launch a lobbying campaign to reform post-Enron reforms that raised the financial hurdles for start-ups to go public. ... Todd Dagres of Spark Capital, in a press release, seemed dismissive of the NVCA's talk that the entrepreneurial world faced a "crisis": "The data is artificial. Facebook and several other privates could have gone public but chose not to. The issue is overall liquidity. If a private company sells to a public company - it's similar to going public with less risk." [San Jose Mercury News, Jul 2]  But then, if you want something from Congress , you need to talk "crisis" since they are so busy dialing for dollars.

Adjusting for population and focusing on seed- and early-stage capital revealed that several states, including Washington, the District of Columbia, Colorado, Maryland and Connecticut, are seeing impressive increases in capital opportunities for early-stage entrepreneurs, even though their achievements are often overshadowed by the sheer volume of dollars invested in California and Massachusetts. [SSTI, Jul 2]

The second quarter of this year is to be the first in more than 30 years without a venture-capital-backed IPO in the U.S., according to a survey by the National Venture Capital Association, [Wall Street Journal, Jun 30]

Procedural justice may be the reason why venture capitalists favor the entrepreneurs who communicate with them most; a willingness to observe the dictates of process is taken as a proxy for quality. [David Shaywitz, reviewing Brafman & Brafman' Sway, Wall Street Journal, Jun 24]

Kleiner Perkins is now laying a bet on a breakthrough technology surrounding stem cells derived from adult humans. ... backing a new Bay Area company, iZumi Bio Inc., which had its public premiere Monday with the announcement of a research collaboration with the J. David Gladstone Institutes, based in San Francisco. The nonprofit institute is a center of scientific work on novel methods of "reprogramming" adult cells to recover the versatile properties of embryonic stem cells, which can morph into any cell type in the body. [Bernadette Tansey, San Francisco Chronicle, Jun 17, 08]

Wisconsin is one of the venture capital “have-nots,” said Susan P. Strommer, president and chief executive officer of the National Association of Seed and Venture Funds, a network of 8,000 early-stage investment professionals and organizations.   A whopping 60% of all venture capital dollars go to companies in California and Massachusetts, Strommer said. Wisconsin companies pull in just 0.3% of all the venture capital invested in the U.S., she said.  That statistic, plus the fact that venture capitalists now put just 4% of their money into start-up companies, compared with 17% in 1995, shows why it’s so important for the state to build its own infrastructure for investing in young companies, Strommer said.  [Kathleen Gallagher, Milwaukee Journal Sentinel, Jun 11]  The idea of "have-not" empowers representative politicians to correct an "unfair" imbalance. Their problem is that we cannot have "fair" balance and a nationally efficient market-based innovation machine. The same argument applies to SBIR promoters who argue "fair share" as the basis for redirecting government investment in innovation to politically favored companies. 

Biotechnology companies in San Diego and nationwide had little trouble raising money last year, with venture capital, stock offerings and debt deals pumping a near-record $21 billion into the sector. But the biotech industry yet again missed a milestone it's been striving for over the past three decades – overall profitability – although it came closer than it ever has before. [Mike Freeman, San Diego Union Tribune, May 20]

"Blank-check companies" started off 2008 by outpacing the number of traditional IPOs listed in the U.S. But they have begun to lag behind as investors show signs of buyer's fatigue. ... empty shells that raise money through initial public offerings to eventually buy operating businesses, made up nearly a quarter of all initial public offerings in the U.S. last year, according to Dealogic. [Wall Street Journal, May 19]

Clean-tech venture capitalists have taken a shine to makers of LEDs and other bright lights, seeing a growing potential for these semiconductor-based light sources in streetlights and parking lots, in concert venues and gymnasiums ... VC investments in lighting technologies reached $100 million in the first quarter of 2008, ranking behind only biofuel and solar among clean-tech categories. [Matt Nauman, San Jose Mercury News, May 19]

Capital, Capital, Capital. Lightspeed Venture Partners, flexing its success in the ongoing shakeout of venture capital business, announced Monday it had closed a new $800 million investment fund. Issuing press releases in English, Mandarin, Hindi and Hebrew in the wake of two new funds - the $1.2 billion raised by Kleiner Perkins Caufield & Byers, including $700 million in its 13th early-stage fund, and $500 million in its new "Green Growth" fund. [San Jose Mercury News, May 13]

Kleiner Perkins will invest $500 M in green technology companies that have passed their earliest stages of growth and are maturing. The venture capital firm also will invest in green-tech startup companies as part of another investment fund it introduced Thursday, which will invest $700 M over the next three years in startups.  [San Francisco Chronicle, May 2]

Venture capital investments in New England companies fell 40% in the first quarter -- to its lowest level in a decade . [Mass High Tech, Apr 21, 08]

Venture capitalists sank $6.8 billion into U.S. companies in the first quarter, down 8% from a year earlier, according to data from Ernst & Young and VentureSource. [Tomio Geron, Wall Street Journal, Apr 19]

The credit crunch and economic downturn have some angels feeling skittish. But others see opportunity: Studies show that the best time to start a business is when the economy is down. That's because entrepreneurs with good ideas will find cheaper land, labor, supplier contracts, and other ingredients that go into starting a business. Angels that back such ventures can earn impressive long-term returns—one study cites a rate of return of about 27%, on average, or 2.6 times the investment in 3.5 years.  [Chris Farrell, Business Week, Apr 28]

As George Lipper noted for the National Association of Seed and Venture Funds, California claimed about 40% of national venture investment in 1995, a figure which had grown to about 47% by the end of 2007. [SSTI, Apr 16]

Sequential VC Partners. Terry McGuire, a partner with nearby Polaris Venture Partners, was familiar with BIND's nanoparticle technology to treat tumors and heart disease. He's also a friend, and frequent business partner, of Robert Langer, the decorated scientist who runs the MIT lab. That relationship often gives Polaris first dibs on cutting-edge medical technology developed there. Together, McGuire and Langer have launched 13 companies over the past 15 years and become a model for other venture capitalists scrambling to commercialize new drug and medical-device research.  [Rebecca Buckman, Wall Street Journal, Apr 14, 08]

[VC's Grandfather Georges] Doriot was as much focused on the personal qualities of the founding team as the soundness of the business idea. "His famous saying was, 'I'll take an A individual with a B idea over a B individual with an A idea,' " says Dan Holland, who began working for Doriot as an associate in 1969, helping identify and manage investments. [Scott Kirsner, Boston Globe, Apr 7]

With the economic downturn souring market demand for venture-backed start-ups, fewer were sold or went public in the first three months of 2008 than in any quarter in recent years, according to figures released yesterday by the National Venture Capital Association. [Boston Globe, Apr 3]

Angel investors are on track to be more cautious with investments in light of the recent volatility in the economy, according to a new study.  The 2007 Angel Market Analysis from the Center for Venture Research at the University of New Hampshire in Durham, N.H., showed mixed signs and exhibited little change from investment dollars the previous year.  Total investments in 2007 were $26 billion, an increase of 1.8 percent over 2006. However, a total of 57,120 entrepreneurial ventures received angel funding in 2007, a 12 percent increase from 2006. The number of active investors in 2007 was 258,200 individuals, an increase of 10.3 percent over 2006, according to the UNH study. [Dayton Business Journal, Apr 1]

venture capital is still rolling in. [NVCA] reports that 2007 saw the highest level of VC investments - $29.4 billion pumped into 3,813 deals - since 2001. But don't be too relieved by that last figure. As we know from those doomed 2001-era investments, ebullience among venture capitalists can be a very bad omen, if not a sure-fire sign of a market top. ... In other words, the Valley is probably going to have a difficult time keeping up its us-vs.-them mentality. [Adam Lashinsky, Fortune, Mar 20]  If VC, industry R&D, and capital investment all decline, look for the SBIR advocates to make the intellectually bankrupt that putting more government money into small high-techs would be good for America. Actually, it could be good if the government R&D agencies were capable of managing it intelligently. Which they have showed no sign of, and which the SBIR advocates wouldn't like anyway as the money went to an entirely different class of firm than supports SBIR politics. 

Silicon Wadi.  Land of milk and start-ups ... And, as in California, there are plenty of well-funded venture-capital (VC) firms providing cash. ... many entrepreneurs cut their teeth in the Israeli army, which has always needed to compensate for the county's lack of manpower and resources with cutting-edge technology, mainly in communications. ... The focus on innovation and technology, and a relative lack of interest in management and marketing, explain why Israeli entrepreneurs tend to sell out early, mostly to big foreign firms, rather than build up their companies. ... And one day soon, Chinese engineers, in particular, will be as good at building start-ups and developing intellectual property, warns Zohar Zisapel, a serial entrepreneur and chairman of RAD, a group of telecoms-equipment firms. After all, he says, “the Chinese mother is like the Jewish mother—quite demanding.”  [The Economist, Mar 19] 

Seattle was the third-fastest-growing U.S. investment hub of the past 10 years, according to a report by PricewaterhouseCoopers and the National Venture Capital Association. The study, known as the MoneyTree Report, indicated local startups raised some $1.25 billion in 2007, up 211 percent since 1997. Two other areas, New Mexico and Pittsburgh, showed even faster growth [rate] over the decade,  [Seattle Times, Mar 11]

Putting People First. Recent data indicate that early-stage start-ups are once again attracting venture capital. But that renewed interest may not necessarily translate into new local medical device companies, experts say. Entellus' story suggests that VCs are as picky as ever and that people -- not ideas or technology -- carry more weight with investors. [Thomes Lee, Minneapolis Star-Tribune, Jan 29]

Venture capitalists raised $34.7 billion in funds in 2007, an increase of 9.4% and the most the industry has raised since 2001, when it raised $38.8 billion. [eWeek.com, Jan 16]

Venture capital investment in renewable energy reached an unprecedented level of $3.4 billion in 2007, according to newly released data from Greentech Media Inc. [Boston Globe, Jan 16]

Clarian Health Ventures -- the venture capital firm quietly launched last year by Indianapolis-based hospital system Clarian Health -- is planning a schmooze-fest Jan. 29 at the Conrad hotel to officially unveil its new fund. It's an invitation-only affair expected to attract hundreds of physicians and scientists from Clarian and Indiana University School of Medicine, as well as local entrepreneurs, venture investors and others. ... hopes to build a portfolio of 10 to 15 companies  [Indianapolis Star, Jan 14]

Expensive Oil to Sustain Gusher of Energy IPOs.  Among the deals already queued up for this year are a host of midstream energy companies, which primarily operate pipelines to transport oil and gas in the U.S   [Lynn Cowan, Wall Street Journal, Jan 7]

The amount of money raised through IPOs in New York last year surpassed London for the first time in three years, reaching the highest levels since the internet boom. [Financial Times, Jan 3]

Yet it will still be good to be a venture capitalist in 2008 - at least for those who survive the Darwinian shakeout. [SD Harris, San Jose Mercury News, Dec 28]

Venture capital investments, which fund innovative businesses and technologies that can spark economic growth, are set to reach their highest total since 2001. The returns of VC funds for the years 2003-2007 have been 7%, 15%, 12%, 18%, 18%. Not the heady 40% of the dot.com era, but still US Treasuries.  SBIR's return on investment, by contrast, has been undetermined and likely to remain so.  The VCs invest in the good stuff and SBIR invests in (you name it).

Overall, seven of the nine IPOs that priced earlier this week ended their first day with gains, and five experienced double-digit percentage gains. [Wall Street Journal, Dec 15] The IPO of integrated circuit maker Intellon rose 13%.

Austin-based Santé Ventures is set to announce today that it has raised $130 M to invest in medical technology and health care services in Texas and the central United States. [Lori Hawkins, Austin American-Statesman, Dec 17]

In Silicon Valley's freewheeling start-up world, not a week seems to go by without a crop of companies sprouting up. ...  Boston venture-capital firm Spark Capital is starting a push to eliminate one barrier to the job-hopping and cross-pollination that is often credited as a factor in Silicon Valley's entrepreneurial culture, asking Governor Deval L. Patrick and fellow venture capitalists to eliminate the noncompete contract clauses that may prohibit an employee from moving to a competitor for months or years. [Carolyn Johnson, Boston Globe, Dec 7]

The amount of money raised through IPOs in New York is set to surpass London for the first time in three years as companies fuel a surge in IPO volume in spite of the turmoil in capital markets.  [Financial Times, November 25]  If the government wants SBIR to spur private capital investment, it should push its SBIR money toward companies with ideas that have the most potential for making money.

Angels Doing Well. The largest study on the financial returns of angel investors in North America, released in a new report today by the Ewing Marion Kauffman Foundation and the Angel Capital Education Foundation, shows that angel investors participating in organized angel groups achieved an average 27 percent internal rate of return on their investments.  Overall, this set of angel investors affiliated with angel groups experienced exits that generated 2.6 times their invested capital in 3.5 years from investment to exit. [Ewing Marion Kauffman Foundation, Nov 12]

Venture funding for all industries has fallen by more than half since 1999, ...to $26B in 2006, according to the National Venture Capital Association. Funding for Internet startups is running at roughly $1B a quarter in 2007, down from a high of $14B in the first quarter of 2000. ...a few hurdles between Landy Ung and her dream of growing her startup into a household name. ...her only outside funding comes from her mom's fried chicken restaurant, her only full-time programmer is her boyfriend, who has a day job. [Ellen Simon, AP, Nov 10]

Elsewhere in the Valley, the dearth of IPOs today could contain the seeds of the next bust. Because relatively few venture-backed companies are going public, many start-ups are relying on mergers and acquisitions for cash. ... Josh Lerner, a Harvard Business School professor who studies venture capital (and SBIR), says the number of "me-too" tech companies is even greater than it was in the late 1990s. ... The demise of such start-ups won't be pretty for Silicon Valley, but the shock waves sent out by any new bust likely won't travel as far as they did last time. [Rebecca Buckman, Wall Street Journal, Nov 5]

Oregon startups, long starved for attention from the venture capital community, are again feeling the love. A... VCs have invested nearly $200 M in Oregon companies this year. [The Oregonian, Nov 2, 07]

 The U.S. venture and angel markets appear to have fully recovered from their slump earlier this decade. Pricewaterhouse Coopers' Moneytree Survey reports that as of the third quarter, 2007 is on track to become the most active year for venture investment since 2001. [SSTI, Oct 31]

Angel Dust. US business angels, many of them wealthy entrepreneurs who have sold their companies, injected $11.9 bn into 24,000 ventures in the first half of this year, [said] Jeffrey E. Sohl, director at the University of New Hampshire's Center for Venture Research. [Robt Weisman, Boston Globe, Oct 30]

Entrepreneurs visiting a venture capitalist to ask for money sometimes feel like kids asking Dad for an allowance. ...  But every few years, Dad has to hit up Grandpa for a handout. ... Battery Ventures raised a $750M fund this year - that's made it harder for them to invest small sums into fledgling companies, Andonian says. DACE's strategy will be to put about $5 million over time into each company, and then ideally sell it to a larger firm.  [Scot Kirsner, Boston.com, Oct 28]

the IPO of Chinese software maker Longtop Financial Technologies Ltd. up 85% yesterday on the NYSE, the second-best IPO debut of the year  [WSJ, Oct 25] 

Venture capital investing in New England reached a six-year high in the third quarter [Boston Globe, Oct 20]  Venture capitalists invested an average of $20B every three months during 1999 and 2000, emboldened by the soaring stock prices of young and mostly unprofitable Internet startups.  This time Wall Street has shown little inclination to embrace unproven startups, one of the factors that has caused venture capitalists to show more restraint.  [Albany Times-Union, Oct 20]  venture capital investing in Austin posted its strongest quarter in six years. [Austin American-Statesman, Oct 20]

Next month, the New England Venture Network, a regional social group for venture capitalists, is launching VentureNetwork.vc, an online social network for professionals looking for another channel to connect and talk shop. [Carolyn Johnson, Boston Globe, Oct 22]

Southern California's biggest venture capital firm has halted fundraising for its latest venture fund amid the departure of several principals who were spearheading the firm's push into life sciences investments. ... Since it was founded in 1985, Enterprise Partners Venture Capital has raised close to $1.1B through six venture funds, which invested to varying degrees in technology, software and life sciences companies. [Bruce Bigelow, San Diego Union Tribune, Oct 18]

a lot of large U.S. companies (some who were small startups just a little while ago) get new technology more by buying early stage companies that have developed their technology to the level where it is just hitting the market place, rather than by paying university researchers (or even internal research groups) to do the basic research. ... Those companies (perhaps products of IPOs only a few years before) pay a premium for new technology, but they avoid most of the early stage risk. The VCs get handsomely rewarded for their successful bets  [Rod Brooks, Xconomy.com, Sep 10] But as Brooks notes, the scheme depends on government funding university research from which the start-ups spring.  

The angel market may be showing the first signs of leveling off following four years of moderate sustained growth. Angel investment in U.S. companies fell 6% in the first two quarters of 2007, according to the University of New Hampshire's Center for Venture Research (CVR).

venture investment is most desirable when the industry of the start-up company aligns with an area of expertise for the VC firm ...Despite the visibility of the VC industry, only 10 percent of start-ups receive VC support. The remaining 90 percent turn elsewhere for outside funding, often from commercial banks. ... Purchase "Financing Entrepreneurship: Bank Finance Versus Venture Capital" at: http://www.sciencedirect.com/science/journal/08839026  [SSTI, Oct 3]

Money Seeking Ideas. Ignition Partners, a Bellevue WA-based venture-capital firm, raised $675 M of which $400 M will be for traditional VC in early-stage technology companies  [Seattle Times. Oct 2] Business prospects required, not just sweet technology. For support for really nice science, try the federal government. Unfortunately, though, for small firms, the Executive Branch sees no competitive advantage in small company science; only politicians push science money toward small business.  Actually, economics research has established a small business innovation advantage in a narrow slice - innovative technology in market-driven small firms under 20 employees.

A new Boston VC firm launched a $378M fund to invest in early-stage life science companies. Third Rock Ventures LLC is a team of former Millennium Pharmaceuticals Inc. executives  [Mass High Tech, Sep 14]

Venture Lending. Venture-capital funding may be an alternative for some startup companies. But many entrepreneurs don't want to give VC firms an ownership stake in their business, or they can't attract venture investments. Most VC firms shun staid businesses with established markets in favor of “fast-growth” startups with “disruptive” technologies that promise to revolutionize their industry. One solution is what Miller calls “venture lending,” a concept underlying the creation of Huntington Capital, a Carmel Valley firm he co-founded in 2001.  ... Huntington offers loans to well-established, privately held businesses with sales that range from $5 M to $50 M a year.   [Bruce Bigelow, San Diego Union Tribune, Sep 14]

As you hear the SBIR advocates bleat about a lack of VC funding for companies that wouldn't get it anyway, consider: $52M more VC for SolFocus (Mountain View, CA) atop the last tranche of $32M. [Matt Marshall, Venture Beat, Sep 5] ; Plextronics, a Pittsburgh start-up developing organic photovoltaic technology for solar power, said it has raised $20.6M in a second round  [Matt MarshallVenture Beat, Sep 5]  Spatial Photonics, a Sunnyvale CA start-up developing high-definition microdisplays that will compete with existing microdisplay technologies, has raised about $26 M in a second round [Matt Marshall, Venture Beat, Sep 5]; Kovio, a Sunnyvale developer of semiconductor products using thin-film technologies, or "printed electronics," has raised $19.5 million in the first part of a fourth (series D) round; Sunnyvale-based [Matt Marshall, Venture Beat, Sep 5]; FlowCardia, a medical-device maker building catheter systems that bore holes in blood clots, raised $30 million in a third funding round; Aryx Therapeutics, a Fremont biotech company that derives ostensibly safer versions of existing drugs, filed to raise an $85.3 M  IPO..  [Matt Marshall, Venture Beat, Sep 5]

Some top venture-capital firms eager to expand into new markets are twisting their investors' arms to get them to go along -- or so say the investors  ... In some cases, investors "have really felt like there's been a gun held to their heads," says Josh Lerner, a Harvard Business School professor [Wall Street Journal, Aug 28]

Technology start-ups are certainly back in vogue. ... VMware's flotation is a good example of how much has changed. It was able to list on the stockmarket in the teeth of a financial gale only because it actually has a business. ... Since the costs of building new technology services are still coming down, people will just keep coming up with new ones—even if they do not make a lot of money and reach only a small audience. [The Economist, Aug 16] Don't worry about SBIR; the advocates will still plead for more program mostly for companies and technologies that have zero market prospects. Need another rocket plume model?

Seeking Angels. Some tips from Knox Massey, executive director of Atlanta Technology Angels: ones who understand your business, be patient, network, prepare for a long term relationship, listen to their advice.  [Wall Street Journal, Aug 13]  

GUY KAWASAKI, venture capitalist, business pundit and Apple’s first “evangelist,” posited that it’s “easy” to become an Internet millionaire, as long as you have a good idea. You don’t even have to work hard: a couple of hours a day in your underwear should be enough.   No Plan, No Capital, No Model...No Problem (guykawasaki.com) Hot or Not? (hotornot.com) Plentyoffish (plentyoffish.com) Steve Jobs demos Apple Macintosh, 1984 (youtube.com) The Flip Side of Entrepreneurship (guykawasaki.com) Hidden Credit Card Charges When Charging Abroad (gadling.com) Guilt won't stop impulsive shoppers, researchers say (cbc.ca) Mr. Kawasaki was host of a panel discussion June 14 at the Churchill Club, the Silicon Valley public affairs forum, titled “No Plan, No Capital, No Model ... No Problem: Companies That Defied What V.C.’s Will Tell You.” Video and audio of the event are available on Mr. Kawasaki’s blog, How to Change the World blog.guykawasaki.com.   [Alex Eben Meyer, New York Times, Aug 11]

Web Site Puts the 'Vent' Into Venture Capital ... TheFunded lets entrepreneurs rate venture firms according to five different criteria (track record, operating competence, pitching efficiency, favorable deal terms and execution assistance) and also write reviews of firms and their individual partners. Posters can choose to be anonymous. [Rebecca Buckman, Wall Street Journal, Aug 7] Don't like capitalists in your pet business? There's always government funding where the money doesn't care whether your business succeeds and grows in value.

Fewer dollars, more deals. That was the venture capital snapshot in the second quarter, both in New England and across the nation, according to the quarterly MoneyTree report. [Robt Weisman, Boston Globe, Aug 7]

Accelerator, Seattle's souped-up biotech incubator, has raised $22M in its third investment round. The funds will help start up to six emerging companies over the next two or three years,   [Seattle Times, Aug 3]

National venture funding was $7.4B in the second quarter, up 8% from a year ago.  Not the kind of numbers that suggest such a dearth that government intervention in the form of SBIR, for example, is needed, even if it could be run economically intelligently by government bureaus.

Every Fool Deserves an Angel. Entrepreneurs looking to start or expand a business remain underserved by the conventional equity markets – in fact, since 2000, venture capital investment in startup and early-stage companies has declined by more than 80%. Chairwoman Nydia M. Velázquez introduced the Angels Nurture Growing Entrepreneurs into Long Term Successes (ANGELS) Act, which establishes a new program and tax credit to promote this kind of less-formal investment in small businesses through angel networks. [press release House SB Committee, Jun 25]  Politicians love to find a problem at which they can throw money to constituents without having to first raise the money. But to feed all the American inventors and innovators who think they deserve an investment of Other People's Money, there is not enough money in all of China's dollar reserves. Capitalism has a working mechanism for matching dreamy rich folk with dreamy entrepreneurs, and to judge by the amount of capital poured into the sub-prime mortgage market, there is no shortage of ready money for chancy enterprises. There is no obvious market failure in American innovation that needs government intervention; there is only failure of mediocre ideas to attract capital being directed to more profitable enterprises. Angels do not need tax breaks to do what they would do anyway. The larger problem is a steady accrual of government intervention in American life - anything bad should be illegal and anything good should be done by government. 

Sodhani is turning the chip maker's sprawling investment arm - one of the world's largest and most active corporate venture capital organizations - in a dramatic new direction. Once a back-seat investor that let others "lead," or structure deals, Intel Capital is displaying a new aggressiveness. It is stepping more nimbly, spending more money and shedding its reputation for slow decision-making. [Mark Boselt, San Jose Mercury News, Jun 28]

IPOs in Europe.  Solaria's IPO is the latest in a long string of initial public offerings from European renewable-energy companies, ... Interest in solar stocks and alternative sources of energy has climbed as governments have pushed companies to reduce carbon emissions and oil prices have climbed. The European Photovoltaic Industry Association estimates the global market for solar power, measured by sales, will grow by an average of 37% annually through 2010. [David Roman, Wall Street Journal, Jun 18, 07]

VC Going Where?   "Central and Eastern Europe are already a better play" than China and India, says Scott Maxwell, co-founder of OpenView, which has invested 30% of a $100 million global technology fund in the region. "The technologies are more sophisticated."  [Business Week, Jun 11, 07] The risks in Russia especially are compounded by the lack of any working rule of law. So, why not invest in Wichita or Spokane? Venture seeks its own risks and opportunities; only governments try to breed money at  home with whatever is available and with other people's money with no penalty for failure.

Sizing Up Solar-Power IPOs Two profitable Chinese outfits are going public, but sunstruck investors should remember last year's disappointing ethanol offerings  [Business Week, May 30]

As more technology companies go public, the dot-com bust of seven years ago seems to have become a distant memory on Wall Street.  Investors are once again scoring double-digit first-day "pops" on the stocks. Smaller companies, some in recently shunned sectors such as software, are seeking stock-market listings. But this time around, investors expect companies to be relatively mature and on a solid financial footing. At the height of the dot-com craze in 1999 and 2000, some investors appeared unconcerned with a technology company's business plan and lack of profitability. [Yvonne Ball, Wall Street Journal, May 29]  one of the hottest months in years for Massachusetts companies that want to go public. Five companies have already made it onto public markets and raised $459 million selling shares this month.[Boston Globe, May 30] But, not everywhere: According to the latest figures from the British Venture Capital Association, the average return on venture capital over five years has been minus 4.8 per cent a year and over 10 years minus 1.1 per cent per annum. That compares with an exceptionally good 27.3 per cent per annum over five years and 22.2 per cent over 10 years from large management buyouts. [The Independent, May 26]

"We've seen one of the heaviest periods of filings in the last couple of years," said John Fitzgibbon, an IPO analyst and founder of IPOScoop.com. "They seem to be priming the pump for the summer rush."  [Yvonne Ball, Wall Street Journal, May 21]

Venture-backed companies, the [NVCA] study estimates, accounted for 10 million jobs and $2.1 trillion in revenue in 2005  ... But some skeptics argue that the study, which is being released today, overstates the effect of venture-capital financing. [David Ranii, Raleigh News and Observer, Mar 21]

Southwest Opportunity, a new Austin buyout firm,  plans to invest in small to midsize companies.  

