debbiegage

They include IBM (the entire company) for its development of the Blue Gene supercomputer; Dr. Francis Collins, who led the Human Genome Project; Dr. Craig Venter for his contribution to genomics and for his ability to clearly communicate his work; and Adobe co-founders John Warnock and Charles Geschke, for, according to President Obama, "spurring the desktop publishing revolution and their role in changing the way people create and engage with information across...print, video and the Web." Other winners made advances in neuroscience, human stem cells, batteries and astronomy -- Dr. James Gunn's work on telescopes, for instance, enabled the Sloan Digital Sky Survey, which is the basis of Microsoft's Worldwide Telescope. Also, four of the 14 winners this year

Twitter should be a non-profit, says Bo Peabody of Village Ventures -- never mind the last $100 million in venture capital and the $1 billion valuation from Twitter's investors. "A visit from the pope may attract a large audience, but it's not a great place to make money," he wrote last month in an op-ed in the Washington Post. "Likewise, social networks can successfully bring people together, but don't expect them to turn a profit." Peabody should know, as he goes on to explain. In 1995, he founded one of the Internet's first social networks -- Tripod -- which by 1998 had become the eighth largest site on the Web. But even though users flocked to Tripod, advertisers failed to follow.

Members of three private equity trade groups lined up today before the House Financial Services Committee to argue why venture capitalists should NOT be exempted from registering with the SEC under the Private Fund Investment Adviser Registration Act -- and why private equity groups should get some breaks too. First Argument: What's in a name? "While I sympathize with venture funds that are too small to create systemic risk, I think it will prove very difficult to define a venture capital firm and distinguish it from most others," said Douglas Lowenstein, president of the Private Equity Council. "I think it's fairer to raise the threshold from $30 million to a level Congress deems appropriate. That would capture the larger firms, whether they're venture capital or private equity or some other adviser, and treat ALL small advisers the same." Lowenstein said he was also thinking of the SEC and its need to preserve scarce SEC resources. Second Argument: Anybody can be tempted. James Chanos, chairman of the Coalition of Private investment Companies, warned of "the growth of bubbles and fraud" if Congress lets venture capitalists off the hook with this law. "We question whether any category of private funds should be relieved by virtue of their self-proclaimed investment strategy," he said. "Fraud can be run with any asset class, and the definition of funds tends to blur over time."

NVCA Chairman Terry McGuire is scheduled to testify within the next hour or so on why venture capital funds should be exempted from the Private Fund Investment Adviser Registration Act. The committee is holding what is shaping up to be a day-long hearing on three draft pieces of legislation -- the other two would strengthen protections for investors and create a Federal Insurance Office -- and has just taken a break for lunch. They reconvene at 1 Eastern/10 Pacific.

Craig Winfield Johnson, a man who played a big role in the formation of Silicon Valley as we know it, died unexpectedly from a stroke suffered last Tuesday, according to his firm, Virtual Law Partners. He was 62 years old. Johnson was a graduate of Yale and a former Peace Corps volunteer who served in Ethiopia. After he graduated from Stanford law school, he went to work at Wilson Sonsini advising startups until he was bitten by the startup bug himself. In the course of his career he founded two law firms: Venture Law Group, which represented Yahoo!, Hotmail, WebTV and other notable startups before it merged with Heller Ehrman in the wake of the dotcom bust, and Virtual Law Partners, a Web-based law firm that cuts down on overhead by letting attorneys share documents and back-office processes and keep 85% of what they bill (compared to the 33% kept by associates at conventional law firms).

It can be tricky when venture returns and exits are way down. Limited Partners who bet on ScaleVP are no doubt happier than some because they're going to get a distribution check from Adobe's $1.8 billion acquisition of Omniture -- a Scale portfolio company -- which is expected to close this quarter. But the firm isn't taking any LP happiness for granted, according to Scale's Kate Mitchell, and its annual meeting for LPs, held last week in Silicon Valley, was tweaked again. Last year, after the federal government let Lehman Brothers go bankrupt, Scale polled its LPs to see how they were feeling and decided to have the CEOs of its portfolio companies speak frankly at the annual meeting -- "more than just the typical song-and-dance, marketing oriented, where people are sitting in the back checking their blackberries," Mitchell said. This year, the firm went a step further and took the CEOs off the podium and into the audience, where they were immediately available for questions after their speeches.

But you already knew that, didn't you? Only five people on Forbes' list of 400 Richest Americans this year are venture capitalists. If you don't count the ones that also made money elsewhere -- Paul Allen, who co-founded Microsoft with Bill Gates, and Carl Edwin Berg, who built a commercial real estate business with John Sobrato in Silicon Valley -- there are only three. John Doerr of Kleiner Perkins slid down this year's list -- his net worth dropped to $1 billion from $1.6 billion so he's number 346. Vinod Khosla of Khosla Ventures slid off -- last year he was worth $1.4 billion, but his net worth must have dropped to below $900 million, which is this year's bottom. (A lot of people lost money in the global financial crisis, but maybe Khosla's been investing his money in clean tech companies.) On the other hand, two venture capitalists made the list who didn't last year, maybe because the bottom is $400 million lower.

Half of all U.S. venture capital firms, and around half of U.S.-based companies, are located in just three areas: San Francisco/San Jose, Boston and New York, according to the National Bureau of Economic Research. Firms in these three areas outperform firms in other areas of the country, and they attract other venture firms, which are more likely to open offices in cities that already have venture firms -- the more, the better. In other words, VCs chase other VCs. "One of the most important determinants of the number of VC offices in a region is the success rate for all previous VC investments in that region,"according to the NBER. That said, the performance of firms in these hot areas depends not so much on their local investments, but on their investments that are farther away.

Nye was working out of his home office in Southern California after his East Coast firm, Prism VentureWorks in Needham, suspended efforts to raise its sixth fund and closed its office in Venice. He supported Prism's decision as being best for the business and said he could have stayed on -- Prism is still deploying the rest of its fifth fund. But, he said, "the prospect of being a satellite in a home office with a partnership that needs to be face-to-face, serving its portfolio, was not a setup that I thought was great for either group." Also, "the (venture) industry is at a challenging precipice. My happiest professional days were as an operating person, I was told by my wife."

After all that lobbying, the National Venture Capital Association managed to get venture capitalists exempted from the proposed Private Fund Investment Advisors Registration Act that's been working its way through Congress. There is now new language in the bill reads: ‘‘(l) EXEMPTION OF AND REPORTING BY VENTURE 18 CAPITAL FUND ADVISERS.—The Commission shall identify and define the term ‘venture capital fund’ and shall 20 provide an adviser to such a fund an exemption from the 21 registration requirements under this section. The Commission shall require such advisers to maintain such records 23 and provide to the Commission such annual or other reports as the Commission determines necessary or appropriate in the public interest or for the protection of investors.’’ NVCA Chairman Terry McGuire will testify before the House Financial Services Capital Markets Subcommittee next Tuesday.