Feeds:
Posts
Comments

Archive for November, 2012

Ernst & Young (“E&Y”) has published their fifth annual report on the state of the medical technology industry. Below are the link to this report and also a link to an excerpt from the report displaying charts of the industry’s performance.

Let us also take this oppontunity to say we hope you and yours had a wonderful Thanksgiving Holiday.

Pulse of the Industry – Ernst & Young

Pulse of the Industry: Medical Technology Report 2012 – Industry performance
 
Should you wish to visit our website please click on our logo at the top of this e-mail.
Warmest regards,
Ron and Susan
Ronald H. Coelyn
Susan F. Norton
817-424-3652
650-383-5153
rcoelyn@coelyngroup.com
snorton@coelyngroup.com

Advertisements

Read Full Post »

SALE OF Coherex Medical FlatStent Assets & Intellectual Property
Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Coherex Medical Inc. (http://coherex.com) to solicit interest for the sale of all, or substantially all, the Assets & Intellectual Property pertaining to its FlatStent PFO technology (“COHEREX MEDICAL Assets”).

 IMPORTANT LEGAL NOTICE:
The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to COHEREX MEDICAL’s Assets has been supplied by COHEREX MEDICAL. It has not been independently investigated or verified by Gerbsman Partners or its agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by COHEREX MEDICAL, or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.
COHEREX MEDICAL, Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of COHEREX MEDICAL’ or Gerbsman Partners’ negligence or otherwise.

Any sale of the COHEREX MEDICAL Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of COHEREX MEDICAL or Gerbsman Partners. Without limiting the generality of the foregoing, COHEREX MEDICAL and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the COHEREX MEDICAL Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

 
Coherex Medical Company Profile
Coherex Medical, Inc.(the Company) was founded in 2003 to design, develop, and market innovative catheter-based technologies for the treatment of structural heart defects. The Company is led by President and CEO Alex Martin who has over 30 years experience in the medical device industry.  Alex is supported by a management team that has on average more than 25 years of experience in medical device design and development, manufacturing and operations, marketing and sales, quality and regulatory systems, intellectual property protection, and financial and business leadership.

Headquartered in Salt Lake City, Utah, Coherex Medical is a medical device company focused on development and commercialization of innovative customizable structural heart technologies including a Left Atrial Appendage (LAA) occluder called WaveCrest and a Patent Foramen Ovale (PFO) closure device called FlatStent. This sale pertains to the FlatStent PFO assets and technology only.
The Company initially focused on the development of the FlatStent to treat a common heart defect called a patent foramen ovale (PFO), which is present in approximately 25% of the population. PFO has been identified as a potential cause of certain migraines, embolic strokes, transient ischemic attacks (TIAs) and other medical indications. The Coherex FlatStent™ EF PFO Closure System has been designed to maximize safety, efficacy, and ease-of-use in closing a PFO. The device has a CE mark that allows it to be sold in the EU and other countries. The PFO device also has conditional IDE approval.

The company is currently focused on the WaveCrest LAA technology, which is undergoing clinical trials in Europe. The Coherex WaveCrest™ Left Atrial Appendage Closure System, addresses a large and unmet need to prevent strokes in patients suffering from a common heart condition known as atrial fibrillation. Atrial fibrillation (also known as A-fib or AF) is a disturbance of the normal heart rhythm in the upper chambers of the heart.  It results in poor or virtually no contraction of those chambers, which may cause blood to pool and not be ejected from a pouch attached to the left atrium called the Left Atrial Appendage.  A-Fib is the most commonly diagnosed heart rhythm disorder.

To date the company has raised $47.9 million through equity fund raising.  Investors include Oxford Bioscience, vSpring Capital, Tullis Health Investors, Abbott Laboratories, Saints Capital and Johnson & Johnson.
The company is selling the PFO assets to raise funds for its ongoing business which is focused on the LAA technology.

 
Coherex Medical believes its FlatStent PFO device assets are attractive for a number of reasons:

The Coherex FlatSent is CE Marked, has an FDA approved IDE and represents:

The only in-tunnel PFO closure device approved for sale in CE marked countries
Significant and unique intellectual property related to a PFO closure device providing closure within the tunnel.
The Coherex FlatStent system has received a conditional Investigational Device Exemption (IDE) from the United States Food and Drug Administration.
The FlatStent assets include the QA manuals, manufacturing related materials and processes necessary to manufacture the devices.
The Flatstent device employs dual closure mechanisms.
Lateral forces approximate the septum primum and septum secundum.
Polyurethane foam promotes rapid tissue growth within the PFO tunnel.
The FlatStent provides an extraordinarily small footprint and it has not been associated with complications noted with competing PFO devices including; Thrombus, Erosion, Arrhythmia.
The FlatStent leaves the fossa ovalis open for future procedures which require transseptal puncture.
The FlatStent is delivered to the left atrium in a rapid exchange fashion which eliminates the risk of air embolism.

 Impact of Technology on the Market

COHEREX MEDICAL believes that its FlatStent technology offers advantages over currently marketed double disk PFO closure technologies:

Treats the PFO tunnel ONLY.
Does not cover the walls of the atrial septum.
Minimal atrial exposure to limit thrombus and headache exacerbation.
Very small metal mass with minimum footprint and implant bulk.
Offers minimal impact to the interatrial septum reducing potential complications of septal stiffening, perforation, erosion, arrhythmia, chest pain, and valve distortion.
May be delivered without long access sheaths reducing ancillary device requirements and potential of air embolism.
Implant comes pre-loaded on delivery system reducing preparation time.

Coherex FlatStent Assets

Coherex  Medical has developed a portfolio of assets critical to the development, manufacturing, and marketing of the Flatstent PFO Closure System. These assets fall into a variety of categories, including:

Patents, Patent Applications and Trademarks
CE Mark for Flatstent PFO Closure System
Custom built equipment and tooling for manufacturing Flatstent systems
Key know-how, expertise, and documentation to manufacture PFO Closure System
Patient Data from 4 clinical trials involving 104 patients
The assets of Coherex Flatstent will be sold in whole. (collectively, the “Coherex FlatStent”). The sale of these assets is being conducted with the cooperation of Coherex. Coherex and its employees will be available to assist purchasers with due diligence and a prompt, efficient transition to new ownership.

