Dan Primack

We've spent countless hours discussing the issue of carried interest taxation, and whether such investment fund profits should be treated as capital gains (status quo) or ordinary income (status fro). It's a particularly contentious issue among venture capitalists, who believe a change away from capital gains would choke new business creation and job growth. But maybe all the VC fretting was for naught, based on the following words from President Obama during tonight's State of the Union address: "I am also proposing a new small business tax credit – one that will go to over one million small businesses who hire new workers or raise wages. While we're at it, let's also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment." Does this mean that angel investors would no longer be required to pay taxes on investment returns? Does it mean the same for venture capitalists, or at least those investing in early-stage businesses? Would there even be a holding period requirement?

Do no women work at Apple? This is from 2006...

Last Friday, I learned that Vistaprint had acquired custom embroidery company Soft Sight (dba Threadsmith.com). Not the world's largest deal, but notable because Vistaprint is better known for M&A cold feet than for consummation. My sourcing was impeccable, but I followed journo protocol in calling Vistaprint for confirmation and comment. At the very least, I was hoping to learn what made Soft Scan different from all the acquisition targets that had come before. After a few hours, a spokesman emailed me the following: "It is our policy not to comment on market rumors or speculation." The email I wanted to send back was even shorter. Just two words, and the second one was "you."

Nearly two years ago, I conducted an on-stage interview with Carl Icahn at an industry conference. We mostly discussed economic conditions and shareholder activisim, but I also asked about his minority investment in a young mobile content management company called Motricity. The company was an unusual target for Icahn -- privately-held, VC-backed -- and had just recently announced plans to cut up to 350 workers and move its headquarters out of North Carolina. Icahn's explanation, in short, was to blame his son. "My son liked it and talked me into it... I said okay, and I'm not sure it was the right decision." You can watch video of the exchange after the jump. Today, however, Icahn might be giving his son a pat on the back instead of a hard time. Motricity has filed for a $250 million IPO, and reports strong year-over-year revenue growth between 2006 and 2008. It also had an 18.6% revenue increase between the first nine months of 2008 and the first nine months of 2009

Web-based printshop Vistaprint has made what appears to be its first-ever acquisition, quietly scooping up custom embroidery and apparel embellishment company Threadsmith.com. A company spokesman declined to confirm or deny the deal, which is schedule to be formally disclosed as part of a quarterly earnings release next Thursday. Threadsmith.com (a.k.a. Soft Sight Inc.) has raised around $2.4 million in VC funding from High Peaks Venture Partners and Advantage Partners. High Peaks recently announced that the company had been sold, but did not name the buyer. It also did not announce a sale price, except to say that the deal generated "a high double digits annualized return rate."

Venture capitalists invested $17.7 billion into 2,795 deals for U.S.-based companies in 2009, according to data released today by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters (publisher of peHUB). That's a 37% dollar decrease and 30% deal decrease from 2008, and represents the lowest volumes since 1997. It actually gets a bit worse. All but one industry sector experienced double-digit dollar declines (including some particularly sluggish stats for cleantech). And the one exception -- chips and networking -- still dropped by five percent. So why my headline optimism? Three reasons: 1. Low investment totals might concern entrepreneurs and fee-driven investors, but they don't correlate to low investment returns. Far more venture capital was invested in 2001 or 2003 than in 1997, but which year's median returns would you prefer?

Rhode Island already has a private equity pro running for Governor (Rory Smith of Nautic Partners), so why not a venture capitalist running for Treasurer? That venture capitalist is Gina Raimondo, a general partner of Point Judith Capital. She helped found Providence-based Point Judith in 2002, after having spent three years running fund development and leading a handful healthcare deals for Village Ventures (Point Judith is part of the Village Ventures network). Her Point Judith portfolio companies include GetWellNetwork, NABsys, Novare Surgical and Spirus Medical. "I can think of no one I would rather have as the steward of the public's capital," says Matt Harris, a managing general partner of Village Ventures.

In October, I wrote the following after returning from the Quebec City Conference: “Terry McGuire of Polaris Venture Partners said in Quebec that the future of venture capital would be smaller funds and smaller partnerships. He declined to say if that applied to Polaris itself – methinks it does, as the firm is expected to fundraise next year.” Yup, it does. Polaris is targeting $500 million for its sixth fund, after raising $1 billion for its fifth fund in 2006. I know of at least one current partner who isn’t part of the new effort, but will

Venture capitalist Fred Wilson today wrote about "DST deals," or later-stage VC investments for companies that have rejected corporate takeover offers. Think Facebook, Twitter and Yelp. Fred positions this as a new phenomenon, and an indication that "VCs are starting to compete directly with the M&A market." I'm not sure I agree on either count. First, we've seen this show before. Russia's DST is certainly a new player, but Advanced Equities has been doing this sort of thing for years. So was Tudor Ventures for a while. And remember that explosion of big-dollar corporate venturing in 1999-2001, in which ROI was considered more important than strategic alignment? Or big buyout firms dipping into the VC market?

One year ago next week, I wrote about how Atlas Venture had slimmed its personnel roster after a disappointing fund-raising drive. Now, the firm is making additional changes. Atlas has opted to consolidate its deal-making and operational activities within its Waltham, Mass. office (which could soon relocate closer to, or within, Boston). That means no more deals coming out of London, even though Atlas will maintain a few staffers on the ground there for portfolio management and investor relations purposes. London-based partner Fred Destin will relocate to the U.S. (he’s already bought a house in Brookline), while fellow London-based partners Graham O’Keefe and Regina Hodits will become venture partners (i.e., continue to work with their existing portfolio companies). Chris Spray will continue to serve as a partner focused on LP relations and portfolio management, but is not expected to make new deals nor stay on when Atlas eventually raises its next fund. There also are a few junior/backend layoffs in London, while Waltham-based venture partner Jeff Andrews is leaving to become head of strategy for an Atlas portfolio company.