Venture-capital investment flooded into Chinese companies in 2006, rising 55% from the previous year, with more-mature start-up companies attracting money like never before.  [Wall Street Journal, Feb 13]

Exit to Sweden. A gaggle of VCs, that reads like a who's who list of Sand Hill Road heavies, exited their investment in Entrisphere, (Santa Clara, CA; no SBIR)  by selling it to the Swedish telecom giant Ericsson, a world-leading provider of mobile network equipment. Its 140 employees develops products for the next generation of IP-based network technology known as Gigabit Passive Optical Network, or GPON. [SFGate.com, Feb 12]

A group of Utah angel investors is willing to back your business idea with cash - if it's judged the best in a competition for seed capital that will be held during the Governor's Utah Economic Summit in Salt Lake City on March 22.     The winner will receive an equity investment of as much as $100,000 [Paul Beebe, Salt Lake Tribune, Feb 9]

Last year was the best for venture-backed IPOs since the bubble burst, and this year looks even better. [San Jose Mercury News, Feb 11] Of course if you are getting or seeking DOD SBIR, the don't expect getting venture money since DOD doesn't care about future investment.

Silicon Valley pundits are predicting 2007 will be the biggest year [for tech IPOs] since 2000 when 170 high-tech companies sold nearly $19 B in IPOs[Business Week, Jan 8]

A Central Texas angel investing group, started last year to fill a void in backing for startups, is beginning to pump money into young Austin companies.  The group has committed a total of $750,000 to companies, with two deals nearing completion: AccuWater Inc., which makes an irrigation monitoring system, and NaturallyCurly.com, a product and social network Web site for people with curly hair. [Austin American-Statesman, Jan 25]

Angels Are Out There. Ed Rudman is a cautious man. He has spent a lifetime steering wealthy clients away from risky investments, and carefully tending their fortunes for future generations. So his latest investment might come as a shock. At 69, Rudman is putting his own money into a start-up drug developer with eight employees in a tiny lab in Cambridge. ... One among the million, Rudman was diagnosed with Parkinson's in 1997. Suddenly, this man so accustomed to discretion in the financial matters of others -- clients like astronaut John Glenn and Philadelphia Eagles owner Jeffrey Lurie -- had a secret of his own, and he kept it for seven long years.  [Beth Healy. Boston Globe, Jan 16]

In Michigan, VCs .. RPM Ventures, are selectively putting money and counsel into technology-driven startups, including software and materials companies, that they believe offer the means of innovation to older, larger and perhaps less nimble manufacturing firms. RPM's strategy is to identify and invest early in companies with products or technology-based services that are sold to Midwest manufacturers and other customers to make them more competitive, allowing them to become more efficient internally and to react quicker. [John McClenahen, Rust Belt Rebound?, Industry Week, Dec 1]

"No one wants to write the first check. Everyone wants to write the second check," said Jordan Dolin, chief executive of Emmi Solutions, which produces Internet-delivered patient-education tutorials on common medical procedures.

U.S. venture investing is outpacing last year ... entrepreneurship is alive and well and growing as fast as ever. Also, VC has become a global phenomenon. ... seed and early-stage investments are on the rise ... Software was one area that saw a decline. Investments in software companies dropped 19 percent  [San Jose Merc Mercury News, Nov 12]  SBIR on the other hand is alive but sick. Most of the money goes to contract service firms with little taste for the vicissitudes of the market. In Jon Baron's words: SBIR dollars as an end in itself.

Charles River Ventures plans to roll out a funding program today meant to help a new generation of low-cost Internet entrepreneurs rapidly launch new ideas before raising venture funding. ... its new CRV QuickStart program, will offer such entrepreneurs loans of as much as $250,000, known as ‘‘convertible notes’’ — meaning the venture firm can convert them into equity if and when the start-up raises its first round of venture capital. [Robert Weisman, Boston Globe, Nov 1]

Central Texas companies raised the most venture capital in five years. Twenty-one companies raised $206.8 M a 126% increase over last year. [Austin American-Statesman, Oct 24, 06] None shows up in SBIR lists. Meanwhile, VC was down 25% in the Triangle area of North Carolina, says the News-Observer. And down 52% from a much smaller base in Maryland.

About 30 potential [accredited] investors got a sneak peek last week at some promising technologies coming out of Arizona State University. It was the inaugural meeting of the Arizona Technology Investor Forum, a group designed to introduce well-heeled investors to up-and-coming companies spawned by university technology. [Arizona Republic, Oct 6] Nice idea, won't do any harm except possible leaks of proprietary information. Not clear it does much good, but as long as ange,s show up, it's at least entertainment.

What trends do you foresee in venture capital investing? A. In the near term, Silicon Valley and conventional technology sectors, the Internet and biotech, will be where the bulk of the dollars will go. But there’s definitely a globalization occurring. And there is movement into new sectors. And within information technology and within life sciences, there is a shift in what kinds of companies are getting funded and their locations.  [Bob Higgins, New York Times, Sep 24]The technology sector hasn't been particularly kind to IPO investors this year. Offerings in the industry have posted an average one-day return of 5.6% so far this year, compared with 7.2% across all other sectors, according to data from Dealogic. Total volume for all technology stock sold to investors -- including IPOs and follow-ons -- is down 15% so far this year, compared with the same period in 2005, the data tracker says. [Wall Street Journal, Sep 18]

In-Q-Tel, the venture capital arm of the CIA and other intelligence agencies, has hired an Intel Corp. manager with a background in cyber security as its new chief executive.  Christopher A.R. Darby.  [Washington Post, Aug 29]

make no mistake [about cleantech], Mr. Parker said. “This is not the venture equivalent of socially responsible investing,” he insisted.  It’s about money, Mr. Parker said. And venture capitalists are clamoring to get in. In the first two quarters, venture capitalists invested $379 million in 30 cleantech companies, according to the National Venture Capital Association. That is up from $230.8 million in 27 companies in all of 2005. The fervor is so strong, some critics say, that the cleantech label is being attached to concepts that only marginally fill the bill [Matt Richtel, New York Times, Aug 25]

[New Enterprise Associates] announced a new $2.5 B venture fund, the largest in its 28-year history and the second-largest the industry has ever seen. More surprising is that NEA will spend up to half of it on high-risk deals most VCs spurn: mega-investments in money- losing businesses, many of which haven't gotten their technologies to work yet. Some of the money will prop up cash-burning public companies that can't otherwise raise capital. In other deals, NEA will acquire unproven drugs -- many with U.S. regulatory approval still years away -- from Big Pharma outfits and build startups around them.  [Business Weeek, Sep 4]

Venture capital infusions into Utah's economy plunged 80% in the second quarter, to $21M, but analysts insist that the state has lost none of its allure to investors. [Salt Lake Tribune, Jul 27]

VC investing in the Philadelphia region reached its highest level since 2001, driven by strong interest in biotechnology and life sciences. [philly.com, Jul 25]

More Angels. The number of organized angel investor groups has increased almost 60% in the last three years ...  in 2005, the average angel group invested $1.45M with each individual investor contributing an average of $33,236 per deal. [Melanie Brooks, Inc, Jul 21]

the second quarter helped Central Texas post its strongest venture capital quarter in two years. Twenty-one companies raised $170.5 million during the quarter, a 134% increase from the same quarter a year ago, according to a survey by PricewaterhouseCoopers, Thomson Financial and the National Venture Capital Association. [Austin Statesman-American, Jul 25]

Ignition. Ignition Partners..  raised $80M last month to top off its already-robust $320M fund, making it the largest information-technology fund in [WA]. ... Earlier this year, it raised $200M to invest in China. [Tricia Duryee, Seattle Times, Jul 24]

VC Yard Sale. most traditional venture investors are still searching for new start-ups that could bring them Google-like returns.  Still, the later-stage survivor companies are becoming more popular. That is partly because such firms are closer to staging possible IPOs and returning money to investors than tiny start-ups.  [Rebecca Buckman, Wall Street Journal, Jul 18]

Better Money Elsewhere. In-Q-Tel has lost three managing general partners over the past year. Gilman Louie's $800K a year couldn't keep him forever in what seems to have become a training ground for VCs general partners. until now, we've been surprised that In-Q-Tel had been doing as well as it has -- linking up with top-tier venture firms to invest in key intelligence technologies  [story from Silicon Beat]

VCs have raised $18B so far this year, 41% more than last year.

Swallowing a Pill Company. Since 2003, Bain & Co sees six buyouts for every IPO as The median value of biotech acquisitions last year nearly tripled to $170 M [from] the previous year. ...reflects a newfound hunger on the part of major pharmaceutical companies for drug candidates to fill their depleted pipelines. [David Hamilton, Wall Street Journal, Jul 13]

Venture capital firm DFJ Element has raised a record-sized fund [$284 M] for investing in green technology companies, the latest sign that this area is red-hot.  ... Limited partners in the new fund include CalPERS, Swiss Re, Coca Cola, ITT, Robeco, LA City Employees Retirement System, WP Global, and British Airways to name a few [siliconbeat.com, Jun 30]

In 2005, venture capitalists invested $2.54 billion in 301 deals in the San Diego area and in Los Angeles, Ventura, Riverside and Orange counties, a 17 percent increase in dollars over 2004. By contrast, the industry invested $2.67 billion in New England, a 13 percent decline in funds. [New York Times, Jul 2]

Intel Capital funded four more Chinese start-ups. Last year 60% of its start-up investments went abroad, up from 40% in 2004. [Wall Street Journal, Jun 27]

Worth More, Maybe. The median valuation of VC-backed companies rose 20% in the first quarter, says Venture One., to $18M.  [Wall Street Journal, Jun 6].

Company Buyers Are Lurking. Ignition Partners, which has a $320 M venture fund for investing in startups, said it has gathered $80M more to support acquisitions by the companies in its portfolio ... Last year, 379 venture-backed companies were purchased for a total of $28.9 billion in the U.S., according to Dow Jones VentureOne. [Tricia Duryee, Seattle Times, Jun 2] For money to support life-style science, look to angels and government (and an equity mortgage in the house boom).  

Profitability of Venture Capital Investment in Europe and the United States.  This research paper from the European Commission examines the profitability of venture capital investment in Europe and the United States. It highlights the unfavorable profitability differential of European venture capital investment in comparison with the United States. The investment performance measures used are the internal rate of return and investment multiples.  [SSTI, Jun 1]

For biotechnology companies, the IPO isn't what it once was. VCs and financiers say the so-called IPO window remains open. But only biotech companies with desirable, late-stage drug candidates and the right kind of deals with pharmaceutical companies will be able to sell shares to the public at high prices.

Twin Cities angel investors -- wealthy people who collectively have contributed tens of millions of dollars to [entrepreneur Doug] Pihl startups Lee Data, NetStar, RocketChips and MathStar. ... Two of his companies have sold for $300M each, and he's credited with creating numerous other Minnesota millionaires. [Steve Alexander, Minneapolis Star Tribune, May 7 http://www.startribune.com/535/story/415638.html ]

Angels Flying Again. The new angel activity is proving to be a boon for entrepreneurs ... Since February, Mr. Senkut, 36 years old, has put money into five Silicon Valley technology start-ups and has lined up several similar investments. Becoming suddenly wealthy, "at first I thought I'd have nothing to do with the Internet or high tech again," he says. "But I realized I knew nothing about retail or restaurants. I needed to come back to what I know."  [Pui-Wing Tam, Wall Street Journal, May 1]

A venture-capital trade group says government regulations and other market obstacles are hindering start-up companies from going public and driving others to consider listing shares overseas. But it is unclear what kind of relief, if any, venture capitalists will get from regulators. [Rebecca Buckman and Kara Scannell, Wall Street Journal, Apr 27] the National Venture Capital Association naturally wants lots of exit routes for their infancy stage investments.

cash is still cascading into the start-up world. Palo Alto venture capital firm, Norwest Venture Partners, today becomes the latest firm to defy any emerging skepticism in the industry. It has raised $650M  in fresh cash, from its sole investor Wells Fargo, to invest in technology start-ups, [siliconbeat.com, Apr 19]

And the money keeps rolling in. VCs gathered 21% more money last quarter in nine new and 42 existing funds, says NVCA.

The number of U.S. venture-backed companies staging initial public offerings in the first three months of the year rose 63 percent from 2005 levels, but the median amount raised by these companies has plummeted. According to newly released data from Dow Jones VentureOne, [John Letzing, Dow Jones Newswire, Apr 10 ]

San Francisco start-up Arch Rock got a first round VC injection of $4.5M for wireless sensor technology. No sign of SBIR money; great technologies with market potential don't need nor want government money. The founder is  David Culler, a computer scientist at UC-Berkeley and former director of the Intel Research Berkeley lab. [siliconbeat.com, Mar 26]

Plenty of money sloshing around as VCs raised another $22B last year, up 19% from 2004.

Renewable Money. The VC money is chasing technologies aimed at increasing the supply of renewable energy, as well as for making existing energy plants and other infrastructure cleaner and more efficient. Venture capitalists sank nearly $181 million into alternative-energy companies last year -- nearly double the $103 million invested in that sector in 2004, according to estimates by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association. In 1995, investment in the sector was a scant $2.95 million.  [Jim Carlton and Rebecca Buckman, Wall Street Journal, Feb 2]

Welcome to the latest venture capital lemming rush: investing in consumer electronics start-ups....particularly technology to allow video over home networks. .. also  Gilman Louie, chief executive of the CIA's venture arm, In-Q-Tel, announced his resignation. Louie is returning to Silicon Valley, and is hooking up with former journalist and venture capitalist Stewart Alsop. The duo, who have known each other since 1986, plan to raise a $70 million fund to invest in early-stage technology companies.Louie understands technology and has experience running companies, while Alsop is ``probably the best networking gadfly in the marketplace,'' Louie said. ``He knows everybody.''  [Matt Marshall, San Jose Mercury News,  Jan 6 http://www.mercurynews.com/mld/mercurynews/business/columnists/matt_marshall/13563241.htm ]

The first time Scott Shickler went to a gathering of "angel" investors, he came home with a stack of business cards from lawyers, accountants and others -- and no investors. ... finding and winning over local investors willing to put anywhere from a few thousand to hundreds of thousands of dollars into a start-up can be tricky and time-consuming. .. According to estimates from the Durham, N.H., center, angels invested $11 billion in start-ups in the U.S. in the first half of 2005 and $22.5 billion in all of 2004. Of the 2005 investments, about 20% went into health-care services, medical devices and equipment, and most of the rest went to technology-related fields such as biotech and software. [Aja Carmichael, Wall Street Journal, Jan 30 http://online.wsj.com/article/SB113825026006856795.html?mod=todays_us_the_journal_report ]

Valley Boom, Valley Bust. interesting graphic, though, from the National Venture Capital Association today (below). It shows how prone Silicon Valley is to boom and bust. Look at the venture capital profits. They're much higher than the rest of the market (see S&P) when things are good, and losses are deeper when things are bad. [www.siliconbeat.com, Jan 31]

New VC Blogs,  Raj Kapoor, partner at Mayfield Fund, the vc in me....  Mike Hirshland of Polaris Ventures Mike's blog

DOD would call it "relevance".  Applied Materials will bring its VC arm back in-house from life as an independent venture so it can be more aligned with Applied's strategic direction," said J. Christopher Moran, general manager at Applied Ventures.  The $25M fund will go for American, Chinese, and Indian ventures. [story from Donna Fuscaldo, Wall Street Journal, Jan 23]

VCs put $22B last year into U.S. companies last year, more than any year since 2001. Get yourself a credible competitive advantage and a story. No, the usual pabulum called "Commercialization Strategy" in SBIR proposals won't do.  If your story anywhere says "assuming we can get x% of the television market", you need a new story.

Lightspeed Venture Partners said it has finished raising $475 million to invest in new companies. ..it plans to invest directly into companies in China and Israel. So it is a sign of the times. Everyone is investing abroad.  [Siliconbeat.com, Jan 11]

Guy Kawasaki, founder of Garage Technologies, a Silicon Valley venture firm that invests in early-stage start-ups, has launched a blog. Garage used to consult for start-up companies, helping them do things like raise cash, but more recently became a full-fledged seed-stage venture firm.  Kawasaki recently wrote the book The Art of the Start, a good primer for those wanting to start their own company and have no idea how to write a business plan, pitch their company or put a team together.  [siliconbeat.com, Jan 11]  One advice from Guy: Think digital, act analog. Thinking digital means that companies should use all the digital tools at its disposal--computers, web sites, instruments, whatever--to create great products. But companies should act analog--that is, they must remember that the purpose of innovation is not cool products and cool technologies but happy people. Happy people is a decidedly analog goal.

Sunshine VCs. In the first three quarters of this year, U.S. venture-capital firms funneled $67.7 million into the solar-energy sector, up from $31.4 million for all of 2004, according to the National Venture Capital Association, an Arlington, Va., trade group. That's more than 30 times the amount invested 10 years ago and presents more evidence that record-high energy prices have incited a monumental push for cheaper forms of energy. The NVCA says solar investments for the first three quarters of 2005 represented more than a third of the $194.6 million invested by venture-capital firms in the entire U.S. energy industry.  [futurepundit.com, Dec 22, 05]

This year saw 202 IPOs with an average gain of 19.7%, a decline from 2004, says The Red Herring. There’s no question that 2004 was a better year than 2005. Nevertheless, the IPO market outperformed the underlying stock market in each year..

The Alliance of Angels, one of the largest networks of individual investors in the Puget Sound area, said 20 local startups this year raised $7 million, even more than in 1999, when the tech bubble was at its peak and the alliance was at its busiest.  [Seattle Times, Dec 22, 05]

Venture capitalists have recently encouraged high-technology start-ups to set up offices in India, where they can hire low-cost engineers and outsource basic programming tasks. Now some of those financiers are taking a different tack: investing directly in Indian high-tech companies.  The trend, still in its early stages, shows how India is slowly moving up the high-tech food chain. It is a development already seen in China, [Rebecca Buckman, Wall Street Journal, Dec 7]

Valuations for companies backed by venture capitalists soared to the highest level in four years during the third quarter, another indication of the large amounts of capital flowing into the venture industry and the frothiness now marking some investment sectors. The median valuation for venture-funded start-ups in the U.S. hit $16.8 million [Rebecca Buckman, Wall Street Journal, Nov 30]

The best estimate is that the total value of extant venture-funded companies is about $250 B (down from its peak of $450 B in 2000), vs. a value of $14 T in the US public stock markets and an equal amount in the rest of the world.   [SUSAN WOODWARD, J Economic Literature, Sep 05, reviewing Venture Capital Contracting and the Valuation of High-Technology Firms. Ed by Joseph McCahery and Luc Renneboog.]  OK, if VC isn't your route from idea to market, what is? Getting repeated SBIRs until the idea becomes obsolete?

New England got 16% more VC money than last year's quarter which is a little more than the 13% national growth. Nationally, venture firms poured $5.3 billion into 714 high-tech start-ups  [R Weisman, Boston Globe, Oct 25] Want to get some of that early investment? Have a technology with a market future. If you were a buyer/user of your technology, would you buy it for the price at which you hope to sell it?

Venture capital, to be sure, is a sport played best by risk takers who understand that the cost of getting into a deal doesn't matter nearly as much as the price someone else - whether a larger company or investors through an initial public offering - is willing to pay at the exit. There were plenty of V.C.'s who once declared absurd the $4 million that Kleiner Perkins Caufield & Byers paid in 1994 for roughly a quarter of Netscape. That, of course, proved to be one of the more lucrative venture investments of the Internet era.  [Gary Rivlin, New York Times, Sep 4]

venture capital turned in 19% returns last year,... Still, one well-known VC looked at these trends and got out of the business completely. Earlier this year, Howard Anderson, co-founder of Boston-area venture firms Battery Ventures and YankeeTek Ventures, was about to raise his ninth fund when he paused for a gut check. Anderson concluded that it would be nearly impossible to deliver attractive returns. Now he's quitting the venture business to teach and advise young companies. "We were, as an industry, funding too many companies that were nonviable," he says. "We were hoping the market would get irrational again and we would get bailed out."  [Justin Hibbard, Business Week, Jul 4] 

Want VC money? Hone your podcast pitch   Noteworthy post here by David Hornik of August Capital, soliciting funding pitches from entrepreneurs via podcasts. Its called the Postcast Elevator Pitch. As he notes, Feedburner's Eric Lunt has already tried it with venture capitalist Fred Wilson.  [Silicon Beat, The Mercury News, Jun 16]  

VC Tuition: $20M. there are hundreds fewer venture capitalists around today than just two years ago. The business of financing start-ups, it turns out, may not be as easy as it seems. ... John Doerr at Kleiner Perkins (his hits include Google, Amazon, Netscape and Sun Microsystems), used to say that training a new venture capitalist was not unlike preparing a fighter pilot for battle: it takes "probably six to eight years and you should be prepared for losses of about $20 million. [Mitch Kapor, inventor of fabulously successful Lotus]  failed to choose a single company that made him, his partners and their investors any money. He confesses he was 0-for-5 in the investments he made during his three years at Accel  [Gary Rivlin, New York Times, May 22] 

Venture capital is risky business in the hands of professionals. When done by the federal government it tends toward the disastrous, as the Small Business Administration is now admitting about its decade-long attempt to outsmart Warren Buffett. ... Republicans of all people should know better than to tax some Americans more so that the government can invest in businesses that couldn't raise enough private capital. Congress can't even balance the budget, much less pick a winning telecom or biotech stock. [Wall Street Journal editorial, Apr 13] But why would Congress kill a program that hands out money to small business whether in the  Participating Securities program (the one at issue that has estimated losses of $2.7B) or SBIR which is not allowed to report losses. 

There is even a new trade group, the Angel Capital Association, whose goal is to raise the public's awareness of angel investing (angels complain that VCs get all the glory) ... the Web site of the Angel Capital Association  is angelcapitalassociation.org, though if you couldn't discover that on your own, you have no business being involved in this world in the first place [Lee Gomes, Wall Street Journal, Apr 11] Angels are local rich guys who could be likened to a warm-up act for the VC that has serious money and a break-your-knees approach to company management of its money. 

It explains why VCs take so agonizingly long to make up their minds, and why their due diligence feels like a body cavity search. [2] With so much at stake, they have to be paranoid.  It explains why they steal your ideas. [Paul Graham] Thanks to AMT's Jeff Bond who helps manufacturing companies get government support (money, that is; you don't want anything else).  

Alarm:Clock -- Ventures in the Business of Technology. We've teamed up with Andrew Madden, a former Red Herring editor who now runs his own blog, alarm:clock, covering the business of technology startups. Each Wednesday, he will write an in-depth piece about one company exclusively for the TR, along with a brief synopsis of the week in VC and technology. 
http://www.technologyreview.com/articles/05/03/wo/wo_madden031605.asp?trk=nl [MIT Tech Review, Mar 17]

For technology entrepreneurs, the old line may be true: It's not paranoia if everyone really is out to get you. [Scott Kirsner, Boston Globe, Mar 14]  Brian Barth tells his story of bringing his SideStep to some VCs and then finding their funding a competing venture with the same idea. While it would clearly be unethical for a VC to hand over documents from one company to a second company she'd decided to fund, nothing prevents VCs from sharing with that second company what they've learned from the five or 10 companies they've had meetings with that occupy that same industry niche. Peabody and Ittycheria both say it's standard operating procedure.
 

Angels are flocking to biotech. And they're filling a critical financing gap. Venture capitalists are steering clear of startups, preferring to fund companies with drugs nearly ready for market. Stock investors are equally wary, since one biotech initial public offering after another has nosedived this year. So angels are stepping up, betting that biotech is poised to deliver major drugs for everything from cancer to brain disorders. They poured $1.98 billion into biotech last year, up 10% from 2003 and 52% from 2002, estimates Jeffrey Sohl, director of the Center for Venture Research at the University of New Hampshire. [Justin Hibbard, Business Week, Mar 7]

IPOs have raised $8.4B, an all-time high for this early in a year, Thomson Financial says. but it's not 1999 all over. only about 20% of the companies in the IPO pipeline are techs, Killian says. That's below the long-term average of 35% as well as the 60% level during the tech boom. [USA Today, Feb 17]

Biggies Also Have VCs on Board. HP announced [Thomas] Perkins, a partner in the Kleiner Perkins Caulfield & Byers, would re-join the board,  Coming as it does after recent reports suggesting HP's board has been unhappy with the company's uneven performance under Fiorina, Perkins' return seems a bit more loaded than HP would have us believe. "Here is a guy who has deep, deep technology connections, has previous HP experience in his background, a long history in the PC industry, a guy who I think will vigorously review business decisions,'' said Harry Blount, a Lehman Brothers analyst who does not own any HP stock. [siliconvalley.com, Feb 8]

Tech Coast Angels invested $6.6M in 2004, a 53% jump from the year before and the highest level since 2000, the group says. The 250-member group also is announcing the opening of a Westlake-Santa Barbara network, its fourth chapter ... [they] funded 17 companies last year, including SpongeTech; Diver Entertainment Systems Inc. of San Diego,  and Altadena's LeisureLink,  ... [nationally] angels provided about $12.4 billion in financing to 27,500 entrepreneurial businesses through June 30, compared with $18.1 billion for all of 2003. [Josh Friedman, LA Times, Feb 7] 

Money Is Out There. Investments in venture capital continued to rise, as universities, endowments and pension funds committed $17.6 billion to 170 venture funds in 2004, up 67% from 2003.. The bulk of the money, 52.4%, will go into early and seed stage funds, which back the youngest start-up companies [Wall Street Journal, Feb 1]

Exit-poll companies find work doing VC surveys: If you track Silicon Valley venture capital trends, you have every right to be confused today. You spend the weekend depressed over a report that venture funding in the last quarter had fallen to its lowest point in seven years, only to hear on Monday morning that investment was not down 12 percent, but was in fact up 12 percent. The managers of the two surveys said they use different methods of reporting that tend to skew quarterly data (and investor digestive systems), but which generally converge over longer periods. [siliconvalley.com, Jan 24]

Money Available. Venture capital financing climbed 7% last year to beyond $20B. 

Applied Materials shut its VC operation after anticipating a 35% drop in orders next quarter. Some of the venture arm's investments include Infinera, Instant802 Networks, Grandis, Menara, M-Stream, FlexLight and Takumi. [San Jose Mercury News, Dec 17] Apparently risk taking is only for the very rich. Which is why government risk-taking should be a part of national innovation.  And for small high-tech companies, the cash-rich SBIR - $1B a year is big money for small nursery-scale projects - could seed a thousand innovations if intelligently done.  But not like it has been done for its life of funding mostly ordinary R&D for incremental advances in knowledge. 

... more capital could be on its way to small businesses in the Northwest. The Alliance of Angels, one of the largest networks of individual investors in the Puget Sound area, said yesterday 2004 will be its busiest year since 1999.The alliance, with about 110 investors, meets monthly to hear business plans from three companies, then decides whether to invest on an individual basis. This year, nine companies received $4M, more than any year since 1999, when 15 companies received $4.3M.  [Tricia Duryee, Seattle Times, Dec 21]

Fools rush in. With billions of dollars surging in from first-time investors, top U.S. venture-capital firms are demanding bigger fees, more of the profits and other concessions -- scaring off sophisticated longtime backers who fear the glut will depress returns. ...says Harvard Business School Professor Josh Lerner, who studies institutional investor trends. "The fact that the most sophisticated of them seem to be looking to get out hardly looks like an auspicious omen for returns going forward."  [Ann Grimes, Wall Street Journal, Dec 14] NVCA foresees $18B this year, a 71% jump over last year. When Sweden and New Jersey dabble, Harvard and CalPers find something else to do. 