Notwithstanding the foregoing, Coherex Medical should not be contacted directly without the prior consent of Gerbsman Partners.

Turn-key Manufacturing Process

Coherex has developed a turn-key process to transfer all equipment, documentation, and product knowledge to the buyer. This process will facilitate rapid manufacturing start-up of the FlatStent product.

This turn-key system includes:

Clinical data,
R&D Design History Files (DHF),
Manufacturing and Quality documentation and Marketing materials.

Included in this product portfolio is tooling, fixtures, and equipment that are necessary to manufacture the Flatstent product. A detailed description of all purchase specification and raw material suppliers are included in the Device Master Record (DMR), which is located in the company’s due diligence data room.

 
Key Personnel

Alex Martin — President & CEO

John Alexander (Alex) Martin joined Coherex Medical as Director, President and CEO starting in July 2012. Mr. Martin has had executive experience with medical device companies such as WorldHeart, Edwards Lifesciences, Cordis Corporation, a Johnson and Johnson (J&J) company and CR Bard. Mr. Martin served in sales, marketing and business development management positions within these several organizations. Mr. Martin earned a bachelor’s degree from the University of Kentucky at Lexington.

Sheri Thomas — Vice President, Finance

Ms. Thomas is a Certified Public Accountant with 24 years experience in public accounting and industry.  The companies for whom she has worked include Price Waterhouse, WordPerfect Corporation, Novell and Phone Directories Company.  She has been with Coherex Medical for three years.

Ronald Watkins— Chief Operating Officer

Mr. Watkins joined Coherex in 2007 and has over 20 years of medical device manufacturing and operational experience. Mr. Watkins has worked with both large medical device companies such as Baxter Edwards and Boston Scientific as well as several start-up companies. He has served a key role in developing engineering and manufacturing processes, implemented quality systems, and is instrumental in developing a culture of success for these companies.

Daryl Edmiston – Vice President, RD

Mr. Edmiston has an extensive background and over 24 years experience in engineering project management, medical device design, and state-of-the-art manufacturing processes. As a private consultant, Mr. Edmiston advised various companies in the semiconductor and medical device manufacturing sector. Before joining Coherex in March 2006, he worked for Rubicon Medical, as Director, and then Vice President of Research and Development.

Abe Mathews – Vice President, Regulatory Affairs

Mr. Mathews began his career in the medical device industry with the Ethicon Division of Johnson & Johnson.  He then joined Provasis Therapeutics, a start up medical device venture,  as Vice President, Regulatory Affairs and Quality Assurance. Mr. Mathews worked for Boston Scientific before joining Coherex Medical over 5 years ago as Vice President, Regulatory Affairs.

Cliff Montagnoli – Vice President, Clinical Affairs

Mr. Montagnoli, VP of Clinical Affairs, joined the Coherex Medical team in February of 2007. His extensive background in the medical industry began in 1991 with clinical research in pediatric cardiology at the University of Utah Medical Center. Other extensive experience includes work with Clinical Innovations (CI), Final Touch Training Group, Shared Technologies and Microsoft. Cliff worked for Rubicon Medical as Manager of Clinical Affairs before joining Coherex

COHEREX MEDICAL, Board of Directors

Brian Whisenant, M.D., Chairman of the Board: Intermountain Health Care

Alex Martin:  Coherex Medical

Kadir Kadhiresan:  Johnson and Johnson

Zack Scott:  Saints Capital

Dinesh Patel, Ph.D.: VSpring Capital

Dan Cole: Oxford Bioscience Partners

Roy Tanaka: Independent

Curt LaBelle: Tullis Healthcare Investors (Board Observer)

Mark Williams, Ph.D.: Abbott Laboratories (Board Observer)

Dave Berger: E.B. Berger (Board Observer)

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the COHEREX MEDICAL Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of COHEREX MEDICAL, Inc., Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and neither COHEREX MEDICAL nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the COHEREX MEDICAL Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than January 4, 2013 at 3:00 p.m. Pacific Standard Time (the “Bid Deadline”) at COHEREX MEDICAL’ office, located at 125 Constitution Drive, Menlo Park, CA 94025.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached COHEREX MEDICAL fixed asset list may not be complete and Bidders interested in the COHEREX MEDICAL Assets must submit a separate bid for such assets. Be specific as to the assets desired.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to COHEREX MEDICAL, Inc.). The winning bidder will be notified within 3 business days after the Bid Deadline. Unsuccessful bidders will have their deposit returned to them. COHEREX MEDICAL reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.

COHEREX MEDICAL will require the successful bidder to close within 7 business days.  Any or all of the assets of COHEREX MEDICAL will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the COHEREX MEDICAL Assets shall be the sole responsibility of the successful bidder and shall be paid to COHEREX MEDICAL at the closing of each transaction.

For additional information, please see below and/or contact:

Steven R. Gerbsman
(415) 456-0628
steve@gerbsmanpartners.com

Kenneth Hardesty
(408) 591-7528
ken@gerbsmanpartners.com

Philip Taub
(917) 650-5958
phil@gerbsmanpartners.com

Read Full Post »

Further to Gerbsman Partners e-mail of November 19, 2012 regarding the sale of certain assets of Cambridge NanoTech, Inc., Inc., I attach the draft legal documents (Purchase and Sale Agreement and Secured Party’s Bill of Sale) that we will be requesting of bidders for certain Assets and Intellectual Property of Cambridge NanoTech, Inc.  All parties bidding on the assets are encouraged, to the greatest extent possible, to conform the terms of their bids to the terms and form of the attached agreement.  Any and all of the assets of Cambridge NanoTech, Inc. will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.  

Please be advised that the Cambridge NanoTech Assets are being offered for sale pursuant to Section 9-610 of the Uniform Commercial Code.  Purchasers of the Cambridge NanoTech Assets will receive all of Cambridge NanoTech’s right, title, and interest in the purchased portion of  SVB’s collateral, which consists of substantially all of Cambridge NanoTech’s assets, as provided in the Uniform Commercial Code.

I would also encourage all interested parties to have their counsel speak with Donald Rothman, Esq. and/or Alexander Rheaume, Esq., counsel to Silicon Valley Bank.

