Panels & Panelists

Panel 1: The Current State of Early Stage Venture Capital:  Investing in Technology of the Future

Venture capitalists invested $28.3 billion in 3,808 deals in 2008, marking the first yearly decline of total investments since 2003. Venture investments in 2008 represented an 8 percent decrease in dollars and a 4 percent decrease in deal volume from 2007. Investments in the fourth quarter of 2008 totaled $5.4 billion in 818 deals, the lowest amount of dollars invested since the first quarter of 2005 and a 26 percent drop from the $7.3 billion invested in the third quarter of 2008 .

The decline in investments over the prior year is spread across industries and stages of development, with some notable exceptions. Dollars invested in the Clean Technology sector grew more than 50 percent in 2008. Companies in the Seed Stage of development also received more money in 2008, reaching the highest level seen since 2000.  

Investments into Seed Stage companies increased substantially in 2008, jumping 19 percent from the prior year to $1.5 billion going into 440 companies, compared to $1.3 billion going into 450 companies during 2007. This marks the highest annual total of dollars captured by Seed Stage companies since 2000. 

The panelists will discuss the recent trends in venture capital that are creating a new level of excitement.  The panelists will also address whether the industry is experiencing a shift in risk tolerance and whether the increased funding in Seed Stage deals will be sustainable.  Discussion will focus on emerging investment sectors such as Clean Technology, Nanotechnology, and Web 2.0.  The panel will cover the market risks, market growth opportunities, capital requirements, exit opportunities, investing horizons, and current valuations associated with each emerging investment sector.

Panelists

• Robert Beaury, Instructor, College of Engineering, Penn State University
• Jim Plonka, Griffon Financial Services, LLC, Angel Investor, Bluewater Angels
• Craig Bandes, CEO, Pixelligent Technologies, LLC
• John Jordan, Executive Director, Center for Digital Transformation, Penn State University
  
• Denise Prince, Chief Executive Officer, Geisinger Ventures

Panel 2: Angel Investors and Venture Capitalists: How to Make the Relationship Work

Industry surveys support the view that angels and VCs do not compete, but are rather complementary players in the venture arena.   Venture Capitalists overwhelmingly believe that Angel investors play a significant role in the venture industry and that their involvement is indeed beneficial to the industry.  The prevailing view among Venture Capitalists is that Angels are critical to bringing companies to a venture-backable stage.  The evidence shows that there is a healthy foundation of goodwill and respect by the VC community towards Angels upon which to build a better working relationship.  According to industry surveys, 49% of VCs “mostly or sometimes” co-invest with Angels in portfolio companies and 89% of VCs make follow-on investments in ventures with prior Angel funding.  These figures support the popular view among VCs that Angels serve as the “feeder” system for Institutional VC.  While VCs and Angels both serve important roles in the ecosystem, both groups also acknowledge that both groups can do a better job working together. 

Angels and venture capitalists both play key roles in the venture industry. Angels rarely fund a company to exit, and thus, they need institutional money to do so. On the other hand, VCs seldom provide the seed capital and time commitment to start-up entrepreneurs in order for those companies to get to a place where they are venture worthy. As a result, angels and VCs are essential components to the “Conveyor Belt” that takes start-ups from creation to exit, and the venture industry and the nation would benefit from an Angel-VC framework that fosters more understanding, and a more
efficient working relationship, between the two groups.

This panel of experts will discuss:

• The issues between the Angel and VC Communities

• The factors that make Angel-backed companies unattractive to VCs

• The reasons why Angels find it difficult to work with VCs

• VC:Angel best management practices including how to structure deals to make them most attractive for VC follow-on financing

• What are the common pitfalls of Angel Investing and how they can be avoided.

• The key success factors that can make the relationship work

• The common interests, constraints, and expectations experienced by traditional VCs

• The common interests, constraints, and expectations experienced by Angels 

• What Angels and VCs need to better understand

• The disparate impacts of over and under-valuations on Angels and VCs

Panelists

• Barry Genkin, Blank Rome, LLC, and Partner and Chair of Business Department
  
• Paul Schmitt, Managing Director, Novitas Capital
  
• Mel Billingsley, President & CEO, Life Sciences Greenhouse, Professor of Pharmacology at Penn State Milton S. Hershey College of Medicine, Professor of Biotechnology and Entrepreneurship, Penn State University
  