Paul Gompers and Josh Lerner, in their influential 2001 book, “The Money of Invention”, calculate that over the years, “venture capitalists have created nearly one-third of the total market value of all public companies in the United States.” In 1999-2000, more venture capital was raised than in the entire previous life of the industry, stretching back to the 1940s. . ... venture-capital firms may raise as much as $25 billion this year, compared with only $11 billion in 1997 ... around 50 venture-funded firms are now said to be developing products to improve internet security, compared with the pre-bubble norm of 10-15 firms per sector. Clearly this is a recipe for many more corporate failures [The Economist, Nov 27]

Where's VC headed in 2005? Spam, for starters. Here's a noteworthy summary of where venture capitalists predict their money will be going in the coming year, published today by the National Venture Capital Association.   [siliconbeat.com, Dec 15] NVCA says: Venture capitalists will be searching for true breakthrough innovations and will be avoiding “me-too” deals.

How to Pitch a VC.  To get funding, different or original ideas proposed by unusual people are sometimes better than simply good ideas proposed by smart people. Sergey Brin and Larry Page had no business plan and no immediate prospect of generating any revenue, but they had an original idea that made me want to listen further. There is no hard-and-fast matrix that startups can follow to get Sequoia's attention. Factors like market size and intellectual property clearly play into our decisions, but there are no absolutes in the world of venture capital. The only thing that leaves me cold during a pitch from a startup is the use of the drop-dead words or phrases: "synergy," "no-brainer," and "slam dunk."  [Michael Moritz, Sequoia Capital, Business 2.0, Dec 04] 

The VCs Are Back; they never went away. The VC/BIO lobbyists hope the Congressional "Lame Duck" session will bless their SBIR opening to VC-controlled firms through SBIR law changes.  The big difference between the VCs and their opponents is that the VCs want the government to invest in R&D with an economic payoff, and the SBIR advocates want to protect the jobs that the government pays for in economically mediocre firms. Says Red Herring, The spin doctor is in. Entrepreneurship expert Scott Shane has a word of advice for university spinoffs that want to succeed: get a VC. “VC-backed companies do 100 times better than non-VC-backed companies.    The mediocre companies plead their case.

"Angel Investment Groups, Networks, and Funds" is targeted for those interested in forming angel groups and for entrepreneurial support professionals and community leaders looking to expand the financing resources available to start-up entrepreneurs. The guide also contains pointers for accredited investors interested in becoming angels. It is available at: http://www.kauffman.org/items.cfm/590  [SSTI, Nov 9]

"Venture capitalists follow the adage, 'Bet on the jockey, not on the horse.' They're looking for people who are dedicated, passionate, who have a high level of commitment. Knowing people counts for a lot. There's a notion that in today's world everything is governed by anonymous expertise. I question that. I think the world of techno-science is more like the premodern world."  -- Steve Shapin, Professor of the History of Science. Shapin also subscribes to the Scottish tradition where you can't call yourself an educated person unless you can reflect on the enterprise in which you are engaged."

a handful of venture capitalists have started opening up about their thoughts. And they're doing it democratically: with blogs. .. We've counted 11 serious VC blogs ... www.ventureblog.com,  one VC with SAP Ventures, a VC with the Pacifica Fund, Steve Jurvetson, a partner at Mobius, [Matt Marshall, San Jose Mercury, Sep 21]

New England Down, MN Up. VC investment dropped 26% nationally and 57% in New England in 2Q04 from 1Q04, normal drops say the experts for summer vacation time. Dave Furneaux, managing general partner at Kodiak Venture Partners said that New England VCs  now are more likely to break their financing packages into several rounds, offering start-up companies additional "milestone funding" when they have met certain targets or goals. [Robert Weisman, Boston Globe, Oct 26] But in med-tech rich Minnesota, it rose 16%, says the Star Tribune. Around Puget Sound the total dropped by about a third but the number of deals rose, in line with a trend to much smaller deals. 

IPOs picking up. Third quarter saw 65 US IPOs more than in any quarter since the dot-com boom burst. They raised $14B. For the near future, about 170 more companies have registered for IPOs  [Robert Weisman, Boston Globe, Oct 5]

David J. Muchow, President & CEO, Skybuilt Power, will describe SkyBuilt’s innovative garage size unit that can produce, condition and put to immediate use, a wide variety of renewable and other power sources. The Center for Economic and Environmental Partnership, Inc., will sponsor its next Washington, DC Energy & Environmental Funders’ meeting on Friday, November 5, 2004.  online registration

Angels Flying Again. Once again, angel investors -- wealthy individuals who advise start-up companies at their earliest stage -- are returning. So are "emerging" venture funds, in many cases backed with big bucks from public pension funds eager to get into the next hot venture-capital firm. New state-backed venture funds are popping up around the country, targeting local entrepreneurs. So are venture firms run by corporations, which are usually the first to dive in during an up-cycle and the first to jump out when things get rough. And there are tourists of a different stripe: foreign investors who were bit players during the last boom. ... At least 200 more venture firms are in the marketplace trying to reel in investors, called limited partners.  [Ann Grimes, Wall Street Journal, Sep 8]

ARISE and Renew.  The Center for Economic and Environmental Partnership, Inc., will sponsor its next Washington, DC Energy Environmental Funders’ meeting on Friday, September 15. Speakers will be Ian MacLellan; CEO of ARISE Technologies on US Solar Energy Products and Projects, and Michael T. Eckhart, President of the American Council on Renewable Energy on the mushrooming market for solar equipment and services. Info from Gelvin Stevenson at gelvins@earthlink.net. Money will be there looking for investment opportunities. 

When Nanosys pulled its IPO, one hedge fund manager said, If this company couldn't make it, no one else can, especially companies without any profits and vague product plans. ...  Overall, the IPO market has been edgy. More than half the companies than went public in July, for instance, were forced to sell their shares below expectations, according to data from Thomson Financial in New York.  [Wall Street Journal, Aug 5] Nanotech and biotech are two fields with great promise for the future of humanity but not for investors looking for outsize returns in the short or medium term. Unless, of course, the dot.com-style frenzy repeats itself. 

When John Jaeger set out to raise $3 million for his year-old tech start-up in January, he skipped right past Silicon Valley's top-tier venture-capital firms. "It might be difficult for somebody who has an $800M fund to take an active role" in such a small investment, Jaeger says. His company, telecommunications gear maker OnSite Systems, got the money from the $330M Woodside Fund, which specializes in nurturing embryonic companies. [Justin Hibbard, Business Week, Jul 19]  So you would like some of that newly free-flowing VC money that does not come with management oversight from your new part-owners?  Sorry, only the government gives away money without meddling in your company, because the government only cares about your contract performance and not about your survival after the contract ends. 

It's Better With VC, even if only eventually.   National Venture Capital Association.says that VC-backed firms do better than others. VC-backed firms had a 6.5% employment growth 2000-2003 versus a 2.3% loss for total US employment.  While that sounds great, The study, which counted 26,494 companies, includes the performance of 9,924 start-ups that received funding in 2000 to 2003. But it also reflects the recent employment and revenue growth of 59 industry leaders -- such as Microsoft Corp., Apple Computer Inc. and Cisco Systems Inc. -- that received venture capital decades ago. The study doesn't break down which category of company accounts for how much job or revenue growth. But  Josh Lerner, a Harvard Business School professor who is an expert in venture capital, said employment and revenue probably would have declined from 2000 to 2003 if only recently funded companies were included.  [Ann Grimes, Wall Street Journal, Jul 20]

Anxious and Idle Money. Sevin Rosen was inundated by would-be investors. On July 8, the firm announced a new $300M fund, but Mr. Jaggers said it could have raised at least five times that much. Potential investors, many from Europe and Asia, called out of the blue; some even provided references in the hope of persuading the partners to take their money. "We were just swamped with interest from new investors," Mr. Jaggers said. [NY Times, Jul 18]  When interest rates are dirt-cheap and stock markets merely quiver, hot money seeks action elsewhere. 

An IPO. Phase Forward after market price rose to the range where it originally tried to price the IPO. The Waltham MA software company makes a package of products that automate many of the processes used in drug research, such as data capture of patient information, data management, and monitoring of drug safety. SBA's two-year lag records shows no SBIR history.  

Bye Bye Dot.com, Hello Nano. The chief executive of Nano-Tex LLC warned about the mounting hype around his company and other nanotechnology startups at a recent investor conference. But the first question from the audience showed how his message had been digested. "When is your IPO?"  ... a closely watched startup Nanosys  is expected to go public this year. [AP, Jul 13]  Like in biotech and dot.com, hype is not profits, and without profits the bubble will burst. 

Tech Stock Fun Coming? hedge-fund managers may take on more risk to try to make up the lost ground. Mr. Boldt-Christmas thinks that means they may start piling into technology stocks. When hedge funds start chasing performance like that, the rallies that result can be powerful -- particularly as mutual-fund managers join in.  Such moves usually end in tears, but at the outset they can be a lot fun. [Justin Lahart, Wall Street Journal, Jun 25]

Ol' Man Ribber just keeps flowing along. VC investing in New England start-up companies dipped 9.7% to $743.5 million in the first quarter .. But the venture outlays climbed 9%  in the last three months of 2003. For the nation as a whole, venture investments ... were 9.5% higher than a year ago, but 11.5% below the fourth quarter. says the quarterly MoneyTree survey. [Boston Globe, Apr 27] Although the $4-5B is a lot less than the flood of $28B at the height of the IT bubble. 

Seven Keys to VC: Find the right VC; It's all about the team; Bring more than just an idea; PowerPoint with a point; Be specific about the opportunity; Master the basics; Don't promise the moon.  [Business 2.0, Apr 04]  The sine qua nons: management, profitability, competitive advantage.

Money is Money, But .... A sure sign of springtime for the economy, particularly in Southern California, is that venture capital investors are eager to back technology start-ups for the first time since the 1990s boom went bust. And there's a new twist this time: globalization. Money and companies are coming here from all over the world to invest in software, Internet communications and biotechnology.  [James Flanigan, LA Times, Apr 4] If you are planning on dazzling the government with your private sector investment, be careful how you tell the government about foreign money. SBIRs have some uber-nationalist reviewers and deciders, especially in DOD, and could well mark down your story as un-American and a security risk. You'll never know it happened since the law does not permit them to decline a proposal on that basis. 

Ever the optimists, venture capitalists are starting to return to their investors to raise new funds, an indication that a new generation of start-up businesses may again begin to get backing. ... Nearly 53% of U.S. venture firms have said they planned to raise new funds in 2004.  [Ann Grimes, Wall Street Journal, Apr 1]  VC money is good at finding the best business opportunities among new technologies. Unfortunately, the SBIR advocates quake in fear that the government might actually use such information in deciding which SBIR proposals have an economic future and which are merely service contracts for government knowledge. 

New Enterprise Associates has assembled its 11th VC fund, $1.1B for start-ups in IT and health care. Everyone will need IT and health care for a long time. Want some of it? Get yourself a technology with an economic future; that's ECONOMIC future, not technical sweetness. And maybe get some SBIR for openers just to gain more maturity for the technical aspects. SBIR will NOT help you with showing economic value; the government simply does not do that.  

VC flowing. Last quarter (4Q03) VCs put in the highest since 2Q02, $5M of which 27% went into the Bay Area. It could be characterized that VCs are investing rather than throwing money at fantasy business models. If you're an SBIR company with a product with a competitive advantage you can compete for such investment, or perhaps better still, get an industry wanting to partner. Face it, industries have the structure to put your product into play. Not the government, which has almost no capacity to put a product into competitive play. But industries are driven by economics and profit potential with little regard to the sweetness of your technology. Governments can be beguiled but sweetness but are subject to politically whims on money to spend on your technology. With deficits looming, there will be pressure for government to spend less (or at least relatively less) on almost everything, even health care for the growing population of seniors with an attitude. 

Venture Blog  www.ventureblog.com  A group effort begun by partners in the eight-year-old Silicon Valley venture-capital firm of August Partners, this particularly well-organized blog launched in the spring. It offers a useful window into the minds of folks who put their money on technology that may, or may not, change the economy as we know it.  [Wall Street Journal, Dec 4, 03]

$16B To Get Organized.  Angel investors, acting alone or in the 170 angel capital groups, sunk $16B into new businesses in 2002. Now they will have an organization, IF they want one. the Ewing Marion Kauffman Foundation has got up an  Angel Capital Alliance to collect data about how and where it is done well. About 10% of  start-up or early-stage companies in the U.S. get equity capital from angels. [SSTI, Nov 14] 

How much venture-capital funding still sits on the sidelines?   billions, but in the Northwest, companies haven't been able to grab much of it — especially not in the third quarter, when the amount of money raised by local companies dipped to seven-year lows.  It's been estimated that there is $55B waiting on the sidelines in the United States,  ...   how come there aren't more bets being placed? Some doubt $55B is an accurate figure, while others say it's not the right time in the Seattle area's business life cycle to be investing.     [Tricia Duryee,  Seattle Times, Oct 27]

Rising Cash, Falling Courage. Not even $84B can buy courage. Venture firms have a staggering $84 billion in their coffers to invest, a near-record amount. And institutional investors are eager to give them more dough.  ... "Even today, after all the problems the business is having, there are tons of institutional investors clamoring to get into the venture business," says Joshua Lerner, a professor at Harvard Business School.  ... too much caution could be costly. If the VCs focus their time and money on later-stage deals, they may not have the resources for big, new ideas. Experts say some of the most innovative, swing-for-the-fences business plans could suffer significant delays or, worse, never get off the ground.  [Linda Himelstein, Business Week, Sep 29] OK, if the VCs won't invest in new ideas, who will? Ah, the government with start-up starters like SBIR. Hah! Those guys are even more gun-shy than the $84B. Congress's big talk about little business and American innovation and blah, blah, blah, come to naught because Congress gave the money to the gun-shy federal bureaucrats with no demand for accountability.  

James Bond Meets John Doerr. Herman Louie answers a few questions for Wired (Sep 03), such as "What's the goofiest idea you've heard?", from the "wingnuts". Perpetual motion, zero latency, putting an idea into someone else's brain. "We keep them in a 'best of' collection." Why didn't I think of that in the 80s and 90s. Because there is sometimes a closer line than many government people think between madness and genius. They tend to reject "different" just because it is different. Louie says ideas from 2% of 3400 companies are off-the-wall technologies. If you have an off-the-wall revolution, re-calculate where your physical assumptions have carried you too far. Then make a convincing case of the merits in some frame that appeals to whomever you going to address it. "A new world order" is not a convincing case. 

While other segments of the venture industry are slowly returning to historical norms, the market for start-up and seed money continues to lag, despite the better performance in the second quarter. In 2002, seed money represented less than 2 percent of U.S. venture capital investment, a stunning reversal from the 1980s and 1990s, when it regularly represented anywhere from 15 to 25 percent of overall investment. ... The problem isn't a lack of venture money. In fact, the market is awash in money. .... When you've got that much money, it's hard to invest it in small chunks. ... Venture capitalists also got burned on emerging companies during the crash ... Start-up companies are job engines. ... [Rick Brimacomb and Mark Sides, Minneapolis Star Tribune, Sep 21, 03]  So, if start-up companies are engines for what politicians most want - jobs - why doesn't the government do something to get start-ups started? Actually, it did try in 1982 with SBIR that was supposed to shovel money to promising tech start-ups. But the program was hijacked by the federal agencies for their usual R&D as revenge for the money having been robbed from those programs in the first place. The result has been a lot of ordinary R&D done by a lot of ordinary small companies and no measurable job growth that wouldn't have happened anyway. 

Corporate venturer sells out (for what it can get). Corning said it sold most of its venture capital arm to Saudi Arabia-based Scimitar Capital Partners, moving to exit a non-core business.  Corning, (which has a marvelous glass museum at its Corning NY HQ) didn't disclose the terms of the transaction. Greg Smith, president of Corning Innovation Ventures, said the sale included 16 portfolio companies involved in optical communication technology. The company said in January that CIV had invested more than $50M since founding in 2000 but that it took $47M in write-downs as valuations declined in the technology meltdown. [Reuters, Sep 15 (thanks to Leslie Aitcheson for noticing)]  At least three BMDO SBIR supported companies were acquired by Corning's venture: Intellisense, NZ Applied Technologies, and OCA Applied Optics. BMDO (in its former venture mode) supported those companies because they were good candidates for taking new technology to some market that would develop the technologies without gobs of government money (which SBIR did not have anyway and which mainline BMDO developers were too timid to invest). 

raising money successfully is amazing," he said . Seattle-based venture capitalist Jon Staenberg has joined forces with a Los Angeles-based venture-capital company to raise a new fund and connect Seattle to the broader West Coast. Staenberg and Rustic Canyon Group have raised about $130 million for a new investment pool to fund storage, wireless and e-commerce companies .... The fund also has received a SBIC license which provides $2 in government funding for every $1 raised from other sources.  [Tricia Duryee, Seattle Times , July 19, 2003 ]. 

Finally! Venture Capitalists have crawled out of their bomb shelters and are funding startups again. ... America needs startup companies. ...  They are our economy's secret sauce, the only thing that distinguishes the still-dynamic U.S. economy from those of sclerotic Europe and Japan. ... Startups and gazelles exert competitive pressure on large companies. We all benefit. ... Startups put the U.S. on a steeper learning curve. ,,,  it is crucial to understanding why startups make America dynamic. ...  most startups fail. Statistics vary, but a good rule of thumb is that 90% of startups die within their first three years. Startups backed by professional venture capital do better--maybe three out of ten succeed in some fashion. ... Every time a startup takes a risky chance and careens over the guardrail, something beneficial is learned. A valuable technology or marketplace experiment has taken place. Looked at this way, no other country in the world invests as much in R&D--i.e., in its own future--as America does.  [Rich Karlgaard, Forbes, Jul 17] If the federal agencies cared at all about the American economy, they would stop handing out SBIRs to experienced mediocrities and hand the money to dynamic startups. They would trade their conservatism of preferring a 99% chance of a 1% advance for a 1% chance of changing the world. No, they just haven't got the entrepreneurial spirit; if they had it, they wouldn't be working for the government anyway. Which is why SBIR as practiced is a national waste of their time. 

Raising venture capital for a start-up business can be an enjoyable process if you like "chewing glass while putting hot needles in your eyeballs," Nazie Eftekhari told a University of Minnesota luncheon group. Using plain, entertaining language, Eftekhari recounted her experience raising money for HealthEZ, a Bloomington start-up where she serves as CEO. .. Eftekhari  has raised almost $15M million, but has received relatively little from traditional venture capitalists. She has relied on "angel investors ... Her hunt for capital, she said, has taught her that entrepreneurs with new ideas, especially women, must develop a thick skin to weather rejection and stupid questions.  A favorite questions from venture capitalists, she said, is: "If this is such a good idea, why did you come up with it?" Her favorite answer, she said, is that the idea probably has occurred to others, but they didn't pursue it, "because they're surrounded by jerks like you."  [Larry Werner, Minneapolis Star Tribune, Jul 1, 03]

Warm Winters, Warm Tax Breaks.. Phoenix is offering $12M worth of tax credits to encourage venture capitalists to invest in biotech in or near downtown. ...   venture-capital funds that raise up to $30M in two years to invest in biotech would receive federal tax credits that could be passed on to fund investors. The venture-capital firms could invest in new or existing companies   [Jodie Snyder, The Arizona Republic, Jun. 17, 03]

Jurvetson is determined not to let the next wave slip by again. While most of Silicon Valley's surviving entrepreneurs and venture capitalists are now doing 12-step programs to break their addiction to Next Big Things, Jurvetson, at the ripe old age of 36, is loudly championing the latest N.B.T.: nanotechnology. [Elizabeth Corcoran, Forbes, 06.23.03]

if you have the right experience, and a good idea, venture capitalists will fight to give you their money -- and even shower you with gifts to make sure you take it. ..Scalix is just one of several hot deals in recent months that some say underscore a new era. During the downturn, most start-ups were reeling: Their sales were non-existent or declining, few could sell products to skeptical larger corporations, and venture capitalists were like deer frozen in the headlights. But lately, some companies are finding fresh ideas, showing growing sales, and boasting experienced management teams cherry-picked from a large pool of available labor. The average deal still takes about three to four months, says Jesse Reyes, vice president of Venture Economics. ...  Besides offering a good idea, Farris boasts 15 years of experience in the messaging space, and has hired a team of messaging experts -- the sort of recipe that investors like.  Other such start-ups are getting multiple suitors.  {Matt Marshall, San Jose Mercury News, Jun 5]

  Bob Lozano raised millions of dollars for his first company during the Internet boom. .. Lozano is one of 20 entrepreneurs who are going, hat in hand, to Thursday's InvestMidwest Venture Capital Forum in Kansas City. They'll face an audience that's smaller and less flush with cash than in years past. But Lozano thinks it's an audience that will value his experience and his focused business plan. "Because we've built a successful company before, we can at least get venture capitalists to return our calls, and we've even started getting some cold calls," Lozano said. "That didn't happen before." ... For the last couple of weeks, Lozano has been rehearsing the 10-minute sales pitch that he'll make at the  annual showcase for promising startup companies from Missouri and surrounding states. ... But venture capitalists aren't parting with their money easily these days. In the first quarter of this year, they invested just $3.8 billion in U.S. companies, according to the MoneyTree survey by Pricewaterhouse Coopers and the NVCA. That was down 41% from last year, and is the lowest quarterly total in nearly six years.  [David Nicklaus Post-Dispatch, 05/20/03] 

Here's one reason why venture capital investing keeps falling: A growing number of entrepreneurs are shunning venture capitalists.  With enough cash to scrape by without venture backing, many veteran entrepreneurs are making do. Raising money is too time-consuming, VCs are offering terrible terms, and lower operating costs mean less cash is needed.  Others feel burned by VCs. They say some VCs pushed entrepreneurs in too many directions during the boom years, pressing them to sell products for more than they were worth, hire too many people and pitch to too many customers before they were ready. [Matt MarshallMercury News, May 18] 

Wake of the crash  Seven of every 10 Silicon Valley companies that Wall Street first sold to the public during the technology boom -- a group that generated some of the biggest first-day gains in stock market history -- are now dead or valued at less than half their initial price. The grim toll raises the question of how much investment bankers, who arranged the stock deals for billions of dollars in fees, were to blame for the carnage.  [Deborah Lohse and Jack Davis, San Jose Mercury News, May 4]  Helps explain why most of the SBIR victors (no, those that got public capital from an IPO, not those that got a ton of government money) have market caps that foresee doom.  . 

"the general feeling is that things aren't going to get worse," said Anthony Warren, a partner with Adams Capital Management, and a professor at Penn State,. He expects IPO and M/A opportunities for VC-backed firms to pick up within about a year. But Mr Warren also pointed to continued uncertainty that could hurt VCs.  [Peter Loftus, Wall Street Journal, Apr 30]

For those few SBIR companies looking to get venture capital to exploit their technical success, prospects got grimmer. VCs invested under $4B in the first quarter, the first time for such a low number since 1997, and the smallest number of investments since 1996. 

Microvision, still struggling to turn a profit in optical gear after losing another $27M last fiscal year, raised another $12M from a private equity sale, which brings its capital raising to $50M since going public in 1996. Its early public days saw two Phase 2 SBIRs from DOD in 1998. Unfortunately for the investors, the stock price dove 20%. [story from Tricia Duryee, Seattle Times, Mar 6]

VC friend or fiend: Jonathan Dickey, one of the lawyers who defended a group of venture capital firms against the Mercury News' demands for disclosure of their performance results in December, has switched sides, and is now suing venture capital firms. .... [Matt Marshall
San Jose Mercury News, Mar 6,03]

Private Placement a Bad Omen. Public companies who get private purchases of equity usually do 30-40% worse than market averages over the next three years, says a U Georgia study. Why? Who knows. The authors speculate that the private investor paid less than the market price.which is in itself an indicator that the market price over-estimates the company worth. [Business Week, Feb 3]

According to Jesse Reyes at Venture Economics, 9,900 venture-backed companies are still scrambling for the exits. Most of them won't make it. A mere 22 went public in 2002. The median sale price for the 214 venture-backed companies sold last year was $19 million. Investors put up a median $16 million to start those companies. And these were, by and large, the winners. [Erika Brown, Forbes, 02/10/03]

Privately held U.S. companies raised $20.3B venture capital last year down by almost half from a year earlier as cautious investors backed away from deals in the second half, according to a report on Friday. Last year's funding level was "far removed from the boom years of 1999 and 2000" and down 46% from the $37.7B for 2001, the VentureWire venture industry newsletter said. [Jim Christie,  Reuters, Jan 3] 

Still hurting from the dot-com bust, shellshocked VCs in 2002 curtailed their fund raising for future investments to a 21-year low, according to a report released yesterday. While 108 venture-capital funds raised a total of $6.9B during 2002, another 26 funds refunded $5B to investors, according to data compiled by Thomson Venture Economics for the NVCA. The net fund-raising total of $1.9B represented the smallest inflow of venture capital since $1.6 billion flowed into the industry in 1981. Last year's $1.9B trickle represented a 95% drop from the $40.7B raised in 2001. [Michael Liedtke, The Associated Press] 

It's not that VC firms have thin wallets; they simply have short arms. VCs must get out of their offices and do what they're supposed to do: back promising entrepreneurs developing promising products, and form companies that make the products people want and will pay for. There may be some magic involved, but it's not rocket science. [editors, The Red Herring, Dec 02]  

VCs Still Hopeful.  A $900M Boston biotech VC fund is the largest life-sciences portfolio in the industry for biotechnology companies, drug developers, and medical technology worldide in the $5-60M range. Said Nicholas Galakatos, a general partner,  For two out of three diseases, there are no cures. The pharmaceutical industry has been half as productive at putting out innovative new drugs as all of us would have hoped. [Beth Healy, Boston Globe , 12/10/02]

Angel  groups used to be informal clubs, secret societies of elite techies with time and money on their hands. But the clubs are changing. They're opening offices, putting up Web sites, running small venture funds and, amazingly enough, holding national meetings to compare notes and set standards for what's become a booming little industry. [Beth Healy, Boston Globe, 11/25/02]

Too Much Ventured Nothing Gained.  VCs are a hurting bunch. New companies feel their pain. The venture capital business has a size problem. A monstrous, staggering, stupefying one. Brobdingnagian even. In three years, from 1999 to 2001, venture capitalists raised $204 billion to back young companies in what are now known as Bubble Funds. That's a lot of money, but to appreciate the magnitude, match it against the past: Between 1970 and 1998, VCs attracted a total of $132 billion to finance startups. In other words they raised more money in three manic years than they had during the nearly three decades that preceded them. If you include money from previously raised funds, VCs have $252 billion in capital under management today. ...  Now consider the pickle in which the industry finds itself. Venture funds run ten years. To earn 18% annual returns for their investors--the low end of historical venture capital returns--the funds would have to create $1.3 trillion in market value by selling or taking public their portfolio companies over the remainder of the decade.[Russ Mitchell, FORTUNE,  November 25, 02]

Capital Punishment.  The boom gave rise to hundreds of new venture capital firms that collected obscenely rich fees. Postbust, howling investors think most of them should die. ... The venture world is reeling from its rotten investments. Limited partners are bailing out, demanding cheaper fees, insisting on outright refunds--and even violating nondisclosure agreements to go public with just how bad some funds have performed. The atmosphere has gotten so poisonous that some VCs are buying liability insurance against negligence lawsuits. ... In the [2d] quarter VCs raised $1.8 billion, and returned even more, $2.7 billion, the first time ever this has happened. [Erika Brown, Forbes, 11.25.02]

Like other later-stage start-ups, five-year-old Authentica has seen the bar for raising money rise dramatically since the late 1990s. VCs are taking far fewer leaps of faith, demanding that companies have customers, revenues, realistic profit forecasts, and unassailable technology. Second and third rounds don't exist for pipedreams, investors say. Even fresh, new start-ups are expected to have far more substance than their flashy peers of the boom years.  ''The VCs are still willing to invest in early-stage companies,'' said Lance Urbas, 50, Authentica's chief executive. ''What they're more leery about is the later stage.''  [Beth Healy, Boston Globe, 11/13/2002]

VC Still Diving. VC investments dove to $4.5B, says PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree Survey, 26% below the first quarter and a third of the 2001 second quarter. [ANN GRIMES, THE WALL STREET JOURNAL, Oct 29] Is there something the government could do to compensate for the cooling of the start-up investment fire? Yes! It could use the billion a year of SBIR for real innovative technology in innovative companies instead of pouring most of into safe predictable R&D that serves only government programs.

