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Purple Nation

May 30, 2013

Freedom of the Press vs. National Security – A Tough Balance  By Lanny J. Davis

I have known and been a friend of Attorney General Eric Holder for many years. He is a progressive Democrat who believes in First Amendment values and especially vigorous freedom for investigative reporters to publish the facts. So I give the Attorney General a heavy presumption of good faith and trying to make the best judgment at the time.

I also know, as widely reported, that now, with the wisdom of hindsight, he is willing to express regrets about the approach used in subpoenaing telephone records of certain reporters in the course of a serious national security leak investigation, especially the ill-advised decision to name Fox investigative reporter as a criminal “co-conspirator.”

By the way, the words Eric Holder testified to in front of the Judiciary Committee were, as far as I can tell, accurate – there was never an intent to bring criminal charges against (or “prosecute,” the word he used) Mr. Rosen. That is a fact. And that is what he said. Naming Rosen as a co-conspirator, however ill-advised, was for the purpose of establishing him as a fact witness, not to prosecute him.

I for one believe the bar should be very, very high – that is two “very’s” – before any reporter should have to be subpoenaed to testify and required to reveal the source of a story.

Rogers Ailes, Fox News Channel’s CEO and president, was right to be angry and to denounce the naming of his respected Fox investigative reporter James Rosen as a co-conspirator in the affidavit supporting the subpoena for telephone records. (If I were in trouble, I would want Roger Aisles in the trenches to take the spears for me. P.S. I am a Fox News contributor and friend of Ailes for many years. P.P.S. –  another fan and friend of Roger Ailes is progressive MSNBC TV commentator, Chris Matthews, who got his first TV job from Ailes.

The best – the only answer – to resolving the inherent tension between First Amendment freedoms and the need to deter national security-implicated leaks that could be illegal is – forgive what seems to be a trite expression – a balanced approach. And this is what we see, thank goodness, from two Senators from both sides of the aisle — Senators:  Lindsey Graham (R.-S.C.) and Charles Schumer (D.-N.Y.), who released a legislative proposal over the weekend that from now on, any subpoena for telephone records or wire intercepts of journalists should be decided by a judge, not the DOJ or FBI alone.

The judicial balancing standards proposed by Messrs. Schumer and Graham are as follows:

“In national security leak cases, demands for reporters’ phone or email records — whether sought by subpoena or National Security Letter — would need to be approved by a judge under a strict legal standard. The judge would need to be convinced that there is a ‘significant and articulable risk of future terrorism or harm to the national security’ and that the information sought would materially assist the government in preventing that risk.”

The proposal would also require the news organization to be notified ahead of time to be given a chance to object to the judge or the Justice Department before the subpoenas are issued. I would also suggest that the definition of a journalist be taken into consideration by the judge — with a free-lance Blogger (who could be an Al Qaeda member in disguise) given less weight for protection by a judge than a reporter of a known, serious news organization, such as James Rosen.

This should be a truly purple issue – both liberals ACLU members and conservative libertarians and Tea Party members do not want expansive government power that can chill First Amendment expression or vigorous investigative reporting. On the other hand, since 9/11, there is no “Red” or “Blue” difference between the need to protect against genuine threats from terrorists and hostile powers to our homeland’s security.

We need to protect our individual privacy rights – libertarians and liberals agree on that. And we need to avoid another 9/11 – libertarians and liberals agree on that. Let’s go ahead with that purple position and find the right balance.

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Mr. Davis is former Special Counsel to President Bill Clinton and is principal in the Washington D.C. law firm of Lanny J. Davis & Associates, in which he specializes in crisis management.  He is Special Counsel to Dilworth Paxson of Philadelphia, Pa., and the author of a recently published book, “Crisis Tales: Five Rules for Coping with Crises in Business, Politics, and Life” (Threshold Editions/Simon and Schuster).  He can be followed on Twitter @LannyDavis.

www.lannyjdavis.com

Available on Amazon.com

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stlogoEarly Buzz for Lauren A. Rothman’s upcoming book, Style Bible: What to Wear to Work (Bibliomotion October 2013) on Oprah’s OWN, Northern Virginia Magazine, and Let’s Talk Live!