For additional information please contact Donald Rothman, Esq, 617 880 3556 and/or Alexander Rheaume, Esq. 617 8808 3492.  drothman@riemerlaw.com – arheaume@riemerlaw.com

Please review in detail, the “Bidding Process for Interested Buyers” below.

The key dates and terms include:

The Bidding Process for Interested Buyers

Due Diligence:
Interested and qualified parties will be required to sign a nondisclosure agreement in the form attached hereto as Exhibit A to have access to the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Cambridge NanoTech Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of SVB or Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and SVB or Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Qualifying to Bid at Auction:
The Cambridge NanoTech Assets will be sold pursuant to a secured party’s public auction sale.  In order to qualify to bid at the public auction sale, interested parties must submit initial bids for the Cambridge NanoTech Assets so that they areactually received by Gerbsman Partners via email to steve@gerbsmanpartners.com no later than Thursday, December 12, 2012 at 3:00 p.m. Eastern Standard Time (the “Initial Bid Deadline”) with a copy to Riemer and Braunstein LLP, 3 Center Plaza, Boston, MA, 02108. Attention: Donald E. Rothman, Esq. and via email to drothman@riemerlaw.com.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  In order to qualify to bid at the public auction sale, all initial bids must be accompanied by a refundable deposit in the amount of $200,000 which shall be paid to Riemer & Braunstein LLP as escrow agent (the “Escrow Agent”) in accordance with the wire instructions attached hereto as Exhibit “B”. All deposits shall be held in a non-interest bearing account.  Non-successful bidders will have their deposit returned to them within five (5) business days following the completion of the public auction sale. The deposit of the Successful Bidder (as defined below) shall be held by the Escrow Agent pending the consummation of the sale in accordance with the terms and conditions of the sales agreement to be executed by SVB and the Successful Bidder.

Initial bids should identify those assets being tendered for and in a specific and identifiable way. The attached Cambridge NanoTech fixed asset list (Exhibit “C”) may not be complete.

SVB shall be deemed to be a qualified bidder.

Public Auction Sale:
On Friday December 14, 2012, a public auction sale (the “Auction”) of the Cambridge NanoTech Assets will be conducted among all qualified bidders commencing at 11:00am Eastern Standard Time at the offices of Riemer & Braunstein LLP, 3 Center Plaza, Boston, MA, 02108.  Qualified bidders shall appear in person at the Auction or participate by telephone conference.  The dial in numbers are Domestic – 888 640-4172, International 913 227-1228, participation code 617 880 3556

SVB reserves the right to cancel, postpone, or adjourn the Auction to such other time or times as the Secured Party may deem proper by announcement made at the Auction, and any subsequent adjournment thereof, either before or after the commencement of bidding, without written notice or further publication.  The Auction may be resumed without further notice or publication at the time and place at which such Auction may have been adjourned.

Prior to the start of the Auction, the auctioneer will advise all qualified bidders of what SVB believes to be the highest or otherwise best qualified bid(s) with respect to the sale (each a “Stalking Horse Bid”).  Only qualified bidders are eligible to participate in the Auction.  Bidding at the Auction shall begin initially with the Stalking Horse Bid(s) and shall subsequently continue in such minimum increments as the auctioneer determines.

Bidding will continue with respect to the Auction until SVB determines that it has received the highest or otherwise best bid(s) for the Cambridge NanoTech Assets.  After SVB so determines, the auctioneer will close the Auction, subject, however, to SVB’s right to re-open the Auction if necessary.  SVB will then determine and announce which bid(s) has/have been determined to be the highest or otherwise best bid(s) (each a “Successful Bid”) and the holder of each Successful Bid shall be deemed to be a “Successful Bidder”.

SVB reserves the right to (i) determine in its reasonable discretion which bid is the highest or best bid and (ii) reject at any time prior to the execution of a purchase agreement, any offer that SVB in its reasonable discretion deems to be (x) inadequate or insufficient, or (y) contrary to the best interests of SVB.  In determining which bid(s) is/are a Successful Bid, economic considerations shall not be the sole criterion upon which SVB may base its decision and SVB shall take into account all factors it reasonably believes to be relevant in an exercise of its business judgment.

Each Successful Bidder will then be required to immediately execute and deliver a purchase agreement to SVB in the form attached hereto as Exhibit “D”. SVB will require each Successful Bidder at the Auction to close within 7 days after the Auction. Any or all of the assets of Cambridge NanoTech will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

SVB reserves the right at any time to (i) extend the deadlines set forth herein and/or adjourn the Auction without further notice, (ii) offer any portion of the Cambridge NanoTech Assets to be sold separately at the Auction if SVB determines to do so, (iii) withdraw any of the Cambridge NanoTech Assets at any time prior to or during the Auction, to make subsequent attempts to market the same, (iv) reject any or all bids if, in SVB’s reasonable business judgment, no bid is for a fair and adequate price, and (v) otherwise modify the sale procedures in its reasonable discretion.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Cambridge NanoTech Assets shall be the sole responsibility of the applicable Successful Bidder.

For additional information, please see below and/or contact:

Steven R. Gerbsman                                                          
Gerbsman Partners
(415) 456-0628                                                          
steve@gerbsmanpartners.com                         
 
James McHugh
Gerbsman Partners
(978) 239-7296
Jim@mchughco.com

Donald Rothman, Esq.
Riemer Braunstein LLP
(617) 880-3556
drothman@riemerlaw.com

Read Full Post »

Article from GigaOm.

What an amazing and relaxing week. I hope you had a great Thanksgiving meal with your loved ones and spent time thinking about how much we have to be thankful for.

If you are done shopping and are looking for some good stuff to read, here are seven stories I recommend for this weekend…

  • 10 Things Julius Caesar could have taught us about business leadership: Oliver Blanchard goes back in time and finds that there is a lot to learn from the Roman emperor.
  • Making Cents: As someone who celebrates the success of new connected companies like Spotify and Pandora, it is eye-opening to see the other side of the equation. Damon Krukowski of Galazie 500, a musician, shares his story.
  • The man who hacked Hollywood: Since I am in Hollywood myself, why not share this story about Chris Chaney, who hacked the emails of some of the biggest names in Hollywood? Just plain common sense and some dedication from his Florida home.
  • The divine Gary Cooper: And talking about scandals, even the old Hollywood had many of those. I wonder what bloggers would have done with Gary Cooper.
  • Why it is good to be Michael Lewis: Well, there are many reasons, and they all start with his books. Great profile of Lewis and his rise to the top of the writing totem pole.
  • Mexico: Risking life for truth: is a great story about reporters who ply their craft in Mexico at the risk of being beheaded. An eye-opening story about how journalism happens in one of the most dangerous places in the world.
  • The Mandate of Hell: Tom Engelhardt laments the pervasiveness of the do-nothing culture, especially amongst the politician set. As an apolitical person, I found this piece resonating with me.