Venture capital investments into private start-ups plunged in the third quarter to the lowest level in more than four years, led by health care, which declined 47 percent [which] deflates the assumption that the venture industry had neared its bottom. ... In one hopeful sign, investments in information technology start-ups appeared to stabilize, particularly in the Bay Area. Nationally, they declined 1.7 percent to $2.5 billion. [Matt Marshall, San Jose Mercury News, Oct 27,02]

Too Much Venture Capital? Rich Karlgaard scorns the idea of to much VC as expounded by NYT's Charles Ferguson. Karlgaard claims VC is a cartel dominated by white geeks in Menlo Park, Cambridge, Seattle, and lower Manhattan. Some firms of the venture cartel have averaged triple-digit returns since 1995. .. VCs oppose reducing capital gains taxes because even though VC stand to benefit individually, the reduced rates would also lower entry barriers for new competition in the form of angels and corporations. His solution: A trillion dollars a year [of VC] would be much better. Cut taxes (He works for Steve Forbes)Let a million entrepreneurs bloom. [Forbes, Jan 10]

old text misc 2007-8

what happens on Wall Street does eventually trickle down to Silicon Valley. ...  flush with cash and optimism just six months ago. Now ...  start-up companies and their investors are beginning to hunker down and tighten their belts. ... Among their worries: that a tough economy will slash big companies' spending on the products sold by start-ups.  [Rebecca Buckman,  Wall Street Journal, Feb 15]

be optimistic. Prosperity and profit still depend, above all, on human ingenuity. Wetware is still the main asset you're holding in any well-diversified stock portfolio. No serious student of science technology can be anything but bullish about the long-term prospects for profit and growth in the ingenuity-driven economy. [Peter Huber, Forbes, Feb 25]

America's vast research-and-development enterprise is being reshaped in significant ways. Corporations -- the biggest spenders on R&D -- are increasingly outsourcing research and development overseas. Many U.S. companies have sharply cut their funding of "basic," or fundamental, research in favor of shorter-term projects that could provide a quicker financial payoff. ... China has been increasing its R&D spending by 15% to 20% each year as it sprints to catch up with Western countries and Japan. [Gautam Naik, Wall Street Journal, Feb 14]

Thinking Global. in 2004, [CEO Immelt] moved G.E. Healthcare from Wisconsin to outside London, the home of Amersham, a company G.E. had just bought.  Clearly, he liked the results. G.E. now has research centers in Munich, Shanghai and Bangalore, India. The unit that sells equipment and services to oil and gas companies is based in Florence, Italy. ...“Everyone talks about outsourcing manufacturing, but it is the high-level R.& D. jobs that are the great marketing tools,” Mr. Immelt said. “And I’m a salesman, remember. I know that you don’t get to sell things for long unless you are part of the culture into which you are selling.”  [Claudia Deutsch, New York Times, Feb 14]

If you're not in a medical or tech sector and you're not located in a hotspot like Silicon Valley or Boston's Route 128 corridor, your chances of getting VC funding are virtually nil, Shane says.

I think in business, you just have to learn to take the right next step. Predicting where things can be in 5 years is too hard if your industry has an kind of technology component. [businesspundit.com]

Loving the Internet.  The growing popularity of video on the Net has driven a traffic increase that's putting strains on service providers, particularly cable companies. To deal with it, they have had to change the way they convey Internet data. [Houston Chronicle, Feb 12] And impose some market mechanism for limiting video (mere words take up little bandwidth), especially the junk that has no redeeming social value. In Britain, People who illegally download films and music will be cut off from the internet under new legislative proposals to be unveiled next week. Internet service providers (ISPs) will be legally required to take action against users who access pirated material, The Times has learnt.  [The Times (London), Feb 12]

Polaroid, which rode its once wildly profitable technology into the grave, is finally abandoning instant print pictures. It lost out when it did not adapt to digital photography.

A newly formed Madison (WI) company aiming to use its technology to destroy certain cancerous tumors has snagged $4.5 million of venture capital, along with a former high-level GE Healthcare executive. NeuWave Medical Inc. started in January under the leadership of Laura King, who previously ran GE Healthcare's $1.2 billion interventional division. [Kathleen Gallagher, Milwaukee Journal-Sentinel, Feb 8,08]

the cross-fertilization that has made Silicon Valley the world's leading incubator for both information technology and life sciences.  Despite the recent economic turndown, venture capital in both sectors is at record levels.  [Scott Duke Harris, San Jose Mercury News, Feb 10]

Think about the road tripper who pounds an energy drink to stay awake on a long-haul drive: He gets a short-term jolt, and then gets even sleepier. Similarly, the economy is about to start chugging the Red Bull of interest-rate cuts and tax rebates, which could briefly lift it from its doldrums. ... Once the stimulus cocktail wears off, home prices seem likely to keep falling, weighing on consumer balance sheets, confidence and spending. ... credit will be harder to come by ... "What we're facing right now is years of subpar financial-market performance in the U.S.," warns Howard Simons, strategist at Bianco Research LLC. [Mark Gongloff, Wall Street Journal, Feb 11]

"What is intelligence?" Apple co-founder Steve Wozniak asked his audience at the Houston area's first Up Experience conference in Stafford. His answer? A robot that could get him a cup of coffee. [Purva Patel, Houston Chronicle, Feb 8]

Many communities dream of becoming the next Silicon Valley. [Seattle] is actually doing it. Stroll through the hip Fremont District .... Google recently opened a research lab here, its second in Microsoft’s backyard. Technology start-ups are sprouting up amid quirky neighborhood landmarks ... More young companies are moving in downtown, near the art galleries and bookstores around Pioneer Square. Still others are spreading into the surrounding suburbs. ... the University of Washington, in fact, is one of the big draws. ... “Now tons of companies are spinning off people,” said Ed Lazowska, a computer scientist who holds the Bill and Melinda Gates Chair at the University of Washington. Veterans from Amazon, Microsoft, RealNetworks and other established companies are leaving to form start-ups and venture funds, he said. “We’re finally at the stage of becoming a perpetual-motion machine.” [John Markoff, New York Times, Feb 8]

Packing Them In. Intel has built a new chip packed with a record 2 billion transistors, more than doubling the processing power of a line of its chips for supercomputers [AP, Feb 5]

Drug companies need to reassess the way they do business, and collaborations and partnerships are likely to proliferate as firms seek to develop new drugs. That was a key finding presented to a panel of industry leaders convened by the Tufts Center for the Study of Drug Development and PRTM, a management consulting firm.  [Chris Reidy, Boston Globe, Feb 5]

Longtime economy and market watcher Ed Yardeni, who heads his own research firm, said it best in a recent note to clients: "I don't recall so much policy stimulus and so many bailout plans thrown at the economy so fast before there was compelling evidence of a recession." It all raises a new question for the outlook: Does this megadose of anti-recession medicine fit the disease? [James Cooper, Business Week.com, Jan 31]

Talk to folks on Wall Street, and you sense panic. This could be the Big One ... But, "The further you get from Wall Street, the better things look," says economist Mark Vitner, who works at a Charlotte, NC bank. [Wall Street Journal, Jan 31]

Helping the Results Along. Dr. Zigler had more than a medical interest in the outcome. So did doctors at about half of the 17 research centers involved in the study. They stood to profit financially if the Prodisc succeeded, according to confidential information from a patient’s lawsuit settled last year. [Reed Abelson, New York Times, Jan 30]

as Scott A. Shane puts it in "The Illusions of Entrepreneurship," we imagine "a jet-setting, Silicon Valley-residing engineer who, along with a couple of his buddies, has raised millions of dollars of venture capital to start a new company to make a patent-protected gizmo." Such people do exist, of course, and more power to them. But reality is less glamorous than that.  ... "Each year in the United States more people start a business than get married or have children. And as much as 40% of the US population will be self-employed for some part of their work life. ... According to Mr. Shane, "every year only about 7% of new companies in the United States are started in . . . high technology, and only about 3% of business founders consider their new businesses to be 'technologically sophisticated.' " ... "local, state and federal governments in the United States . . . have adopted a wide array of policies to increase the number of entrepreneurs." These policies include transfer payments, loans and subsidies, bankruptcy protection, lower tax burdens, and exemptions from regulations.  And they are generally a bad idea. [Nick Schulz, Wall Street Journal, Jan 30] But politicians cannot resist pretending they are helping a class of voters with specific interests. There is a living to be made in DC and the state capitals shilling for small business handouts.

If It Only had a Heart. Can scientists program war-fighting robots to behave more ethically in battle than emotion-driven human soldiers? If so, what is the scientists' social responsibility for the destruction their inventions might wreak? ...Organized by the Computer Professionals for Social Responsibility, the group of civilians, military, academics and human rights workers engaged the key question: "What should socially responsible computer professionals do in a time of high-tech warfare?"  [Tom Abate, San Francisco Chronicle, Jan 29] The socially responsible technologists must remember that war has its own logic, and practitioners of war will adapt any available means to their ends without regard to the intentions of the inventor.

[PC Mag] Columnist John C. Dvorak seems to be taking on all office workers in his latest column, proclaiming that no one works at 100 percent. He says this because he believes that products trying to measure impact on productivity are nonsense, since no one can actually measure productivity in an office where we employees aren’t working nonstop for 8 hours. [Ziff Davis News, Jan 24]

At Davos, sovereign wealth funds get all the attraction as, Silver Lake Partners' Glenn Hutchins said he and his private-equity brethren "have returned to the obscurity that we so richly deserve."  [Alan Murray, Wall Street Journal, Jan 28] The business downside comes in a crisis when the foreign governments vote their shares. For decades, Mr. Summers and like-minded U.S. officials have traveled the globe preaching the virtues of privatization. In the postcommunist world, they sought to improve economic efficiency by wresting control of businesses from government. So it's jarring for them to see businesses suddenly selling sizable stakes in themselves to government-controlled funds. Meanwhile, Pennsylvania likes buyouts, Smaller companies in remote parts of the United States are also being bought out. "The U.S. dollar is getting weaker and weaker, and many medium to small U.S. companies are in economic crisis. So they need investments from China. It is very good timing," said Yu Dan, a representative for the state of Pennsylvania in China. [Ariana Cha, Washington Post, Jan 28]

Many people have been in a funk this week, fretting over the possibility of a harsh economic downturn. They should cheer up, says the Economist in its characteristically contrarian fashion, because behind the gloomy headlines lies a world that is more peaceful and prosperous than ever. The newsweekly notes the souring of attitudes as U.S. economic conditions have grown increasingly unsettled. Americans are becoming more isolationist, and opposition to immigration is growing. In many countries, majorities of people believe globalization hurts them personally. But those views are belied by evidence showing that conditions are improving in many places. The newsweekly draws that conclusion by looking at three areas: social conditions in poor countries; poverty alleviation; and the incidence of wars. [Wall Street Journal, Jan 26] The sitting president (such as GHWB 41) always delivers such a message that is denied by the challenger who plays on local fears, as did WJC 42 "It's the economy, stupid." Politicians are never the place to look for the truth.

Fight Fire With Fire. As generics firms evolve from mere copycats into innovators in their own right, many such firms—led by Israel's Teva, India's Ranbaxy and Dr Reddy's Laboratories—are vigorously challenging patents. ...as the industry's sagging share valuations suggest, the new-drugs pipelines at big firms have run dry. ...  but Big Pharma has found a loophole. It is pre-emptively launching generic versions of its own branded pills, which wipes out those six months of monopoly profits and undermines the economics of generics firms. [The Economist, Jan 24]

Jack Welch transformed General Electric Co. from an old-economy manufacturer into a modern conglomerate, in part because of his insistence on a culture of straight talk, according to a book by his former speechwriter.  [Boston Globe, Jan 27]

Who knows? investment-newsletter editors, who, on average, are usually wrong about the market's direction; they are currently bearish.... corporate insiders, who usually get it right, and they are mostly bullish. [ Mark Hulbert, New York Times, Jan 27]

The price/earnings ratio for tech stocks, based on projected 2008 earnings, is a relatively cheap 15.7 times. But investors clearly believe earnings are going to weaken a lot more than analysts do. Cautious words from Apple and Intel were all that was needed to set sellers off and running.  [Scott Patterson, Wall Street Journal, Jan 24]

A Coming Liquidity Trap? The U.S. financial crisis is starting to look eerily like Japan's, which has some currency traders asking the previously unthinkable: Could the U.S. dollar slowly be turning into the Western equivalent of the yen? [Mark Gongoloff, , Wall Street Journal, Jan 28] Unthinkable, therefore possible.

George Soros, the man who famously broke the Bank of England 15 years ago, said it’s going to be difficult for either Britain or America to avoid recession. He sees the upheavals as part of the long-term shift of global power and influence from Europe and the US to China and India. [William Kay, The Sunday Times (London), Jan 27] May you live in interesting times - an ancient curse.

Selling the Family Silver. governments in the Persian Gulf, China and Singapore have snapped up $37 billion of stakes in Wall Street, the bedrock of the U.S. financial system. Lawmakers and the White House are welcoming the cash, and there is hardly a peep from the public. This is no accident. The warm reception reflects millions of dollars in shrewd lobbying by both overseas governments and their Wall Street targets -- aided by Washington veterans from both parties, including big-time Republican fund-raiser and lobbyist Wayne Berman. Also easing the way: The investments have been carefully designed to avoid triggering close U.S. government oversight.  [Wall Street Journal, Jan 25] 

Science fiction has become the last bastion for the literature of ideas, says journalist .... By questioning society's basic rules and speculating on how other worlds might work, on the other hand, science fiction can raise fresher, more provocative questions. [Clive Thompson, Wired]

DeviceGuru writes "Harvard University's tiny microrobotic fly, hailed by its creators as 'the first robotic fly that is able to generate enough thrust to takeoff,' will be showcased at New York's Museum of Modern Art starting Feb. 24. The life-sized 'Flybot' reportedly has a wingspan of 1.2 inches (3 cm) and weighs a mere 0.002 ounces (60 mg). This project of the Harvard University Microbotics Lab has received funding from DARPA, the U.S. Defense Advanced Research Projects Agency, which hopes to gain access to micro-miniature surveillance technologies." [slashdot.org, Jan 22]

As the market saturates, Yahoo co-founder Jerry Yang has concluded hundreds of employees will have to be fired to help the slumping Internet icon recover from years of misguided management. [AP, Jan 23] Trees don't grow to the sky, although the market-driven SBIR companies would love to have Yahoo's dilemma. The other SBIR companies will still grovel for the government handouts.

Stimulus Stimulant. Starbucks, the company that popularized the $4 cup of coffee, is testing a $1 cup and free refills of some of its offerings. [WSJ, Jan 23]

One of the world's fastest-growing economies is also the world's fastest-growing supporter of scientific R&D. Right, China. overall, the rapid rise in Chinese science is good for China and the rest of the world, and the global scientific enterprise should do all it can to help. More science means more knowledge, which most people applaud unless the benefits go to someone else, like an international competitor. an annual growth rate of 18% over the past 5 years (the United States, Japan, and the European Union grew at a combined average rate of about 2.9%)  Fortunately for the xenophobic, such trees do not grow to the sky; rapid rates from a low base plateau at some sustainable level. [Alan Leshner and Vaughn Turakian, Science, Dec 7]

Intel will no longer produce silicon in California

In high-income countries, between 10 and 40 percent of early-stage entrepreneurs expect 25% or more of their customers to come from outside their country, said [the ninth annual Global Entrepreneurship Monitor Global Report], which also found that the more burdensome a country's business regulations, the lower the entrepreneurs' expectations for growth. [Chris Reidy, Boston Globe, Jan 18]

The University at Albany's College of Nanoscale Science and Engineering will begin collaborating with IMEC, a leading European research lab that has long been considered a major rival.... Scientists from IBM Corp. and ASML Holdings NV, a Dutch lithography tool maker, will also participate. [Albany Times-Union, Jan 22]

"You get what you measure," says panel member Arthur D. Collins Jr., chairman and former chief executive of Medtronic ... The report to be released by the Commerce Dept. on Jan. 18, called Innovation Measurement: Tracking the State of Innovation in the American Economy, amounts to a sharp turn in the US system of economic statistics .. aggressive proposals for measuring innovation better. [Michael Mandel, Business Week, Jan 28]  Perhaps Commerce could also take on measuring SBIR's performance in a way that shows Congress that good politics doesn't make good economics.

Despite a focused five-year effort to build its life-sciences industry, Indiana continues to lag other Midwestern states in one key metric: the number of life and physical scientists employed in the state. [Indianapolis Star, Jan 22]

Picturephone v. iPod. Great innovations have foundered over human stubbornness. ... Adaptable humans usually trade one technology for another, rather than reject any and all. To be accepted, innovations must deliver benefits — enough benefits to make change worthwhile. ... Killer apps are sought-after innovations because people get addicted to them and make behavioral changes that might otherwise be unthinkable. ... Dependency drives profits, the ultimate arbiter — for some — of an innovation’s success. [GP Zachary, New York Times, Jan 20]

Selling the Companies, Not the Goods. For much of the world, the United States is now on sale at discount prices. ... Last year, foreign investors poured a record $414 billion into securing stakes in American companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm. That was up 90% from the previous year ... Five million Americans now work for foreign companies set up in the United States, Mr. Kimmitt said, and those jobs pay 30% percent more than similar work at domestic companies. ... The soaring price of oil and a widening trade deficit underscore how the American economy is increasingly vulnerable to decisions made far away. [Peter Goodman and Louise Story, New York Times, Jan 20]  Two obvious places where the government has failed to help  - one big: oversight of the hedge fund industry, and one small: SBIR funding of market-dead, life-style companies.

what are the implications of the rise of state capitalism? Will mutual interests in a global economic system limit any new rivalry between the west and Russia and China? Will economic freedom eventually produce political freedom in these countries? Or is the era of free markets fading away? And will new alternative to the western model continue to thrive? Dr Kagan and Mr Rachman will answer your questions on all aspects of illiberal capitalism live online on Tuesday January 22 from 2pm GMT (9am ET). Post a question now to ask@ft.com or use the Financial Times online submissions form  [Financial Times, Jan 19]

The website used by pilots and aircraft personnel to discuss theories on incidents and pass on information and gossip, pprune.org (the professional pilots rumour network), went down under the sheer weight of would-be users yesterday [The Guardian, Jan 19]

You don't make money in the stock market by assuming whatever just happened will happen again. You make money by figuring out what's going on and why, every day, and acting accordingly — and, if possible, being right. [Donald Luskin, Smart Money, Jan 18]

A German company is the latest international technology firm to set up shop at the University at Albany's College of Nanoscale Science and Engineering. Berlin-based Atotech specializes in metals and chemicals used by various industries. It employs more than 3,000 people worldwide.  [Larry Rulison, Albany Times-Union, Jan 17]

Applied Materials, a major supplier of computer chip-making equipment, is jettisoning 1,000 jobs, a 7% cutback that suggests some manufacturers are hunkering down for a recession. ... biggest retrenchment since November 2002  [AP, Jan 15]  While Intel's profit jumped 51% on higher processor sales and lower costs, but the results fell short of Wall Street's expectations. Shares plunged more than 15% in late trading. [Wall Street Journal, Jan 15]

California's small firms may be key to helping the state weather a potential economic downturn, says Marty Keller, the state's small-business advocate. ... for the state's estimated 3.3 million small firms ... he plans to focus on procurement, regulatory flexibility and cost, disaster preparedness and economic development, particularly in clean energy and high tech. ... California ranks near the bottom of the 2007 small-business survival index. How can you change that?  Regulatory flexibility.  When a small business expresses to us a concern about the potential impact that a proposed regulation may have, we will contact that agency and make sure it is satisfactorily answering the concern.  You have a small staff -- just one person. Is that enough?  It's deceptive. [Cyndi Whalen, LA Times, Jan 17] Somehow, I doubt that regulations dominate the birth and death rate, or success, of California's small businesses.

Employers claim there is a severe shortage of IT workers in the US [but] the IT labor market is clearing and none of the indicators demonstrates a systemic shortage ... the gains for IT workers were hardly robust and don't indicate any significant scarcity. [Ron Hira, Information Week, Jan 12]

some prominent cardiologists say the results of two recent clinical trials have raised serious questions about the value of lowering cholesterol ... In the last 13 months the failures of two important clinical trials have thrown that hypothesis into question. First, Pfizer stopped development of its experimental cholesterol drug torcetrapib in December 2006, when a trial involving 15,000 patients showed that the medicine caused heart attacks and strokes. That trial — somewhat unusual in that it was conducted before Pfizer sought F.D.A. approval — also showed that torcetrapib lowered LDL cholesterol while raising HDL, or good cholesterol. Torcetrapib’s failure, Dr. Taylor said, shows that lowering cholesterol alone does not prove a drug will benefit patients. [Alex Berenson, New York Times, Jan 17]

Rensselaer Polytechnic Institute's revenues from licensing agreements has doubled in the past year ... getting technology out of the laboratory and into the marketplace--has been a major push at Rensselaer in recent years. ... estimates Rensselaer has an average of 40 active deals a year [Richard D'Errico, The Business Journal (Albany),  Jan 11]

It's the money.  The trend toward finance appears to be accelerating. A survey of the Class of '07 last spring by the campus newspaper, the Harvard Crimson, found more than one-fifth of the men -- and about one-tenth of the women -- who took jobs, as opposed to going to graduate school or other pursuits, headed to investment banks. The lure is obvious.  Comparing graduates with similar SAT scores, grade-point averages, gender, age, occupation and everything else they can measure, Mr. Katz and Ms. Goldin find Harvard grads who work in finance earn 195% of the pay of those who work elsewhere. [David Wessel, Wall Street Journal, Jan 17] Why engage in wealth creation of innovative development when they can get rich by shuffling other people's wealth for a fee. Until the bubble collapses. It's good news for mediocre SBIR firms who don't have to worry about real competition.

There were 66,921 hot spots in the U.S. last year, up 56% from 2006

the crisis of the future will be a crisis of prosperity [as] more than 2 billion people in China and India alone are becoming upwardly mobile consumers. ... eat more meat needing a lot more grain ... clean water for showers, dishwashers and washing machines, creating a groundwater crisis ...  consume lots of energy [for which] China is building about one coal-fired plant a week  [Michael Gerson, Washington Post, Jan 16]

Just Do It. energy experts say that the new technologies required to meet the new [CAFÉ] standards are minimal ...  such as continuously variable transmissions and better tires. [Peter Fairley, MIT Tech Review, Jan 15]

The next bubble in the U.S. economy should be taking hold right about now, says entrepreneur and investor Eric Janszen [who] runs iTulip, an investment Web site premised on the idea that the financial sector has locked the U.S. into a damaging cycle of bubbles that are disconnected from the actual health of the economy.  ... the alternative-energy industry's expansion is showing some of the same patterns that allowed values to swell far beyond their true worth during the dot-com and housing booms. For starters, green energy is popular with the media and with politicians -- "energy security" has become a catchphrase for both Democrats and Republicans. It has received favorable legislation involving loan guarantees and subsidies, just as the Internet got a sales-tax amnesty in the 1990s and deregulation allowed banks to offer more credit to potential homeowners. [Harper's, Feb 08]

Buy more oil, sell more banks.  sovereign funds have invested over $50 billion in weakened banks. That is a small amount compared with the $2 trillion in these funds, to say nothing of additional trillions in central banks and other related entities. But no one likes to lose money, even funds that have very long investment thresholds.  “At some point these investors will say no,” said Mr. Yardeni. “So far these investment have been value traps as opposed to good value.”  Yet with oil prices increasing, sovereign funds and other government-sponsored funds are likely to generate investment surpluses approaching $8 trillion in the next five years, according to McKinsey & Company’s research arm. [Landon Thomas, New York Times, Jan 16]  The xenophobic de-regulating Republican free-marketeers have brought us irresponsible financial shenanigans leading to US banks' begging for maybe foolish foreign ownership investment.