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Lauren on Let’s Talk Live!Click to Pre-Order Style Bible on Amazon!
Lauren A. Rothman is featured on Oprah’s OWN, Northern Virginia Magazine, and Let’s Talk Live!

To schedule an interview with On-Air Style Expert and Author
Lauren A. Rothman, please contact:
Phone: +1.202.631.8878
Email: lauren@styleauteur.com
Web: www.styleauteur.com
Twitter: twitter.com/styleauteur
Facebook: facebook.com/styleauteur
TV Clips: styleauteur.com/press/
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Mistakes Women Make With Fashion: Style Choices That Age You
By: Pamela Masin

Black does wonders for trimming a figure and is appropriate for almost every occasion, but as women get older, their skin tends to become paler — and wearing black can create a harsh contrast that emphasizes wrinkles and calls attention to dark shadows under the chin and around the eyes. Add a bright accessory like a scarf or a statement necklace — any pop of color will lessen the washed-out effect, says Lauren Rothman, the founder of Styleauteur.com and author of Style Bible: What to Wear to Work. She also suggests shopping for earthy neutrals — like cocoa, olive, camel or gray — which are subdued but still add contrast. Also, jewel tones are a color group that flatters most women.
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Follow @Styleauteur on Twitter & ‘Like’ Styleauteur on Facebook
Lauren A. Rothman Bio

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Background—We analyzed the terms of venture financings for 118 companies headquartered in Silicon Valley that reported raising money in the first quarter of 2013.

Overview of Fenwick & West Results

Although a healthy 68% of Silicon Valley financings in 1Q13 were up rounds, both the average and median percentage change in share price declined noticeably from 4Q12. In short, the up rounds were “up” by less. For example, 43% of up rounds in 4Q12 were up by more than 100%, while only 23% of up rounds in 1Q13 were up by more than 100%. Here are the more detailed results:

  • Up rounds exceeded down rounds in 1Q13, 68% to 11%, with 21% of rounds flat. This was a slight decline from 4Q12 when up rounds outpaced down rounds 71% to 8%, with 21% of rounds flat.
  • The Fenwick & West Venture Capital Barometer™ showed an average price increase of 57% in 1Q13, a healthy result but a decline from the 85% recorded in 4Q12.
  • The median price increase of financings in 1Q13 was 14%, a significant decline from the 41% recorded in 4Q12.
  • The results by industry are set forth below. In general the internet/digital media and software industries lead, with hardware and cleantech following, and life science trailing significantly.

Overview of Other Industry Data

Third party reports on the first quarter of 2013 showed weakness in the venture environment.

  • The amount of venture investment was the lowest quarterly amount since 3Q10.
  • The number of IPOs was the second lowest quarterly amount since 4Q09.
  • The number of venture-backed companies acquired was the lowest since 2Q09, and the amount paid in acquisitions was the lowest amount since at least 4Q09.
  • Although the dollar amount of VC fundraising was up from 4Q12, the number of funds raising money was the lowest since 3Q03.

There were certainly positive signs as well, with VC sentiment improving, angel investing strong, Nasdaq up and, as mentioned above, venture valuations reasonably healthy, but the overall venture environment is currently tough.

    • Venture Capital InvestmentDow Jones VentureSource (“VentureSource”) reported that venture capitalists (including corporation affiliated venture groups) invested $6.4 billion in 752 financings in the U.S. in 1Q13, a 3% decline in dollars but a 3% increase in deals from the $6.6 billion invested in 733 financings in 4Q12 (as reported in January 2013). This was the lowest dollar amount invested since 3Q10.

The PWC/NVCA MoneyTree™ Report based on data from Thomson Reuters (the “Money Tree Report”) reported $5.9 billion invested in 863 deals in 1Q13, an 8% decline in dollars and an 11% decline in deals from the $6.4 billion invested in 968 deals in 4Q12 (as reported in January 2013).

