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New National Angel Network
Angel investing has enjoyed an interesting history over the years. It began as individuals backed companies with their own time and treasure. By the 1990s, more formal angel networks emerged in a number of communities. These groups held regularly scheduled meetings, invested as a group, and encouraged regular pitches from entrepreneurs. Now, in 2003, the field is taking another progression with creation of the first national network of angel investing groups. The new Angel Capital Alliance (ACA), backed by the Kauffman Foundation of Kansas City (NDE’s sponsor), brings together the nation’s angel organizations. ACA helps these groups collaborate on research projects, share best practices, network and advancethe field. The network not only seeks to expand angel networks around the US, but also wants to ensure that all local angel investors can access the latest thinking and ideas about how to effectively build and grow new businesses. ACA has been endorsed by 46 angel groups.
To learn more about the Angel Capital Alliance, visit www.angelsummit.org
New
Data on Social Investments
Does socially responsible investing pay off? That was the question under consideration in a new study from researchers at Harvard Business School. The study examined returns from 110 companies funded by the Investor’s Circle, a national network dedicated to financing ventures that “deliver commercial solutions to solve social and environmental problems.” Researchers followed the ventures between 1992 and 2001. They found that a slight majority of firms (55%) still remained in business. Of the remainder, 30% were bankrupt, 9% had been acquired, and 6% had gone through an initial public offering. The business survival rates were not significantly different when compared to other early stage companies, but these socially responsible firms had a much lower average rate in terms of experiencing a liquidity event. The most successful firms were in the fields of technology and health care. From the investor’s perspective, these investments did not pay off as handsomely as expected. However, most interviewed investors did plan to continue socially responsible investing as part of a diversified portfolio of investments.
To learn more about the study, visit
http://www.hbsworkingknowledge.hbs.edu/pubitem.jhtml?id=3774&t=nonprofit
More State Rankings
Last week, we noted a new ranking of best states for business by Site Selection magazine. This week’s new rankings come to us from the Corporation for Enterprise Development (CFED). CFED’s respected Development Report Card of the States is now in its 17th annual edition. It measures how states are performing in terms of innovation and entrepreneurship, equity, and in their ability to develop effective economic development initiatives. Overall, the picture for working families is worse than in 2002 thanks to higher unemployment, lower wages, and other pressures. But, some states are still performing admirably in the face of tough circumstances. Massachusetts, Minnesota, and Virginia are the top performers in the report card’s honor roll; other high scorers include Colorado, Connecticut, New Jersey, Pennsylvania, and Utah.
To view the report, visit http://drc.cfed.org/
Understanding Biotech
While everyone seems to want biotech firms in their community, many of us don’t fully understand some of the industry’s unique characteristics. A new report from the Commerce Department’s Office of Technology Policy tries to help. A Survey of the Use of Biotechnology in U.S. Industry summarizes the results of a large-scale survey of more than 3,000 companies who were asked to report on issues related to workforce performance, R&D spending, financial performance and the like. The report has lots of interesting findings. For example, biotechnology is a big business, employing more than 1.1 million people, and accounting for roughly 2.7% of GDP in 2001. Firms range in size from small start-ups to massive global players like Merck or Glaxo. The business is also highly concentrated; 70% of firms are headquartered in just ten states. These companies expect rapid growth in the future, and many also report that they are developing technologies that can be licensed to others. What’s the number one problem area for these companies? Finding qualified workers. Recruiting and retaining talented workers is a huge problem in the industry. Managers are considering all sorts of potential solutions, from new training programs to outsourcing jobs overseas. Most biotechnology industry workers are recruited from local markets. To date, only 6% of firms obtain technical workers from foreign sources. However, if the industry hopes to continue current growth rates, new sources of skilled personnel must be developed.
To access the October 2003 U.S. Department of Commerce report, A Survey of the Use of Biotechnology in U.S. Industry, visit
http://www.technology.gov/reports/Biotechnology/CD120a_0310.pdf
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The Dingman Center for Entrepreneurship
University of Maryland
3750 Van Munching Hall
College Park, MD 20742
P: (301) 405-9545 || F: (301) 314-7973
dingman@rhsmith.umd.edu
http://dingman.rhsmith.umd.edu
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While the Angel Capital Alliance is pushing angel investing at the national level, the University of Maryland’s Dingman Center for Entrepreneurship is pushing such ideas at the regional level. The Dingman Center has just announced a new program, the Capital Access Network (CAN) to help link local entrepreneurs to service providers and angels who can provide financing in the range of $250,000 to $1.5 million. In addition to this effort, Dingman and the Robert H. Smith School of Business run a host of interesting programs for local entrepreneurs. For example, the Hinman Campus Entrepreneurial Opportunities (CEOs) Program includes a dormitory for students interested in entrepreneurship as a career option. In addition, the university has an entrepreneurship citation program for students in fields as diverse as liberal arts, engineering, life sciences, and computer sciences.
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