Frontline Wireless, which wanted to build an innovative cellular network for both private use and local public safety agencies, has collapsed because it could not raise enough money [required deposit of $128M] to bid in the government auctions of wireless spectrum that start later this month. [Saul Hansell, New York Times, Jan 9]

Data Never Die. Demand for storage capacity continues to grow at a rate of nearly 60 percent, according to IDC, a Framingham-based firm that specializes in market intelligence. [Boston Globe, Jan 8]

Aerva Inc. and LocaModa Inc., both of Cambridge, have created technology that lets people use cellphones to send messages or pictures to video screens scattered around late night hot spots and other venues where people socialize. [Carolyn Johnson, Boston Globe, Jan 1]

[several] Multinational companies will unveil today what they call a patent-sharing plan for companies to donate intellectual property that improves the environment. ... the "Eco-Patent Commons," builds on the experience of the open-source software movement ... Nokia is donating a patent for methods of recycling obsolete cellphones into noncommunicating calculators and personal digital assistants. ... any company can join the commons by contributing a patent. But all patents offered are available to anyone in the world on a Web site that will be maintained by the World Business Council. [Wm Bulkeley, Wall Street Journal, Jan 14]

GM  is taking a stake in an Illinois startup alternative fuel producer that claims to be able to make ethanol ...at half the cost of making gasoline. ... Coskata was formed in 2006 by venture capital firms that licensed a fuel-making process developed by researchers at two Oklahoma universities. The tiny startup has spent 18 months in "stealth" mode while scientists refined the technology ... GM favored Coskata's technology for several reasons: It can be deployed anywhere because it uses multiple nonfood sources, and perhaps even scrap from GM assembly plants; the process consumes less than a gallon of fresh water per gallon of fuel produced — far less than corn-based ethanol; and carbon dioxide emissions can be cut by 84% compared with gasoline, according to an analysis by Argonne NL. [Jeffrey Tomich, St Louis Post Dispatch, Jan 14]

Market turmoil promises the life-sciences sector a bumpy 2008. Increasing pressure on federal regulators to strengthen drug safety, a shifting political landscape and jittery investors could make it hard for biotech companies to raise money from the stock market. But Big Pharma, the major drug firms eager to inject some life into their withering product pipelines, may provide the funding that biotechs need to develop new drugs. [Angel Gonzalez, Seattle Times, Jan 12]

Companies like Pfizer have laid off thousands of chemists over the past year. Instead, they're turning to biologists for drug development. [Jack Hough, Smart Money, Jan 10]

If global growth resumes apace, tech shares should lead the market higher. Semiconductor stocks now trade at close to five-year lows, based on trailing sales and projected earnings. [Greg Zuckerman, Wall Street Journal, Jan 13] But Food and energy prices might be driving the inflation rate a bit above the Fed’s comfort zone, but that is nowhere near as terrifying as the prospect of a major, protracted recession. That prospect now looms larger than even a few months ago  [Irwin Stelzer, Jan 13]

the formation of Silicon Valley involved serendipity more than intentional design.  The co-inventor of the transistor and the founder of the valley’s first chip company, William Shockley, moved to Palo Alto, Calif., because his mother lived there. [John Markoff, New York Times, Jan 13] Now it's a juicy target: The annual mating ritual between elite business schools and the talent-hungry technology industry this year lured a record 115 master of business administration candidates from MIT's Sloan School of Management in Cambridge to the hillside campus of VMware Inc., one of Silicon Valley's hottest companies. [Robert Weisman, Boston Globe, Jan 14]

Slow Starting Cars. Three senior executives and more than a dozen other employees have been ousted by Tesla Motors as the Silicon Valley electric-car company struggles to get its much-delayed roadster to market.  [Matt Nauman, San Jose Mercury News, Jan 13]  Each of the last three agencies that received state funding to build a [hydrogen] fueling station has decided not to pursue the project, including Pacific Gas & Electric's recent decision to abandon building a key Bay Area fueling station in San Carlos. In addition, three stations have recently closed, including one in Richmond that served county buses and was dismantled this week. ... PG&E officials said they've shifted hydrogen to the back stage and now consider it a distant technology  [Kimberly Kindy, San Jose Mercury News, Jan 13]  Maybe hydrogen will make another political appearance in the state-of-the-union address as a way to change the subject.

China is much further from world economic leadership than we may have thought. Furthermore, poverty in China remains severe; the data revisions imply that China has 300 million workers — about the size of the entire United States population — earning less than a dollar a day. Given these weaknesses in the Chinese economy, the yuan may not be so undervalued after all.  [Tyler Cowen, New York Times, Jan 13]

Mercurial Lamps. Our national legislators are banning traditional incandescent light bulbs, which were invented by Thomas Edison more than 120 years ago. By 2014 these bulbs will be illegal. ... if CFLs are so great, why do we need a law to force us to buy 'em? ...But there's a more immediate problem: Each CFL bulb contains about 5 mg of mercury, a highly toxic and indestructible substance. Billions of these bulbs will be everywhere. If one breaks, you've got a problem, especially if you have small kids or pets roaming around. [Steve Forbes, Forbes, Jan 28] One firm got a Navy SBIR to safely dispose of fluorescent bulbs at sea - Air Cycle (Broadview, IL).

If you're young, the 1970s seem like ancient history. Before the heavy volatility erupted last summer, the sophisticates said that derivatives, collateralized debt obligations and other new securities had soothed the market permanently. Not quite. These Wall Street darlings went on to be the cause of the trauma. [John Rogers, Forbes, Jan 28] The 70s stagflation could return, as soon as this year. Then after some years of pain, a new Ronald Reagan could ride in and take credit for the inevitable recovery. 

one thing the [electric] car people won't be charged up about: batteries. For all the hoopla, nobody yet has figured out how to make a small enough battery that will hold a big enough charge for these new cars -- and not be a risk to burst into flames. ... The competition pits big Asian battery makers against a gaggle of small start-ups, most of them based in the US  [Norihiko Shirouzo, Wall Street Journal, Jan 11]

Feeding Polarization. Nicholas Negroponte, prophesied the emergence of the Daily Me – a fully personalised newspaper. It would allow you to include topics that interest you and screen out those that bore or annoy you. ... The result is group polarisation, which occurs when like-minded people speak together and end up in a more extreme position in line with their original inclinations ... given people’s new power to create echo chambers, the result will be serious obstacles not merely to civility but also to mutual understanding and constructive problem solving. The Daily Me leads inexor­ably also to the Daily Them. That is a real problem for democracy. [Cass Sunstein, Financial Times, Jan 10]

In addition to more wind farms and solar-electric plants, [Xcel Energy, Colorado's largest utility] plans to investigate development of a large-scale solar-thermal power plant — technology some analysts believe could eventually displace fossil-fueled generation. [Denver Post, Jan 9]

The Consumer Electronics Show, which is ostensibly dedicated to all that is dazzling and new in gadgetry, has managed to somehow become rather dull. [Lee Gomes, Wall Street Journal, Jan 9]

They Ignore Economics. As recent polls have shown, Americans are quite anxious about the future and pessimistic about the economy’s direction, but still fairly satisfied with their own financial situation. The anxiety suggests people may be ready for a sharp break from Mr. Bush’s economic policies. The satisfaction suggests they may want more modest changes. [David Leonhardt, New York Times, Jan 9] Smart politicians know that people vote their wishes with apparent ignorance of the underlying economics. Lower taxes cannot pay for long wars, higher Medicare, more highway lanes, and more handouts to small business. On the realism side, the U.S. Chamber of Commerce, the nation's largest business group, said that it might support tax increases in 2008 targeted at improving aging U.S. roads, bridges and railways. [AP, Jan 9]

What They See. Face-to-face interviews of an apparently random sample of the Pakistani population were conducted in August 2007 for Terror Free Tomorrow, a non-partisan Washington policy organization (www. TerrorFreeTomorrow.org). Those interviewed were asked questions about Al Qaeda and other issues facing Pakistan. The results indicate that more than a third of Pakistanis have a favorable view of Al Qaeda, the Taliban, and bin Laden, and that President Musharraf is the least popular political leader in Pakistan. Respondents also have a decidedly unfavorable view of the US-led war on terror, for they believe that its real purpose is to kill Muslims, break Muslim countries, and achieve other related goals. [Becker-Posner blog, Jan 6]

Novel Inspiration. British exec Luke Johnson  compiled a shortlist of the best novels featuring entrepreneurs I have read over the decades. The Three Stigmata of Palmer Eldritch by Philip K Dick. Reminiscences of a Stock Operator by Edwin Lefèvre. Mildred Pierce by James M Cain. Atlas Shrugged by Ayn Rand. Nostromo by Joseph Conrad. The Paper Palace by Robert Harling. The Way We Live Now by Anthony Trollope. What Makes Sammy Run? by Budd Schulberg. ... Two points stand out from my list. First, most of the books are American – probably because their culture celebrates business in a way we do not. Second, several of the entrepreneur characters are villains, not heroes. Join the debate Do you agree with the list? Which fictional novels do you think are the most inspiring for entrepreneurs?  [Financial Times, Jan 9]

Where's the Money? National health spending soared above $2 trillion for the first time in 2006 and has nearly doubled in the last decade, amounting to an average of $7,000 a person, the government reported [Robert Pear, New York Times, Jan 8] The boomers, the pig in the population python, will be buying more and more medical attention for the next thirty years.

Last month, Stanford University materials scientists unveiled a nanowire electrode that could more than triple lithium batteries' energy storage capacity and improve their safety. The development, reported in the scientific journal Nature Materials, stems from the labs of nanowire innovator Yi Cui and battery expert Robert Huggins at Stanford's Materials Science and Engineering Department. The researchers show that nanowires of silicon just a few atoms across can function as high-capacity electrodes, absorbing and releasing about 10 times more lithium ions than the graphite electrodes that are commonly used today.  [Peter Fairley, MIT Tech Review, Jan 4]

Energizer Holdings, The country's No. 2 battery seller is introducing a new line of flashlights and head lamps for "extreme outdoorsmen," as well as home lights that keep running if the power goes out. The idea is to attract consumers with high-intensity, energy-efficient technology [LED],  which commands a higher price and fatter profit margins than standard incandescent technology. ... Energizer's sales volume of lithium batteries jumped more than 30% in the year  [Jeremiah McWilliams, St Louis Post Dispatch, Jan 5]

"A journey by jet to the sun would last 21 years, at which point passengers should be advised that contents in the overhead compartment may have melted.” .... a consistently gripping hi-sci read,   [John Cornwell, reviewing Natalie Angier's The Beautiful Basics of Science, The Sunday Times, Jan 6]

portable computers are finally taking over. Last year, for the first time, U.S. consumers bought more of them than desktops. Sixteen of the 20 best-selling PCs on Amazon.com this holiday season were laptops. U.S. corporations are expected to make laptops the majority of their computer purchases in 2008. [Michelle Quinn, LA Times, Jan 7]

About 300 companies will showcase their work at the JPMorgan Annual Healthcare Conference [in San Francisco], including efforts to make a vaccine against cancer, antibodies to fend off Alzheimer's disease and drugs to help the obese lose weight. The invitation-only event is in its 26th year [Bernadette Tansey, San Francisco Chronicle, Jan 7]

Eternal Hope. A Silicon Valley startup is promising to blanket San Francisco with free wireless Internet service, reviving a crusade that crumbled last year after two much larger companies, EarthLink Inc. and Google Inc., scrapped their plans to build a high-speed network for Web surfing.  Meraki Networks Inc., whose financial backers include Google, hopes to complete the ambitious project within the next year by persuading thousands of San Francisco residents> to set up free radio repeaters on their rooftops and in their homes. [Michelle Liedtke, AP, Jan 4]

The [San Jose] Mercury News is well on its way to rethinking its role for the future, said its new editor as it struggles to compete with the Internet for advertising.  Trouble in the capital of entrepreneurial technology capitalism.

A typical talk on BBC’s Radio Three might start by bemoaning the consumer society, with its passion for shopping and the rush to make pointless purchases. It might then bemoan the nervous strain in the quest for economic growth and the lack of time or energy for more worthwhile activities. But then comes a more interesting twist. All this frenzy of pointless activity is required, it is said, to keep the economy going. Without it, the implication is, production would dry up and jobs disappear, and we would wallow in semi-permanent depression. [Samuel Brittan, Financial Times, Jan 3]

Thirteen nano-level university laboratories across the country — including the NanoTech User Facility at the University of Washington — are hiring themselves out to businesses eager to make their mark in the millennium of the minuscule. The intimidatingly named National Nanotechnology Infrastructure Network, begun in 2004, is funded, in part, with $14M a year from the NSF. [Ben Dobbin, AP, Dec 31]

More Shape Memory. Roland Piquepaille writes "The U.S. National Science Foundation (NSF) has recently reported that two research teams have developed a new porous foam of an alloy that changes shape when exposed to a magnetic field. The NSF states that this new material is able to remember its original shape after it's been deformed by a physical or magnetic force. This polycrystalline nickel-manganese-gallium alloy is potentially cheaper and lighter than other materials currently used in devices ranging from sonar to precision valves. It also could be used to design biomedical pumps without moving parts and even for space applications and automobiles."

Lucas123 writes "According to a Computerworld survey of IT managers, data storage projects are the No. 2 project priority for corporations in 2008, up from No. 4 in 2007. IT teams are looking into clustered architectures and centralized storage-area networks as one way to control capacity growth, shifting away from big-iron storage and custom applications. The reason for the data avalanche? Archive data. In the private sector alone electronic archives will take up 27,000 petabytes (27 billion gigabytes) by 2010. E-mail growth accounts for much of that figure."

Oil prices ended 2007 less than the cost of a ballpark hot dog away from three digits, but that milestone looms with undaunted global demand. Light, sweet crude closed out the year at $95.98 a barrel — a 57% surge over the year-end 2006 [Houston Chronicle, Jan 1].  Tech advances needed in efficiency of use.

When You're Hot, ... Colorado stocks collectively powered past U.S. equity indexes in 2007, spurred by the state's booming energy and biotechnology sectors.  The Bloomberg Colorado Index, a price-weighted collection of stocks based in the state, rose 17.7 percent last year. ... the Standard & Poor's 500 index grew 3.5 percent. [Andrew Vuong, Denver Post, Dec 31]  But next door, The Salt Lake Tribune/Bloomberg Index, which was established on Dec. 30, 1994, gave up 14.8% last year for its worst annual performance ever. [Salt Lake Tribune, Jan 1]

Even More Knowledge.  so where can you find some real facts online? Some sources. [James Knight, The Sunday Times, Dec 30]

Startup Weekend, a mini-conference where attendees create and start a company in a weekend, is coming to Seattle on Jan. 25-27 for a session at Adobe's Fremont campus. Registration is $20, and participants receive shares of the company they start. Startup Weekend, an organization run by Boulder, Colo., entrepreneur Andrew Hyde, gets 5 percent of the company. He's held similar events in 13 other cities since July.  [Brier Dudley's blog, Seattle Times, Dec 18]

Use Cobalt? The price of cobalt, a rare metal used in products such as batteries for mobile phones and hybrid cars, has surged to record levels amid booming demand and supply problems in the war-stricken Democratic Republic of Congo.  Cobalt prices soared nearly 60 %  last year , the highest since a modern market for cobalt trading started to develop in the 1970s. [Financial Times, Jan 2]

The boom in industrial production of the 1930s did signal growth, but not necessarily growth of a higher quality than that, say, of a Soviet factory running three shifts. [Amity Shlaes, Wall Street Journal, Dec 31] The SBIR advocates make the same kind of argument that the New Dealers made in the 1930s: let public capital in political enterprises substitute for private capital in market-driven enterprises. With the same apparent result: temporary jobs paid by the government.

As 2009 dawns we can toast the nation's willingness to address longstanding problems head-on and to forge a new consensus out of adversity. U.S. stocks have never been this cheap relative to the rest of the world. And it's been a long time since real estate has been this affordable.  [Igor Greenwald's early review of 2008, Smart Money, Dec 31]

Europe is awash in bio-diesel thanks to large subsidies and low demand.  The industry is in trouble, under pressure from soaring costs, disappearing tax breaks, less-costly imports and waning public support. .... Now even Green lobbies are also turning against biodiesel [because] growing crops for biodiesel puts too much pressure on land and food prices. [John Miller, Wall Street Journal, Dec 28] When subsidies encourage production that the market doesn't want, the government wastes the money (except for buying the producers' support.)  The same ugly economics applies to subsidies like SBIR for products with no market future.

You’re in for very bad weather. In 2008, your television will bring you image after frightening image of natural havoc linked to global warming.  ... Unfortunately, I can’t be more specific. ... Long-term climate models cannot explain short-term weather.   [John Tierney, New York Times, Jan 1] Climate and weather modeling needs a whole new math of numerical computing. Incremental improvements in such computing won't solve the problem since they usually just take advantage of faster computers built elsewhere. 

Got a Great Story to Tell? New printing technologies are making published authors of legions of aspiring writers, ... On-demand publisher Lulu.com has churned out 236,000 paperbacks since it opened in 2002, and its volume of new paperbacks rose each month in 2007, hitting 14,745 in November. Retail giant Amazon.com got into the game in the summer, offering on-demand publishing through its CreateSpace, which was already letting filmmakers and musicians burn DVDs and CDs. [Candace Choi, AP, Jan 2] Avoid those niggling editors.

twitter writes "PC World has released their year in review statistics and 2007 was not kind to Microsoft. IE 6 users are equally likely to move to Firefox as they are to IE7 and no one wants Vista.  [slashdot.org, Dec 30] Do innovation giants eventually lose their touch?

The euro has fast gained ground against the dollar in international official foreign exchange reserves in recent months, according to official statistics highlighting the nine-year-old currency’s growing global importance. [Financial Times, Dec 30] Well, if you are just an SBIR company looking for another DOD or NASA R&D contract for a turbulence model, you can ignore such international developments. But if you are a market-driven company, you might be concerned about the trends resulting from America's recent our-way-or-the-highway attitude toward the world. We are NOT an island any more.

Severstal, Russia’s biggest steelmaker, aims to increase profit from its US operations almost threefold by 2010 with the help of a $1bn investment plan to increase output and improve quality. [Financial Times, Dec 30] Do we think that the Russians really understand profit making investment? Or are Russian investments returning to their Cold War ideas that everything is about political power?  If the Russians offered you an investment, would you take it?

But At What Price? scientists at Sandia National Laboratories aim to find out by building a novel reactor that can chemically "reenergize" carbon dioxide.  The device uses a solar-powered two-stage thermochemical reaction to break down carbon dioxide to produce carbon monoxide. ... says Christian Sattler, of the Institute of Technical Thermodynamics at the German Aerospace Center, in Cologne. "The question is, at what efficiency?" he says. "How much energy does it take to carry out this reduction? It may be more efficient to use the solar energy for direct power production." [Duncan Graham-Rowe, MIT Tech Review, Dec 17]

Netscape, the browser once used in 80% of all Internet sessions, will be shut down by AOL after failing to regain market share from Microsoft Corp.'s Internet Explorer.  Netscape users should switch to Mozilla Foundation's Firefox browser, Netscape director Tom Drapeau wrote on his blog. [Houston Chronicle, Dec 29]

Mr. Thiel, the former CEO of online-payment company PayPal, is making waves in Silicon Valley with an investment strategy that differs significantly from the traditional approach. His company invests only modest amounts of money, sometimes just a few hundred thousand dollars, and focuses on entrepreneurs Mr. Thiel and his partners often know personally. He also takes an uncharacteristically hands-off approach to company management. [Rebecca Buckman, Wall Street Journal, Dec 29]

InfoWorld thinks you'll find these stories surprising, interesting and above all, useful.
1. Java is becoming the new Cobol
2. Sun Microsystems is back in the game
3. Hackers take aim at Mac OS X
4. There are some threats you can worry less about
5. Companies may have found a way around H-1B visa limits
6. Open source's new commercial strategy
7. End-to-end Ethernet finally arrives
8. Blade servers arrive for the masses
9. BI is dead; long live BI
10. Balance of power shifts to software buyers

Competition for Investment. There was a time when no one in their right mind would invest overseas because the USA had a deeper market, better regulation, better accounting, better ratings for investment risk and a better currency. Today, all those harmful barriers have been swept away. [Scott Burns, Dec 30]

The Curse of Knowledge. “Look for people with renaissance-thinker tendencies, who’ve done work in a related area but not in your specific field,” she says. “Make it possible for someone who doesn’t report directly to that area to come in and say the emperor has no clothes.” ... IT’S a pickle of a paradox: As our knowledge and expertise increase, our creativity and ability to innovate tend to taper off. Why? Because the walls of the proverbial box in which we think are thickening along with our experience. ... This so-called curse of knowledge, a phrase used in a 1989 paper in The Journal of Political Economy.   [Janet Rae-Dupree, New York Times, Dec 30]

The Bay State ranked fifth in patents per resident in fiscal 2007, trailing only Idaho, Vermont, Oregon, and California. [Boston Globe, Dec 31]

Extrapolation Is So Easy. I look pretty stupid in hindsight, although I remind you that I had plenty of company in the audience that day. How could so many people be so wrong? .... I saw no sign of light anywhere. A child of the Great Depression, I had been well schooled by my college professors in economics in the late 1930s to believe that the American economy had lost its long-run dynamic. So, in the downturn of 1957, I was convinced that the dreaded moment had arrived when we would sink back into the stagnation of production and employment that I had remembered so well. [Peter Bernstein, New York Times, Dec 30]

Conservative Doctors. One reason for this mess [of medication errors] is that 95% of prescriptions are transmitted using 5,000-year-old technology: pen and paper.  That is unacceptable. The deaths and inefficiencies of paper prescriptions can be nearly entirely eliminated if we use the same technology that we use in other aspects of our lives. Electronic prescriptions can replace handwritten, misread and mismatched prescriptions with online, automated and expert technology. .... One initiative led by Chrysler, General Motors and Ford to encourage doctors to write e-prescriptions in the Detroit region has generated more than one million prescription alerts that have saved lives and money. The benefits of e-prescribing are so important that the Institute of Medicine has called for every doctor and nurse to prescribe electronically by the year 2010. [Newt Gingrich and John Kerry, AEI Public Policy Paper, Nov 07]

Wang's company is typical of China's dot-com boom. Over the past decade, startups have proliferated, thanks to an aggressive government campaign to attract private investment. Many of the new companies focus on Web sites, but there are also computer-chip and telecommunications equipment designers, biotech development labs and medical-device makers. The state has created dozens of "new Silicon Valley" districts — glittering high-tech zones and incubators as big as cities, with such incentives as no corporate income tax for the first three years. The largest is Beijing's Zhongguancun, home to 20,000 start-ups, most of them information-technology companies, with nearly 800,000 employees that together received more than half the international venture capital invested in China last year.  The money flowing into China is transforming small towns into tech centers and a Third World economy — based on churning out such products as cheap TVs and socks — into a world player in innovation.  [AE Cha, Washington Post, Dec 31]

 If you can keep your head, ... Born December 30, 1865: English author, Rudyard Kipling

air travelers will no longer be able to pack loose lithium batteries in checked luggage beginning Jan. 1, .... Passengers can still check baggage with lithium batteries if they are installed in electronic devices, such as cameras, cell phones and laptop computers. If packed in plastic bags, batteries may be in carryon baggage. The limit is two batteries per passenger. The ban affects shipments of non-rechargeable lithium batteries, such as those made by Energizer Holdings and Duracell brand.  [AP, Dec 28]

"This evidence reinforces the likelihood that the economy will slow dramatically in the fourth quarter," Nigel Gault, U.S. economist at forecaster Global Insight, said in a note to clients.  A slowdown in business investment could spell trouble [Kelly Evans, Wall Street Journal, Dec 28]

There always will be bubbles in markets, adds Mr. Posner, and government intervention aimed at preventing a future crisis would create a false sense of security that would only lead to future bubbles. In the long run, he says, a recession would do less harm to society than restrictions on lending practices.  [Nobelist Gary] Becker writes on the blog he shares with U.S. Circuit Judge Richard Posner. Adult thinking.]

The World Economic Forum announced a list of startup technology companies that the international organization said have demonstrated visionary leadership and proven technology that could change business and society.  [World Economic Forum]  Of the 47 winners, 24 appear eligible for SBIR.  23andMe, Accuray, RainDance Technologies, Rincon Pharmaceuticals, SiGNa Chemistry, Cima NanoTech, Gridpoint, Hycrete, LS9, Nanostellar, Primafuel, Silver Spring Networks, Unidym, AdMob, Clearwire, Innovative Silicon, Kayak, Lumio, MEDIO SYSTEMS, Meraki, QlikTech International, Roundbox, Transclick. Of the 24, two had SBIR for a total of less than $1M. Is the Executive Branch having trouble seeing the high potential companies or do such companies just not want to bother with the structure and attitudes of SBIR? Although Congress could change the Executive Branch's vision criteria, it is unlikely to do so while distracted by much larger issues. So, DOD and NASA SBIR will continuer to bumble along funding mostly futureless companies.

several experienced chief executives have joined together to offer a mentoring program for Chicago-area firms. After a competition among several young firms, three have been selected to receive intense mentoring for the next six months. ... The firms are RevStor LLC, a Schaumburg-based data storage firm; ParkWhiz LLC, a Chicago-based firm that uses the Internet to match people wanting to rent out parking spaces with motorists needing a place to park; and PrepMe Inc., a Chicago firm that helps people prepare to take standardized tests. .... Even though most entrepreneurs are in love with the bright idea that causes them to start a new company and the technology behind it, Churchwell said, investors aren't impressed. Instead of listening to descriptions of slick technology and rosy sales projections, they look for solid management with a proven success record.  [John Van, Chicago Tribune, Dec 17]

China's stock market wound up a stellar — and turbulent — year today, with its benchmark Shanghai composite index up 97%  And of course, "We expect the stock market will go up in 2008, but..., said one China securities wag. [Joe McDonald, AP, Dec 28]  Take a flyer?  Be careful with markets that can be manipulated by the government.

Gerard Baker's [The Times, London] prediction quiz. 6. The economy will:  a) collapse under the weight of America's bad-loan-riddled housing market;   b) surge on the strength of continuing substantial growth in emerging markets;  c) bobble along all right at a perfectly decent rate of growth while every pundit and journalist screams it's the dawn of another Great Depression;  d) none of the above. Baker's answer: c Sub-prime crisis? What sub-prime crisis?  Life and entrepreneuring will go on because the American system rewards optimism.

Brookhaven researchers discover unexpected fuel cell catalyst activity ... two next-generation catalysts including gold, cerium, titanium, and oxygen nanomaterials exhibit very high activity [Small Times, Dec 18]

Researchers from the University of Rochester (NY) have created a nanoscale device that is capable of detecting one quadrillionth of a gram of biological matter, or about the size of certain viruses. In the future, the sensor may be able to detect influenza, severe acute respiratory syndrome (SARS), bird flu, and other viruses. ... described in a recent edition of Optics Letters.  [physorg.com, Dec 20]

“When the Janesville banks turned him down, it was a major blow and became a defining moment in his life,” daughter Kim Hendricks recalled in June 2006, when her father won the annual “Seize the Day” award from the Wisconsin Technology Council. “That's partly why my dad is so passionate to this day about helping small businesses get started. He truly finds great joy in starting businesses and creating jobs. He's a big believer in the American Dream.”  Hendricks estimated a year ago that, in addition to ABC, he owned 30 other firms with combined sales of $1.5 billion. [Tom Still, Wisconsin Technology Network, Dec 24] Hendricks, 66, died Dec. 21 after falling through a hole in the floor of an addition being built to his Rock County home

The Future.  IBM released its second annual " IBM Next Five in Five" innovations that have the potential to change the way people work, live and play over the next five years. The list is based on market and societal trends expected to transform our lives, as well as emerging technologies from IBM’s Labs around the world that could make these innovations possible. ... "smart energy" technologies will make it easier for you to manage your personal "carbon footprint";  a wave of connectivity between cars and the road ; know the exact source and make-up of the products you buy and consume; your mobile phone will be a trusted guide;  your doctor will be able to see, hear and understand your medical records in entirely new ways.  [IBM press release] .... The Futurist magazine has its own list of predictions for 2008 and beyond: a billion millionaires by 2025; revolutionize the textile industry; threat of another cold war with China, Russia, or both; move toward a cashless society; the verge of a significant extinction event; global fresh water shortages; a full-scale rush to develop the Arctic (see Karl Vick, Alaskans Weigh the Cost of Gold, Washington Post, Dec 25].