Read more here.

 

Read Full Post »

SALE OF Cambridge NanoTech, Inc.

Gerbsman Partners – http://gerbsmanpartners.com  has been retained by Silicon Valley Bank (“SVB”), the senior secured lender to Cambridge NanoTech, Inc. (“Cambridge NanoTech”), (http://cambridgenanotech.com) to solicit interest for the acquisition of all or substantially all of Cambridge NanoTech’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Cambridge NanoTech Assets”).

Please be advised that the Cambridge NanoTech Assets are being offered for sale pursuant to Section 9-610 of the Uniform Commercial Code.  Purchasers of the Cambridge NanoTech Assets will receive all of Cambridge NanoTech’s right, title, and interest in the purchased portion of  SVB’ collateral, which consists of substantially all of Cambridge NanoTech’s assets, as provided in the Uniform Commercial Code.

The sale is being conducted with the cooperation of SVB and Cambridge NanoTech.  Cambridge NanoTech has advised SVB that it will use its best efforts to make its employees available to assist purchasers with due diligence and assist with a prompt and efficient transition at mutually convenient time.

IMPORTANT LEGAL NOTICE:

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the Cambridge NanoTech Assets has been supplied by third parties and obtained from a variety of sources. It has not been independently investigated or verified by SVB or Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

SVB and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of SVB’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Cambridge NanoTech Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of SVB and GerbsmanPartners. Without limiting the generality of the foregoing, SVB and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the Cambridge NanoTech Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without SVB’s Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

SUMMARY OF HISTORICAL INFORMATION[1]

Cambridge NanoTech, Inc. (“CNT”) is a materials science company that designs, develops and manufactures high-performance turnkey equipment for Atomic Layer Deposition (“ALD”) from R&D to high volume production. ALD is a cutting edge thin-film deposition nanotechnology and CNT has dominant market share in the number of ALD R&D systems worldwide – a market that CNT created back in 2003.  CNT’s solutions range from lab-based analytical instruments for research to large-format, commercial production systems for high volume production of films used in various sophisticated electronic components such as micro-electromechanical systems (“MEMS”), semiconductors, optoelectronics, photovoltaics, solar, flat panel displays and advanced biomedical devices, among others. The Company also has a services component to its business, offering materials coatings services, contract R&D, as well as materials science solution consulting services.

ALD is a process by which thin-films, a few nanometers in size, are used to coat an object (“substrate”) one atomic layer at a time. CNT’s proprietary ALD technology is used to apply a wide array of coating materials, creating virtually perfect, uniform films both on surfaces and inside microscopic pores, trenches and cavities. ALD-based coatings improve the performance of a broad variety of materials, offering improved anti-wear properties, increased water vapor resistance, as well as enhanced optical, mechanical, and electrical properties. ALD has broad applications across a number of industries, including electronics, energy, healthcare, and textiles. ALD adoption has been driven by the decrease in technology form factors as an enabler for smaller and faster electronic devices and the subsequent need for nanoscale coatings given that traditional thin-film deposition techniques are reaching their technological limits.
Cambridge NanoTech  is headquartered in Cambridge, MA, and was boot-strapped in 2003 by Dr. Jill S Becker, directly out of the Gordon Lab at Harvard University (www.chem.harvard.edu/groups/gordon/), Since then, CNT has experienced tremendous revenue growth and profitability in almost every year since inception, serving a variety of world-leading enterprises as customers across a variety of end markets

Target Market:
Cambridge NanoTech (CNT) pioneered the development of compact ALD systems for the research and development sector, and in doing so created the market for affordable R&D systems. Based on the success of its R&D systems, CNT expanded its product lines to meet the needs of both R&D and Production customers. Within the span of the application space, CNT’s products target a diverse set of technologies, including Energy (Solar, Li-ion Batteries, Fuel Cells), Lighting and Display (OLEDs, LED), MEMS/ MOEMS, Electronics, and Nanotechnology.

Customers:
CNT has strong customer relationships with blue-chip customers across a variety of end markets. Key manufacturing customers CNT has served include leading producers of displays, solar technology, MEMS, and R2R flexible displays. CNT is the R&D systems leader with more than 300 R&D systems sold worldwide. A key factor in CNT’s success has been the Company’s end-to-end customer support throughout the sales process, providing consultative services on systems design, contract R&D services and installation / post-installation support. CNT’s knowledgeable team of scientists, who come from an assortment of research disciplines, can provide knowledgeable insight and offer material science solutions to address customer needs. CNT’s customers span a wide range of business and academic sectors and include, Texas Instruments, 3M, IBM, GE, DuPont, Toyota, Northrop Grumman, Harvard University, Stanford University, and Sandia Laboratories.
The accounts receivable base of CNT is diverse, as no client had represented over 10% of its accounts receivable balance.

1INTERESTED PARTIES SHOULD SATISFY THEMSELVES THROUGH INDEPENDENT INVESTIGATIONS AS THEY OR THEIR LEGAL AND FINANCIAL ADVISORS SEE FIT. Any sale of the Cambridge NanoTech Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of SVB and GerbsmanPartners. Without limiting the generality of the foregoing, SVB and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the Cambridge NanoTech Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

Intellectual Property
CNT has generated a substantial body of intellectual property in the form of patents, trademarks, know-how and trade secrets.  The Company currently has 1 issued US patent and 6 issued international patents, 8 pending patent applications in the US and 9 pending international applications and is continuously inventing and expanding its IP portfolio in a manner that protects markets and enhances shareholder value. The patent portfolio includes a separate patent family for each of its product lines. Moreover each patent family  specifically sets forth ALD process and reaction chamber innovations that resulted from a ground up ALD design as opposed to converting a non-ALD deposition system to an ALD deposition system.
The patent families include:
•  Savannah Patent Family (R&D lab equipment)
•  Fiji Patent Family (R&D lab equipment with plasma and additional in-situ diagnostics)
•  Phoenix & Tahiti Patent Family (Production equipment for high volume manufacturing)
•  Preboost Patent Family (To proliferate the use of more precursors in any ALD system)
•  Roll2Roll Patent Family (Fast ALD; high throughput; atmospheric ALD)
Details of the issued patents and trademarks are shown in Appendix A

ALL INFORMATION PROVIDED HEREIN RELATING TO THE OPERATIONS OF CAMBRIDGE NANOTECH’S BUSINESS AND THE MARKET POSITIONS AS IT RELATES TO PERIODS ON OR PRIOR TO NOVEMBER 9, 2012, WHEN THE COMPANY CEASED OPERATIONS.