The MoneyTree Report also reported that despite the overall investment decline, investment in software companies was up 8% to $2.3 billion in 1Q13, while investment in internet companies, life science and cleantech all declined. It also reported that venture capital investment in first time financings was down 20% in 1Q13, with investment in first time life science financings falling to the lowest amount since 3Q96.

    • IPO ActivityDow Jones reported that 9 U.S. venture backed companies went public in 1Q13 and raised $643 million, compared to 8 IPOs raising $1.2 billion in 4Q12.

Similarly, Thomson Reuters and the NVCA (“Thomson/NVCA”) reported 8 IPOs raising $672 million in 1Q13, which was a 52% decline in the amount raised and a flat number of deals from 4Q12.

This was the second lowest number of IPOs in a quarter since 4Q09. Six of the IPOs were IT and all were for U.S. based companies.

    • Merger and Acquisitions ActivityDow Jones reported that acquisitions (including buyouts) of U.S. venture backed companies totaled $4.9 billion in 94 deals in 1Q13, a 47% decline in dollars and a 17% decline in deals from 4Q12 (as reported in January 2013).

Similarly Thomson/NVCA reported only 77 acquisitions in 1Q13, a 19% decline from the 95 reported in 4Q12 (as reported in January 2013). This was the lowest quarterly number of acquisitions since 2Q09.

    • Venture Capital FundraisingThomson/NVCA reported that 35 U.S. venture capital funds raised $4.1 billion in 1Q13, a 17% decline in the number of funds but a 25% increase in dollars raised compared to the 42 funds that raised $3.3 billion in 4Q12 (as reported in January 2013).

This was the lowest number of funds raising money since 3Q03, and the five new funds that raised money was the lowest number since 4Q06. Over half of the total amount raised ($2.2 billion) was raised by just four funds.

Similarly, Dow Jones reported $4.2 billion raised in 1Q13, the lowest first quarter total since 2009.

More money was invested in venture backed companies than was raised by venture capitalists for the fifth year in a row. Although 2012 data was incomplete, the excess aggregated $22 billion during the 2008-11 time frame, and while individuals and corporate investment likely made up part of the difference, it was unlikely to have made up a significant amount. (Venture Capital Journal, JoAnne Glasner, January 14, 2013).

It also appears that more hedge funds and private equity investors are doing later stage “venture” deals, which provides additional capital, but also creates more competition for venture capitalists (VentureWire, Shira Ovide and Pui-Wing Tam, March 7, 2013). The interest of these alternative investors is likely driven by the increased time to IPO, and increased amount being raised prior to IPO, by some of the most promising venture-backed companies. For example, the median time from initial equity to IPO increased to 9.4 years in 1Q13, and the median amount raised increased to $105 million, both the highest amounts in at least eight years (VentureSource).

  • Angels and AcceleratorsThree of the six largest venture capital investors in 1Q13 (by number of deals) were seed focused funds (500 Startups, Y Combinator, First Round Capital) (VentureSource). For a discussion of trends in seed financing see our 2012 Seed Survey at www.fenwick.com/seedsurvey.
  • Crowd FundingCrowd funding is growing substantially, despite regulatory delays in implementing some of the related provisions of the JOBS Act. Massolution reports that $1.6 billion was raised in North America by crowd funding in 2012, up 81% from 2011. And the recent partnership between AngelList and Second Market (described below) bears watching. There are even indications that seed funds might use crowd funding to raise money for their funds (Venture Wire, Chernova and Kolodny, April 10, 2013).
  • Secondary MarketsAlthough the Facebook IPO put a significant dent in the volume of trading on secondary market exchanges, the industry has been active.Nasdaq and SharesPost have recently announced a joint venture, the Nasdaq Private Market, to facilitate the buying and selling of private company shares, and to provide liquidity to early investors, founders and employees.And AngelList and Second Market have partnered to facilitate investing in early stage companies, by allowing investors to pool their investment through Second Market, so that they can each invest relatively small amounts of money into companies listed on AngelList.
  • Venture Capital ReturnCambridge Associates reported that the value of its venture capital index increased by 1.15% in 4Q12 (1Q13 information has not been publicly released) compared to -3.10% for Nasdaq. For longer time frames, the venture capital index surpassed Nasdaq for the 3 and 5 year period, and 15 years and longer, but trailed for the 1 and 10 year periods.
  • Venture Capital SentimentThe Silicon Valley Venture Capitalists Confidence Index® by Professor Mark Cannice at the University of San Francisco reported that the confidence level of Silicon Valley venture capitalists was 3.73 on a 5 point scale in 1Q13, an increase from 3.63 in 4Q12 and the third consecutive quarterly increase in the index. Reasons given for the increase were a stabilizing macro environment, continued easy money, a reduction in “frothiness” in internet/digital media, and the growth of cloud based, web centric software innovations.
  • NasdaqNasdaq increased 5.7% in 1Q13, and has increased 5.2% in 2Q13 through May 13, 2013.