• Valerie Gaydos, Executive Director, Private Investors Forum, CEO, Fifty-First Associates, LLC
  
• Michael Kopelman, Principal, Edison Ventures
• Jim Pietropaolo, Director, Ben Franklin Technology Partners
  

Panel 3: New Models for Early Stage Venture Funding

Micro-equity financing has emerged as a viable alternative to financing and launching companies.  As it gets cheaper to start a company, the balance of power is shifting from investors to hungry, first-time entrepreneurs.  Rather than pursuing traditional sources of venture capital and incubator space, more and more start-ups are seeking out micro-equity funds.  Pioneers in the micro-equity space include Y Combinator (Mountain View, CA; Cambridge, MA), and Dreamit Ventures (Philadelphia, PA).  This new model integrates well with the business needs and investing horizons of technology-based companies, and has to date been exclusively limited to this investment sector.  Unlike more traditional channels, micro-equity funds take a more hands-off approach to managing their investment portfolios.   Y Combinator and Dreamit are striving to be the primary source of seed-stage financing in addition to offering executive support during early-stages.

Micro-equity funds are also joined by business accelerators in helping to redefine the early-stage investing landscape.  Accelerator Corporation, founded in 2003, is taking a novel approach to technology incubation.  Accelerator Corporation is a vehicle for disciplined and efficient investment in and management of emerging biotechnology opportunities.  Located in Seattle, Washington, the company identifies, evaluates, finances, and manages ground breaking emerging life sciences opportunities.  Accelerator Corporation relies upon a unique set of sources to fill a world-class pipeline of deal flow and has established and utilized a now proven array of resources to identify, evaluate, capitalize and manage emerging biotechnology companies.
This panel of micro-equity and business accelerator participants will discuss the success of their unique business models and provide practical expertise for the next generation of micro-equity funds and business incubators.

Panelists

• Robert Macy, Clinical Professor of Entrepreneurship, Penn State University
  
• Steve Welch, Founder, Co-Founder, DreamIt Ventures and Past Founder and CEO of Mitos Technologies
  
• David Schubert, Chief Business Officer, Accelerator Corporation
  
• Scott Nissenbaum, Managing Director, Novitas Capital
  
• Mike Farrell, President and Chief Executive Officer, Farrell and Company, Chief Executive Officer, Standard Steel, LLC

Panel 4: A Resource-Based View of How Academia Can Add Value in the Venture Capital Arena

Penn State is one of a handful of Universities along with Stanford, MIT, University of Texas, Cornell, and University of Utah with student-managed venture capital funds.

The Garber Fund was established in 1999 with a $5 million commitment from Penn State alumnus John Garber and his wife Bette to bring reality to the teaching of entrepreneurship and venture capital. The fund is part of Nittany Lion Venture Capital (NLVC), an MBA student-run management group that works with small companies and other investment groups in early stage business planning, execution, and due-diligence assignments. NLVC forms part of Smeal's highly acclaimed entrepreneurship program, in which students are immersed in real-life situations throughout their studies.

Historically, Academia has preferred to keep its distance from the private sector and instead partner with government or other nonprofits.   Academic experts are making an aggressive case for greater direct involvement between universities and the societies they serve. Penn State University with its mission deeply rooted in outreach, is taking a leadership role in exploring various mechanisms for fostering university and private sector partnerships specifically geared to building a culture of entrepreneurship throughout society. 

This panel comprised of both industry and academic experts will discuss new models for linking Academia directly to industry though student-managed Venture Funds (e.g. Penn State Garber Fund), The Kauffman Innovation iBridge Network, Innovate PA, and Proof of Concept Centers piloted by MIT and UC San Diego.  These new models are allowing Academia to deploy its unique resources and are filling resource gaps which currently exist in current Economic Development models.

Panelists

• Peter Tombros, Director and Chairman of the Board, Pharmanet, Director, Cambrex Corporation, Director, NPS Pharmaceutical, Director, Protalex, Inc., Executive in Residence, Penn State University
• Cissy Young, Director, Strategy and Business Development, Cerulean Pharma, Inc.
  
• Bill Frezza, General Partner, Adams Capital Management
  
• Robert Wooldridge, Director, Innovation Transfer Center at Carnegie Mellon University
• Chris Pavlides, Associate Professor of Entrepreneurship, Senior Executive Fellow, Fox School of Business and Management, Temple University and Founder and Chairman, Greater Philadelphia Senior Executive Group, Inc.