Venture Capitalists

The recession brought the U.S. market for initial public stock offerings to a halt in the fourth quarter, closing the worst year for IPOs since 1977, the National Venture Capital Assn. said Monday. No companies backed by venture capitalists went public in the fourth quarter, and only six staged IPOs in all of 2008, the association said. Emerging businesses also had trouble merging with larger companies, with just 37 venture-backed firms selling themselves in the fourth quarter.

WASHINGTON - President Obama on Wednesday will nominate venture capitalist Thomas Wheeler as the nation's top telecommunications regulator, tapping a major campaign fundraiser with long ties to the media and the telecom industries, White House and industry officials said. Wheeler, managing director of Core Capital Partners in Washington, D.C., would replace Julius Genachowski as chairman of the five-member Federal Communications Commission board. Democratic Commissioner Mignon Clyburn, who was mentioned as a candidate, will take over as acting chairman when Genachowski steps down in the coming weeks.

Venture capitalists slammed shut their wallets during the last three months of 2008, investing 45% less in Southern California start-ups than during the same period a year earlier, according to a report scheduled for release today. The sharp fourth-quarter decline, to $422 million from $764 million, turned what was expected to be a full-year gain into a loss, according to the Dow Jones VentureSource report. Venture funding to the region's businesses in 2008 fell 20% to $3.2 billion.

SAN FRANCISCO - Nirav Tolia is trying to build the next big social network - block by block. Nextdoor is like Facebook but for a neighborhood: a private network to find a baby sitter, borrow a cup of sugar, organize a block party or spread word of a break-in. It's not the first time a start-up has tried to network neighbors, but Nextdoor is one of the first to gain momentum. So far, more than 8,000 neighborhoods across the country have signed up for the service, including Laurel Canyon and Atwater Village.

Silicon Beach is mourning the death of entrepreneur and Ecomom co-founder Jody Sherman this week. Sherman, 47, died of a self-inflicted gunshot wound, officials said. Since his death Monday, several L.A. tech bloggers, friends and venture capitalists have taken to Twitter, Facebook and personal blogs to share memories of Sherman, who co-founded Ecomom in Santa Monica in 2009. The company, which sells eco-friendly and healthful products for children, mothers and the home, moved to Las Vegas about a year ago. The messages also emphasized the need for a more open dialogue about the pressures of creating a start-up and running a business, with entrepreneurs and others calling on the tech community to open up and offer support to colleagues who may be suffering from depression.

Michael Schrage's column "Venture Capital Loses Spirit of Adventure" (Sept. 5) totally mis-characterizes the venture capital industry, its importance to the country and the significance of its role in the 1990s. True, early stage investment is at its lowest level in years. Many people predicted that this would happen when, in 1986, Congress raised the tax rate on long-term capital gains. Venture capital professionals aren't taking fewer risks--there simply isn't enough capital to invest because we lack incentive for such investment.

Venture capitalists invested a record $3.1 billion in U.S. companies in the second quarter, according to a survey by New York-based Coopers & Lybrand. The investments in 667 American companies boosted the total for the first half of 1997 to a record $5.5 billion, the study found. Information-technology companies accounted for half the number of second-quarter investments and 45% of the dollar amount invested in emerging growth companies.

Ask a venture capitalist where to find opportunity these days and you get a surprising answer: Southern California. As recently as five years ago, you could count the number of venture capital firms operating in the Southland on the fingers of one hand. Now the area hosts more than a dozen, about half of them newcomers to Southern California in the last year alone. And it's a good bet that more are on the way.

With Wall Street in a depressing plunge that shaved another 6% from the average stock price this week, it's not exactly the best time for small companies to go begging for capital. But 32 such hopefuls still showed up in Newport Beach on Wednesday and Thursday. The companies, mostly very young, private, Southland firms, made presentations to venture capitalists and other big investors at brokerage Cruttenden & Co.'s fifth annual conference on emerging growth companies.

Venture capitalists ended 2004 on their most profitable run since the dot-com bust, according to a report issued Monday. The return on venture capital funds averaged 19.3% in 2004, a big jump from the 11.7% average gain in 2003, the National Venture Capital Assn. and research firm Venture Economics said. Last year's performance represented the venture industry's best one-year showing since 2000, when the average fund generated a 24.7% return.

Silicon Beach is mourning the death of entrepreneur and Ecomom co-founder Jody Sherman this week. Sherman, 47, died of a self-inflicted gunshot wound, officials said. Since his death Monday, several L.A. tech bloggers, friends and venture capitalists have taken to Twitter, Facebook and personal blogs to share memories of Sherman, who co-founded Ecomom in Santa Monica in 2009. The company, which sells eco-friendly and healthful products for children, mothers and the home, moved to Las Vegas about a year ago. The messages also emphasized the need for a more open dialogue about the pressures of creating a start-up and running a business, with entrepreneurs and others calling on the tech community to open up and offer support to colleagues who may be suffering from depression.