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Here’s the 5-year-old whose pitch won over 20 VCs

This is 5-year-old Rhett, who is being treated for acute leukemia and made a special pitch that convinced more than 20 VCs to auction themselves for a lunch to benefit the Bay Area Leukemia & Lymphoma Society. Click here to watch his video, “Dear Mr. VC.”


Senior Technology Reporter- Silicon Valley Business Journal

Your average Silicon Valley VC probably hears hundreds of pitches a month but none more effective than this one made by a 5-year-old named Rhett.

His video plea to, “Help get the bad guys out of my body,” is surely enough to melt even the most jaded viewer on Sand Hill Road.

Young Rhett was diagnosed with acute leukemia after suddenly falling ill watching the San Francisco Giants win the 2010 pennant on their way to becoming World Series Champions. After many treatments since then his prognosis is good. His biggest dream, besides beating cancer, is to meet the Giants.

The “Dear Mr. VC” video he made convinced more than 20 of the top VCs in the region to offer themselves in auctions for lunch dates to benefit the Bay Area Leukemia & Lymphoma Society. Reportedly none who saw the pitch turned it down.

Click here to learn more about who those VCs are and how to make a bid to pitch to them. But be forewarned, you will have a hard time topping young Rhett.

Watch Rhett’s plea in the video attached to this story or you can go to YouTube to watch it by clicking here.

Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.

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powered by the Silicon Valley Business Journal

Canada pitches startups with lower taxes, instant residency

Canada’s new immigration-centric pitch to Silicon Valley’s many foreign-born entrepreneurs.

Economic Development Reporter- Silicon Valley Business Journal

Canada is pitching Silicon Valley entrepreneurs on northern migration.

The gist: Easier access to visas for foreign-born entrepreneurs, a growing base of engineering talent, R&D tax credits and lower corporate taxes.

Low-tax U.S. states like Arizona, Nevada and Washington have pitched financial incentives to Silicon Valley companies mulling a move for years (read more about some recent attempts here). But Canada has a leg up on one issue near and dear to many in the Valley tech community – a new Start-Up Visa Program offering permanent residency to foreign entrepreneurs, who often encounter U.S. immigration obstacles when coming to the Valley.

Jason Kenney, Canada’s Minister of Citizenship, Immigration and Multiculturalism, was in Silicon Valley over the weekend to attend the entrepreneurship conference TieCon in Santa Clara. Kenney also spoke at a Silicon Valley Business Journal event on Monday, “Start-up Visa and Doing Business in Canada.”

“We know that there are tens of thousands of brilliant young international workers, typically in the stem industries…who cannot get their immigration status figured out,” Kenney said Monday. “We are prepared to take a risk on risk-takers.”

Kenney jokingly referenced the incongruity with Canada’s reputation for polite conservatism when explaining the play for Silicon Valley entrepreneurs: “I apologize for being uncharacteristically aggressive,” he quipped.

The country recently took out a local billboard ad emblazoned with a slogan highlighting Silicon Valley companies’ difficulty obtaining employer-sponsored H-1B visas. The billboard reads “H-1B problems? Pivot to Canada.”

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