Ice Miller Venture Briefing Weekly

Entrepreneurs Turn Away From IPOs to Alternative Options
Expert Partly Blames Lack of 2nd Qtr IPOs on Presidential Race
VCs, Small Businesses at Odds Over Federal Funding Program
Lawmakers Call for Stronger Financial System Regulation
Study Finds Private-Equity Owned Firms Performed Well Last Year
Private Equity Firms Raised $132.7B in First Half of '08, Down 3%
Financial Services Cos. Could Benefit from P.E., Fed Says
Female Entrepreneurs Claim Just 4.8 Percent of All VC Dollars
VC Confidence Index Sees Record Low in Second Quarter
Obama Plans $6B a Year in Small Biz Health Insurance Tax Credits

Entrepreneurs Turn Away From IPOs to Alternative Options
Venture-backed initial public offerings have been declining, and as VCs make more demands, entrepreneurs have been looking at alternatives.
(Source: BusinessWeek, 2008-07-09)

Expert Partly Blames Lack of 2nd Qtr IPOs on Presidential Race
The number of initial public offerings took a nosedive in the second quarter of this year compared with the second quarter of 2007. But surprisingly, the sharp decline may have almost as much to do with the presidential election as it does with the tight credit market.
(Source: Financial Week, 2008-07-09)

VCs, Small Businesses at Odds Over Federal Funding Program
A fight is brewing between venture capitalists and some small businesses over VC-controlled companies' eligibility for federal aid. At stake are billions of dollars in grants and contracts disbursed through the government's low-profile Small Business Innovation Research program, which funds early-stage research in areas ranging from potential cancer cures to top-secret products for the military.
(Source: The Wall Street Journal, 2008-07-07)

Lawmakers Call for Stronger Financial System Regulation
Policy-makers said they were doing everything possible to restore calm to financial markets, but stressed to lawmakers that a longer-term regulatory overhaul was vital to avert future crises. Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson told Congress they agreed the Fed needs a stronger hand in supervising investment banks to help shield the broader economy from problems like the ones that forced the emergency rescue of investment bank Bear Stearns.
(Source: Reuters, 2008-07-10)

Study Finds Private-Equity Owned Firms Performed Well Last Year
Businesses sold by private equity firms last year saw greater growth in value and profit than their publicly held peers, a new study by Ernst & Young found. Indeed, the enterprise value of companies previously owned by PE firms grew at a 24 percent annual clip in 2007, twice the rate of growth of public companies.
(Source: Financial Week, 2008-07-09)

Private Equity Firms Raised $132.7B in First Half of '08, Down 3%
The nation's private equity firms raised $132.7 billion across 185 funds in the first half of the year, down three percent from a year ago when 199 funds raised $137.2 billion ahead of the credit crunch that began last summer, according to industry newsletter Dow Jones Private Equity Analyst. The full-year fund-raising record was set last year when private equity firms raised $313 billion.
(Source: San Francisco Business Times, 2008-07-08)

Financial Services Cos. Could Benefit from P.E., Fed Says
The Federal Reserve considers private equity to be a good source of capital for financial services companies battered by the credit crisis, top regulators said.
(Source: Reuters, 2008-07-10)

Female Entrepreneurs Claim Just 4.8 Percent of All VC Dollars
As of the first quarter of 2006 (the latest data available), just 4.8 percent of all VC dollars were behind female-owned companies, down from (a still meager) 7.1 percent in 2000, estimates Venture One, a research arm of Dow Jones. Meanwhile, overall female entrepreneurship has been on the rise.
(Source: Forbes.com, 2008-07-10)

VC Confidence Index Sees Record Low in Second Quarter
The Silicon Valley Venture Capitalist Confidence Index for the second quarter of 2008 registered 3.07 on a 5-point scale, falling from the previous quarter's reading of 3.22 to a third consecutive new low in the history of the index. The previous low of VC confidence reported for the first quarter of this year preceded the worst quarter (Q2) for IPOs (0) for venture-backed firms in 30 years.
(Source: San Jose Business Journal, 2008-07-09)

Obama Plans $6B a Year in Small Biz Health Insurance Tax Credits

Democratic White House hopeful Barack Obama unveiled a proposal to give $6 billion a year in tax credits to small businesses that provide health insurance plans. Under the plan, small businesses would get a refundable credit of up to 50 percent on premiums paid on behalf of their employees.

(Source: Reuters, 2008-07-13)

For further information on these topics contact Ice Miller's Business Group.

Are You Sure You Want to be a Director?

The Indiana Supreme Court recently decided a case which could impose significant new responsibilities on directors of Indiana corporations. In Lean v. Reed, the court found a director of an Indiana corporation personally liable as a matter of law (i.e., without trial) for violations of the Indiana securities laws by the corporation. While this in itself is not groundbreaking, the facts underlying the case are rather startling.

Read the entire article.

Upcoming Events

July 29 - IBJ's Life Sciences Power Breakfast Series

August 14 - Lacy Leadership Association and Keep Indianapolis Beautiful's Green Gathering
August 25 - DuPage County, Illinois Affordable Housing Seminar

September 11 - Invest Indiana 2008
September 18 - Unsurpassed Elegance
September 18 - IBJ's 2008 Fastest Growing Companies
September 25 - KPMG LLP's Indy's Best and Brightest Awards Luncheon

October 1 - CEO Survey Breakfast
October 23 - Indiana Lawyer's 2008 Diversity in Practice Conference

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.