My experience over the years is that Nolan Bushnell, the guy who founded Atari  and once hired Steve Jobs, doesn't talk to the press much. So when the opportunity to talk to him came up, I jumped at it. "I basically look at PR as something you do if there's an object in mind," Bushnell said during a phone interview this week. "But my ego doesn't need it. " Fair enough. But Bushnell does have an object in mind. In fact, two of them.  The first is a documentary that's going to be airing on various PBS stations over the next few weeks called, "Something Ventured: Risk, Reward And The Original Venture Capitalists.

Can government play a positive role in economic development? To understand who built what in the construction of the American economy from its pre-industrial origins, a look at one of the drivers of U.S. innovation - venture capital - is instructive. For more than three decades American venture capitalists have concentrated their activities and earned their returns in a very small number of industrial domains. In booms and in slumps, in bull markets and in bear markets, the information and communications technology and biomedical sectors together have consistently accounted for 80% of venture capital investment.

A New York State judge gave a light sentence to a Los Angeles venture capitalist and philanthropist for his participation in a pay-to-play corruption scandal involving former New York State Comptroller Alan Hevesi. Elliott Broidy, 55, on Monday pleaded guilty to a misdemeanor charge of attempting to receive a reward for official misconduct, the New York attorney general's office said. The judge let him change his plea to a misdemeanor from a felony and spared him jail time. Broidy provided important evidence in a case against former New York Comptroller Alan Hevesi, who served as the sole trustee to a $125-billion public pension fund, Justice Lewis Bart Stone said.

Maybe the attraction is Silicon Beach, the swath of Los Angeles that is home to so many tech start-ups. Or maybe it's just the beach. Either way, Northern California technology titans and wannabes increasingly are sinking money into trophy homes from the Hollywood Hills to the beach in a kind of Silicon Valley south. Making tsunami-like waves so far this year are three Westside transactions: •Billionaire venture capitalist and hedge fund manager Peter Thiel cherry-picked a house in the Hollywood Hills this spring for $11.5 million.

Venture capitalists, shmenture capitalists. That is not what Eric Migicovsky said to himself when he went out to get funding for a new smartwatch he and his team developed called Pebble. Migicovsky, who had some critical success with a Blackberry-compatible smartwatch called the inPulse, was hoping to fund his next venture the traditional Silicon Valley way -- through angels and venture capitalists. The new smartwatch would be compatible with the Android and iPhone, linking to the smartphone via Blue Tooth and would also have an e-paper screen that could easily be read in sunlight, as well as the ability to show emails, tell you who is calling on your phone, and serve as a bike computer for avid cyclists.

Funds managed by venture capitalists dropped by an average of 6.3% in last year's final quarter as the dot-com downfall dragged down the financiers who helped bankroll the e-commerce boom, according to statistics released Monday. The setback marked the venture capital industry's first quarterly losses since the third quarter of 1998, said Venture Economics, a Thomson Financial research firm that compiled the report. The losses came on the heels of a 6.4% gain in last year's third quarter.

Today, entrepreneurs from 21 start-up firms will make their pitches for financing to a group of venture capitalists and top private and corporate firms at the fifth annual Southern California Technology Venture Forum. "This is the best crop of companies I've ever seen here," Jon P. Goodman, director of USC's entrepreneur program EC2 Incubator Project, told The Times.

Facebook's looming initial public offering is just the latest in a nine-month series of blockbuster tech IPOs, rekindling memories of the go-go markets of the late 1990s. Ahh, good times - at least until the markets tanked. A closer look, though, reveals that the similarities to the dot-com era don't extend very far. In fact, the latest IPOs spotlight a problem with the system: Too few companies are going public, and they're waiting too long to do so. Researchers say that start-up companies have been responsible for 100% of the job growth in the United States since the late 1970s, and that the vast majority of the jobs created by new companies arrived after their IPOs.

It had to be done Re "How far is too far on Iran?," Editorial, Jan. 12 The editorial regarding the car-bomb killing of an Iranian nuclear scientist comes across as rather sanctimonious. All but assuming that Israel's hand was at play, the editorial condemns the action as somehow unfitting. The Iranian regime has said Israel should be destroyed. Such a move by Iran could only be accomplished through a nuclear attack on Israel, which probably motivates Iran's unrelenting effort to develop such weapons.