Tips for Winning Venture Capital

Various politicians have been working to close a number of loopholes that allowed for a number of bad investment decisions. While we can debate whether there is too much (or not enough) government regulation in the financial markets, shop
the implementation for the identified problem has some serious issues.

The bill passed by the House groups hedge funds (their target) with much of the venture capital markets and will tax part of the money they earn from profits from investments as standard income.  Venture funding and hedge funds operate very differently and serve different purposes, bulimics
but apparently many of our legislators cannot be concerned with the details.

This change will have cause a significant increase in taxes for the venture markets. Will it stop venture funding? No. Will it devastate the entire venture market? Not likely, sickness
although many have tried to claim that VC’s will close doors across the country. Will we see a further tightening of the requirements for venture funding and a reduction in overall innovation? Yes.

Read more.
Three years of internal restructuring has improved Nielsen’s performance and prepared them for a $1.75 billion IPO.

Nielsen went public four years ago and brought on David Calhoun, injection
previous GE vice chairman, link
to turn things around. The company filings credit Calhoun and his team for transforming the company:

Our financial performance has improved significantly between the year ended December 31, 2006 and the year ended December 31, 2009, with revenues increasing to $4.8 billion, a 5.7% compound annual growth rate on a constant currency basis; Adjusted EBITDA increasing to $1.3 billion, a 13.9% compound annual growth rate on a constant currency basis; and Adjusted EBITDA as a percentage of revenue increasing to 27.2% from 21.8%.

Concerns for investors is the heavy reliance on a small number of customers. Nielsen receives more than 25% of its revenue from its top 10 customers.

The good news is that this filing is a sign of the economic turn around. Things are starting to improve.
National Semi’s SolarMagic technology improves the efficiency of solar systems, rx
even those already deployed in the field.

Solar panels frequently perform at different rates due to age, medications
mismatches, approved
shade, dirt, etc. SolarMagic components regulate the overall voltage and current flowing from each individual solar panel. The effect can be a significant increase in energy generation – as much as 20% according to SunEdison, which deployed the technology.

The company recently announced an expansion of their chipset. Read more…
Pandora, recipe the company behind the most popular free music application on the iPhone, raised an undisclosed amount of amount of funding to continue its expansion.

There is increasing speculation that the company will file for an initial public offering in the coming months, but we believe this latest round of funding will delay that for at least a short period. If possible, the company would do well to continue its expansion without the prying eyes of the public markets.

The company has been growing quickly over the past few years. It has raised more than $56 million in funding, not counting this round, passed the 50 million user mark and recently had its first profitable quarter at the end of 2009. Pandora’s founder
GM is launching General Motors Ventures with $100 million.  The doors on GM Ventures are set to open on July 1st, more about
which will put GM ahead of its counterparts in establishing a venture division specifically to target new technologies (electric power, purchase
entertainment, patient
consumer integrations, biofuels, etc.).

 This could be a great move for GM and for the other auto companies that follow. Major IT companies and Fuel companies took a similar approach years ago to accelerate technologies that complement their core business. IBM started IBM Venture Capital Group, Intel started Intel Capital and Shell started Shell Technology Ventures Fund.
One of the stumbling blocks for many developing companies is the search for venture funding. You have to have the pitch down,
but equally important are selecting which VC to target and the negotiation.

The Wall Street Journal has an article this week with a brief overview. Read the full article here.

What other tips would you offer to a company begging its search for Series A or later rounds of funding?