·       Attractive Industry – Material science industry, and ALD in particular  is growing at a rapid rate, as material science solutions pervade the electronics and nanotechnology sectors

·       Best in Class Technology – CNT’s ALD systems are the dominant tool of choice for researchers and offer leading edge capabilities

·       Diversified Base of Customers – CNT’s ALD systems are used in academic, and manufacturing environments, and cover a range of technologies including – Electronics, MEMS/MOEMS, Display/Lighting, and Energy. Systems have been purchased by universities, research institutes, government and military labs, and industry

·       Excellent Relationships – CNT’s strength has always been predicated on strong relationships within and outside the ALD industry

·       Opportunity for Future Growth  – Opportunities for growth can be realized by fully exploiting the need for thin film material science solutions, and in taking advantage of the Intellectual property contained within its patent portfolio.

The reasons why Cambridge NanoTech’s assets are attractive are:

CNT has historically experienced strong growth and has been the leader in the field of R&D ALD systems. However, recent working capital constraints and an overly leveraged balance sheet have created the opportunity for all or a portion of CNT’s assets to be sold.  The acquisition of these assets can enable the purchaser to realize significant short and long term value from the CNT assets as CNT maintains the ability to quickly scale within the context of sufficient working capital and a stronger balance sheet.

Robust Growth: CNT achieved profitability in 2004, within its first 12 months of being established. Since that time, revenues have grown at an 85% CAGR through 2011, and while net income performance has been lumpy, the Company has sustained profitability during periods of high growth and during periods of significant investment in product development.

Market Position: CNT is the dominant ALD company in a group of 3 other major companies participating in the ALD sector for R&D applications,  in terms of market size and presence. While CNT is not the biggest of the group, it has the advantage of superior scientific an engineering expertise, and a exceptionally strong reputation for providing material science solutions, which is not true of its competitors.

Dominant ALD R&D Platform: The Company’s R&D ALD platform is renowned for its affordability and performance – a blend which makes the Company’s products the most sought after in this competitive market. The platforms are robust, easily serviceable,  and maintainable, and meet the extraordinary needs for research level flexibility.

Diversified Customer Base: The Company has over 300 ALD systems deployed in the field in a wide variety of  industries. This allows the Company to avoid fluctuation in its revenues caused by adverse changes affecting any particular industry.

Potential Backlog and Pipeline: Prior to ceasing company operations, the Company had a backlog of purchase orders, and a sales pipeline. This information is available in the Due Diligence War Room, and is subject to an NDA.

Management Team at Cambridge NanoTech Inc (for information purposes only)[2]:

Jill Becker Ph.D, Founder and CEO: Jill founded Cambridge NanoTech in 2003 and continues to successfully lead the Company’s technical, sales and operational functions. Dr. Becker holds a Hon. B.S. from the University of Toronto and completed her Ph.D in Chemistry at Harvard University under the supervision of Professor Roy Gordon. Dr. Becker is a specialist in inorganic and metal-organic chemistry, ALD system design, precursor synthesis, and thin-film characterization techniques. She has published extensively and holds numerous patents

Ray Ritter, President: Ray has extensive experience managing and growing technology companies. Prior to joining Cambridge NanoTech, Ray was a founder and the vice president of Sales and Marketing at BlueShift Technologies in Andover, MA, a venture-backed startup delivering manufacturing automation products to the semiconductor market. Ray was the principal at Ritter Consulting Group, where he assisted private and publicly-traded corporations in driving product and service revenues through greater brand awareness and targeted sales strategies. Ray has an M.S. from Rensselaer Polytechnic Institute and a B.S. from Rutgers University

Don Farquharson, Acting CFO: Don is the acting Chief Financial Officer at Cambridge NanoTech.  Don has extensive financial and general management experience in both public and privately held companies. During the past five years, Don held positions as Chief Financial Officer and Director of Operations of Service Point USA, Inc. Prior to joining Cambridge NanoTech, Don served as CEO and CFO of Cambridge-Lee Industries, Inc., the US and European metals manufacturing and distribution operations of privately held Industrias Unidas, SA de CV.   Early in his career, Don was a treasury analyst at Digital Equipment and a CPA for Arthur Andersen.   Don has a B.A. in Mathematics from Indiana University and an MBA from The Wharton School, University of Pennsylvania.

Ganesh Sundaram Ph.D, Vice-President of Technology: Ganesh is Vice President of Technology for Cambridge NanoTech.  Prior to joining Cambridge NanoTech, Dr. Sundaram held positions at Veeco Instruments, Schlumberger Technologies, Micrion Corporation and Texas Instruments, ranging from scientific to product management roles. Dr. Sundaram received his Ph.D in Physics from Oxford University, where he specialized in low temperature, high magnetic field physics of low dimensional semiconductors. His industrial experience encompasses processing of Si and compound semiconductors, lithography, particle beam technology, metrology and thin-film applications.

Roger Coutu, Vice-President of Technology: Roger is Vice President of Engineering for Cambridge NanoTech. Roger spent the previous six years consulting with companies in the semiconductor, automotive, materials and vacuum-handling industries. He has extensive experience designing substrate handling and advanced vacuum systems. Prior to starting his own company, Roger held numerous engineering management positions at MKS, Eaton, Millipore, Bruce Technology International and other companies. Roger has a B.S. from the University of Massachusetts, Lowell in Mechanical Engineering.