The 21st century economy rewards hard work all right. But it must be smart and productive work. Hard productive work will always trump hard dumb work.  [Rich Karlgaard, Digital Rules blog]

“Berkeley has one of the strongest chemical engineering schools in the world, but it will be the M.B.A.’s who understand areas like microfinance solutions to drinking water problems,” Mr. Hawkins said. ... The political landscape of academia, combined with the fight for grant money, has always fostered competition far more than collaboration.  But the threat of global warming may just change all that.  [Claudia Deutsch, A Threat So Big, Academics Try Collaboration, New York Times, Dec 25]

Darwinalia.  the Darwin Correspondence Project’s new web site. The main feature of the site is an online database with the complete, searchable, texts of around 5,000 letters written by and to Charles Darwin up to the year 1865. This includes all the surviving letters from the Beagle voyage - online for the first time - and all the letters from the years around the publication of Origin of species in 1859. [Cambridge University]

In reality, most incubators fail to live up to expectations. Indeed, a survey of 300 firms by Arthur D. Little found that only 47% of companies believe their new ventures satisfy strategic objectives. Worse, only 24% meet financial objectives. When done right, however, new growth businesses can in fact generate massive growth. ....Disruptive innovations are uncertain, unpopular and difficult. In a portfolio heavily weighted toward incremental improvements, disruptive projects invariably lose out, even though they tend to create by far the most shareholder value.  [Stephen Wunker, Forbes, Dec 21]

"The global war on terror has spurred spending on advanced technologies, such as net-centric and embedded technologies, but has siphoned away funds for traditional or pure-play IT projects, resulting in a slight slowing of the annual growth rate of such technologies over the next few years," Lauren Jones, principal analyst for Input, said in a statement (about FY08 DOD spending). [KC Jones, Information Week, Dec 21]

Stonebraker,  the 'Johnny Appleseed' of start-ups. His first three companies, all started in the 1980s and 1990s while he was teaching computer science at Berkeley, were acquired by high-tech biggies Computer Associates, Informix, and PeopleSoft for as much as $400M.  [Scott Kirsner, Boston Globe, Dec 23]

America’s Piggy Bank. Over all, foreigners continue to finance the American government deficit, with their Treasury holdings rising $194.7 billion in the first 10 months of the year, more than the $166 billion increase in Treasury securities held by the public. Since January 2001, when President Bush took office, the debt issued to the public has risen by $1.7 trillion, with $1.3 trillion of that increase being taken by foreigners, the Treasury estimated. ... But,  the Treasury has a history of getting these numbers wrong, and then fixing them months later.  [Floyd Norris, New York Times, Dec 22]  Think of something you would like from the USG, then get your favorite Congresscritter to demand it while cutting your taxes.

A CREDIT crunch, a liquidity squeeze, a subprime meltdown... now it looks like becoming a banking crisis as well. The grievous experience of two centuries of financial busts is that when the banking system is in difficulties the mess spreads. Straitened banks lend less, sucking money out of the economy. ... There is an irony in seeing state-owned investors bail out capitalism's most ardent exponents; back when money was plentiful, the government outfits were rebuffed.  [The Economist, Dec 19] Those so-called conservatives who want low tax and micro government (except for a large military to conquer the world) can be thankful that a too-large government has the capacity and the organization to right the ship before it takes on much water.

The same least common denominator folks, some of whom got overboard in sub-prime mortgages also want foreign wealth holders to bail them out at no cost. These enormous pools of wealth, controlled by governments in countries that have been getting fat off high oil prices and a booming global economy, are viewed suspiciously by those who fear foreign powers might use them to gain competitive advantages or push political agendas. [Bill Powell, Time, Dec 31] Well, of course, when you put yourself at their mercy, you get what you deserve when they do what you would do -  use any advantage for your purposes. Turn about is fair play! Don't want to depend on them any more? Cut your energy consumption in half.

Expert Predictions. "We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system." BEN BERNANKE, Federal Reserve Chairman, May 17, 2007. A global credit crunch began three months later.

It was a big week in the fight against global warming. ... and our biggest enemy will be ourselves ... While a growing majority of us believe we ought to do something about global warming, we're not so sure we want to pay the upfront costs.  From high-efficiency light bulbs to solar-electric panels, ... We need to stop obsessing about the next iPhone and think more about inventing a real eCar. [Vindu Goel, San Jose Mercury News, Dec 23]

Who's Innovative?  In 2006, Idaho led the nation with 266.8 patents per 100,000 workers employed in the state. This was followed by California (161.5), Vermont (160.3), Oregon (149.2), and Massachusetts (136.7). The District of Columbia had the lowest number (10.3 patents), along with Mississippi, Alaska, West Virginia and Arkansas  [SSTI, Dec 17]  DC does politics.

Chinese buyers spent $29.2B acquiring foreign companies so far this year, outpacing for the first time foreign buyers that have invested in China. [Wall Street Journal, Dec 20]

MIT: Completely Online. ... has put all its courses online. Free materials for all 1800 courses are available at ocw.mit.edu--everything from full video talks about aerospace engineering to anthropology lecture notes about "Intersubjectivity, Phenomenology, Emotion, and Embodiment." The site has drawn 35 million visitors since 2002, most from outside North America, says MIT's Stephen Carson. "It's unprecedented to have all the courses available at a university this deeply and openly available on the Web. … It's an extension of the public-service function of the university."  [Science, Dec 14]

Persuading the private sector to accept a handout from California's $3 billion stem-cell institute might strike some as a no-brainer. After all, what business wouldn't take the money?  But there's a catch: Although companies now have a chance for the first time in the institute's three-year history to apply for its money, they may wind up having to share some of their revenue and research. And that is giving some companies second thoughts about participating.  The California Institute for Regenerative Medicine, which so far has awarded about $260 million in grants to non-profit institutions, today will begin to get an inkling of how many businesses are interested. [Steve Johnson, San Jose Mercury News, Dec 20]

Academics, business leaders, and politicians have warned repeatedly that the United States risks losing its economic edge unless it produces more scientists and engineers. They also say that the country's system of science and math education is not up to snuff. But a new study questions two basic tenets of that argument, concluding that work force data do not support claims of a looming labor shortage and that test scores indicate U.S. students are doing at least as well in science and math as their international counterparts are. [Yudhijit Bhattacharjee, Science, Nov 16]

Prediction 2008. media attention will focus on China as the world's next potential “bubble” and cause many manufacturers to shift sourcing strategies from Asia to the Americas. The falling U.S. dollar, limited free trade agreements, high energy costs, and rising production costs in Asia will all contribute to companies reevaluating extended supply chains and moving sources closer to their home markets.  [David Blanchard (Ed-In-Chief), Industry Week]

Re-Inventors Welcome. [Toledo] became famous in the last century for being one of North America's leading glass centers. The industry has been in decline since the 1980s, but Toledo hopes to be known for its glass again. This time, though, the glass is being coated with thin layers of chemicals to produce ecofriendly "solar cells." ... "The good thing about the Rust Belt is they want factories there," says Ron Kenedi, vice president of Sharp Corp.'s Solar Energy Solutions Group ..."I started in glass, and now I'm back in glass," says Mr. Johnston, whose start-up has recently been acquired by German solar-panel maker Q-Cells AG. [Jim Carlton, Wall Street Journal, Dec 18]

Got a Wave Idea? "Wave energy is in the early stages of development," said Uday Mathur, an energy-procurement principal for Pacific Gas & Electric. "It's where wind power was 10 to 15 years ago." ... PG&E will become the first U.S. utility to agree to buy energy from the ocean when it announces a deal today to get 2 megawatts of power by 2012 from the cold, choppy waters off the Northern California coast.  The deal, with Finavera Renewables, a Canadian company, could eventually lead to the building of a "wave farm" about 2.5 miles off the coast of Eureka in Humboldt County. ... As PG&E seeks to meet California's mandate that it get 20 percent of its electricity from renewable sources by 2010   [Matt Nauman, San Jose Mercury News, Dec 18]

Need Treasures and Junk Prices? Even tech companies need garage sales now and then ... San Jose start-up FreeFlow puts out the signs. The company's sole role in the tech value chain is to help companies around the globe unload outdated or excess products and components with Internet speed. "We joke about being technical ragpickers," said FreeFlow vice president Andrew Katcher. [John Boudreau, San Jose Mercury News, Dec 18]

With Americans cutting the cord to their land lines, 2007 is likely to be the first calendar year in which U.S. households spend more on cell phone services, industry and government officials say. [Dibya Sarker, AP, Dec 18]

When the Data Don't Fit. The lead researcher of a long-delayed drug study says he regrets not standing up to Merck and Schering-Plough when they first told him last month that they planned to alter the statistical analysis of their jointly sponsored trial. ... John P. Kastelein, a cardiologist at Academic Medical Center, Amsterdam, and principal investigator of the study, said he breathed a "sigh of relief" when the companies told him last week they were reversing course. "It's never, ever right to change the primary endpoint of a study," especially after all the data are in, he says. ... The decision drew a wave of criticism, including the launch last week of a Congressional inquiry into the conduct of the study. The companies say their decision to go back to the original analysis plan was made before they heard from Congress.  [Ron Winslow, Wall Street Journal, Dec 17]  Now when it comes to the White House interpreting data from Iraq, ....

Doctor-R writes "The Computer History Museum in Mountain View, CA has created a new YouTube channel for videos of their lecture series. Newest is the Dec 10 panel on the 25th Anniversary of the Commodore 64. Currently there are 23 lectures available and the 7-minute Museum overview." [slashdot.org, Dec 16]

Fortune revealed today what it calls the "101 Dumbest Moments in Business, 2007,"  ... One Laptop Per Child Foundation of Cambridge was 82 on the list [Boston Globe, Dec 18]

Clean Energy The Northern California Power Agency will use solar panels to generate electricity to run water pumps at its geothermal fields. [San Jose Mercury News, Dec 11]

with everyone predicting a more volatile year ahead, business executives are going to be graded more heavily on whether the decisions they make on everything from strategy to talent help their companies grow. They have to stop becoming experts on giving a positive spin to economic warnings and start analyzing the data at hand. [Carol Hymowitz, Wall Street Journal, Dec 17] For SBIR proposers, the "Commercialization Strategy" can still be all spin since the government neither knows nor cares much.

Green tech" may be the top business buzz-phrase of 2007—and that could signal a problem. Venture capitalists have been piling into biofuels, solar power, and wind farms, investing $2.6 billion over the first three quarters, compared with $3.9 billion in Web outfits. The question is whether that's too much money chasing too few good ideas. Already, some experts are predicting a shakeout. (wired.com) [Business Week, Dec 24] 

A new computational method that searches an enormous database of protein structures could allow researchers to predict a drug's potential side effects without breaking out a single test tube. The technique, developed by researchers at the University of California, San Diego (UCSD), could also be applied to existing drugs to explain known side effects or to identify additional uses. [Jocelyn Rice, MIT Tech Review, Dec 17]

As the transistor turns 60.  Preparing for the day they can't add more transistors, chip companies are pouring billions of dollars into plotting new ways to use the existing transistors, instructing them to behave in different and more powerful ways.  Intel, the world's largest semiconductor company, predicts that a number of "highly speculative" alternative technologies, such as quantum computing, optical switches and other methods, will be needed to continue Moore's Law beyond 2020.  [Jordan Robinson, AP, Dec 17]

maintained internal laboratories like Bell Labs. These corporate labs were essentially research universities embedded in private companies, and their employees published academic papers, spoke at conferences and even gave away valuable breakthroughs. Bell Labs, for instance, created the world’s first transistor after World War II — and never earned a dollar from the innovation. Almost no corporate labs based on the Bell or Xerox model remain, victims of cost-cutting and a new appreciation by corporate leaders that commercial innovations may flow best when scientists and engineers stick to business problems. [GP Zachary, New York Times, Dec 16]  They also saw the federal government ramping up its basic research machine that competed for the best scientists and was at least as likely to find the big discoveries first. As the private labs shrank, the science machine magnified its arguments for ever more public money to keep America first. And with the public acceptance of deficit finance, the politicians could pay off the interest groups and claim high patriotism. But “Universities don’t innovate,” says Curtis R. Carlson, chief executive of SRI International, a nonprofit research institute in Menlo Park, Calif., that bought what remained of RCA’s lab. “Innovation means you get it out so people can use it. The university is not going to take it to the world.” 

Hong Kong and many other corners of Asia are betting billions of dollars to become incubators of innovation. China has 56 official, and countless unofficial, technology parks, and President Hu Jintao regularly calls for "independent innovation." In India, government and industry leaders sponsor startup incubators and lure venture capitalists in hopes of spawning the next generation of entrepreneurs to lead the country beyond its role as back-end outsourcer. [John Boudreau, San Jose Mercury News, Dec 17] The good news is that as long as governments call the shots in innovation, only government's interests will be served. They can waste energy and opportunity on their no-value-added SBIR programs too.

Connect in Denver.  Travelers at Denver International Airport who have previously had to pay for wireless Internet access are getting an early Christmas surprise: The service is now free [Denver Post, Nov 29]

Bargain bin. It's becoming increasingly clear that the low U.S. dollar has become the primary force in domestic M&A right now ... According to data compiled by Thomson Financial, none of the 10 largest merger-related bids here in the past four months had a U.S. acquirer, and in only two of the top 10 acquisitions overseas is a U.S. company the buyer. Expect even more bargain bin hunting in the first half of 2008 [Dennis Berman,  Wall Street Journal, Dec 15] some retailers rolling out the red carpet for anyone with a foreign passport [Wall Street Journal, Dec 15] The dollar was so weak, “We had trouble spending all our money.” Add a new superlative to New York’s long list: world’s most fabulous discount mall. [K Hammer & J Vertigier, New York Times, Dec 15]   Not to worry. Though the dollar is undergoing a correction, it is a healthy one and the dollar is likely to stay on top for years to come. The real matter for concern is the large U.S. trade deficit with the rest of the world, which causes jobs and demand to leak out of the economy. As a result, borrowing and spending that should create jobs in the United States end up creating jobs offshore, while the U.S. economy is left with a weakened manufacturing sector and burdened with the debts that finance this spending. [Thomas Palley, Foreign Policy, Dec 07]

Great Tech, Treo smart phones, but now Palm is laying off about 10% of its work force this week to cut expenses. Tech and competitors march on. [AP, Dec 14]

20% in India. IBM Corp.'s expansion in developing countries shows no sign of relenting. The technology company revealed Friday that it now has 73,000 employees in India, almost a 40% leap from last year. [AP, Dec 15]

Carbon nanotubes may be perfectly safe, but then again, they may have asbestos-like properties. Nobody knows. Indeed, industry, regulators and governments know little about the general safety of all manner of materials that are made into fantastically small sizes. ...Research on animals suggests that nanoparticles can even evade some of the body's natural defence systems and accumulate in the brain, cells, blood and nerves. [The Economist, Nov 24]

This Christmas, Royal Philips Electronics is vividly displaying its dominance in the lighting market. ... Philips also will provide the lights for the New Year's Eve Times Square Ball in New York. Instead of 600 incandescent and halogen bulbs, the ball will be fitted with more than 9,500 LEDs, which burn twice as brightly and can create a palette of 16 million colors. Depending on their hue, they'll be up to 98% more energy-efficient than the bulbs they replace. ... Check the economics: A 67-cents incandescent bulb will burn 1000 hours for $360 of electricity; a $35 LED will burn 60000 hours for $12 of electricity. [Business Week, Dec 24]

the Rich Are Getting Richer Faster, Much Faster. The increase in incomes of the top 1% of Americans from 2003 to 2005 exceeded the total income of the poorest 20% of Americans, data in a new report by the Congressional Budget Office shows. [New York Times, Dec 15] George Bush, the darling of the rich and religious, has a solution: cut their taxes.

Perspective. our poorest 20% would be upper middle class in most countries of the world, and would be far richer than 99.9% of people who have ever lived. [Coyote blog, Dec 11]

Among the [oil supply] peakists, war and economic breakdown are favorite themes. They figure that cheap oil is the essential fuel of modern capitalism, which will founder without it. A more hopeful take is that innovation is the essential fuel of modern capitalism and that high oil prices will drive rapid advances in conservation and alternative energy. Either way, the beginning of the end of the oil era may be upon us, well ahead of schedule. [Justin Fox, Time, Dec 3]  If innovation is the answer, and the government has a funding program named innovation, should it be used to pursue the proposed innovations with the greatest potential for making a future societal impact? 

one niche that [Frank Sustersic, manager of the $674 million Turner Emerging Growth Fund] likes right now is clinical research organizations. These companies are hired by pharmaceutical and biotech firms to run clinical trials and collect data. He thinks this is a high-growth area now because of changes in the pharmaceutical industry toward more outsourcing. "A shift from a major pharma company to go from 20 to 30 percent outsourcing—that's a huge shift." [Matthew Bandyke, US News & World Report, Dec 6]

Gimme, Gimme. More than 3 in 4 life sciences companies would consider leaving Massachusetts, according to preliminary results of a survey by the Massachusetts Life Sciences Collaborative. ...and 63% have already been contacted by other states about moving.  [Boston Globe, Dec 12] The story did note that Massachusetts has a "strong workforce", that is a large smart labor pool that may not want to move to Kentucky. Nor would the similar pool move from Silicon Valley to Kansas. The poll sounds more like a tactic seeking more government subsidy for private firms. It naturally did not address the question of where the money for such subsidies would come from. Isn't government money free?

experts on California's economy say the state could see a more dramatic and prolonged downturn than other parts of the country ... forecasting a 9% decline in average home prices on the statewide level in 2008. And he said an additional 15 to 20% drop in 2009 would not be out of the question. [Kelly Zito, San Francisco Chronicle, Dec 11]

other industry forces are at work, causing large pharmas to buy smaller ones with promising technology, or, as the bioscience people call new drugs, "molecules." Any time a great story pops up and an exciting drug makes it through the tortuous FDA approval pipeline, the company that developed the molecules receives offers that can’t be refused   [Keith Dubay, coloradobiztoday]

IBM has announced an optical breakthrough that could integrate thousands of individual processors into a single chip as fast as a supercomputer but only requiring the power of a light bulb [newsfactor.com]

Rent-a-Lab. Thirteen nano-level university laboratories across the country are hiring themselves out to businesses eager to make their mark in the millennium of the minuscule. The intimidatingly named National Nanotechnology Infrastructure Network, begun in 2004, is funded in part with $14M a year from [NSF]. [Ben Dobbin, AP, Dec 11]

Progress Has a Price “Everyone wants that silver bullet,” said Fran Recht of the Pacific States Marine Fisheries Commission. “The question is, Is this as benign as everyone wants to say it is?”  The first federal permit to conduct testing for a wave energy farm off the coast of the United States was awarded in February ... “I don’t want it in my fishing grounds,” said Mr. Martinson, ... “I don’t want to be worried about driving around someone else’s million-dollar buoy.” [Wm Yardley, New York Times, Dec 8]  Waves themselves are perfectly green and free since they naturally capture wind energy over a long reach.  And we love to extract free natural resources.

Free Market or Nationalism? no one wants foreign states, especially those which might be anti-Western, acquiring Western companies that have anything to do with national security or advanced technology. But policymakers also believe that having governments play an active role in the stock market and in the global economy might make the whole system less efficient and productive, since government-run companies would likely think about things other than the bottom line, including protecting the interests of their home country. This situation has put free-marketeers in a peculiar quandary. They usually favor the free flow of capital in the world’s markets, but, in this case, supporting the free flow of capital would mean letting governments run American companies, which no free-market economist thinks is a good idea. ... Passing laws barring foreign states from acquiring American companies may help treat the symptom. But it’s not going to do much to cure the disease.  [James Surowiecki, The New Yorker, November 26]

[Guy] Kawasaki said that many companies raise money because the first version of their products suck. [San Jose Mercury News, Dec 7]

Sunny New England. United Natural Foods Inc., a Dayville, Conn.-based distributor of natural and organic foods, reports it has finished the installation of what it's calling the largest solar electric system in New England. [Mass High Tech, Dec 7]

a new concern has recently gone "from not on the radar screen to being an American consensus." The worry? It's foreign oil dependence. ...  Adds Democratic pollster Mark S. Mellman: "There's a strong feeling that we are sending billions to people who don't like us in exchange for oil, damaging national security."  [John Carey, Business Week, Dec 6] Worry, sure. Sacrifice, fuuhgedabboutit.

In 1974-2005 food prices on world markets fell by three-quarters in real terms. Food today is so cheap that the West is battling gluttony even as it scrapes piles of half-eaten leftovers into the bin. That is why this year's price rise has been so extraordinary. Since the spring, wheat prices have doubled and almost every crop under the sun—maize, milk, oilseeds, you name it—is at or near a peak in nominal terms. ... the rise in prices is also the self-inflicted result of America's reckless ethanol subsidies. This year biofuels will take a third of America's (record) maize harvest. [The Economist, Dec 6] Hey, aren't subsidies a free good?

Researchers at the NIST and the University of Colorado at Boulder have taken an important step toward making nanoscale resonators that could be used in communications devices. The researchers have grown gallium-nitride nanowires that display properties much better suited to such uses than other nanostructures of similar sizes. [P Pratel-Predd, MIT Tech Review, Dec 5]

On Tuesday, JetBlue Airways plans to become the first US carrier to offer airborne travelers the ability to e-mail or chat online. And the service will be free. [Boston Globe, Dec 7]

Slower. Weakness in the US economy figures to take a bite out of the technology industry’s growth rate in 2008, when analysts expect tech spending to slow around the world.  The picture is not exactly dire: A forecast released today by the analyst firm IDC calls for the worldwide information-technology market to grow 5.5 percent to 6 percent in 2008, the lower end of what has become a usual range. In the United States, the market is expected to expand 3 to 4 percent.  Those growth rates would be softer than this year’s 6.9 percent worldwide and 6.6 percent US growth rates.   [Boston Globe, Dec 6]

Moradi, who calls himself a "serial entrepreneur," has founded nanotechnology companies. But he was blown away by Albany NanoTech, which houses the University at Albany's College of Nanoscale Science and Engineering. "If I were a semiconductor company, I'd pick up and move out here in a heartbeat," he said. "It seems like the center of the universe, at least for new ventures." [Larry Rulison, Albany Times-Union, Dec 7]

Outsourcing Research. Five years from now, Eli Lilly could look like a different company, with fewer employees and plants, as it shifts more of its scientific research, manufacturing, sales and administrative work from Indianapolis to outsiders around the world. [John Russell, Indianapolis Star, Dec 7]  The more that large companies do that, the less rationale for government R&D "fair share" subsidy of small tech firms, especially life-style firms.

Helium Rising and Falling. when his helium supplier informed him it was cutting deliveries to his lab, Mr. Vidali said, "it sent us into a panic mode." ... The technology explosion is sucking up helium supplies at dizzying rates. U.S. helium demand is up more than 80% in the past two decades, and is growing at more than 20% annually in developing regions such as Asia. ... Soaring helium expenses could shut the doors of some independent labs  [Ana Campoy, Wall Street Journal, Dec 5]

Generic Competition. First Pfizer, then Merck, now Bristol-Myers Squibb plans to cut jobs as the pharmaceutical industry wrestles with profits being siphoned off to generic drugs.   Bristol-Myers Squibb, whose best selling product is the anticoagulant Plavix, said Wednesday it would lay off about 4,300 employees and close more than half of its manufacturing plants in a broad restructuring aimed at cost savings of $1.5 billion by 2010.  Bristol-Myers is the latest brand drug maker to reduce its work force, as the industry struggles to battle generic competition following expirations of key drug patents. [Jennifer Sterling, AP, Dec 5]

a new fear now stalks the markets: that the dollar's slide could spin out of control ... Already Airbus has called the dollar's decline “life-threatening” and France's president, Nicolas Sarkozy, has given warning of “economic war”. ... Investors' conviction that transparent markets and vigilant regulators make America a safe place to store money has taken a battering from the revelations of recent weeks.  [The Economist, Dec 1]

Sometime next year, developers will boot up the next generation of supercomputers, machines whose vast increases in processing power will accelerate the transformation of the scientific method, experts say. The first "petascale" supercomputer will be capable of 1,000 trillion calculations per second. That's about twice as powerful as today's dominant model  [Christopher Lee, Washington Post, Dec  3]

Bay Area companies making an array of futuristic products have captured nearly a third of the World Economic Forum's Technology Pioneer Awards for 2008. ...This year's crop of 39 includes 11 Silicon Valley companies among 23 U.S. winners [Pete Carey, San Jose Mercury News, Nov 30]  Only one SBIR company: Accuray with one Phase 1.  Non-SBIR companies: 23andMe, Admob, Arteris, Innovative Silicon, LS9, Lumio, Nanostellar. Silver Spring Networks, Unidym.   Other non-SBIR US winners: RainDance Technologies, Rincon Pharmaceuticals, SiGNa Chemistry, Cima NanoTech, Gridpoint, Hycrete, Primafuel, Clearwire, Kayak, MEDIO SYSTEMS, QlikTech International, Roundbox, Wikimedia Foundation (ineligible). One SBIR winner: Transclick (NYC)

Only on Our Terms.  Flush with petrodollars, oil-producing countries have embarked on a global shopping spree. ... Experts estimate that oil-rich nations have a $4 trillion cache of petrodollar investments around the world. And with oil prices likely to remain in the stratosphere ... Many oil investors are also worried about a potential political reaction in the United States similar to the furor of last year when Dubai tried to acquire a company that operates American ports ... Such concerns seem to be driving investments to other parts of the world  [Steven Weisman, New York Times, Nov 28]

Broadcom said yesterday that it will ask a federal court to stop Qualcomm from making and selling cell phone chips that infringe on the Irvine company's patents, after a ruling that left both sides claiming partial victory. [San Diego Union Tribune, Nov 24]

The Big Game. The corporate giants popularly known as Big Pharma spend annually, worldwide, some $25 billion on marketing, and they employ more Washington lobbyists than there are legislators. Their power, in relation to all of the forces that might oppose their will, is so disproportionately huge that they can dictate how they are to be (lightly) regulated, shape much of the medical research agenda, spin the findings in their favor, conceal incriminating data, co-opt their potential critics, and insidiously colonize both our doctors' minds and our own. [Fredrick Crews reviewing three books on Prozac, New York Review of Books, Dec 6]

The Abu Dhabi Investment Authority started in 1976. It occupies its own skyscraper, with three trading floors and total square footage equivalent to a third of the Empire State Building. While many ruling families in the region relied on one or two investment advisers a generation ago, today their own, often Wall-Street-trained sons and daughters invest their swelling oil profits.  [Keith Bradsher, New York Times, Nov 29]  If the USA is to compete with such bankrolls of our own money, the government could at least do its part by pushing any R&D subsidies to companies whose ideas have he best potential for self-sufficient life and growth after the subsidy. But the drivel of the political debates gives little confidence that the politicians can see that far. 

