SSTI Digest

New England led the country in total angel investment dollars during the second quarter of 2013, according to the Angel Resource Institute’s quarterly Halo Report. California continues to lead as the top market for angel deals with 17.3 percent of the national total. However, 70 percent of all deals in the second quarter were completed outside of California and New England, 10 percent more than in the previous quarter and the previous year. In contrast, more than half of all venture capital deals last year happened in those regions. For the first time, the report separates Texas-based deals from the rest of the Southwest and ranks the state as the fourth most active angel market behind California, New England and the Southeast. Read the Q2 2013 Halo Report at: http://www.svb.com/halo-report/.

City finance officers were better able to meet financial needs in 2013 than in 2012 and, despite national economic indicators pointing to continued slow growth, improved conditions for city budgets are projected for 2014 and beyond. These are among the findings in the National League of Cities annual survey on city fiscal conditions. Sales and income taxes seem to be a bright spot for cities. In 2012, city sales tax receipts increased over previous year receipts by 6.2 percent, similar to growth levels seen prior to the recession. City finance officers also reported year-over-year growth of 4.4 percent for 2012 in income taxes and are projecting growth of 2.3 percent for 2013. The report's authors warn that city fiscal conditions remain vulnerable to external policy shifts, including cuts in federal spending. Additionally, pension and health care costs continue to be a drag on municipal budgets. Read the report.

A measure to amend the state securities laws in order to permit equity crowdfunding won approval in the Wisconsin Legislature following swift and unanimous passage in the Senate this week. The bill, called the Wisconsin Crowdfunding and Securities Exemptions (CASE) for Jobs Act, is aimed at providing better access to small business capital by connecting Wisconsin-based investors with startups through crowdfunding websites. Wisconsin now joins three other states, Georgia, Kansas and North Carolina, that have enacted similar securities exemptions. Lawmakers across several states, including in New Jersey, have cited frustrations regarding the delay in full implementation of the federal JOBS Act as a reason for creating the state-level exemptions.

The California Governor's Office of Business and Economic Development is preparing to launch four new Innovation Hubs (iHubs) across the state. iHubs, strategically placed within existing clusters, serve as centers of collaboration for regional economic development agencies, venture capitalists, incubators, and higher education to develop joint programming for entrepreneurship (see the September 4 issue). The program is supported by public, private and federal funding and, with the recent expansion, now hosts 16 centers across California. Three of the new hubs will serve specific regions, including the San Joaquin Area, Kern and Ventura Counties and Inland Southern California. The fourth hub will offer a statewide network of manufacturing support. Read more...

Last week the Columbus Metropolitan Club hosted Alcoa CEO Klaus Kleinfeld to give remarks on the state of American manufacturing. Kleinfeld made the case that "talent is global," and that the U.S. must invest heavily in workforce development and STEM education if our country wants to continue to grow the manufacturing sector and remain globally competitive. Advocating for the overhaul of the entire K-12 and higher education systems, Kleinfeld cited the need to train students in high-tech skills and connect them to community college and apprenticeship programs that can be supported by local manufacturers. He stressed that education reform should also focus on inclusion to extend opportunity in the industrial economy to women and minorities, citing Alcoa's Women in Hardhats program as an example of successful outreach.

During most of the 20th century the textile industry was an economic pillar of the American South. During the 1990s the forces of globalization caused most of the industry to move overseas. Economic experts predicted that the textile industry would never return to U.S. soil. Recently, towns like like Gastonia, NC, and Gaffney, SC, have seen shuttered mills reopened for business as advanced manufacturing technologies have supported the growth of an emerging advanced textiles sector. Economic development organizations in the Carolinas are focusing on investment in the growth of a new Advanced Textiles value chain that uses automated technologies to produce synthetic fibers, industrial filters, military equipment, and clothing. But there are lingering concerns over workforce development and the effects of automation on job creation.

In contrast to last week's coverage of the Virginia gubernatorial candidates on issues that affect jobs and the economy, there are little specifics on the topic provided by either New Jersey candidate. Incumbent Gov. Chris Christie has a significant lead in the polls over Democratic challenger and New Jersey State Senator Barbara Buono, but he has offered little in the way of new ideas for economic growth in the next term, instead relying heavily on past accomplishments. Sen. Buono has put forth a jobs and economic security plan outlining support for increased investment in R&D, tax credits targeted to life sciences companies, and encouraging STEM jobs and workers. However, the plan lacks concrete proposals.

A network of more than 1,500 expert advisors is among the distinctive features that makes the Innovation Center of the Rockies' (ICR) low-cost, effective model for commercializing research appealing to universities across the country. This week, ICR announced they have entered into an agreement with the University of Wyoming to bring more faculty inventions to market based on their successful model. ICR works closely with tech transfer offices in Colorado, and now in Wyoming, to understand and develop viable pathways for university-based inventions. The volunteer advisors are matched with university research projects to help identify and solve customer problems. Read the news release.

ICR garnered national recognition earlier this year as a 2013 SSTI Excellence in TBED award winner. Learn more at: http://www.sstiawards.org/2013.html.

Early data from a number of sources indicates that the venture capital market continued its resuscitation from the 2008 crisis during the third quarter of 2013. CB Insights reports that 857 venture deals representing $7.2 billion were completed last quarter, which, by their data, would be the highest rate of dealflow since the dotcom era. Other sources report a similar number of deals, but find that some quarters in recent years have been more active. Initial public offerings (IPOs), mergers and acquisitions (M&As) and valuations have all risen over the last few quarters, though venture fundraising is down for the year, according to data from the National Venture Capital Association (NVCA) and Thomson Reuters.

The Social Venture Connection (SVX), a new impact investing platform in Toronto, was launched to catalyze debt and equity investments in socially driven ventures that have demonstrable social and/or environmental impact and the potential for financial return. Developed by the MaRS Discovery District, SVX provides local, socially minded accredited investors (e.g., high net-worth individuals, foundations and financial institutions) a savvy web tool to make investments in vetted nonprofit or for-profit organizations.

Startups spun out of university research parks stayed in business longer than the overall national average and helped to improve regional competitiveness by establishing their companies within the area where they were incubated, according to a recent survey from the Association of University Research Parks (AURP). The survey reported the findings of 108 university research park directors over the past five years to demonstrate the extent to which the parks are focused on advancing innovation in their region. Among the top rated opportunities for enhancing growth, effectiveness and impact of research parks going forward are: developing and expanding the business services offered by incubators, capitalizing on more corporate outsourcing of research and deepening university-industry research partnerships, and strengthening collaboration between the park and its affiliated universities. Read the report…

As the TBED community seeks to diversify its funding partners, corporations would seem to be logical prospects. Pickings are getting slimmer, however. Despite tallying record profits and stock market values over the past few years, corporations are getting stingier with their giving programs, according to a new report from the Foundation Center.

The center estimates in its annual survey that giving from corporate foundations, totaling an estimated $5.1 billion in 2012, is 1 percent less than the 2011 total. Total giving from the nation's 81,777 foundations in 2012 is expected to top $50.9 billion, up $1.9 billion from the previous year. At $4.7 billion and a 9 percent growth, community foundations increased giving the most of the four foundation types covered in the report. More information...