2 THE BIOGRAPHICAL INFORMATION CONCERNING THE CURRENT MANAGEMENT OF CAMBRIDGE NANOTECH IS INCLUDED FOR INFORMATION PURPOSES ONLY.  ALTHOUGH THIS SALE IS BEING CONDUCTED WITH CAMBRIDGE NANOTECH’S COOPERATION, THIS SALE IS STRICTLY AN ASSET SALE OFFERED BY SVB AS CAMBRIDGE NANOTECH’S SENIOR LENDER PURSUANT TO ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE.  SVB HAS NO ARRANGEMENT PURSUANT TO WHICH BUYER OF THE CAMBRIDGE NANOTECH ASSETS COULD BE ASSURED OF THE FUTURE SERVICES OF ANY CAMBRIDGE NANOTECH OFFICERS OR EMPLOYEES.

The Bidding Process for Interested Buyers

Due Diligence:
Interested and qualified parties will be required to sign a nondisclosure agreement in the form attached hereto as Exhibit A to have access to the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Cambridge NanoTech Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of SVB or Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and SVB or Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Qualifying to Bid at Auction:
The Cambridge NanoTech Assets will be sold pursuant to a secured party’s public auction sale.  In order to qualify to bid at the public auction sale, interested parties must submit initial bids for the Cambridge NanoTech Assets so that they areactually received by Gerbsman Partners via email to steve@gerbsmanpartners.com no later than Wednesday, December 12, 2012 at 3:00 p.m. Eastern Standard Time (the “Initial Bid Deadline”) with a copy to Riemer and Braunstein LLP, 3 Center Plaza, Boston, MA, 02108. Attention: Donald E. Rothman, Esq. and via email to drothman@riemerlaw.com.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  In order to qualify to bid at the public auction sale, all initial bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Silicon Valley Bank). All deposits shall be held in a non-interest bearing account.  Non-successful bidders will have their deposit returned to them within three (3) business days following the completion of the public auction sale. The deposit of the Successful Bidder (as defined below) shall be held by SVB pending the consummation of the sale.

Initial bids should identify those assets being tendered for and in a specific and identifiable way. The attached Cambridge NanoTech fixed asset list (Exhibit “B”) may not be complete.

SVB shall be deemed to be a qualified bidder.

Public Auction Sale:
On Friday December 14, 2012, a public auction sale (the “Auction”) of the Cambridge NanoTech Assets will be conducted among all qualified bidders commencing at 11:00am Eastern Standard Time at the offices of Riemer & Braunstein LLP, 3 Center Plaza, Boston, MA, 02108.  Prior to the start of the Auction, the auctioneer will advise all qualified bidders of what SVB believes to be the highest or otherwise best qualified bid with respect to the sale (the “Stalking Horse Bid”).  Only qualified bidders are eligible to participate in the Auction.  Bidding at the Auction shall begin initially with the Stalking Horse Bid and shall subsequently continue in such minimum increments as the auctioneer determines.

Bidding will continue with respect to the Auction until SVB determines that it has received the highest or otherwise best bid(s) for the Cambridge NanoTech Assets.  After SVB so determines, the auctioneer will close the Auction, subject, however, to SVB’s right to re-open the Auction if necessary.  SVB will then determine and announce which bid has been determined to be the highest or otherwise best bid (the “Successful Bid”) and the holder of the Successful Bid shall be deemed to be the “Successful Bidder”.

SVB reserves the right to (i) determine in its reasonable discretion which bid is the highest or best bid and (ii) reject at any time prior to the execution of a purchase agreement, any offer that SVB in its reasonable discretion deems to be (x) inadequate or insufficient, or (y) contrary to the best interests of SVB.  In determining which bid is a Successful Bid, economic considerations shall not be the sole criterion upon which SVB may base its decision and SVB shall take into account all factors it reasonably believes to be relevant in an exercise of its business judgment.

The Successful Bidder will then be required to immediately execute and deliver a purchase agreement to SVB in the form attached hereto as Exhibit “C” (this will be forwarded at a later date). SVB will require the successful bidder at the public auction sale to close within 7 days after the public auction sale. Any or all of the assets of Cambridge NanoTech will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

SVB reserves the right to (i) extend the deadlines set forth herein and/or adjourn the Auction without further notice, (ii) withdraw portion of the Cambridge NanoTech Assets at any time prior to or during the Auction, to make subsequent attempts to market the same, (iii) reject any or all bids if, in SVB’s reasonable business judgment, no bid is for a fair and adequate price, and (iv) otherwise modify the sale procedures in its reasonable discretion.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Cambridge NanoTech Assets shall be the sole responsibility of the Successful Bidder.

For additional information, please see below and/or contact:

Steven R. Gerbsman
Gerbsman Partners
(415) 456-0628
steve@gerbsmanpartners.com

James McHugh
Gerbsman Partners
(978) 239-7296
Jim@mchughco.com

Kenneth Hardesty
Gerbsman Partners
(408) 591-7528
ken@gerbsmanpartners.com

Donald Rothman, Esq.
Riemer Braunstein LLP
(617) 880-3556
drothman@riemerlaw.com

Steven R. Gerbsman
Principal
Gerbsman Partners
Phone: 415.456.0628
Fax: 415.459.2278
Cell: 415.505.4991
steve@gerbsmanpartners.com
thegerbs@pacbell.net
http://www.gerbsmanpartners.com

BLOG of Intellectual Capital
http://blog.gerbsmanpartners.com
Skype: thegerbs

Read Full Post »

Article from Fenwick & West.

Background—We analyzed the terms of venture financings for 117 companies headquartered in Silicon Valley that reported raising money in the third quarter of 2012.

Overview of Fenwick & West Results

Venture financings in 3Q12 continued to show solid price increases from their prior round, but 3Q12 was not as strong as 2Q12.

    • Up rounds exceeded down rounds in 3Q12, 61% to 17%, with 22% of rounds flat. This was another strong quarter, but not as strong as 2Q12 when 74% of rounds were up, 11% down and 15% flat. This was the 13th quarter in a row in which up rounds exceeded down rounds.

Series B rounds were especially strong, with 92% of Series B rounds up, and Series E (and later) rounds were relatively weak, with only 44% up. However 64% of the Series B rounds were software and internet/digital media companies, while only 39% of the Series E rounds were from those industries, and as described below, software and internet/digital media were the strongest industries.