Science Rescues Itself. What struck me was how common this phenomenon is becoming. Increasingly science seems both to plunge us into irresolvable ethical quandaries only to rescue us shortly thereafter. Trade-offs of all sorts – moral, ethical and economic – that were once hard to fudge are increasingly rendered moot by technological or scientific advance.   [Andrew Sullivan, The Sunday Times, Nov 25]

ethanol has gone from panacea to pariah... A recent study by the Organization for Economic Cooperation and Development concluded that biofuels "offer a cure [for oil dependence] that is worse than the disease." [Lauren Etter, Wall Street Journal, Nov 28]

I'm also thankful for bubbles.... But without an inflated belief in the future, entrepreneurs wouldn't take crazy risks. ... If you sneeze "clean tech" at venture capitalists, they will cut you a check for $5 million. ... The last bubble ... helped develop the Web to the point where Yahoo and Google could succeed. ... We got cheap Internet access thanks to the bubble makers who put a bunch of fiber-optic cable into the ground and across the oceans.  [Dean Takahashi, San Jose Mercury News, Nov 26]

Throughout the Triangle, small businesses are beefing up their online presence, and they're having to expand their information technology staffs and hire outside consultants to do so.  Even companies well outside the tech field are hiring software developers, multimedia experts and the like to help them store and sort data, maintain secure networks, develop business software and create Web marketing strategies. ... demand for information technology workers is at a five-year high, according to Robert Half Technology. ... a shrinking supply of workers in some fields as baby boomers retire and U.S. universities produce fewer computer science majors as a percentage of total graduates. [Frank Norton, Raleigh News&Observer, Nov 24]

Smaller companies are grabbing a bigger share of U.S. exports, making up for some of the jobs lost as multinational firms move operations overseas. American businesses without international subsidiaries accounted for 46% of sales abroad in 2005, up from 38% in 1999, according to a Commerce Department analysis  [Courtney Schlisserman, Bloomberg News, Nov 23]

China’s new sovereign fund alone has two hundred billion dollars to invest, while sovereign wealth funds all together control more than two and a half trillion dollars—and could control as much as twelve trillion by 2015. These funds now have the buying power to shape market prices and acquire assets throughout the developed world. Were China’s fund so inclined, it could buy Ford, G.M., Volkswagen, and Honda, and still have a little money left over for ice cream. [James Surowiecki, The New Yorker, Nov 26]

Is growth a self-evident good?   Thanks to technologies initially supported by or spun off from cold-war research projects—such as computers, fiber optics, satellites, and the Internet—commodities, communications, and information now travel at a vastly accelerated pace. Regulatory structures set in place over the course of a century or more were superseded or dismantled within a few years. In their place came increased competition both for global markets and for the cataract of international funds chasing lucrative investments. Wages and prices were driven down, profits up. Competition and innovation generated new opportunities for some and vast pools of wealth for a few; meanwhile they destroyed jobs, bankrupted firms, and impoverished communities. [Tony Judt's lo-o-ong  review of Robert Reich's Supercapitalism, New York Review of Books, Dec 6]  Echoes of Galbraith's The Affluent Society which does not surprise me in a world where lessons of any past generation are forgotten or ignored as irrelevant in an age of instant everything and survival of the fittest.

Six Ideas That Will Change the World .  "hacktivists" who help people stranded in Web-censored countries, bendable, stretchable circuits that will one day be used to make electronic skin and malleable computers, get rust nanoparticles to bind to arsenic, machines that fix themselves, burying our CO2, biodegradable plastic from lemons. [Esquire.com, Nov 20]

Dot-com Redux. Silicon Valley solar companies are on a hunt for talent. Akeena Solar of Los Gatos is looking for installers. GreenVolts of San Francisco wants reliability test engineers. Innovalight of Santa Clara wants an ink formula chemist. Nanosolar of San Jose wants technicians and engineers. And Solyndra of Fremont, SolarCity of San Francisco and SunPower of San Jose, well, they want everybody. ... A dot-com feel to solar growth [Matt Naumann, San Jose Mercury News, Nov 20]

a new type of magnetometer--or magnetic-field detector--that rivals the sensitivity of its predecessors but is small and cheap, and uses very little power. ... developed by NIST physicist John Kitching, consists of a laser, a cell containing vaporized metal atoms, and a light detector. [MIT Tech Review, Nov 16]

Playing the Game. Duke University, UNC-Chapel Hill, N.C. State University and RTI International formed the Research Triangle Energy Consortium. ... to attract more of the federal grants and venture investments that until now have headed to alternative-energy research hubs in Texas, Massachusetts and California. In turn, the organizers hope that such research will spur startup companies and stimulate economic development. ... "It could be a big deal in terms of a critical mass that competes against MIT and Cal Tech for major federal earmarks," said Dennis Grady, a political science professor at Appalachian State University who directs the ASU Energy Center. [John Murawski, Raleigh News&Observer, Nov 21]

Small business matters a lot to the economy. Companies with 500 or more employees have been cutting positions in the U.S., and adding them overseas, while smaller companies have been expanding at a solid clip, according to Automatic Data Processing Inc., a payroll processor.  The growth is cooling off. At businesses with fewer than 50 employees, 501,000 workers have been added to payrolls this year through October, according to ADP. That is down from 655,000 for the same period a year ago, and 827,000 in 2005. [Wall Street Journal, Nov 20] Is that a good reason to divert jobs from large business to small business by forcing more government R&D contracting into small business? The SBIR advocates say so, although they have no compelling evidence that small business does the government job any better than large business. Nor is there any compelling evidence that government can pick small business contractors to develop marketable innovation any better than the market alone will do. At least the SBIR'ers can claim that it doesn't do much harm, although an acid test of whether the federal agencies think so would be to make it optional rather than mandatory.

MIT has launched a group that will act as a liaison between MIT researchers and venture capitalists around the world. The International Innovation Initiative (I³), which MIT president Susan Hockfield announced, will be modeled on the school's Deshpande Center for Technological Innovation, which has funded more than 65 projects since 2002, including 12 spinouts.  [MIT Tech Review, Nov 19]

The rise of Asia is changing the geography of innovation, shifting it East, away from the U.S. and Europe. China and India have become not only low-cost sources for manufacturing and services, but also their universities and research labs are growing centers for talent—engineers, scientists, designers, inventors.  Typically, Nearly all the candidates are in favor of spending more federal money for education in science, math, and engineering. And Republicans and Democrats alike want to invest more in nonoil energy sources. Most have advisers on innovation with ties to Silicon Valley and leading research universities.  [Business Week, Nov 26]  Good, they're for innovation, even though they won't talk about how pay for their schemes. Of course, they don't spend, they invest.  These candidates also talk like they can unilaterally enact their tech (or any other) agenda, when the inconvenient fact is that the Congress has been around a lot longer than they have and Congress makes laws, not the President. After all the vested interests have their say, any emerging law will look quite different from any Presidential proposal.

As America threatens to slide into recession, China is still growing at 10% cent a year. Four of the world’s ten largest companies by market capitalisation are now Chinese. But the Chinese economy is unlikely to overtake that of the US for a generation or more. .... China, India and even a resurgent Russia are emulating America by trading their way to greatness.  [Gideon Rachman, Financial Times, Nov 20]  Meanwhile, China expressed concern at the decline in the dollar, joining a growing chorus of global policymakers alarmed by the weakness in the world’s main reserve currency. [multiple authors, Financial Times, Nov 20] China bet that it would prosper by keeping its exports competitive and holding dollars. But the American taste for Chinese products led to a treasury full of dollars that keep deteriorating partly because China was so good at exporting to America while America was so good at buying on credit. “It may be our currency, but it's your problem,” was Treasury Secretary John Connally's taunt when the United States unhooked the dollar from the gold standard in 1971, unilaterally rewriting the rules of world business in America's favor. Now the world is taunting back.  [James G. Neuger and Simon Kennedy, Bloomberg News,  Nov 20] If you were China with a eroding trillion dollars, what would you do? 

A Minority of Two Adults. In the midst of a heated congressional debate over taxing wealthy investors, [VC William] Stanfill broke ranks with his industry and promoted a 20% tax increase on himself, his friends and his colleagues in the VC industry. ... “If I couldn’t go against the current at the age of 71, when was I going to?” asks Stanfill. [Lisa Lerer, politico.com, Nov 13]  He and Warren Buffet make a minority of about two who find societal equity in taxing private equity pay as ordinary income (which puts the income in the progressive tax structure). But of course, we go by majority rule, no matter how selfish the motive, for determining our actual tax structure. The high rollers appeal to Adam Smith (and supply-side Arthur Laffer) and the Institute for Policy Innovation asks "What Would Reagan Do?", while the Members of Congress keep the pot stirred which (purely coincidentally, of course) attracts more campaign contributions.

Public Proposal Review? If scientific papers can be publicly reviewed either pre-publication or post-publication, and if one day soon the public can have a voice on the patents, then why not also grant proposals? Now, Michael does not go that far - he only proposes a more direct communication between the researcher and the reviewer - but, why not? Some people write good proposals. Others can sell them better in a different way: by talking about them. I would certainly like to be able to try to sell my grant proposal by shooting a video and posting it on a site like Scivee.com, where both the reviewers and the public can add their commentary. [Posted by Coturnix , A Blog Around the Clock, Nov 15]  Fertile ground for IP theft.

a tool that could help democratize the funding hunt — IdeaCrossing.org. Think of it as matchmaking service between entrepreneurs and investors.  IdeaCrossing is open and free to anyone in the U.S. Entrepreneurs build a profile, and the system matches them to like-minded participating investors. Investors can see these profiles (the entrepreneur doesn’t get to right away) and reach out with time or money.  The site is still in beta with about 1,000 users. [Independent Street blog, Wall Street Journal, Oct 30]

technology companies are on a buying spree  ... Technology executives and industry watchers say more mergers and acquisitions are on the way. ... Technology industry analyst Charles King said there are a few other reasons why big tech companies are on a buying binge. First, King said, they want to expand into areas that are expected to be hot in the future. Most of the acquisitions in recent weeks have involved companies in the data storage and management, data "mining" and "business intelligence" fields — all areas that are expected to grow substantially in coming years. Second, with continued concerns about an economic on downturn, companies are looking for ways to diversify and insulate themselves. That might mean expanding beyond businesses that just sell products and into areas such as business services. [Bob Keefe, Austin American-Statesman, Nov 17]

Needed Money More. Advanced Micro Devices said Friday that it sold an 8.1% stake in the company for $622 M to an investment arm of the Abu Dhabi government  ... to shore up its financially troubled balance sheet. [Mark Boslet, San Jose Mercury News, Nov 17] Buy more oil so the desert sheiks can own more American companies. Anyway, in a pinch, the US government could ban the sheiks from exercising any control just like other desperate governments.

a BP-funded alternative energy initiative at Berkeley has officially begun to function, ... The Energy Biosciences Institute, as the partnership is known, has a $500M commitment from BP to seek a long-term solution to the fossil fuel crunch. ... Still, BP's [recent] woes added fire to stiff opposition from many around campus who argued that signing the deal would render Berkeley's research hostage to BP's interests. [Angel Gonzalez, Seattle Times, Nov 17]

Ya Gotta Believe. [Wall Street firms] field departments full of smart analysts [that cost tens of millions a year] to assess market, credit, liquidity and operational risk. The process is marked by a formal governance structure and risk-tolerance limits. That's what the banks tell investors, anyway. When it came to their exposure to the subprime mortgage market, none of this seemed to matter. "Executives believe what they want to believe," says Frederick Cannon, a bank analyst at Keefe, Bruyette & Woods. [N Weinberg & N Condon, Forbes, Nov 26] Self-deception while the money-making fun lasts.

In our experience, many companies are constrained by an inability to achieve long-term growth through innovation. Their competitive advantage, if they have one, cannot readily be sustained because it is built only on their current enterprise, with insufficient attention paid to the innovations necessary to drive future growth and create future value. [Toni C. Langlinais and Marco A. Merino, Outlook Journal, September 2007] The idea applies also to companies who live from SBIR to SBIR, and government is wasting its SBIR opportunity by continually funding their safe and incremental propositions.

No recession forecast. In 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: “A severe depression is outside the range of probability”. In a survey in March 2001, 95% of American economists said there would not be a recession, even though one had already started. Today, most economists do not forecast a recession in America [The Economist, Nov 17]

Cooler Tech. Intel CEO Paul Otelini pledges to do something about the fact that for every dollar we spend on servers we're going to be spending 70 cents to cool them within the next three years. ... the electricity consumed by data centers represents 1.5 percent of the total U.S. energy consumption [Brian Prince, eWeek, Nov 13]

Innovative Chip-Making.  Frito-Lay is embarking on an ambitious plan to change the way this factory operates, and in the process, create a new type of snack: the environmentally benign chip. Its goal is to take the Casa Grande (AZ) plant off the power grid, or nearly so, and run it almost entirely on renewable fuels and recycled water. Net zero, as the concept is called [Andrew Martin, New York Times, Nov 15]

Drowning in Info? Anthropologist-turned-brand-strategist Cheryl Swanson identifies a mega-trend of the past decade, "Survival of the Fastest." She says that while we are processing 400 times more information than our Renaissance ancestors, the day did not get 400 hours longer. "Whipsawed by stimuli" that we haven't (or can't?) adapt to physically or mentally and with family dinnertimes shrinking to less than a few minutes. [Source:AdAge, Boston Globe business filter blog, Nov 14]

"The foundation of capitalism, both economically and socially is, therefore, the insatiability of wants that entrepreneurs have managed to induce consumers to see as needs." That is, in many ways, the most pessimistic statement I have read about capitalism, but it's also very true. [Robert May, businesspundit.com, commenting on Schumpeter]

Too Many Techs. The federal dollars pumped into university science departments has created more scientists and engineers than the market wants, said Michael S. Teitelbaum, vice president of Alfred P. Sloan Foundation, ... Engineers and scientists have started to grumble about poor job prospects.  [Chronicle of Higher Education, Nov 16]

Biotechnology companies are gobbling up a growing amount of laboratory space in the Boston area, according to a report by Richards Barry Joyce & Partners, a commercial real estate firm in Boston.The report found vacancy rates for lab space fell to 9.1% for the two quarters ending Sept. 30, the first time vacancy rates have fallen below 10% since 2002. [Boston Globe, Nov 14]

Nov 14, 1972 – The Dow Jones industrial average closes above 1,000 for the first time.

Throughout 2007, Seattle's biotech industry has been running just to stand still. It could have been a blockbuster year. Many companies awaited landmark clinical results that, if successful, could have boosted their stock and lifted the struggling local sector into national prominence. But it didn't play out that way. The market value of local companies climbed some 25% to $4 billion early in the year as investors wagered on good data. But failed tests, delays and other bad news disappointed observers and investors in the area's publicly traded firms. [Angel Gonzalez, Seattle Times, Nov 12]

21 companies that will pitch their stories to investors from at least three states Wednesday [Nov 14]at the Wisconsin Early Stage Symposium in Madison's Monona Terrace Community and Convention Center. About half are biomedical firms, with the rest in software, Internet services, advanced manufacturing and clean technologies, said Tom Still, president of the Wisconsin Technology Council, which puts on the event. [Kathleen Gallagher, Milwaukee Journal-Sentinel, Nov 13]

Gore and Doerr in 2004 came true in 2007 as Al Gore joined Silicon Valley VC behemoth Kleiner, Perkins.

A study sponsored by the drug industry suggests that Massachusetts life science companies account for a small, but growing piece of the state's economy. The full report, scheduled to be released tomorrow, found the state's biopharmaceutical industry employed 55,000 workers in 2005, up 12% from 2000 and up 46% since 1990. [Todd Wallack, Boston Globe, Nov 13]

Google plans to offer $10M in prizes to developers who create applications for its mobile phone operating system, known as Android. ... The cash awards will range from $25,000 to $275,000. Winners will be selected by a panel of judges. [Bloomberg News, Nov 13] Want more efficiency from SBIR? Offer prizes instead of zero-risk process money.

A recent Ernst & Young study says the IPOs with the best stock performance in their early months are those of companies that have been around awhile, eight or nine years under their belts prior to going public. [Business Week, Nov 19]

sinking technology stocks were out of luck. They battered the Nasdaq composite index, which fell 1.9%. The index was down as much a 3%. It was a sudden downturn for technology companies, which have enjoyed a steady run-up in prices since the summer. Analysts said yesterday’s sell-off was driven by a bout of profit-taking in an uncertain climate. [Michael Grynbaum, New York Times, Nov 9]

technology is bound to deliver a biofuel that will be competitive with fossil energy at something like current prices. It probably already has. Brazil has been exporting ethanol to the US at an average delivery price of $1.45 for an amount with the energy equivalence of a gallon of petrol. It is doing so profitably and in increasing amounts, in spite of a 54 cents a gallon tariff to protect American maize-based ethanol producers. [Ricardo Hausmann, Financial Times, Nov 6]

EVEN as oil prices surge, the housing market contracts, Wall Street reels and multibillion-dollar deals falter, small businesses are flourishing and, in fact, are helping to buoy the economy, experts say.  ... an increase in private sector employment in October of 106,000. That included a surge of 63,000 at businesses with fewer than 50 employees  ... Carl Schramm, an economist, said the figures indicate that the role of small businesses as an engine of job growth is gaining force, especially in troubled economic times.  [Brent Bowers, New York Times, Nov 8]

Sounds Good, Does Little. A recent article by Yoonsoo Lee of the Federal Reserve Bank of Cleveland suggests that public incentives to attract and retain industrial plants have only a marginal impact on the decisions made by manufacturing firms to relocate or shut down particular plants. ... Lee also argues that the incentives themselves do little to attract or create new jobs.  Download "Geographic Redistribution of the U.S. Manufacturing and the Role of State Development Policy" at: http://www.ces.census.gov/index.php/ces/cespapers?down_key=101779

Where Capitalism Shines. If you get too excited about technology you end up in Silicon Valley, where pretty much everyone is either making, drinking, or selling Kool-Aid about the potential for technology to make wondrous things happen. In the Valley, there's the added excitement that technology can also make you incredibly wealthy. [Michael Parsons, The Times online (London), Aug 31]

At this year's [Massachusetts Biotechnology Council's annual] investor conference , most presenters are small publicly traded companies, including Alseres Pharmaceuticals (no SBIR) of Hopkinton, Momenta Pharmaceuticals (one SBIR) of Cambridge, Oscient Pharmaceuticals ($2.3M SBIR) in Waltham, and Synta Pharmaceuticals (no SBIR) in Lexington. The largest is Vertex Pharmaceuticals ($1M SBIR), the Cambridge company whose market value has rocketed to nearly $4B on hope for its experimental hepatitis C drug, telaprevir. [Todd Wallack, Boston Globe, Nov 5]

Kentucky writes "MRI machines are about to get smaller, much smaller. Most of their bulk is taken up by the huge superconducting magnets required to generate fields of a few Telis. Now a team at the Los Alamos National Lab in New Mexico has built a machine that can produce images using a field of only a few Microtel (PDF, abstract here). So giant superconducting magnets aren't necessary, a development that has the potential to make MRI machines much smaller, perhaps even suitcase-sized. The one-page paper shows sections of the first 3D brain image taken with the device."  [slashdot.org, Nov 10]

Desalt Innovations Needed.  Israel has the world's largest desalination plant, by reverse osmosis. The massive scale of the plant also makes its product the cheapest so far, with production costs below $0.55/m³. But the fresh water for drinking isn't good enough for agriculture (which uses 70% of world's fresh water supply). Israeli farmers have discovered that although Na⁺ and Cal^- have been removed, so too has Mg²⁺, essential for plant growth.  As if that weren't bad enough, boron concentrations have increased. Although boron poses no threat to human health, most crops aren't so lucky. Last but not least, the altered ion balance in the desalinized water results in water that is less buffered, meaning that the pipes that carry it corrode faster. [Jonathan Gitling, Ars Journal, Nov 10]

Thanks, Uncle Sam.  Gloom envelops world markets  Stock markets on both sides of the Atlantic concluded their worst week in months as deepening economic gloom prompted investors to ratchet up bets that the US Federal Reserve would be forced to cut rates again in the face of mounting credit losses. [Financial Times, Nov 9] One of the reasons that the vicissitudes of the markets will produce only a mild economic shift is the existence of a conservative bugbear - a large government - whose boring steadiness provides a counterweight.

Guesswork 101. Why do academic economists believe that short-run currency fluctuations are not connected to macroeconomic fundamentals, whereas the individuals most connected to financial markets obviously do? Our answer is that market participants and observers recognize that the relationship between the exchange rate and macroeconomic fundamentals changes at times and in ways that cannot be fully foreseen. While they may use economic theory to understand and forecast markets, they recognize that they cannot base their actions solely on a fixed model. The basic premise of our approach, called "imperfect knowledge economics" (IKE), is that the search for sharp predictions of market outcomes is futile. [Roman Freedman and Michel D. Goldberg, The Dollar-Euro Exchange Rate and the Limits of Knowledge, Nov 9]

Check the Mirror.  High oil prices are fueling one of the biggest transfers of wealth in history. [Steven Munson, Washington Post, Nov 10] Hate the wealth transfer consequences of dear oil? We have had thirty years to do something, but we preferred immediate pain avoidance. The Europeans took a different route - taxing petroleum fuel to suppress demand. As a result, English petrol (gasoline) now peddles for £1 per liter, which translates to about $8 a gallon if you buy with the falling dollar. We will do and say almost anything to prevent new taxes, and we demand that our politicians agree with us. If they want to get re-elected, they have no choice but to "represent" us.  We could also demand that our lawmakers raise fuel efficiency standards which would push us to buy smaller, lighter, more efficient autos. On the other hand, look on the bright side - Houston loves dear oil. And Houston oil money brought us the big W who for seven years has resisted any pain for Houston.

Capital is plentiful; it is skilled people who are scarce. The salient struggle is no longer capital versus labor but, capital versus talent. The upshot is that in many knowledge businesses the employees often do better than the shareholders....Even in Silicon Valley, land of the inflated stock price, companies are so desperate to attract and keep the best and the brightest that workers often prosper at the expense of the capitalists.  [James Surowiecki, The New Yorker, Mar 2005] Surowiecki was talking about professional hockey players with Silicon Valley as a side example.

Bubbles Inevitable. The problem with credit has been the always dubious promise of magically high returns without unacceptable risks. It is insane greed that leads people to toss aside arithmetic and basic theory and just go for the green stuff up to the elbows. It happened with tech stocks, Drexel junk bonds, savings and loans and real estate (over and over). And it will happen again. [Ben Stein, New York Times, Nov 11]

What brand is your mattress? According to a Times interview with the head of Tempurpedic, you don't know. That's how they built a built a billion dollar company. By getting 2% of a market that doesn't care about brands to care about them. A typical marketer looks at this and says, "great marketing! You branded a product in an unbranded marketplace."  [Seth Godin's blog, Nov 11]

Tech in Demand. At Hotel 1000, which markets its high-technology trappings to people visiting this tech-driven [Seattle], guests can get high-definition movies delivered over the Internet to a giant flat screen ... The $133 billion lodging industry's cutting edge sees a business opportunity in traveling lawyers pining for high-speed Internet access, twentysomethings looking for a place to plug their iPods and vacationers preferring YouTube over the boob tube.  [Joseph Menn, LA Times, Nov 11]

In an annual ritual, two dozen local medical device companies plan to make quick pitches to investors today at an industry conference in Boston.  The MedTech Investors Conference, sponsored by a state trade organization, will feature mostly early stage companies - promoting everything from cutting-edge medical scanners to gels that heal wounds. Abiomed, NeuroLogica, Tepha ($1M+ SBIR), SteriCoat (one-year-old)  [Todd Wallack, Boston Globe, Nov 1]

Despite the attractiveness of exotic new Asian and Eastern European markets [Chengdu, China, Orissa, India as well as Ho Chi Minh City/Hanoi, Vietnam], Dennis Donovan, principal of Wadley-Donovan-Gutshaw Consulting, said North, Central and South America, "continues to be very strong," for outsourced call centers and manufacturing centers. Donovan calls places ranging from Dickinson, North Dakota, to Hermosillo, Mexico to Santiago, Chile, among the hottest future investment hotspots in the Western Hemisphere. [Industry Week, Nov 7]  If you can't find Dickinson, look along I-94 in the SW corner near the Montana border. The town next door, Medora, rocks in the summer with Teddy Roosevelt in person and a grand outdoor musical variety show. 

Clay [Christiansen] said he got his best tips [on disruptive innovation] from his students. Which makes sense: Young people have a better feel for the next disruptive thing. Clay's strategy--investing in disruptive companies before the Schumpeterian sea changes become obvious--has yielded Clay a 35% compound annual return over the last five years. [Rich Karlgaard, Digital Rules blog]

Marquette University has launched an initiative to spur innovation and breed the kind of entrepreneurship administrators say they see in the school's alumni. The Cross-Campus Entrepreneurship Initiative will be run out of the Kohler Center for Entrepreneurship  [Kathleen Gallagher, Milwaukee Journal-Sentinel, Nov 7]

Hydrogen for Politics; Batteries for Cars. Batteries are a clear winner in the grid-to-wheels efficiency battle. Conventional Lithium-ion batteries charge at about 93% efficiency and operate at about the same efficiency, leading to an overall efficiency of over 85%. For the same energy input, you'll get three times the power out of a battery than out of a fuel cell.  [gizmag Emerging Technology Magazine, Nov 2]

Time Will Tell. The race is on among medical device makers to grab bigger pieces of a shrinking market for cardiovascular stents. ... Since the alarm bells sounded, sales of drug-eluting stents have fallen. They had been $6 B worldwide. The market now is $4 - 5 billion worldwide, says John Capek, Abbott's executive vice president of medical devices. [Peter Benish, Investors Business Daily, Nov 2]  Once again, shining success in short term trials awaits the judgment on time scale of adverse effects in human bodies.

IT Bubble Redux. the larger force at work--capitalism's cold efficiency. What Wall Street does is raise money to throw at innovation. Creating liquidity in mortgage markets so that more people can buy houses is not so unlike funneling billions to Silicon Valley in the 1990s to secure U.S. technological dominance. The problem, as epitomized by the tech boom, is that the Street never knows when to turn off the money spigot. A good idea once is a good idea a million times, to the point of excess. In the hunt for ever more profit, everyone gets carried away, ethics and laws are at times breached, and then, ultimately, the collapse comes. [Barbara Kiviat, Time, Nov 12]

Everybody knows how to get more innovative, but they are rarely willing to undertake the kinds of cultural changes necessary to yield significant results. Without more actionable advice, too many companies proceed to make the same mistakes when trying to spark innovation. ... The companies that are realizing the biggest bang for their innovation buck, however, aren't on the front page anymore. While out of the public eye, companies such as Hewlett-Packard have been digging deep and doing the long, hard work of transforming into innovation leaders for the long term. They can see the script for innovation isn't a mystery. It just takes a long time and a lot of change to pull off. [Dev Patnaik, Business Week Online, Oct 23]

The Southern Growth Idea Bank at www.southernideabank.org is an online compendium of smart ideas, best practices and innovative programs from across the Southern region. [SSTI, Oct 31]

Researchers at IBM have devised a process to recycle discarded computer-chip wafers into solar panels [Milwaukee Journal-Sentinel, Oct 31]

On Top and 75th.  A report on the competitiveness of economies around the world released yesterday puts the U.S. out front and highlights the growing potential of energy-producing countries awash in oil and natural-gas revenue. [Marc Champion, Wall Street Journal, Nov 1] Even so, the dollar is still dropping. And, "The U.S. does amazingly well on innovation and markets, but on the macroeconomic-stability pillar it ranks 75th" out of 131.

