Venture Briefing: June 14, 2017 Venture Briefing: June 14, 2017

Venture Briefing: June 14, 2017

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Small Businesses Urge Congress to Oppose 'Border Adjustment Tax'
About 60 small business owners and a representative from the retailer Big Lots will hold meetings with members of Congress in an effort to oppose a proposed 'border adjustment tax', organizers said. Retailers led by large stores including Target, Best Buy and AutoZone are trying to get Republicans to abandon the tax as a piece of any sweeping tax reform.
(Source: Reuters, 2017-06-06) Read the full article
PCAOB Reveals First Significant Audit Report Changes in 70 Years
Worrisome matters reported by an auditor to a board audit committee would be disclosed in the auditor's report under a new standard approved by the Public Company Accounting Oversight Board. Although the standard would retain the current pass/fail model of the auditor’s report on the financial statements of corporate clients, it represents what its chairman thinks are the first major changes in the report since the late 1940s.
(Source: CFO.com, 2017-06-01) Read the full article
Private Equity 'Buy and Build' Deals Increasing Substantially
Private equity firms are dusting off a tried-and-true strategy, spending some of the $842 billion in dry powder to bulk up their portfolio companies through acquisitions with the goal of increasing returns and obtaining higher exit prices. While the practice -- sometimes called "buy and build" -- is not new, the frequency of such deals has increased exponentially.
(Source: Pensions & Investments, 2017-06-12) Read the full article
Steve Case Says Three States Account for 75% of V.C. Funds
California, Massachusetts and New York drew 75 percent of venture capital last year, Revolution CEO Steve Case told Walt Mossberg at the Code Conference in Rancho Palos Verdes, California. That left 47 states to fight over the remaining quarter of funds, he said.
(Source: re/code, 2017-06-01) Read the full article
Value of Late-Stage, V.C.-Backed Companies Hits $490 Billion
The total valuation of late-stage, venture-backed private companies in the United States and Europe has exploded from a few dozen startups worth a collective $40 billion in 2010 to hundreds of firms that together are now worth almost $500 billion, according to a report. There are now 471 late-stage private companies -- defined as firms that have raised at least $75 million through at least three rounds of financing -- with an approximate valuation of $490 billion, according to the report from Scenic Advisement, a San Francisco-based investment bank that facilitates secondary stock transactions.
(Source: Fortune, 2017-06-01) Read the full article
Venture Investing in U.S., Europe Looks Very Different
While venture investing outside the U.S. has come a long way in recent years, an analysis shows it remains an entirely different industry than U.S. venture capital. Tech Crunch looked at venture investment trends in 2007-2011 from PitchBook and compared them with VC exit results in 2012-2016 to very roughly compare investment in one five-year period with exit results in the ensuing next five years, roughly matching VC investment cycles.
(Source: Tech Crunch, 2017-06-07) Read the full article
Entrepreneurs May Find V.C. Alternatives More to Their Liking
Many entrepreneurs say equity investors are better suited for startups with whiz-bang proprietary technology and a realistic strategy to scale and sell quickly. Today, fundraising options are many.
(Source: Entrepreneur.com, 2017-06-05) Read the full article
Twenty Nine Different Reg CF Crowdfunding Platforms Currently Exist
The number of FINRA approved and regulated crowdfunding portals has been inching higher. Today, there are 29 different Reg CF crowdfunding platforms each targeting the new securities exemption created under the JOBS Act 0f 2012.
(Source: Crowdfund Insider, 2017-06-11) Read the full article
Family Offices Prefer Direct Investing in Lieu of P.E. Funds
Family Office Exchange (FOX) says most family offices today are increasingly bypassing private-equity funds and their 2/20 fees, and investing directly in private companies. In fact, 81 percent of the 118 family offices surveyed by FOX this year have hired staff to invest directly in private firms.
(Source: Barron's, 2017-06-12) Read the full article
V.C. Industry Increasingly Being Managed by 20-Somethings
In a trend that turns the established venture capital dynamic on its head, the investors backing the Bay Area's early-stage tech startups increasingly are 20-somethings with little more than college credits, internships or a few years of work experience under their belts -- a far cry from the seasoned tech veterans who traditionally have offered sage advice and guidance to the startups in their portfolios. While the trend is largely anecdotal -- and many 20-somethings still would rather follow in the footsteps of entrepreneurs like Mark Zuckerberg or Larry Page -- the chance to cash in as an investor in the next Facebook or Google is increasingly alluring.
(Source: Seattle Times, 2017-06-05) Read the full article
 
 
 
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Connect With Our Dealmakers at AM&AA's New York City Chapter Summer Event
Tom Kesoglou Chris Bordoni

Ice Miller is proud to co-host the New York City Chapter of AM&AA for the Summer Event on Wednesday, June 21 from 5:30-8:30 p.m. at Convene at 101 Park. In addition to the good food and great company that you have come to expect, this event will include middle market Investment Banks bearing deals and transaction opportunities.  We would be delighted for you to join us. Register here.

 

By The Numbers

Venture investment in US cybersecurity startups is on pace for an all-time high this year. Capital invested has increased steadily from 2010 to 2015, topping out at $3.46 billion, per the PitchBook Platform.  
Source: PitchBook - Safety first: VCs set for record-breaking year in US cybersecurity space

 

 

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Ice Miller has been one of the most active law firms in the private equity industry over the last decade, representing both entrepreneurs building great companies and the private equity firms and individuals that invest in them.  We have extensive experience with all types of funds (formations and operations); mezzanine and senior secured financing; leveraged buyouts, roll-ups, build-ups, and consolidations; divestitures and exits; and complex litigation on behalf of investors and privately financed companies.  In addition, over the past 10 years, Ice Miller has represented hundreds of emerging growth businesses in various industries on such matters as entity formation, capitalization, capital raising, alternative financing, intellectual property rights and protection, growth and exit strategies, corporate governance, tax matters, and many other legal issues that are critical to the growth and success of an emerging company.

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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.
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