  • The Fenwick & West Venture Capital Barometer™ showed an average price increase of 78% in 3Q12 – again a solid result but a decrease from 99% in 2Q12. There were three financings in 3Q12 that were up over 750% (two in internet/digital media and one in hardware), and if these three were excluded the Barometer would have been up 50% rather than 78%.
  • The median price increase of financings in 3Q12 was 23%, down from 30% in 2Q12, and the lowest median price increase in the past two years.
  • The results by industry are set forth below. In general the software and internet/digital media industries continued to be the strongest, cleantech showed good results on very low volume, hardware lagged a bit and the life science industry trailed significantly.

Overview of Other Industry Data

The third quarter of 2012 was generally not a strong one for the venture industry, with the upcoming election, the looming “fiscal cliff” and global economic uncertainty perhaps weighing on investors’ minds.

  • Venture investing in the U.S. was down slightly in 3Q12 compared to 2Q12, and 2012 is on track to be below 2011.
  • M&A was down slightly in 3Q12 compared to 2Q12, and was also down slightly in the first nine months of 2Q12 compared to the first nine months of 2011.
  • The number of IPOs was down slightly both in 3Q12, compared to 2Q12, and in the first nine months of 2012 compared to the first nine months of 2011.
  • Venture fundraising in 3Q12 lagged 2Q12, but year to date fundraising in 2012 was above 2011 levels. Funding continues to be concentrated in a limited number of large funds, although less so in 3Q12 than 2Q12.
    • Venture Capital Investment.

      Dow Jones VentureSource (“VentureSouce”) reported that U.S. companies raised $6.92 billion in 820 venture financings in 3Q12, a 14.6% decrease in dollars and a 5% decrease in transactions from the $8.1 billion raised in 863 financings in 2Q12 (as reported in July 2012). Similarly, venture investment was down 15%, and the number of financings was down 3%, for the first nine months of 2012 compared to the first nine months of 2011.

      Venture capital investment in Silicon Valley was down 22% from the first nine months of 2012 ($8.2 billion) compared to the first nine months of 2011 ($10.5 billion), although the number of deals was only down 6.5%. That said, Silicon Valley received 39% of all U.S. venture investment in 3Q12.

The median amount raised in a 3Q12 financing round was $3.7 million, the lowest quarterly median amount since 1997. This result was driven in part by first round financings, whose median amount raised is on track to be $2.5 million for 2012, which would be the lowest annual amount since 1992.

The lead venture investors in 3Q12 were Google Ventures with 21 deals, Kleiner Perkins with 17, and 500 Startups and NEA with 16 each. Google Ventures recently announced that it was increasing its annual fund size from $200 million to $300 million, which will allow it to make more late stage investments (Sarah McBride, Reuters, 11/8/12).

Similar to VentureSource, the PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters (the “MoneyTree Report”) reported that $6.5 billion was invested in 890 deals in 3Q12, a 7.1% decrease in dollars and a 1% decrease in transactions from the $7.0 billion raised in 898 deals in 2Q12 (as reported in July 2012). The MoneyTree Report also indicated that venture investing in 2012 is on track to be below 2011 amounts in both dollars and deal volume, and that seed stage venture investing was especially weak.

The MoneyTree Report also reported that software and internet/digital media investing remained strong in 3Q12 at $2.1 billion, but both industries declined in dollar terms from 2Q12 amounts. Life science investing, led by follow-on biotech financings, increased in dollar terms from 2Q12, but is down 19% year-to-date compared to the first nine months of 2011. Cleantech investing declined 20% in dollars compared to 2Q12, but saw an increase in the number of deals as investing in this sector appears to be shifting to smaller, less capital intensive deals.

    • Merger and Acquisitions Activity.

      Dow Jones reported 99 acquisitions (including buyouts) of venture-backed U.S. companies for $13 billion in 3Q12, a 10% decrease in transactions, and a 5% decrease in dollars from the 110 transactions for $13.7 billion reported in 2Q12 (as reported in July 2012). Nearly half of the companies acquired this quarter were based in California. For the first nine months of 2012, there were 314 acquisitions of venture backed companies for a total of $39.5 billion, a decrease from the 404 acquisitions for $40.6 billion in the first nine months of 2011.

Similarly, Thomson Reuters and the NVCA (“Thomson/NVCA”) reported 96 venture-backed acquisitions in 3Q12, a 6% decrease from the 102 reported in 2Q12 (as reported in July 2012). IT companies dominated the acquisition environment in 3Q12, with 70 of the 96 transactions.

  • IPO Activity.

    VentureSource reported 10 IPOs of U.S. venture-backed companies raising $807 million in 3Q12. This was a slight decrease from the 11 IPOs raising $7.7 billion ($6.8 billion was Facebook) in 2Q12 (as reported in July 2012).

    Similarly, Thomson/NVCA reported 10 IPOs raising $1.1 billion in 3Q12, compared to 11 IPOs raising $1.3 billion in 2Q12. (It appears that Thomson/NVCA includes sales by shareholders in their calculation of the amount raised). Six of the IPOs were in the IT industry, six were from companies based in California and all were from companies in the U.S. For the first nine months of 2012, there were 40 IPOs compared to 41 IPOs in the first nine months of 2011.

  • Venture Capital Fundraising.

    Thomson/NVCA reported that 53 U.S. venture funds raised $5.0 billion in 3Q12, a 15% decrease in dollars but a 40% increase in funds from the $5.9 billion raised by 38 funds in 2Q12 (as reported in July 2012). Fundraising for the first nine months of 2012 was $16.2 billion raised by 148 funds, a 31% increase in dollars from the $12.4 billion raised in the first nine months of 2011, but a 13% decrease in funds. The concentration of fundraising by a few large funds decreased a bit in 3Q12, where the top five funds accounted for 55% of fundraising, as compared to 2Q12 when they accounted for 80% of fundraising, but was still significant.

    Thomson/NVCA also reported that the number of mid-sized venture funds ($250-800 million in size) raising funds has declined significantly over the past five years, with 41 and 45 raising money in 2006 and 2007 respectively, while only 16 raised money in 2011 and only 10 raised money in the first half of 2012 (Private Markets, Mark Boslet, 10/2/12).