Market watchers have been waiting for the pendulum to finally swing back in favor of growth stocks, and that appears to be the case now. But momentum investors have added fuel to particular stocks, industries, and even parts of the world to push some prices dramatically higher.  Of course, those opportunities involve risk.  [Steven Syre, Boston Globe, Nov 1]

GE is returning to its historic roots in [Schenectady NY] with its plan to add 500 jobs locally as part of a $39 M expansion of its power-generation business. ...  founded in Schenectady and was once considered the company's headquarters. During World War II, GE employed 40,000 people in the city, but today it employs just 3,200. Another 2,000 work at the GE Global Research Center in Niskayuna. [Larry Rulison, Albany Times-Union, Nov 1]

Max Weber [Wirtschaft und Gesellschaft, vol. 2, ch. 9, sec. 2 (1919)] taught us that secrecy is the implacable foe of democratic society. It can never be eliminated entirely, because every government has military secrets and similar matters which the interests of state security require it to safeguard. But left unchecked, secrecy becomes a tool in the hands of the political schemer, who will use it to play political games with his domestic adversary. Beyond this, the great strength of democracy is its ability to subject political ideas and plans to the test of the marketplace of ideas where the weak will falter and fail and only the most able will succeed. Secrecy therefore inevitably makes the decision-making process a little bit stupider. And sometimes it makes it profoundly dumb. [Scott Horton, Harpers, Oct 27]

Delaware has one of the highest concentrations of workers in the medical device industry, and those high-paying jobs are helping drive the state's economy, according to a new study.  In Delaware, 3,067 people work in medical technology . ... given the relatively small size of its employment base, had more than 2.5 times more medical technology workers than would have been expected, the study found. That ranked the state second, behind only Utah, which had slightly more than three times more medical technology workers than would have been predicted.  [Gary Haber, Delaware Online, Oct 27]

Look Sharper. A recent poll aimed at automobile shoppers that interact with search engines found that 7 out of 10 Americans experience what’s called ‘‘search engine fatigue.’’ 65.4% of Americans ‘‘say they’ve spent two or more hours in a single sitting searching for specific information on search engines,’’ and 75.1% report leaving their computers without the information [Maura Welch, Boston Globe, Oct 30]

Scholars at the Brookings Institution argue that America's old industrial cities can indeed rise again. ... cities are the natural centres of the new knowledge economy and will only grow more appealing to young people and ageing baby-boomers, who want amenities near their homes. [The Economist, Oct 25] Cities are also large enough to have the kind of assets needed for a tech-based industry - at least one top university, mobile skilled labor pool, large R&D oriented companies, transportation links.... Politicians who shove federal seed money into their have-not areas just because they have-not are wasting the taxpayers' assets.

Blowing R&D. Cleveland wants to tackle offshore wind so that it can identify -- and then overcome -- the technological challenges and institutional barriers that make offshore wind so expensive today. By overcoming the factors that make offshore wind currently uneconomic, Cleveland seeks to become a leading center of offshore wind R&D. [Richard Steubi, cleantech blog, Aug 27, 07]

I believe there is a massive bubble developing because of substantial new capacity coming on stream in a couple of years," he warns. Sass sees polysilicon prices plunging. [Gene Marcial, Business Week, Nov 5, 07]

Really big lens to focus a ton of sunlight onto a crystal that will lase enough to burn magnesium in seawater is the idea being pursued by Takashi Yabe at the Tokyo Institute.  [Duncan Graham-Rowe, MIT Tech Review, Sep 19]

Stony Stevenson sent in this ITNews story which opens, "Techies were paid nearly record-high hourly wages in the third quarter, according to a new report released Thursday by staffing firm Yoh. Based on data compiled from 75 Yoh field offices and 5,000 technology professionals contracted in short and long-term projects, pay increased an average of more than 5.5 percent for the quarter ended Sept. 30, compared to the same period last year." [slashdot.org, Oct 26]

Supply Down. Recent data should provide cheery reading for bulls. Equity is being withdrawn from the market at a record annual pace of roughly $800B, according to the Federal Reserve, mainly as a result of a record amount of share buybacks and extensive spending by private equity firms taking public companies private. [Conrad de Aenlle, New York Times, Oct 27]

Gauging the progress of Indiana's life-sciences effort is tricky. Plenty of public relations folks are happy to tout new venture capital or new companies that add up to new momentum. But momentum in one person's eyes looks like wasted effort to someone else.  [John Ketzenberger, Indianapolis Star, Oct 28]

A Market Way. For those of you who love prediction markets (a variety of which we’ve written about in the past), there’s a new site that looks to be as vast, inclusive, and user-friendly as anything I’ve seen: Predictify. ... There’s a free version of the question model in which you get 100 responses from the public, as well as a premium version that, if the audience proves to be dependable, might soon become every marketer’s best friend  [Stephen Dubner, Freakonomics blog, Oct 25]

To Corsicana TX.  Northrop Grumman opened an information-technology center in town and began recruiting IT specialists and software engineers. ... In a twist on offshoring that Northrop has dubbed "onshoring," the global defense and technology company has been shipping computer work to small-town America, shunning India's Bangalore and Mumbai. [Peter Pae, LA Times, Oct 28]  One reason: in Corsicana you can buy two scoops of ice cream for $2.

“Do cell phones cause brain cancer?”  As a physician who has followed the published medical literature on this, I can tell you that the answer is no.  One problem is that as humans, when something bad happens to us, we blame something. [Pogue's Imponderables blog (New York Times, Oct 23] They have, however, changed the most common English phrase to "It's me."

Venter was riding the waves again last week. He is close to making an artificial life form, very much an alpha male thing. It will, says Venter, conquer infection. Is he playing God? No, he’s more Adam, a new human beginning. He is, as he puts it, “the first chemical machine to gaze upon his own sequence”. He knows, in other words, his own DNA. He was the first man to decode the human genome, the announcement of which in 2000 was hyped as one of the great moments in history, like Galileo, Newton and Darwin rolled into one, but bigger. [Brian Appleyard, The Times (London), Oct 28]

Capital Re-Cycling. "In the current environment, you would have to be extremely brave or extremely stupid to buy a U.S. bank," says Pete Hahn, a fellow at City University's Cass Business School in London.  .. [Business Week, Nov 5] But A $5.5 B investment by China's biggest bank in South Africa is the latest sign of China's growing power as an exporter not just of toys, sweaters and MP3 players, but of capital. ... China's investments in places like Sudan have drawn criticism in the West. [R Carew, J Lowe, J Areddy, Wall Street Journal, Oct 26]  But China has no incentive to play by Western rules that advantage the West. They will do things their way as long as the West keeps feeding them capital while hoping to control the game as it has for two centuries. 

Silicon Valley wits derisively refer to the ailing Mercury News as the "Techtanic." ... "I saw the Internet as a great opportunity, but also as a great threat," says Ingle, then executive editor of the San Jose Mercury News] .... an epic shift of advertising over to the Web would cut the economic legs out from under the Mercury News  ... Today, with advertising weak and readers flocking to the Web, the Mercury News is trying desperately to reinvent itself. ...  [Steve Hamm, Business Week, Nov 5]  If you are in high-tech, with or without an addiction to SBIR, your core advantage could evaporate in a New York minute.

Outsourcing Fatal Ailments. The patients arrive every day in Chinese hospitals with disabling and fatal diseases acquired while making products for America. silicosis, leukemia, kidney failure, touch and inhale carcinogenic materials every day, all day long. Benzene. Lead. Cadmium. Toluene. Nickel. Mercury. [Loretta Tofani, San Jose Mercury News, Oct 28] Yet another form of the free lunch.

Mussel Glue. a new polymer that allows researchers to coat almost any object, even one made of Teflon, with microscopic patterns of metals and organic materials.  Researchers at Northwestern University designed the polymer to mimic a protein-based glue that mussels use to attach themselves to rocks, wood, plastic, and steel--indeed, just about any material they encounter. The researchers, led by Phillip Messersmith, a professor of engineering and materials science and engineering at Northwestern, identified an easy-to-make compound  [Kevin Bullis, MIT Tech Review, Oct 26]

GE invests more into clean technologies than any other company.  The company's yearly allotment for Ecomagination, its cleantech investment arm, totals $1B, and GE says it's on track to raise the number to $1.5B by 2010. Compare that to the mere $844 M invested in U.S. clean-technology companies by the entire venture capital establishment last quarter, which is at record levels.  [Chris Morrison, Venture Beat, Oct 24]

at Sandia, about 20% of the lab's effort is now focused on a different security issue – how to reduce consumption of oil. ... Some of this work is funded by auto makers and truck engine builders. Some of it is your tax dollars   [J White, WSJ,Oct 23] Because  the United States has become increasingly dependent on energy supplies from unstable regions of the world. ... U.S. dependency on foreign energy creates immense economic challenges and vulnerabilities as well. One-third of the skyrocketing U.S. trade deficit can be attributed to increased costs of imported oil. ... not a critical problem as long as U.S. trading partners continue to reinvest their returns in the United States. [Washington Quarterly, Josef Brami, Aut 07]

In 1955, Homer Jacobson, a chemistry professor published a [widely ignored] paper in which he speculated on the chemical qualities of earth in Hadean time, billions of years ago when the planet was beginning to cool down ...  But today it is winning Dr. Jacobson acclaim that he does not want — from creationists who cite it as proof that life could not have emerged on earth without divine intervention. So after 52 years, he has retracted it.  .. It is not unusual for scientists to publish papers and, if they discover evidence that challenges them, to announce they were wrong. The idea that all scientific knowledge is provisional, able to be challenged and overturned, is one thing that separates matters of science from matters of faith.  [Cornelia Dean, New York Times, Oct 25]

Oct. 23, 1911: Aero-Plane Makes Its Debut Above the Battlefield

What Hath Tech Wrought.  Nolan Bushnell, founder of Atari, says that the industry he helped create is now generally responsible for the production of rubbish and filth: "Video games today are a race to the bottom. They are pure, unadulterated trash and I'm sad for that." [Chris Kohler, Wired News, Oct 23]

Gizmos Quick. The military’s appetite for expensive, gold-plated systems still exists, but soldiers increasingly want their civilian technology partners to deliver solutions quickly to the field, even if the devices are far from perfected. That is partly because changing conditions in the Iraq war have raised demand for new gadgets and gizmos, even in tiny batches. ... Asked by the Army to quickly help soldiers in Iraq who found themselves under sniper fire, BBN delivered 50 early versions of a system it called Boomerang in a mere 66 days. ... [in 42 days] BBN built a two-way translator, a hand-held device that allows an American soldier to understand an Arabic speaker, sort of. It is not perfect, Mr. Sherman acknowledges, but at 50 percent accuracy, the digital translator may indeed improve security and save lives  [GP Zachary, New York Times, Oct 21]

Plus or Minus $2B. Pfizer Inc.'s decision to shelve a novel insulin inhaler and take a $2.8B pretax hit on the product -- one of the drug industry's costliest failures ever -- rids the company of an albatross - Exubera. But it suggests the risks Chief Executive Jeffrey Kindler and other industry executives face as they steer makers of traditional pills more deeply into biotechnology drugs. .. in part due to concerns among doctors about its long-term safety. Earlier the company predicted the drug would be a $2 billion-a-year product.  ...to pull a new drug from the market because it didn't sell -- in the absence of a red flag -- is almost unprecedented. ...  "This is one of the most stunning failures in the history of the pharmaceutical industry," said Mike Krensavage, an analyst at Raymond James & Associates. "I hope it would give Pfizer pause about buying any more assets."  [Avery Johnson, Wall Street Journal, Oct 19]  Got a great bio-tech idea, or want to invest in one?  Consider playing the wheel in Vegas. The body becomes a more mysterious organism all the time.

Forty years after a team of Texas Instruments inventors gave the world its first hand-held electronic calculator, the company continues to dominate the market through strong ties with teachers, students and textbook companies.  ... "The thing that most people don't recognize is that calculators are at the crux of their loyalty strategy," said Cody Acree, managing director of the Dallas office of Stifel Nicolaus & Co.  [Brad Hem, Houston Chronicle, Oct 21]

Compete or Die. Today’s corporate and political leaders are no different, he says, from their earlier counterparts. What has changed is that new technology has made the economic environment dramatically more competitive.  [Robert Frank reviewing Robert Reich's Supercapitalism, New York Times, Oct 21]

Drug researchers that contract with pharmaceutical companies to test new medicines plan to create 2,500 jobs in the Triangle over the next three to four years. These will be jobs that pay well. Generally, salaries start at $40,000 -- above the Wake County average salary of $35,672 per year -- and can go as high as $150,000 before benefits [Sabine Vollmer, Raleigh News&Observer, Oct 21]

after returning the Dell and buying a Mac, I blogged an open letter to Michael Dell suggesting his company read blogs, write blogs, ask customers for guidance, and "join the conversation your customers are having without you." ... Dell started its Direct2Dell blog, where it quickly had to deal with a burning-battery issue and where chief blogger Lionel Menchaca gave the company a frank and credible human voice. Last February, Michael Dell launched IdeaStorm.com, asking customers to tell the company what to do. Dell is following their advice.  [Jeff Jarvis (Buzzmachine.com), Business Week, Oct 29]

A high-profile panel of CEOs and academics met last month in Washington to discuss how to measure innovation in the U.S. economy. ... Thirteen proposals were discussed, including the development of a national innovation index and a way to measure the "science of startups," or innovation within new businesses. The transcript is posted online at innovationmetrics.gov.  [Helen Walters,Business Week, Oct 29] Remember that input is not an output measure (except in government).

Limits of Profit Incentive. antibiotics aren't very profitable. It can take up to 10 years and some $800 million to create a new drug, but it's tough to recover those costs, given that a course of antibiotics is usually prescribed just once, for 7 to 10 days. Then there's the antibiotic Catch-22: Doctors tend to limit prescriptions of new drugs for all but the most dire infections in order to delay the emergence of resistant strains. "What's good for the public health is a real disincentive for antibiotic development," says Dr. Barry I. Eisenstein, head of scientific affairs at Cubist Pharmaceuticals [Catherine Arnst,Business Week, Oct 29]

A Stentorian.  "He is incredibly enthusiastic about angioplasty," says Nash, referring to Sharma, "but in my heart of hearts, I believe he's overselling it." After double-digit growth in angioplasties by Sharma's team since 2002, volume in his cath (short for catheterization) lab has fallen 3% this year.   .... Every other month, Sharma travels to India for the weekend to perform angioplasties, free of charge, at a heart hospital he built in his hometown of Jaipur.  [Arlene Weintraub, Business Week, Oct 29]

Brazil's sugar-cane-based ethanol is the only form of ethanol that is generally cheaper to produce than gasoline, according to an International Monetary Fund analysis, boosting Brazil's plans to make itself a fuel powerhouse and undermining U.S. corn growers' efforts to present themselves as price competitive. [B Davis and L Etter, Wall Street Journal, Oct 18]  So, raise the subsidy to make the uncompetitive ... dependent. The same argument made for more and bigger SBIR.

Researchers at Harvard University have made solar cells that are a small fraction of the width of a human hair. The cells, each made from a single nanowire just 300 nanometers wide, could be useful for powering tiny sensors or robots for environmental monitoring or military applications. What's more, the basic design of the solar cells could be useful in large-scale power production, potentially lowering the cost of generating electricity from the sun. Each of the new solar cells is a nanowire with a core of crystalline silicon and several concentric layers of silicon with different electronic properties. [Kevin Bullis, MIT Tech Review, Oct 19]

The Indianapolis Enterprise Center, a business incubator on the Eastside, has been sold to a California company. Seller Scott Meyers, who bought the facility in 2005, said he sold it to devote more time to his self-storage business and two startup companies. [Indianapolis Star, Oct 19]

With world population projected to grow by 3 to 4 billion people over the next fifty years, the corresponding growth in energy demand cannot be met with dwindling supplies of fossil fuels. ... appeal to the reader with little to no background in economics but with some financial common sense [Linda Bui, reviewing Solar Revolution: The Economic Transformation of the Global Energy Industry, by Travis Bradford, J Econ Literature, Sep 07]. Even if the Malthusian population expansion proves wrong again, fossil fuels will still have trouble keeping up with demand at current prices. And there will not be enough sun power to fill the gap.

Silicon Valley Start-Ups Awash in Dollars, Again  [New York Times, Oct 17]  while Wisconsin has a serious shortage of venture capital and ranks poorly compared with the rest of the nation in the number of high-tech businesses that have been spun out of academic institutions, Hefty said. Mason Wells of Milwaukee and Venture Investors of Madison are the only two venture capital firms that focus their investing on the state's young, high-tech companies. [Kathleen Gallagher, Milwaukee Journal-Sentinel, Apr 1, 06] Is it the government's role to remedy such a capital imbalance? No, inter-state competition is not a federal question. Could government succeed even if it tried? We have plenty of evidence that government program(s) merely divert tax money to uncompetitive entities with political connections. If capital is to be efficiently deployed, the private sector has to do it.  The one place where government may have a role is in the infant stage of young technology in young firms. SBIR could possibly play such a role if its current structure were completely re-invented.

Scientists at the University of Michigan have borrowed a trick from oysters, which fabricate mother-of-pearl one layer at a time, and have used it to make a tough, superlight composite plastic. The researchers started with a layer of clay only nanometers thick, then added a sticky liquid, then another layer of clay--repeating this process 300 times. The result is a light, transparent substance as strong as steel but no thicker than plastic wrap. [Business Week, Oct 22]

Solar energy-related stocks are hot. In the first half of 2007, there was a record $4.7B in capital raised in solar-based IPOs, according to U.K.-based research firm New Energy Finance. That's more than double the amount raised in new solar issues during all of last year.  [Forbes, Oct 5]

Bigger Worker Pool. Boston Scientific is preparing to slash thousands of jobs to cope with slumping sales, analysts say. [Todd Wallack, Boston Globe, Oct 16]

Xconomy is a daily blog written and edited by professional journalists, and dedicated to the proposition that the Boston area is an oft-discounted hotbed of innovation. By highlighting local research, invention, startups, venture investment, and other technology-related business news, we hope to both chronicle and catalyze Boston's rise to equal status with Silicon Valley as a source of game-changing technological advances.

The lengthy courtship [of Cytyc by Hologic] highlights the fact that companies must often spend years laying the groundwork before pulling off a major deal. In this case, both firms are also major players in the women's healthcare industry and both are based in the Boston suburbs, so they eyed each other long before seriously discussing a merger ... combined will create one of the state's largest life sciences companies with annual sales of $1.7B [Todd Wallack, Boston Globe, Oct 15]

Misplaced modifier: Debug Console will automatically appear to help resolve web page errors. [Pogue's Post blog, New York Times]

John Kao, an innovation consultant, points out in his new book, Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do to Get It Back, ...that the geography of innovation is changing. For much of the 20th century, the locus of leading-edge thinking was the U.S. and Western Europe. The rise of Asia is evening that out, redistributing the fruits of innovation: wealth and power. How did things switch so swiftly? Here are Kao's bullet points:  — Talent is now everywhere. As are Capital, Silicon Valley, and Military spending. [Bruce Nussbaum, Business Week, Oct 22]

International markets continued to outshine the United States in the third quarter, as many of the world's economies continue to grow faster. ... China region funds remained on top, offering a 28.9% return. Economists expect blistering growth as the country enjoys demand from a growing middle class. [Seattle Times, Oct 11] A sign of how rapidly the trade situation is changing: In August, 41% of the containers shipped from the Port of Los Angeles were loaded, up from a year-earlier 32% [Justin Lahart, Wall Street Journal, Oct 11]

A novel artificial cornea that adheres to eye cells could bring new hope to the estimated 10 million people worldwide who are blind because of corneal damage or disease. ... The key to the new implant is a protein-coated polymer developed by researchers at the Fraunhofer Institute, in Munich, Germany; the group is led by Joachim Storsberg, head of the university's medical-polymer research unit. The polymer, which is commercially available, repels water, so it won't absorb tear-duct secretions that could cause it to swell. It also prohibits cell growth, so natural tissue will not cloud it over. [Brittany Sauser, MIT Tech Review, Oct 10]

Intel Completes Photonics Trifecta. A new light detector means all three core components of telecom networks can now be built in silicon.  [Kate Greene, MIT Tech Review, Oct 10]

Buying from India? India's stock market has been as hot as a five-alarm curry. ... Many tech companies in India haven't joined the party. An index that tracks Indian info-tech companies is down 10% this year, compared with a 33% gain by the Sensex. ... A problem for India's tech outfits -- which get most of their revenue from the U.S. -- has been a 12% gain in the rupee against the dollar this year [Wall Street Journal, Oct 10]

Madison-based Alliant Energy Corp. and two other companies were sued in a challenge to their patent for a way to generate energy from the ethanol-manufacturing process. Idaho Energy LP, a maker of systems for turning waste into fuel, sued Alliant and the co-owners of the patent, Harris Contracting Co. and AE&E-Von Roll. Idaho Energy, known as Energy Products of Idaho, asked a court to rule the patent doesn't cover a true invention and never should have been issued .  [Milwaukee Journal-Sentinel, Oct 10]

In Silicon Valley, old-timers have some leading [economic] indicators of their own. The goofy-names index, for example, is back near its previous high. Consider Orgoo Inc., which helps people organize all their Web communications. Or Zipidee Inc., a purveyor of "digital goods" such as cellphone ring tones. ... The rate of odd-looking start-ups, too, is on the rise. One called Startup Schwag exists solely to deliver a monthly package of T-shirts and other goodies bearing logos of other tech start-ups. Rapper MC Hammer, known for 1990s hits like "U Can't Touch This" and a 1996 bankruptcy filing, is chief strategy officer of an online-video start-up called DanceJam. PlaySpan Inc., a Web-gaming outfit that raised $6.5 million, boasted on its Web site that it had been founded by a fifth-grader.... "It is absolutely déjà vu," says VC David Chao,  "There's just as much junk now as there was in 1999,"  [R Buckman and K Delaney, Wall Street Journal, Oct 9]

Kevin Costner is fighting global warming — and losing. The Oscar winner recently said he's dropped some $40 million on green investments and projects over the years, including a failed plan to develop a nonchemical battery. [Time, Oct 15]

Small, but with the disease. The Bill and Melinda Gates Foundation today will start a $100 M fund to nurture unorthodox approaches to global health, inviting scientists to bid for small, quickly awarded grants. ... among the richest and most ambitious donor-backed programs of this kind ... The Grand Challenges Explorations program, to be announced in Cape Town, South Africa, will reach out to scientists in Africa and Asia, where disease is widespread and money is scarce, though it will be open to all comers. ... "Talent is grouped in great institutions, but not all of it," Mr. Gates said in an interview. "There's a real logic to being where a disease exists."  [Marilyn Chase, Wall Street Journal, Oct 9]

PARC and HP Labs try a new approach to cultivate innovation. ... inspired by the success of two startups recently spun out of PARC: SolFocus (solar energy) and Powerset (natural-language search). ... Among the areas of focus for HP: next-generation data centers, automating data-center tasks, reducing the cost of energy and new nanoprinting technologies. [Lee Bruno, LARTA Vox, Sep 25] What kind of companies would succeed? The ones seeking outsize profits in a narrow sector of a market. Companies that want to do research or sell everything to everybody won't find any capitalists to provide them the financing. One of the false assumptions in SBIR is that small companies can do research better than large entities. “Typical startups don’t have the research capacity of what we have here at PARC.” The only small companies with any competitive advantage are those with solid patents and market agility. But in SBIR, the government pays no attention to either factor and run SBIR programs because they are forced to do so by the political will of Congress.

a recent report I read argued that every asset class is overvalued. The only question is by how much. [James Stewart, Smart Money, Sep 07]

Innotech convention. The Austin Convention Center will be a high-tech hot zone Thursday. About 1,500 people from almost every corner of the tech industry are expected to attend the Innotech Austin conference. The event will highlight companies and innovators from around the region. Visit www.innotechconference.com/austin. [Austin American-Statesman, Oct 8]

Cameras that could spot suicide bombers carrying bombs strapped to their bodies will be used in a new test aimed at securing the nation's rail and bus stations .. Manufacturer QinetiQ (the British firm that bought Foster-Miller) North America hopes to see the technology used at military bases, landmark buildings, large events, arenas and possibly stores trying to catch shoplifters ... TSA bought 12 machines from QinetiQ for $3 million to test in labs and transit stations in the next eight months.  [Thomas Frank, USA Today, Oct 4]

mytrip writes to tell us that Berkeley is now using YouTube as an important teaching tool. Today marks the first time a university has made full course lecture available via the popular video sharing site. Featuring over 300 hours of videotaped courses initially, officials hope to continue to expand this program. [slashdot.org, Oct 4]

If the Dow is divided by the price of one ounce of gold its value is less than half its 1999 value, notes Chart of the Day (Oct 5). It currently takes 19.2 ounces of gold to “buy the Dow", considerably less that the 44.8 ounces back in the year 1999.

It’s no surprise that stocks are rising. It has happened 100 percent of the time in the first month after a Fed rate cut. [Rachel Beck, AP, Oct 8]

By 2010, clean-energy demand will outpace generation by at least 37% unless a rush of projects is built, says a report due out next week from the National Renewable Energy Lab. Under laws in 25 states, clean energy — such as wind, solar and biomass — must constitute up to 30% of a utility's energy portfolio in five to 15 years. [Paul Davidson, USA Today, Oct 4]

Several years ago Jack Welch, former CEO of General Electric, captured the new reality when he talked of ideally having “every plant you own on a barge”. The economic logic was that factories should float between countries to take advantage of lowest costs, be they due to under-valued exchange rates, low taxes, subsidies, or a surfeit of cheap labor. Globalization has made Welch’s barge a reality. [economistsview blog, Oct 3]

Cheaper Solar Technology Attracts More Homeowners. .. Between 2002 and 2006, the number of new photovoltaic systems installed in U.S. homes nearly tripled ... and expected to top 11,000 this year. ... One problem is that there are hundreds of photovoltaic installers to choose from in states such as California and New Jersey, which are among the most aggressive in offering consumer credits to use solar. That makes it difficult to tell who's reliable. [Jim Carlton, Wall Street Journal, Oct 4]

The heavy spending on fiber networks, analysts say, is typical in Japan, where big companies disregard short-term profit and plow billions into projects in the belief that something good will necessarily follow. ... “The Japanese think long-term,” Mr. Bortesi added. “If they think they will benefit in 100 years, they will invest for their grandkids. [Ken Belson, New York Times, Oct 3]

Worries about the current-account deficit have been popping up in currency markets for years. Broadly speaking, the deficit measures how much more the U.S. spen