    Dow Jones reported generally similar fundraising results, finding that $4.73 billion was raised in 3Q12 (but by only 37 funds) and that fundraising for 2012 to date was $17.5 billion versus $12.7 billion in the first nine months of 2011. However Dow Jones found that 9% more funds raised money in 2012 to date compared to the same period in 2011.

    Venture fundraising again lagged venture investment in 3Q12 by a significant amount.

  • Developments in Non-IT Fundraising.

    With traditional fundraising by non-IT venture funds (e.g. life science, cleantech and hardware funds) especially challenging, some alternative funding mechanisms are appearing. This funding is often by entities, such as large corporations and governments, that have motives for investing in addition to financial return (e.g. filling product pipelines, diversifying a nation’s economy), or that have a longer time horizon.

    For example Thomson/NVCA has reported that corporate venture capitalists participated in 17.5% of life science financings in 2011 through the first half of 2012, up from 15.3% in the 2010/2011 time frame. Large pharmaceutical companies are also expanding their investments in, and forming closer ties with, traditional venture capitalists (Timothy Hay, VentureWire, 10/9/12). Johnson & Johnson is even creating early stage “innovation centers” in life science hubs such as San Francisco, Cambridge, London and China to improve access to early stage life science companies. (Brian Gormley, VentureWire, 9/18/12).

    Similarly, in the cleantech area, Broadscale Investment Network has been formed to connect large energy corporations with energy start-ups for investing and partnership purposes, and well known companies like GE and Duke Energy have paid to participate in this venture. (Yuliya Chernova, Venture Wire, 9/24/12).

    In sovereign investing, the Russian government backed fund of funds, RVC-USA, has committed up to $400 million to U.S. start-ups focused in medical devices, IT infrastructure, energy efficiency technologies and telecommunications. Similarly, another Russian fund, Rusnano has invested hundreds of millions in U.S. venture funds, especially those focused in the life sciences (Jonathan Shieber, LBO Wire, 9/11/12).

  • Kauffman Report on Immigrant Entrepreneurs.

    A recent Kauffman Report by Vivek Wadhwa concludes that the U.S. is becoming less attractive to foreign entrepreneurs. The report found that the percentage of Silicon Valley-based companies with a foreign born founder decreased from 52% over the period 1995-2005 to 43% over the period 2005-2012. Visa/immigration problems was listed as a major problem. The improvement in the entrepreneurial environment in countries outside the U.S. was also a likely factor. The report found that by far the largest number of entrepreneurial immigrants to the U.S. came from India (33%), followed by China (8.1%), the U.K. (6.3%), Canada (4.2%), Germany (3.9%), Israel (3.5%) and Russia (2.4%).

  • Accelerators and Angels.

    As noted above, early stage venture investing has declined recently, but the growth of early stage non- venture funding is continuing and may be offsetting this trend.

    For example, the number of accelerators and incubators continues to grow, with worldwide estimates ranging from 200-700. There is concern, however, about the value of some of these accelerators. A recent study by Kauffman Fellow Aziz Gilani of venture firm DFJ Mercury analyzing 29 accelerators found that 45% failed to produce even one graduate that obtained venture funding. David Cohen of Techstars has encouraged accelerators to publish their track records, so that entrepreneurs can be better informed in their selection process. A possible trend in the accelerator environment is increased specialization, with accelerators focusing on assisting entrepreneurs in a specific industry. (Tom Stein, Private Markets, 9/512; Mark Boslet, Private Markets, 10/2/12).

    Angel investing also continues to grow, increasing 3.1% in the first half of 2012 over the first half of 2011, with 40% of such funding going to seed and early stage companies. Jeffrey Sohl, “The Angel Investor Market in Q1/Q2 2012: A Market in Steady Recovery”, Center for Venture Research, October 10, 2012.

  • Venture Capital Return.

    Cambridge Associates reported that the value of its venture capital index increased by 0.61% in 2Q12 (3Q12 information has not been publicly released) compared to -5.06% for Nasdaq. The venture capital index was also slightly higher Nasdaq for the 12 month period ended June 30, 2012, 6% vs. 5.82%, but still lagged for the ten year period ending June 30, 2012, 5.28% to 7.21% per year. The Cambridge Associates venture index is net of fees, expenses and carried interest.

  • Venture Capital Sentiment.

    The Silicon Valley Venture Capitalist Confidence Index™ produced by Professor Mark Cannice at the University of San Francisco reported that the confidence level of Silicon Valley venture capitalists was 3.53 on a 5-point scale in 3Q12, a small increase from the 3.47 reported in 2Q12. Venture capitalists expressed concern about high valuations, macro economic uncertainty and life science funding, but felt positive about the depth and breadth of innovation in Silicon Valley, especially in the mobile, cloud and payment industries, and the availability of strategic acquirors with substantial cash holdings.

  • Nasdaq.

    Nasdaq increased 6.1% in 3Q12, and is flat in 4Q12 through November 8, 2012.

Read orginial article here.

 

Read Full Post »

Article from Techcrunch.

Cisco has announced it plans to acquire Cloupia for $125 million. The software company helps customers automate their data centers.

Cisco sees Cloupia’s infrastructure management software enhancing its Unified Computing System (UCS) and Nexus switching portfolio. Cisco expects Cloupia will help better manage the automation of compute, network and storage as well as virtual machine and operating system resources.

Cisco UCS is a converged infrastructure play. Cisco has made a big bet on providing converged infrastructures that consolidates compute, storage and networking into one box. IT wants to decrease its data center dependency. Vendors like Cisco, EMC and IBM see converged infrastructures as a way to sell their hardware into the enterprise.

Investing in these systems has its costs for IT. The systems are pricey and create a lock-in with one vendor.

Cisco wrote a blog post about the acquisition today. Here’s a snippet:

Cisco’s acquisition of Cloupia benefits Cisco’s Data Center strategy by providing single “pane-of-glass” management across Cisco and partner solutions including FlexPod, VSPEX, and Vblock. Cloupia’s products will integrate into the Cisco data center portfolio through UCS Manager, UCS Central, and Nexus 1000V, strengthening Cisco’s overall ecosystem strategy by providing open APIs for integration with a broad community of developers and partners.

The post is a window into Cisco’s data center strategy. Like other big enterprise software companies, Cisco partners with companies such as NetApp and VMware to sell its solutions through its extensive sales channels.

Read more here.

Read Full Post »

Older Posts »